Category Archives: Finance

The American Dream Is Alive and Well – in China

Home ownership has been called “the quintessential American dream.” Yet today less than 65% of American homes are owner occupied, and more than 50% of the equity in those homes is owned by the banks. Compare China, where, despite facing one of the most expensive real estate markets in the world, a whopping 90% of families can afford to own their homes.

Over the last decade, American wages have stagnated and U.S. productivity has consistently been outpaced by China’s. The U.S. government has responded by engaging in a trade war and imposing stiff tariffs in order to penalize China for what the White House deems unfair trade practices. China’s industries are said to be propped up by the state and to have significantly lower labor costs, allowing them to dump cheap products on the U.S. market, causing prices to fall and forcing U.S. companies out of business. The message to middle America is that Chinese labor costs are low because their workers are being exploited in slave-like conditions at poverty-level wages.

But if that’s true, how is it that the great majority of Chinese families own homes? According to a March 2016 article in Forbes:

… 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other liens. On top of this, north of 20% of urban households own more than one home.

Due to their communist legacy, what Chinese buyers get for their money is not actually ownership in perpetuity but a long-term leasehold, and the quality of the construction may be poor. But the question posed here is, how can Chinese families afford the price tag for these homes, in a country where the average income is only one-seventh that in the United States?

The Misleading Disparity Between U.S. and Chinese Incomes

Some commentators explain the phenomenon by pointing to cultural differences. The Chinese are inveterate savers, with household savings rates that are more than double those in the U.S.; and they devote as much as 74%of their money to housing. Under China’s earlier one-child policy, many families had only one heir, who tended to be male; and home ownership was a requirement to score a wife. Families would therefore pool their resources to make sure their sole heir was equipped for the competition. Homes would be purchased either with large down payments or without financing at all. Financing through banks at compound interest rates doubles the cost of a typical mortgage, so sidestepping the banks cuts the cost of housing in half.

Those factors alone, however, cannot explain the difference in home ownership rates between the two countries. The average middle-class U.S. family could not afford to buy a home outright for their oldest heir even if they did pool their money. Americans would be savers if they could, but they have other bills to pay. And therein lies a major difference between Chinese and American family wealth: In China, the cost of living is significantly lower. The Chinese government subsidizes not only its industries but its families—with educational, medical and transportation subsidies.

According to a 2017 HSBC fact sheet, 70% of Chinese millennials (ages 19 to 36) already own their own homes. American young people cannot afford to buy homes because they are saddled with student debt, a millstone that now averages $37,000 per student and will be carried an average of 20 years before it is paid off. A recent survey found that 80% of American workers are living paycheck to paycheck. Another found that 60% of U.S. millennials could not come up with $500 to cover their tax bills.

In China, by contrast, student debt is virtually nonexistent. Heavy government subsidies have made higher education cheap enough that students can work their way through college with a part-time job. Health care is also subsidized by the government, with a state-run health insurance program similar to Canada’s. The program doesn’t cover everything, but medical costs are still substantially lower than in the U.S. Public transportation, too, is quite affordable in China, and it is fast, efficient and ubiquitous.

The disparity in incomes between American and Chinese workers is misleading for other reasons. The “average” income includes the very rich along with the poor; in the U.S., the gap between those two classes is greater than in China. The oversize incomes at the top pull the average up.

Even worse, however, is the disparity in debt levels, which pulls disposable income down. A survey after the 2008-09 credit crisis found that household debt in the U.S. was 136% of household income, compared with only 17% for the Chinese.

Another notable difference is that 70% of Chinese family wealth comes not from salaries but from home ownership itself. Under communism, all real property was owned by the state. When Deng Xiaoping opened the market to private ownership, families had an opportunity to get a home on reasonable terms; and as new homes were built they traded up, building the family asset base.

Deng’s market liberalization also gave families an income boost by allowing them to become entrepreneurs. New family-owned businesses sprang up, aided by affordable loans. Cheap credit from state-owned banks subsidized state-affiliated industries as well.

“Quantitative Easing With Chinese Characteristics”

All this was done with the help of China’s federal government, which in recent decades has pumped massive amounts of economic stimulus into the economy. Unlike the U.S. Federal Reserve’s quantitative easing, which went straight into big bank reserve accounts, the Chinese stimulus has generated new money for productive purposes, including local business development and infrastructure. Sometimes called “qualitative easing,” this “quantitative easing with Chinese characteristics” has meant more jobs, more GDP and more money available to spend, which in turn improves quality of life.

The Chinese government has done this without amassing a crippling federal debt or triggering runaway inflation. In the last 20 years, its M2 money supply has grown from just over 10 trillion yuan to 80 trillion yuan ($11.6T), a nearly 800% increase. Yet the inflation rate of its Consumer Price Index (CPI) has remained low. In February of this year, it was just 1.5%. In May it rose to 2.7% due to an outbreak of swine fever, which drove pork prices up; but this was a response to shortages, not to an increase in the money supply. Radically increasing the money supply has not driven consumer prices up because GDP has increased at an even faster rate. Supply and demand have risen together, keeping consumer prices low.

Real estate prices, on the other hand, have skyrocketed 325% in the last two decades, fueled by a Chinese shadow banking system that is largely beyond regulatory control. Pundits warn that China’s housing is in an unsustainable bubble that will pop, but the Chinese housing market is still more stable than the U.S. subprime market before 2008, with its “no-doc no-down” loans. Chinese buyers typically put 40 to 50% down on their homes, and the demand for houses remains high. The central bank is also taking steps to cool the market, by targeting credit so that it is steered away from real estate and other existing assets and toward newly-produced goods and services.

That central bank intervention illustrates another difference between Chinese-style qualitative easing and Western-style QE. The People’s Bank of China is not trying to improve banking sector liquidity so that banks can make more loans. Chinese economists say they don’t need that form of QE. China’s banks are already lending, and the central bank has plenty of room to manipulate interest rates and control the money supply. China’s central bank is directing credit into the local economy because it doesn’t trust the private financial market to allocate credit where local markets need it. True to its name, the People’s Bank of China seems actually to be a people’s bank, geared to serving the economy and the public rather than just the banks themselves.

Time for More QE?

 In early April, President Trump said in one of his many criticisms of the U.S.  central bank that he thought the Fed should be doing more quantitative easing (expanding the money supply) rather than quantitative tightening (shrinking the money supply). Commentators were left scratching their heads, because the official U.S. unemployment rate is considered to be low. But more QE could be a good idea if it were done as Chinese-style qualitative easing. A form of monetary expansion that would allow Congress to relieve medical and educational costs, grant cheap credit to states to upgrade their roads and mass transit, and support local businesses could go a long way toward making American workers competitive with Chinese workers.

Unlike the U.S. government, the Chinese government supports its workers and its industries. Rather than penalizing China for that “unfair” trade practice, perhaps the U.S. government should try doing the same. China’s legacy is socialist, and after opening to international trade it has continued to serve the collective good, particularly of its workers. Meanwhile, the U.S. model has been regressing into feudalism, with workers driven into slave-like conditions through debt. In the 21st century, it is time to upgrade our economic model from one of feudal exploitation to a cooperative democracy that recognizes the needs, contributions and inalienable rights of all participants.

• Article was first published on Truthdig.org.

Insidious “Habituations”…

First, they came and said they would borrow your money and pay you a 2% annual interest rate for it. They called themselves a Savings Bank, so you accepted it.

Then they came and said you could borrow money from them at a variable rate, probably 6% (but just maybe as high as 30%). They called themselves a Financial Service, so you accepted it. Soon, they came and said that home “ownership” was a great personal investment and, that notwithstanding inflated market-”bubbles” and the like, it was a great idea to obtain a 30-year-mortgage with an “adjustable” rate. They called themselves a Lender, so you accepted it. Later, they came and said that, since your taxes were being used to kill foreigners rather than pay for your medical “needs,” you needed to “insure” that your personal medical bills would not cause personal bankruptcy. They called themselves an Insurance Company and said that, notwithstanding deductibles and co-payments and claims examiners, they would protect your interests. So you accepted it. (Some years later, jobless due to automation and “outsourcing,” you were ordered to continue buying such insurance–without the income to pay for it–but at a special, “affordable” rate. They called themselves the Government, so you accepted it.

But soon, as you became dependent on drugs called medications which were very expensive, you realized that cheap “generics,” manufactured in South Asian sweatshops, would have to do. After all, the Government had approved this–so you accepted it.

About this time, the President had suddenly urged all citizens to support, and pay for, a massive military invasion of a distant land. He insisted on starting a war–after all, the distant land in question might at some point threaten to start a war. Although no evidence was ever presented to substantiate such a threat, the President said this–so you accepted it. As the resultant war continued, causing unspeakable, mass suffering, the President periodically demanded an extra $200 billion-or-so to pay for his senseless, criminal war–and you accepted it.

Not much later, it was found that the Lender aforementioned had approved mortgages for millions who could not really, under the provisions, afford them in the long-term. Your Lender, having known this all along, had sold off these bad mortgages as a high-interest, “junk” investment which would certainly fail, then invested in lucrative hedge funds predicting such failure–and then paid bribes to the politicians to receive the usual tax-funded Bail-outs. Since economists and other self-styled experts seldom questioned this chain-of-events, you accepted it.

And right now, as it happens, much-worshiped Technocrats are declaring in commanding tones that you cannot even “live” without their daily, constant, intrusive oversight. They know already– and will monitor you all-inclusively–to calculate precisely what you really want–product-wise and “lifestyle”-wise! No need for you to choose–they will choose for you! Moreover, they will connect everything, from your child’s babbling in the nursery to your toaster in the kitchen, to “help” you! And…since they are all-knowing Technocrats, able to know you as you’ve never known yourself…you are accepting this??

Weaponizing the World Bank and IMF

This is a transcript of the full interview with PressTV for their Program “Economic Divide”, of which sections were aired in this broadcast – “U.S. military use of IMF, World Bank”

Background

Wikileaks revelation

The U.S. Army states that major global financial institutions — such as the World Bank, International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD) — are used as unconventional, financial “weapons in times of conflict up to and including large-scale general war,” as well as in leveraging “the policies and cooperation of state governments.”

PressTV: Are these so-called financial institutions guilty of that, and how do they do it? If so, this would point to the fact that these organizations are NOT independent.

Peter Koenig:  Let me start with the fact that indeed these organizations are not independent at all.

The World Bank and IMF are fully controlled by the US. The US has a de facto veto power, since it possesses about 17% of the votes, and it takes 85% to overrule the veto – impossible.

OECD is an organization of some 34 so-called industrialized countries, also dominated by the US and her mostly vassal states of the European Union, Canada, Australia, Japan, New Zealand — so of course, they are controlled by the US, or simply, the West.

You could add to these organizations also WTO – the World Trade Organization, also dominated by the US and Europe to the detriment of developing countries, especially since the latter are too weak in general to impose their trade conditions, or even simply get a fair deal.

And yes, these institutions, WB and IMF, can and have used in the past, financial means as “weapons” – for example, the World Bank’s use of structural type adjustment loans, or so-called “rescue packages” by the IMF – a glaring example is Greece, and lately Argentina. These loans come with strong austerity conditions attached, meaning privatization of public properties, of natural resources – all to the benefit of foreign corporations – and to the detriment of the countries and local populations concerned. At home, in Greece and Argentina – there are growing tariffs for all services, reduction of pensions, education and health services are being privatized and unemployment is rampant, leading to poverty.

In the case of Argentina, in 2015 in November, just a month before the neoliberal Macri was pushed in by Washington as Argentina’s new President – the Kirchner regimes were able to reduce poverty from close to 70% in 2001/2002, when Argentina’s economy collapsed, then also as a result of the IMF, they, the Kirchner Governments, managed to reduce it to about 14%. Today Argentina’s poverty rate is above 35% — and rising, especially with the largest ever IMF loan made in the history of the IMF, granted to Argentina late last year, of US$ 57 billion.

So yes, lending instruments of these organizations can and are being weaponized. Imagine, Argentinians cannot take it any longer and resort to a civil war — I don’t even want to think about it.

PressTV:  It is said the US is not only using this against Venezuela, but it has also exercised this on countries, like Ecuador and Argentina. Isn’t the sovereignty of these countries being violated, and aren’t the economic rights of its citizens also violated due to the actions of the government, like exercising austerity and budget cuts?

Peter Koenig:  Yes, very clearly the sovereignty of these nations is being violated. Not only that, interfering in another nations economic affair is an international crime. However, all international courts of justice in The Hague and elsewhere are bought by Washington. A recent statement by US Foreign Secretary Pompeo, couldn’t have been blunter; he threatened any judge of the ICC with sanctions or harsh actions, if they would dare pursue any US or Israeli citizens, adding that this would apply to other allies too.

The US has not used the IMF and the World Bank in Venezuela, simply because Venezuela under Chavez has exited both Institutions and they are not a member of OECD. However, they have used another – let’s say “money tool” to attempt bringing Venezuela to her knees – economic and financial sanctions. Sanctions can only be imposed to countries that are linked to the dollar-based western monetary system, that also includes the Euro and currencies in Canada, Australia NZ, Japan. But no longer Russia and China and much of the SCO (Shanghai Cooperation Organization) countries.

Under this western system any monetary transaction has to go through a transfer scheme, called SWIFT, and it is automatically channeled through a US, usually Wall Street bank, in either New York or London. Therefore, every transaction is being subject to control and can be blocked and funds can even be confiscated. In the case of Venezuela, the US Government has practically confiscated US$ 35 billion in US banks, and through CITGO – the Venezuela gasoline corporation in the US, from whom profit and cash flows were blocked in US banks.

That’s how the US is punishing Venezuela for not giving it free reign to steal its natural resources, the largest known oil reserves in the world, and for being a socialist country.

On top of it, the US propaganda is such that the majority of the people around the world believe that Venezuela is mismanaged, is suffering from hunger and needs regime change. All of this is a flagrant lie. Fortunately, this is now changing, since about 60 nations, including China, Russia and India in the UN have expressed their disgust with this coercive US policy and stand firmly behind Venezuela – that means more than 50% of the world population supports the current, freely and fully democratically elected Venezuelan Government, headed by Nicolás Maduro.

But the US has used the IMF and the World Bank’s “Money Weapons” in Argentina and also to some extent on Ecuador. The case of Argentina I described earlier, and in an example of Ecuador, the government proposed a motion at the UN, preferring breast feeding over artificial milk, à la Nestlé. The US – followed by her European vassals – threatened Ecuador with trade sanctions, if they would not withdraw their motion – so, they did. And that’s only one example.

PressTV:  Another point of interest is that these financial weapons are largely governed by the National Security Council (NSC), which is currently headed by the US national security advisor John Bolton. The document notes that the NSC “has primary responsibility for the integration of the economic and military instruments of national power abroad.” John Bolton is an avid advocate of regime change, like in Iran: why has he been given these broad powers?

Peter Koenig: John Bolton has been known since the Bush Administration and even earlier as a ruthless character that finds hardly a match among the many ruthless politicians the US has in stock. So they let him lose because his pathological psychopathic behavior is intimidating to many countries.

First you bring down countries by intimidation, once that has been achieved, it is easier to put other coercive measures in place, like more sanctions, as in the case of Iran. And finally, if nothing works, they threaten and demonstrate US/NATO military intervention by putting the weapons at a country’s doorstep. Like in the case of Russia. However, I doubt very much that the US really intends to intervene militarily in Russia and Iran – or in Venezuela for that matter. There is too much at risk. Washington knows that the Russian modern missiles – that can fly at speeds in excess of 20 Mach – and the S-400 missile defense systems, are far superior to anything the US has in store.

In addition to a big-mouth, Bolton is a very good sable-rattler.

PressTV:  It appears that countries who counter US policies can be economically pressured in order to have financial assistance, and if they don’t walk Washington’s line, then these financial instruments can be used against them to bring about regime change: Is this an accurate scenario? Are many countries forced to be financially weak to then be subservient to the US?

Peter Koenig: Yes, this is a plausible scenario, especially in the case of a country that has natural resources, like oil, and especially, if the country does not have a corrupt leader that easily bends to the wishes of Washington. There are reasons invented to punish the country with “sanctions” – case in point is Iran – the negation of the Nuclear Deal for no good reason whatsoever, other than to weaken Iran’s economy – and once the country is weak enough, the IMF and WB come in and offer “help” in the form of bail-out loans, or structural adjustments as they were called in the 80’s and 90’s.

If the government falls for these loans – often the ministry of finance in such countries are infiltrated by “Fifth Columnists” or Atlantists – the IMF and World Bank come in with large loans, i.e. huge debt, that at the end leaves the country totally enslaved to the masters of Washington – ready for privatization of all public goods, natural resources. – Iran has a lot of oil and gas – and other resources.

If that doesn’t work, the Fifth Columnists create civil unrest in the hope of bringing about regime change – which then would allow Washington to put in a puppet regime and come in to steal what it wants to steal, and control a country’s strategic position – like in the case of Iran. So, Iran beware. – I think Iran is fully aware of the game – and the departure of Iran’s Foreign Minister, Mr. Javad Zarif, may just be the beginning.

Monetary Policy Takes Center Stage: MMT, QE, or Public Banks?

As alarm bells sound over the advancing destruction of the environment, a variety of Green New Deal proposals have appeared in the US and Europe, along with some interesting academic debates about how to fund them. Monetary policy, normally relegated to obscure academic tomes and bureaucratic meetings behind closed doors, has suddenly taken center stage.

The 14 page proposal for a Green New Deal submitted to the US House of Representatives by Congresswoman Alexandria Ocasio Cortez does not actually mention Modern Monetary Theory, but that is th it’s e approach currently capturing the attention of the media – and taking most of the heat. The concept is good: abundance can be ours without worrying about taxes or debt, at least until we hit full productive capacity. But the devil is in the details….

MMT advocates say the government does not need to collect taxes before it spends. It actually creates new money in the process of spending it; and there is plenty of room in the economy for public spending before demand outstrips supply, driving up prices.

Critics, however, say this is not true. The government is not allowed to spend before it has the money in its account, and the money must come from tax revenues or bond sales.

In a 2013 treatise called “Modern Monetary Theory 101: A Reply to Critics,” MMT academics actually concede this point. But they write that “these constraints do not change the end result,” and here the argument gets a bit technical. Their reasoning is that “The Fed is the monopoly supplier of CB currency [central bank reserves], Treasury spends by using CB currency, and since the Treasury obtained CB currency by taxing and issuing treasuries, CB currency must be injected before taxes and bond offerings can occur.”

The counterargument, made by American Monetary Institute researchers among others, is that the central bank is not the monopoly supplier of dollars. The vast majority of the dollars circulating in the United States are created, not by the government, but by private banks when they make loans. The Fed accommodates this process by supplying central bank currency (bank reserves) as needed; and this bank-created money can be taxed or borrowed by the Treasury before a single dollar is spent by Congress. The AMI researchers contend, “All bank reserves are originally created by the Fed for banks. Government expenditure merely transfers (previous) bank reserves back to banks.” As the Federal Reserve Bank of St. Louis puts it, “federal deficits do not require that the Federal Reserve purchase more government securities; therefore, federal deficits, per se, need not lead to increases in bank reserves or the money supply.”

What federal deficits do increase is the federal debt;  and while the debt itself can be rolled over from year to year (as it virtually always is), the exponentially growing interest tab is one of those mandatory budget items that taxpayers must pay. Predictions are that in the next decade, interest alone could add $1 trillion to the annual bill, an unsustainable tax burden.

To fund a project as massive as the Green New Deal, we need a mechanism that involves neither raising taxes nor adding to the federal debt; and such a mechanism is actually proposed in the US Green New Deal – a network of public banks. While little discussed in the US media, that alternative is being debated in Europe, where Green New Deal proposals have been on the table since 2008. European economists have had more time to think these initiatives through, and they are less hampered by labels like “socialist” and “capitalist,” which have long been integrated into their multiparty systems.

A Decade of Gestation in Europe

The first Green New Deal proposal was published in 2008 by the New Economics Foundation on behalf of the Green New Deal Group in the UK. The latest debate is between proponents of the Democracy in Europe Movement 2025 (DiEM25), led by former Greek finance minister Yanis Varoufakis, and French economist Thomas Piketty, author of the best-selling Capital in the 21st Century. Piketty recommends funding a European Green New Deal by raising taxes, while Varoufakis favors a system of public green banks.

Varoufakis explains that Europe needs a new source of investment money that does not involve higher taxes or government deficits. DiEM25 proposes for this purpose “an investment-led recovery, or New Deal, program … to be financed via public bonds issued by Europe’s public investment banks (e.g. the new investment vehicle foreshadowed in countries like Britain, the European Investment Bank and the European Investment Fund in the European Union, etc.).” To ensure that these bonds do not lose their value, the central banks would stand ready to buy them above a certain yield. “In summary, DiEM25 is proposing a re-calibrated real-green investment version of Quantitative Easing that utilises the central bank.

Public development banks already have a successful track record in Europe, and their debts are not considered debts of the government. They are financed not through taxes but by the borrowers when they repay the loans. Like other banks, development banks are moneymaking institutions that not only don’t cost the government money but actually generate a profit for it. DiEM25 collaborator Stuart Holland observes:

While Piketty is concerned to highlight differences between his proposals and those for a Green New Deal, the real difference between them is that his—however well-intentioned—are a wish list for a new treaty, a new institution and taxation of wealth and income. A Green New Deal needs neither treaty revisions nor new institutions and would generate both income and direct and indirect taxation from a recovery of employment. It is grounded in the precedent of the success of the bond-funded, Roosevelt New Deal which, from 1933 to 1941, reduced unemployment from over a fifth to less than a tenth, with an average annual fiscal deficit of only 3 per cent.

Roosevelt’s New Deal was largely funded through the Reconstruction Finance Corporation (RFC), a public financial institution set up earlier by President Hoover. Its funding source was the sale of bonds, but proceeds from the loans repaid the bonds, leaving the RFC with a net profit. The RFC financed roads, bridges, dams, post offices, universities, electrical power, mortgages, farms, and much more; and it funded all this while generating income for the government.

A System of Public Banks and “Green QE”

The US Green New Deal envisions funding with “a combination of the Federal Reserve [and] a new public bank or system of regional and specialized public banks,” which could include banks owned locally by cities and states. As Sylvia Chi, chair of the legislative committee of the California Public Banking Alliance, explains on Medium.com:

The Green New Deal relies on a network of public banks — like a decentralized version of the RFC — as part of the plan to help finance the contemplated public investments. This approach has worked in Germany, where public banks have been integral in financing renewable energy installations and energy efficiency retrofits.

Local or regional public banks, says Chi, could help pay for the Green New Deal by making “low-interest loans for building and upgrading infrastructure, deploying clean energy resources, transforming our food and transportation systems to be more sustainable and accessible, and other projects. The federal government can help by, for example, capitalizing public banks, setting environmental or social responsibility standards for loan programs, or tying tax incentives to participating in public bank loans.”

UK professor Richard Murphy adds another role for the central bank – as the issuer of new money in the form of  “Green Infrastructure Quantitative Easing.” Murphy, who was a member of the original 2008 UK Green New Deal Group, explains:

All QE works by the [central bank] buying debt issued by the government or other bodies using money that it, quite literally, creates out of thin air. … [T]his money creation process is … what happens every time a bank makes a loan. All that is unusual is that we are suggesting that the funds created by the [central bank] using this process be used to buy back debt that is due by the government in one of its many forms, meaning that it is effectively canceled.

The invariable objection to that solution is that it would act as an inflationary force driving up prices, but as argued in my earlier article here, this need not be the case. There is a chronic gap between debt and the money available to repay it that actually needs to be filled with new money every year to avoid a “balance sheet recession.” As UK Prof. Mary Mellor formulates the problem in Debt or Democracy (2016), page 42:

A major contradiction of tying money supply to debt is that the creators of the money always want more money back than they have issued. Debt-based money must be continually repaid with interest. As money is continually being repaid, new debt must be being generated if the money supply is to be maintained.… This builds a growth dynamic into the money supply that would frustrate the aims of those who seek to achieve a more socially and ecologically sustainable economy.

In addition to interest, says Mellor, there is the problem that bankers and other rich people generally do not return their profits to local economies. Unlike public banks, which must use their profits for local needs, the wealthy hoard their money, invest it in the speculative markets, hide it in offshore tax havens, or send it abroad.

To avoid the cyclical booms and busts that have routinely devastated the US economy, this missing money needs to be replaced; and if the new money is used to pay down debt, it will be extinguished along with the debt, leaving the overall money supply and the inflation rate unchanged. If too much money is added to the economy, it can always be taxed back; but as MMTers note, we are a long way from the full productive capacity that would “overheat” the economy today.

Murphy writes of his Green QE proposal:

The QE program that was put in place between 2009 and 2012 had just one central purpose, which was to refinance the City of London and its banks.… What we are suggesting is a smaller programme … to kickstart the UK economy by investing in all those things that we would wish our children to inherit whilst creating the opportunities for everyone in every city, town, village and hamlet in the UK to undertake meaningful and appropriately paid work.

A network of public banks including a central bank operated as a public utility could similarly fund a US Green New Deal – without raising taxes, driving up the federal debt, or inflating prices.

­­­­­­­­­­• This article was first published under a different title on Truthdig.com.

The Venezuela Myth Keeping Us From Transforming Our Economy

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

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

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

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

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

What Is Different About Venezuela

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

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

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

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

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

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

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

Killing the Public Banking Revolution in Venezuela

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

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

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

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

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

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

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

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

• First published on Truthdig.com.

Forgive them their debts as they forgive those…

It is “budget time” again!

That is the season when the persons displayed on television screens as representatives of those who have no representation engage in the theatrical display of subordination to those who actually own things, like the countries we happen to inhabit. Although there have been a few publicised investigations and even some occasional criminal charges against (usually septuagenarians) some conspicuous miscreants, there has been no action which could restore some health or sanity to what most of us consider the daily economy. In some countries, like where I live, people go on strike. There is little indication that the fundamental message of the strikers gets heard. Perhaps that is also why the television seems obsessed with the marketing of hearing aids. There is a hearing aid for every occasion, except sessions of the national assembly, where such technology might really help.

One way of dealing with the hearing impaired is repetition. In scientific terms this means increasing the rate of signal in proportion to noise in the hope that the essential message is received. Although I wrote a version of this paper in 2014, four years later I cannot help feeling some repetition would do no harm. If every budget season one has to listen to the same set of distortions, then it is only fair to reproduce the corrections.

Like the absurd climate debate, which never includes the “carbon footprint” of the largest military machines, the budget debates (essentially interchangeable) never discuss the cost of subsidising international banks and corporations to facilitate their extraction of wealth from the national economy. There is no intelligent, let alone honest, discussion of what is meant by “public debt”—or why the taxpayers must bear losses to guarantee tax-exempt profits for investors.

I always ask myself when someone says or writes “loss”, where did the money go? Even when a ship is lost at sea there is generally wreckage. Of course, the ocean is bigger than the economy and it is possible that a ship’s remains disappear beyond recovery. The price of abandoning the very modest social gains of the New Deal in the US and social democracy in Europe with the ascendancy of Margaret Thatcher and Ronald Reagan has been enormous, not only for US and European working people but, for the rest of the world. In fact, the meter is still running with no indication of when it will stop.

The crisis no one cares to talk about any more comprises trillions in losses. If these losses are real, then that means the value has been forfeited in favour of someone else. E.g. after the Great War France and Britain were essentially bankrupt: they owed nearly everything to US banks. Without economic manipulation, war and terror, India would probably have occupied the same status vis a vis Great Britain in 1945 that Brazil gained vis a vis Portugal after the Napoleonic Wars. The claims against the productive capacity and assets of Old Europe were held by identifiable third parties, representing, then as now, a tiny band of bankers. Of course, those claims were so great that no normal income streams from taxation could satisfy them. Control of Britain was effectively ceded to the US, while India was wracked by civil war rather than collecting the wartime debt Britain owed to her.

The other meaning of loss is the inability to sustain a certain valuation of an asset or income stream. The nature of the initial valuation is then the problem. The continuous attempts in the IFRS (international accounting standards) to skirt around the issue of essentially fraudulent valuation illustrates that even the private sector’s notion of “value”, whether book value or fair value, is the product of casuistry.

Since European “banking” was reorganised on the US Federal Reserve model by creation of the European Central Bank, it is instructive to consider how grand theft in the state-banking sector of the US functions. In other words, the “losses” hidden on the books of the USG banks, “Fannie” and “Freddie”, are either notional or they reflect claims that were satisfied in favour of third parties beyond the capacity of those institutions to generate income. Again we know who those third parties are. The “losses” are essentially sacrificed sovereignty.

Government institutions pledge to private persons (corporations and foreign exchange pirates) the State’s capacity to pay, derived from the ability to tax the working population, beyond any realistic possibility to extract that income. This was called “tax farming” in the bad old days of “colonialism”. Frequently punitive military force was sent into any country that was not delivering enough booty (aka interest on foreign debt). In fact, as retired general of US Marines infamously confessed that was his main job in the Corps—protecting corporate plunder.

This is essentially the same principle imposed through the ECB—except that some nominal account has to be taken of national political systems. Since in Europe the State was far more frequently the owner of capital infrastructure, absorbing the cost of its operation and regulating labour as civil servants, considerable ideological work had to be performed to cultivate the generation, which privatised most of the national capital assets held by European states. The fact that since 1945 the US has controlled the international payments system has reduced the need for military intervention. Decisions taken in New York, London, Frankfurt or Brussels can deprive a country of any affordable means to engage in the most basic financial transactions. The entities involved are privately owned and therefore cannot be coerced except by measures that would “threaten private property”.

Just as the railroads and banks obtained control over most of the continental US by defrauding the US government in the 19th century, the surviving banks have defrauded most of the American population of its home equity today. Although it was established that a conspiracy of UK-based clearing banks illegally fixed the LIBOR/ EURIBOR rates, this had no serious consequences. If one considers very carefully that nearly all mortgage and commercial financing agreements base their interest computations on one of these benchmarks, the true scope of the fraud becomes apparent. Everyone who made an interest rate agreement assuming the “free market” condition of the underlying rate was cheated. It could be argued that the interest rate clauses of innumerable contracts were void due to fraud. A perusal of public debt instruments would no doubt reveal even more catastrophic deception.

The endless wars, funded by plundering the public treasury and the wealth of other countries, are part of that income extraction, too. Now the US government and those of its vassals are little more than one large mercenary enterprise, together as NATO, the most heavily armed collection agency on behalf of third party creditors on the planet. It does not matter who occupies the mansion at 1600 Pennsylvania Avenue.

Of course, there is plausible denial for any of the beneficiaries of this plunder since populations weaned on soap operas and “crime drama” are incapable of examining, let alone comprehending, the most obvious operations of US corporations and their agents– who almost never appear as criminals on television. The “crime drama” narrative dominates almost every bandwidth on the critical spectrum and as a much younger US director, Michael Moore demonstrated in Bowling for Columbine, corporate crime does not make acceptable television. The most elemental sociological truths, plain to anyone who has ever belonged to a club or worked in middle management of a company, namely that “democratic” and “meritocratic” decisions are regularly subverted by scheming among the ambitious at the expense of the docile– become discredited when the insight is applied to the polity as a whole. People who do not think twice about making a phone call to a “friend” to influence a decision in their social club or place of employment, become incredulous at the suggestion that the chairman of a major investment bank would dictate policy to the head of state whose election he had financed.

In short, the debate about the current global economic “crisis” is obscenely counterintuitive and illogical to the point of incoherence. Who is willing to “follow the money”? This dictum, popularised in the Woodward and Bernstein fairy tale of US President Richard Nixon’s demise– All the President’s Men— appears utterly forgotten, despite recurring astronomic fraud perpetrated by US corporations since the so-called “S&L scandal”– crimes for which no more than a handful of people were indicted, let alone tried or sentenced. Only one corporation was deprived of its right to do business, Arthur Andersen, and this was patently done to spare all the politicians from the reigning US president, most of the US Congress, and untold state and local officials who had been bribed or otherwise influenced by Enron.

If the stories reported by Pete Brewton in 1992, the documented history of the OSS “China insurer” AIG, and the implications of the 2002 Powers Report on the Enron collapse are taken seriously, then Houston lies on a financial fault line more devastating than the San Andreas. That fault line runs from Texas through Virginia to the bedrock of Manhattan. The economic earthquakes that have persisted since 1980 are both literally and figuratively the result of deployment of the US atomic arsenal and the policies that gave rise to it. The US dollar’s continued, if fluctuating, strength as a reserve currency is based on drugs, weapons, and oil– all traded in US dollars. However, this material reality is also based on an ideological or dogmatic constitution. The seismic activity induced by US corporations created gaping holes in the global economy– holes which could only be breached by the financial instruments developed in the weapons laboratories of Wall Street based on the same conceptual models as the neutron bomb and today’s nano-munitions developed at Lawrence Livermore. Indeed, the theory has been almost universally accepted that people are always to blame for the problems of government and Business is the sole and universal solution to all problems. Hence tax monies will only be spent on weapons, war, and subsidies for corporations—the things Business needs.

A considerable obstacle to any change in the US, short of its destruction, is the fact that as Michael Hudson and former assistant Treasury secretary under Reagan, Paul Craig Roberts, write repeatedly, the US government has absolutely lost whatever legitimate function it may ever have had as an instrument of popular will. In other words, the efforts of working people, whether immigrant or ex-slave to remake the plutocratic regime of the 19th century into a State responsive to their needs were frustrated by the massive assaults on labour, combined with the ideological warfare of the “Progressive” movement. The latter, funded heavily by the newly created super-philanthropies, including those of Rockefeller, Sage, Peabody, and Carnegie, predated CIA-style front organizations and infiltration. They helped turn popular sovereignty movements into the kind of technocratic organisations which prevail today– dependent on corporate donations and led by the graduates of cadre schools like the Ivy League colleges, Oxford and the LSE. With few exceptions the only remnants of the “popular will” in the US are those that drive lynch mobs, reincarnated in “talk radio” today.

The main work of the USG and the corporations for which it stands has been to undermine any notion that the State is rightfully an expression of the popular will for the realisation of popular welfare. The State has been reduced to a protection racket. By the time Ronald Reagan, imitating Margaret Thatcher, pledged to “get government off the back of the people”, the only “people” who counted were corporations and those in thrall to them.

It is easy to forget that the US was actually founded on the basis of a kind of white (in that sense “enlightened”), oligarchic absolutism– the British parliamentary dictatorship minus hereditary monarch. Its moral vision predated the Thirty Years War and, until John Kennedy was elected president, its hypocrisy was that of Cromwellian fanatics. In revolutionary France and countries that were inspired by France, as opposed to the American independence war, struggle continued on the premises that the State is not the King (in whatever incarnation) but created by the citizens (not the possessive individual) for the maintenance of the common weal– including the nutrition, health, housing, education of its people. The opposition to destruction of the public sector or public services and the debate that continues in Greece, France, Italy, and to a lesser extent Germany, defies comprehension in North America and Great Britain because of some unfortunate residues of that revolutionary vision of the State so violently opposed by Britain and the US ever since 1789– except when the resulting instability provided business opportunities. (Thatcher did not restore the spirit of Churchill to power—but that of Wellington.)

Moreover as Coolidge once said, “the business of America is business”. If a policy or action of government cannot be expressed in terms of someone’s maximum private profit then it is indefensible in the US. The conditions of the Maastricht Treaty establishing the euro and the ECB are an attempt to impose those same ideological and political constraints on the European Union enforced by adoption of the Federal Reserve Act in the US. The Federal Reserve is essentially a technology for naturalising usury and endowing it with supernatural legitimacy. But just as it has been argued in some quarters that the US Federal Reserve triggered the Great Depression– for the benefit of the tiny bank of banking trusts– the European Central Bank, urged by the right-wing government in Berlin, is being pressured to follow the same rapine policies as the FED is pursuing today. Of course, there are other countries ruled by financial terrorism or where banking gangs have turned their entire arsenal against sovereign peoples.

The “Crisis” is not really about the “debt” or the heinous losses. It is a crisis of sovereignty. The failure of popular sovereignty means that a microscopic bacterial colony of the immeasurably rich can make war on the rest of the world, destroying the common weal and commerce at home and everything else abroad. Germany’s citizens have been bludgeoned since 1945 by Anglo-American propaganda and the occupation forces to persuade them that they– not the great banking and industrial cartels on both sides of the Atlantic– were responsible for Adolph Hitler’s rise to power. When in 1968, student leaders like Rudi Dutschke tried to remind Germans that their democracy was destroyed before Hitler’s putsch and that they had the right and opportunity to demand a democratic Germany after the war, those young people were harassed and even killed. (Dutschke was shot in the head by an unemployed labourer. That “lone” killer later died in prison with a plastic bag over his head.) Attempts to create a truly popular democratic government in Germany have been frustrated by foreign intervention since the French Revolution. Nevertheless people in Germany still believe that the State is there to provide services to the people– and not to fight wars to further foreign trade as suggested by Horst Köhler before he was relieved of his duties (ostensibly resigning) as German federal president.

There is no doubt in Germany that former Chancellor Schroeder’s refusal to follow the US into Iraq—whatever motivated it—enjoyed the widest support, even among those who tend to believe anything the US government says. The resignation of former IMF director and Federal President Köhler expressed the sensitivity of the situation then. On one occasion he referred to the great banking interests as “monsters” and then broke the silence on the German war efforts in Central Asia by explicitly articulating what had been Chancellor Merkel’s, silent but deadly policy of supporting US counter-terror in Afghanistan. Köhler was not opposed to the future escalation of German belligerence, but by his calling a spade a spade on national radio, the right-wing government in Berlin almost had to defend its unconstitutional deployment of German soldiers in public. Already that April Angela Merkel had been forced to sacrifice an army general and a cabinet minister when it became known that German combat aircraft were also bombing civilians like their US counterparts—and trying to keep the fact a secret.

In the midst of the financial crisis, that is the plunder and pillage of the accumulated reserves of Europe’s working population after those of the US are exhausted, it is impossible to ignore the restoration of Asian political and economic prominence. This process started in the 1960s when Britain and the US launched their wars to secure footholds and control of the vast resources of Indonesia and Indochina. Although only partly successful, the destruction of national independence movements throughout South Asia created the conditions for de-industrialising Europe and North America. Mistakenly much of the North American and European Left judged the losses in Korea and Vietnam as defeats for US power. Such judgments have been based on assessments of the official war aims and not on any analysis of the underlying corporate and financial policy objectives. The long-term results of those wars included creation of the massive debt system that is at the root of financial collapse for the majority of US Americans. Of course, China remains the great unconquerable threat to continuation of US hegemony. The balance of power in Asia may be very delicate indeed.

Continental Europe remained somewhat insulated from those seismic forces until 1989. The “velvet” invasion of Eastern Europe and the former Soviet Union led by US capital, aided as usual by the combined secret services and economic “consultants” of Shock Therapy, began the destruction of the economic base for European social democracy and “real socialism”. The debt machine created to exploit Eastern Europe was applied in Germany first– destroying the GDR and financing that destruction with EU-generated debt, culminating in the euro. Introduction of the euro effectively destroyed half of the purchasing power of working people in the Euro Zone overnight, creating the conditions for consumer borrowing which had prevailed in the US since the late 60s and eroding wages and benefits drastically.

The final loss of control over archaic legislative instruments (whether in the US or Europe) is not only assured by the system of bribery that turns those in office into indentured servants of corporations. Full investigation of the Enron scandal would have proven once and for all that there is almost no one in the US Congress not owned by some corporation. Similar conditions have come to prevail in European legislatures where for decades US academic and policy exchange programmes have trained the political class to work first and foremost for Business.

The loss is also assured by the now entrenched belief that the only legitimate human goal is individual personal profit. As Hudson has suggested, this is the “theology of the Chicago School”. Since Margaret Thatcher was appointed to convert Britain to that dogma, nearly the entire political, academic and “civil” culture has been saturated with people who cannot think in any other terms– even when they assert that they are still social democrats or democratic socialists. The latter insist that “social policy” is merely a palliative to prevent the poor and destitute from becoming unsightly spectres in urban entertainment centres. They all have become positivists– reifying the prevailing economic relations and worshipping quantitative methods– subordinating human agency to pseudo-science and thinly disguised opportunism. The only kindness this ethical standpoint can express is “charity”. Charity, however, has nothing to do with the common weal or the State as an embodiment of the popular will. In fact, it is just as parasitic as the belief from which it springs. If those whom John Pilger called “the new rulers of the world” consent to relieve us– that is to allow us anything resembling our dignity and subsistence wages– then it will scarcely exceed the infamous “dimes” with which John D. Rockefeller cloaked his cynicism in piety and charity. Nowhere is the cynicism more profound than in the expression “giving back”. Of course, the pennies “given back” are microscopic compared with the billions “taken” in the first place. But those shiny pennies and dimes are enough to keep embedded intellectuals loyal to Bill Gates or George Soros. For a few dollars more they will even protect the likes of Blankfein or Buffett.

“Charity” is the gratification a person finds when scratching a mosquito bite. One feels better while scratching– although this provides no relief. The cause of the itch is the substance injected by the mosquito while sucking the blood from its victim. Of course, some mosquitoes offer only token charity and the itch disappears. But there are mosquitoes that carry other parasites– the effects of their charity can last forever, or at least until the victim dies.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

WAR is a racket. It always has been.

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

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

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

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

How many of them were wounded or killed in battle?

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

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

And what is this bill?

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

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

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

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

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

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

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

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

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

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

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

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

Housing Crisis, Mental Health Collective Breakdown, 9 am to 5 am Work!

The essential American soul is hard, isolate, stoic, and a killer. It has never yet melted.

― D.H. Lawrence, Studies in Classic American Literature

He who does not travel, who does not read,
who does not listen to music,
who does not find grace in himself,
she who does not find grace in herself,
dies slowly.

— Brazilian poet Martha Medieros

I work at a homeless veterans (and their families, and some have their emotional support animals here) transitional housing facility in Oregon. We get our money from a huge non-profit religious organization and from the federal government in the form of VA per diem payouts.

The job is tough, rewarding, never with a dull moment, and a microcosm of the disaster that capitalism pushes into every fiber of the American fabric of false adoration of a class dividing and racially scaled society.

Mostly after two-and three-year hitches in the Army, Navy, Marines and Air Force, these men and women are broken on many levels, but serve as emblematic examples of the masses of broken people this country’s top 19 or 20 percent make a killing on. The Point Zero Zero One Percent, the One Percenters and the 19 Percenters live off the 80 percent of us who have toiled for these masters of the capitalist universe and these Little Eichmanns and highly paid bureaucrats and middle managers and top brass in every industry possible (two-income earners making money in higher education, medicine, the law, pharmaceuticals, high tech, military industrial complex, judicial and criminal justice, and all the flimflam that is the retail and consumption class).

I have clients who never saw out-of-country battlefields, but these same veterans hands down have applied and sometimes have received service connected disability claims, from tinnitus to shin splits, bad discs in the back to Parkinson’s, from skin diseases to anxiety disorders, from PTSD to depression, and many, many more.

The problems abound, because these folk are virtually broken and spiritually disconnected, brainwashed by some mythological past, flooded with inertia, possibly never able to get their lives back. We can look at them in their section eight apartments, see them at the free meal joints for veterans, and we can listen to their complaints and then respond by throwing all our fury and recrimination onto them, admonishing them to get off their butts and work. Sounds good from a parasitic, penury capitalistic society of me-myself-and-I thinking, but in reality, these younger and older veterans are strafed with anxiety disorders, co-occurring mental health challenges, post-addiction disorders, and brains that have been calcified by many, many aspects of being in the military; then discharged, and then the entire landmine field of epigenetic realities anchored to what many of them call “broken and bloodied” family lives before hitching up.

Some of us know how to solve their homelessness problem, help with intensive healing, assist them in reintegrating into society: inter-generational communities, in micro-homes/tiny homes, with an intentional cooperative community housing set up with things to do . . . . Like growing food, working on construction projects, engaging in peer counseling, and coalescing around community engagement and co-op like business models.

How many plots of land exist in this PT Barnum Land? How many empty buildings are there in this Walmart Land? How many young and old would like to get off the hamster wheel and out of the machine to live a life worthy of spiritual and collective pacifism to grow a truly communitarian spirit.

Here we have this CryptoZionist VP Pence pledging to rebuild an Air Force base in Florida, Tyndall, for $1.5 billion and then spreading more hubris as we witness Pence and the Air Force brass (their felonious DNA locked into our corrupt military industrial complex) ask for more robbing of the tax till, when a hurricane we knew about weeks ahead of time, destroyed more than 17 Stealth aircraft worth (sic) $339 million each! No apologies, no public investigation, nothing!

You won’t hear on Democracy Now a strong case against building these jets in the first place, or a strong case for lopping off the heads of Generals and state senators, on down, for this Keystone Cop disaster. Up to $6 billion for these graft-ridden and spiritually empty examples (Stealth Baby and Old Man-Woman Killers) of America the Empire.

Daily, I struggle to get veterans accommodations for evictions or for property debts, as many have just failed to pay rents or mortgages because of the colluding forces of mental-physical-spiritual dysfunction created by what it is that makes broken people in general, but especially broken veterans who have some undeserved sense of entitlement. Daily, just attempting to get VA hospital treatment, or trying to have experts look at veterans’ amputated limbs and just getting appointments for prosthesis devices?

We are not in “new times” with a CryptoZionist brigade in office, or a filthy example of an individual as the leader of these follies. Nothing new in the New Gilded Age punishment caused by a small cabal of One Percenters who hold dominion over workers. Nothing new about the power of the media and entertainment game to brainwash compliant citizens. Nothing new about War Is a Racket principles (sic) driving our economy. Nothing new about white supremacy ruling Turtle Island. Nothing new about the Manifest Destiny Operating System ripping land, resources, people from indigenous homelands and other countries’ sovereignty. Nothing new in the great white hope tutoring other like-minded fellows in other countries on how to get one or two or a thousand “ups” on the powerless or disenfranchised peoples of their own countries.

Life for Third World (sic) peoples was bad under all the criminals we have voted into POTUS office for the past 250 years! Longer.

The big difference seems to be the passed on and learned helplessness, fear, bulwarking that has been seeded from generation to generation. The fact there are hyper Christians who support the hyper hedonistic, superficial, irreligious, criminally-minded, sexist, racist, loud mouth, intellectually challenged Trump may seem illogical. Oh, so much illogical braying in the world before the Trump seed spilled on this land. Imagine, Jews supporting white supremacists, anti-Semites. Imagine, Native Americans wrapping themselves in the US red-white-blue, and signing up for war-military in higher numbers than any other demographic group. No need to go apoplectic over women supporting Trump as if he is their daddy or Sugar Daddy. How many times in this country’s history have we had Women for Reagan, Women for Bush, Women for Clinton, Women for the Vietnam War?

Susan Sontag said it pretty clearly:

Of course, it’s hard to assess life on this planet from a genuinely world-historical perspective; the effort induces vertigo and seems like an invitation to suicide. But from a world-historical perspective, that local history that some young people are repudiating (with their fondness for dirty words, their peyote, their macrobiotic rice, their Dadaist art, etc.) looks a good deal less pleasing and less self-evidently worthy of perpetuation. The truth is that Mozart, Pascal, Boolean algebra, Shakespeare, parliamentary government, baroque churches, Newton, the emancipation of women, Kant, Marx, Balanchine ballets, et al., don’t redeem what this particular civilization has wrought upon the world. The white race is the cancer of human history; it is the white race and it alone — its ideologies and inventions — which eradicates autonomous civilizations wherever it spreads, which has upset the ecological balance of the planet, which now threatens the very existence of life itself. What the Mongol hordes threaten is far less frightening than the damage that western ‘Faustian’ man, with his idealism, his magnificent art, his sense of intellectual adventure, his world-devouring energies for conquest, has already done, and further threatens to do.

To be honest, the insanity of the white race is also what I am concerned with in Sontag’s (RIP) polemic. That pejorative “crazy” seems apropos for the white race, if one were to look at the way this country’s leaders and movers and shakers play the game and push their destructiveness on the rest of the world. They are all white!

Crazy watching the Kavanaugh hearings. Crazy reading the World Socialist Web Site hit after hit on any woman fighting the scourge of sexual harassment, sexual assault, rape!

This David Walsh gets it all wrong, deploying simplistic “blame the victim” mentality, and then using “witch hunts” accusations to buttress his absurd essay’s thesis. This article is an example of low level white writer crazy:

The ostensible aim of this ongoing movement is to combat sexual harassment and assault, i.e., to bring about some measure of social progress. However, the repressive, regressive means resorted to—including unsubstantiated and often anonymous denunciations and sustained attacks on the presumption of innocence and due process—give the lie to the campaign’s “progressive” claims. Such methods are the hallmark of an anti-democratic, authoritarian movement, and one, moreover, that deliberately seeks to divert attention from social inequality, attacks on the working class, the threat of war and the other great social and political issues of the day.

Instead of bringing about an improvement in conditions, in fact, the #MeToo movement has helped undermine democratic rights, created an atmosphere of intimidation and fear and destroyed the reputations and careers of a significant number of artists and others. It has taken its appropriate place in the Democratic Party strategy of opposing the Trump administration and the Republicans on a right-wing footing.

The sexual hysteria has centered in Hollywood and the media, areas not coincidentally where subjectivism, intense self-absorption and the craving to be in the limelight abound.

Comments back at the author’s “hysteria” analysis are not worthy of recrimination, for sure, but if you scroll down in the WSWS comments section for this piece, have at it: the continued craziness of white thought, white attitudes and white actions. It’s a long essay, and this man’s conclusions are all over the place, indicting anyone who aligns himself or herself with the #MeToo movement. Blames #MeToo (using current polls) for aiding and abetting an upsurge in misogynistic thinking, where these vaunted white man’s polls say more Americans one year later after #MeToo are skeptical in larger numbers about allegations of sexual harassment coming from anyone. Blame #MeToo, so-called socialist David.  Polls, oh those pollsters, oh Mr. Walsh states that #MeToo activists should be involved in other things, like the plight of working class men and women, or stopping the apocalyptic brinkmanship played out by Trump with toy nuclear weapons. Etc., etc.

It makes sense that we have silos in the social justice, criminal injustice, environmental-economic-equity movements. So much easier to tackle one bad bill or vote or crazy politician in your neck of the woods than to grasp the totality of how broken, mean, murderous, monstrous this country’s policies are! And, reality check – the white race is crazy. You see it in Nazi German, in Europe today, in Israel, in the USA, in Canada, in Australia.

Yet the broken systems, the insanity of even considering a series of social nets being frayed, chopped and burned by the One Percent’s minions in political office and finance – how insane is it that social security is on the chopping block, that there is no single payer health plan, that there is no public transportation, that the commons are being razed, raped and contaminated? How insane is it to “let” lead flow in public water system pipes (Flint, Portland, et al); or that pesticides rule the micro-world of future generations, where brain stems are permanently damaged; or how insane is it to allow a good chunk of young people to come into the world with diabetes, or riddled with on-the-spectrum diseases . . . or full of ticks and physical ailments in the name of Big Ag/Big Energy/Big Chem/Big Med/Big Tech ruling the land?

Insanity is a race that hawks chemicals of death, that inculcates punishments and fines and levies and taxes and penalties and surcharges and charges and fees and tolls and taxes and tickets and defaults and foreclosures and balloon rates and eminent domain decisions and impoundments and confiscations and seizures on their own people?

Daily, Portland (three counties, and then just north, Clark County, WA) is an example of this white insanity — unchecked growth, unchecked rent hikes, unchecked cost of living busting more and more people, unchecked home costs rising, unchecked traffic and bureaucratic gridlock, constant punishment for the downtrodden, homeless, poor. How insane is it to have students of nursing programs living in their cars while attending classes (Portland Community College, et al)? How insane is it that the Portland police bureau can charge non-profits thousands of dollars for public records, our own records?

The system is rigged, and it’s a white system of lawsuit after lawsuit! Death by a thousand fines and spiritual-mental-physical cuts!

Until the system is so broken you have millions of social workers like myself attempting to figure out how to save one life at a time, all broken lives products of the insane white culture, their own insane (crazy) leaders, family members, bosses and communities?

Order and Progress was Never a Civilian Slogan

The apparent victory of Jair Bolsonaro in the 2018 Brazilian presidential elections has been analysed as the return of some kind of fascism to Brazil: electing dictators where they previously had to enter office in tanks. However, Brazilians, unlike Portuguese, did not remove their dictators from power. The Brazilian military gave way to its civilian counterparts. A governing structure was created in 1986, which permitted the discrete withdrawal of uniformed personnel from public offices and public liability for the consequences of their acts. However, it did not end the role of the military in ruling Brazil. For both historical and ideological reasons this was not necessary.

The military-technocratic tradition in Brazil is as old as the founding of the republic.1 That was one reason why the Brazilian military so readily accepted the same “national security ideology” that the US propagated in its cadre institutions like the National Defence College/University, the curriculum of which was largely imitated by the Superior War College in Brazil. The “military” in Brazil is best understood as the elite managers of the republic’s military – industrial – technological complex, one of the products to survive the dictatorship.

Although certainly not an accident, the anointment of Bolsonaro as a saviour in Brazil’s time of troubles, is incidental. His appearance and election (unless something utterly unexpected happens on 28 October) should be understood within Brazil’s ancient domestic political culture and the subordination of the Brazilian military in the widest sense of the term to the hemispheric national security ideology that has prevailed since its formulation in the late 1940s.

Comparisons with Trump are distractions, like the attacks on Trump. They draw attention away from the actual power issues involved and who actually wields power.

Bolsonaro’s election cannot be fully understood without an international perspective. Brazil, although a very large country with an enormous economy, is a very closely held property dominated by a tiny elite with more loyalty to the North American elite than to its own national interests. It has always been a subordinate country in the hemisphere although the mechanisms of subordination have changed over time. Unlike in the US, Brazilian elections are actively manipulated by foreign governments. Brazilian media are even more concentrated than in the US, with Globo occupying virtual monopoly control over every media outlet in Brazil not controlled by a US conglomerate.

Yet there has always been a tension between pro-US and nationalistic factions in Brazil’s elite. The only mass political base ever established in Brazil — prior to the PT — was the Vargas regime, which was vigorously opposed by those in Brazil who hate anything resembling democracy, nationalism or mass-based politics. The PT emerged despite repression to become Brazil’s first mass democratic party. When it was allowed to govern after the long-forgotten corruption of the Collor de Melo presidency, it was because it had attained this broad democratic base capable of winning elections.

Winning elections was considered in the early period after the collapse of the Soviet Union to be the sine qua non of the “victory” of capitalism. The PT then started to create its own political base in the Brazilian context– a combination of local clientelism and organised labour, but including sectors that had previously been excluded from this formula. In Brazil’s federal system it was necessary to establish a serious social budget at federal level to compensate for the intransigence at state level. To do this the PT needed a public budget to finance that expenditure. And here is where international banking– a historical force in suppressing Brazilian national development– applied the brakes. The PT had to commit itself to servicing the extortion aka foreign debt. Like in every other country held down by “debt”, Brazil could not fulfill any but the most superficial social promises and pay the extortion to banks.

So what happened was surely this: the PT political engineers decided to covertly subsidise their political consolidation and some of the social budget by siphoning funds from the parastatal oil company, Petrobras. This had to be done covertly to prevent the extortion ring (international banking and monetary agencies) from manipulating the Brazilian credit ratings and exchange rate to prevent it. So a lot of people got on the gravy train to keep this scheme working. Of course, the drain of paying all those whose cooperation was necessary to maintain this finance mechanism became parasitical so that more money was reaching the facilitators than the intended beneficiaries of the policy.

The idea of draining funds from a corporation through covert means is not new. (Enron was essentially a banking-led investor scheme for laundering money and exporting it to off shore banks. It would have continued had it not been for some personnel problems and a few accidents– biggest of which that it threatened to implicate POTUS G W Bush.) It is entirely excusable as greed when the funds are transferred to the wealthy. However, it becomes a horrible crime if the money benefits masses of ordinary people. The multilateral (US) debt enforcers have always upheld the claims against sovereign states by those who made official loans to corrupt dictators where the money was transferred to private Swiss accounts.

Hence, given the number of people on the Petrobras gravy train, this policy might have continued with relative impunity were it not for two very important international issues where the US regime has a direct interest: BRICS and Venezuela.

It is worth viewing a small segment in the late Allan Frankovich’s 1980 documentary On Company Business. There is an interview with a labour organizer from the US who is recruited by the AIFLD to go to Brazil and organise “anti-communist unions”. He explains what he thought he was doing and what he found to be his actual mission. But his most striking realisation was that he had been sent to Brazil for this work in 1962– a full two years before the “crisis” that officially led to the Brazilian military coup removing João Goulart.

Bolsonaro is discussed as a product of the “anti-corruption” crusade. “Anti-corruption” has merely replaced “anti-communism” since the latter is deemed extinct. In fact, the case for disrupting Brazil’s BRICS policy and isolating it from the Venezuela – Cuba “axis”, was given almost immediately after Lula’s first election. However, it would have taken some time to place everyone and everything in the best position to depose the PT. This was certainly ready by the time Lula’s second term expired. The death of Chavez and recently the death of Castro (at least of natural causes) have made it imperative to close the Brazil-Venezuelan border in every sense. The escalating war against Russia and China had already made it imperative to take the “B” out of BRICS.

The success of the “anti-corruption” strategy in legitimating the overthrow of heads of state had been proven along with the capabilities to generate synthetic social support for such exercises as elections and street demonstrations. Anti-corruption campaigns are directed against public officials and civil servants but not against the military (although the corruption of the arms trade is endemic and apparently incurable) or corporations who initiate the corrupt acts and/or benefit from them. There is a conspicuous reluctance to attack fundamentally anti-democratic institutions: Business and the military. “Anti-corruption” is really a euphemism for a broad attack on all democratic institutions since 1989-90.

It is one of the failures of the Left and faux gauche to grasp these fundamental issues. This is in part because they share the same “moral language” and progressive technocratic ideas about how the State should be constituted and operated. There has been a distinct inability or reluctance to retool, to defend fiscal independence, to recognise and call foreign debt (or in many countries all public borrowing) what it, in fact, is: a deliberate conversion of community resources into private cash streams for the ruling class compulsory debt financing of public expenditure by private banks. This is the main reason why the central banking system adopted by the US regime in 1913 and internationalised at Bretton Woods and in the EU, impoverishes all attempts at socialism. It is impossible to remedy the corrupt system of public finance and government operations without a radical change in the anti-democratic control over money. As long as economics is treated as a science when it is, in fact, a theology, every Left government will have its Luthers praising the slaughter of revolting peasants, while claiming the privileges of their own particular liberties.

The PT attempted to evade this criminal constraint on the democratic government by using a parastatal for social purposes– this was a capital crime and will be punished as such. It makes little difference that Petrobras could never have funded all the activities that the PT government would have implemented were it not constrained by compulsory “debt” service. The scandal effect of a rather thinly disguised evasive tactic by a slightly socialist government was a necessary catalyst to break the electoral majority that had delivered the PT solid election results.

The strategies of Langley have also matured with the years. In 1964 there was no hesitation to use direct military force to seize control. But now this is unnecessary and undesirable. No amount of protest prevented Temer exercising the office of President, despite massive corruption charges pending against him. No one can defend notorious criminal acts if they are made notorious even before trial has established whether a crime was committed. In the 60s and 70s no one in the Western hemisphere or Africa could be “for” a government notorious as socialist/communist, even if it was neither; in fact, (Goulart was no communist but there are people from Brazil who still say that he was. There are also people in Portugal who think that the 1974 revolution was directed from Moscow, although it was clearly the director of the counter-revolution, Frank Carlucci, who died this year.)

Another innovation has gone largely without comment: that is the refinement of the Phoenix programme. The so-called “war on drugs” and its various theatres provide cover throughout Central and South America for counter-insurgency or political warfare against the poor. When Temer ordered the military into Rio the attention was given to the extreme criminality and danger to normal inhabitants, which the military was needed to suppress. Aside from the fact that the military and police in all countries are integral components of the trade in drugs and other contraband, law enforcement militarisation is a classic cover for death squads and similar terror instruments. Placing the poor under martial law is something the Brazilian military actively practiced together with US Forces while deployed in Haiti under UN cover. No serious commentator on Haiti doubts that the “crime” in Haiti is any kind of base organisation against the owners of the neo-slave state.

Bolsonaro’s election result has to be seen, together with the combined operations to demobilise those sectors of the Brazilian electorate that provided the support and legitimacy for the PT, leaving only the historically unreliable and proportionately insignificant middle class to be disaffected (not unlike the anti-Chavista middle in Venezuela) to vote for the mythical “clean broom”. Here we return to the fact that the military never really left the stage. The military can be better grasped in a “cultural” sense — all those people in the elite and supporting classes who think with the military whether members of the armed forces or not. This includes the technocratic strata and those who naively believe in “military rationality” as a pure and national virtue. But one thing should be remembered about modern politics and “independent” candidates. Bolsonaro is expendable. He can be seen as a placeholder for the wider institutional force that combines actively to frustrate any democratisation of Brazil, most importantly by preventing any meaningful self-confident lower class political organisation and obstructing anything but the most meagre attempt to remedy Brazil’s grotesque economic inequalities.

The resistance to political and economic equity, let alone equality, is a centuries-old tradition in the two largest slaveholder republics of the Western hemisphere. This commitment to enrichment by forced labour and plunder has always been the driving force in the US and in Brazil. It makes little difference that chattel slavery was abolished in the 19th century. Democratic allocation of a country’s resources by whatever formula violates the very essence of the economic system slavery made possible. Facing that deep corruption in the Brazilian and US regimes will help in the appraisal of measures and movements to create genuine democracy and maybe even socialism in the majority of countries of the Americas, which have had neither.

  1. Ordem e Progresso (order and progress), the Brazilian national motto is a slogan from the 19th century Positivist Church. The leading figures of the Brazilian military, e.g. Benjamin Constant, who overthrew the monarchy to establish the republic were members. The Positive Church was based on the teachings of Auguste Comte, credited as the founder of positivism and sociology. It was conceived as a “religion of humanity”, emphasising science and progress. This coincided with the development of modern militaries in Latin America based on science and engineering as the foundations of military education. The military’s “modernising” role and its supposed rational objectivity originate in this tradition.

Tenth Anniversary Of Financial Collapse, Preparing For The Next Crash

Jail Bankers Not Protesters, Occupy Wall Street, 2011 (Photo by Stan Honda for AFP-Getty Images)

Ten years ago, there was panic in Washington, DC, New York City and financial centers around the world as the United States was in the midst of an economic collapse. The crash became the focus of the presidential campaign between Barack Obama and John McCain and was followed by protests that created a popular movement, which continues to this day.

Banks: Bailed Out; The People: Sold Out

On the campaign trail, in March 2008, Obama blamed mismanagement of the economy on both Democrats and Republicans for rewarding financial manipulation rather than economic productivity. He called for funds to protect homeowners from foreclosure and to stabilize local governments and urged a 21st Century regulation of the financial system. John McCain opposed federal intervention, saying the country should not bail out banks or homeowners who knowingly took financial risks.

By September 2008, McCain and Obama met with President George W. Bush and together they called for a $700 billion bailout of the banks, not the people. Obama and McCain issued a joint statement that called the bank bailout plan “flawed,” but said, “the effort to protect the American economy must not fail.” Obama expressed “outrage” at the “crisis,” which was “a direct result of the greed and irresponsibility that has dominated Washington and Wall Street for years.”

By October 2008, the Troubled Asset Relief Program (TARP), or bank bailout, had recapitalized the banks, the Treasury had stabilized money market mutual funds and the FDIC had guaranteed the bank debts. The Federal Reserve began flowing money to banks, which would ultimately total almost twice the $16 trillion claimed in a federal audit. Researchers at the University of Missouri found that the Federal Reserve gave over $29 trillion to the banks.

This did not stop the loss of nine million jobs, more than four million foreclosures and the deep reduction in wealth among the poor, working and middle classes. A complete banking collapse was averted, but a deep recession for most people was not.

The New Yorker described the 2008 crash as years in the making, writing:

…the crisis took years to emerge. It was caused by reckless lending practices, Wall Street greed, outright fraud, lax government oversight in the George W. Bush years, and deregulation of the financial sector in the Bill Clinton years. The deepest source, going back decades, was rising inequality. In good times and bad, no matter which party held power, the squeezed middle class sank ever further into debt.

Before his inauguration, Obama proposed an economic stimulus plan, but, as Paul Krugman wrote:

Obama’s prescription doesn’t live up to his diagnosis. The economic plan he’s offering isn’t as strong as his language about the economic threat.

In the end, the stimulus was even smaller than what Obama proposed. Economist Dean Baker explained that it may have created 2 million jobs, but we needed 12 million. It was $300 billion in 2009, about the same in 2010, and the remaining $100 billion followed over several years — too small to offset the $1.4 trillion in annual lost spending.

New York Magazine reports the stimulus was “a spending stimulus bigger, by some measures than the entire New Deal.” But unlike the New Deal, which benefited people at the bottom and built a foundation for a long-term economy, the bi-partisan post-2008 stimulus bailed out Wall Street and left Main Street behind.

Wall Street executives were not prosecuted even though the financial crisis was in large part caused by their fraud. Bankers were given fines costing dimes on the dollar without being required to admit guilt or having their cases referred for prosecution. The fines were paid by shareholders, not the perpetrators.

Protest near Union Square in New York, April, 2010. Popular Resistance.

Still at Risk

Many of the root causes of the crisis remain today, making another economic downturn or collapse possible. The New Yorker reports that little has changed since 2008, with Wall Street banks returning to risky behavior and the inadequate regulation of Dodd-Frank being weakened. Big finance is more concentrated and dominant than it was before the crash. Inequality and debt have expanded, and despite the capital class getting wealthier in a record stock market with corporate profits soaring, real wages are stuck at pre-crisis levels.

People are economically insecure in the US and live with growing despair, as measured by reports on well-being. The Federal Reserve reported in 2017 that “two in five Americans don’t have enough savings to cover a $400 emergency expense.” Further, “more than one in five said they weren’t able to pay the current month’s bills in full, and more than one in four said they skipped necessary medical care last year because they couldn’t afford it.”

Positive Money writes:

Ten years on, big banks are still behaving in reckless, unfair and neglectful ways. The structural problems with our money and banking system still haven’t been fixed. And many experts fear that if we don’t change things soon, we’re going to sleepwalk into another crash.

William Cohen, a former mergers and acquisitions banker on Wall Street, writes that the fundamentals of US economy are still flawed. The Economist describes the current situation: “The patient is in remission, not cured.”

From Occupy Washington DC at Freedom Plaza

The Response Of the Popular Movement

Larry Eliott wrote in the Guardian: “Capitalism’s near-death experience with the banking crisis was a golden opportunity for progressives.” But the movement in the United States was not yet in a position to take advantage of it.

There were immediate protests. Democratic Party-aligned groups such as USAction, True Majority and others organized nationwide actions. Over 1,000 people demonstrated on Wall Street and phones in Congress were ringing wildly. While there was opposition to the bailout, there was a lack of national consensus over what to do.

Protests continued to grow. In late 2009, a “Move Your Money” campaign was started that urged people to take their money out of the big banks and put it in community banks and credit unions. The most visible anti-establishment rage in response to the bailout arose later in the Tea Party and Occupy movements. Both groups shared a consensus that we live in a rigged economy created by a corrupt political establishment. It was evident that the US is an oligarchy, which serves the interests of the wealthy while ignoring the necessities of the people.

The anti-establishment consensus continues to grow and showed itself in the 2016 presidential campaigns of Senator Bernie Sanders and Donald Trump. They were two sides of the same coin of populist anger that defeated Jeb Bush and Hillary Clinton. Across the political spectrum, there is a political crisis with both mainstream, Wall Street-funded political parties being unpopular but staying in power due to a calcified political system that protects the duopoly of Democrats and Republicans.

Occupy Wall Street 2011

Preparing for the Next Collapse

When the next financial crisis arrives, the movement is in a much stronger position to take advantage of the opportunity for significant changes that benefit people over Wall Street. The Occupy movement and other efforts since then have changed the national dialogue so that more people are aware of wealth inequality, the corruption of big banks and the failure of the political elites to represent the people’s interests.

There is also greater awareness of alternatives to the current economy. The Public Banking movement has grown significantly since 2008. Banks that need to be bailed out could be transformed into public banks that serve the people and are democratically controlled. And there are multiple platforms, including our People’s Agenda, that outline alternative solutions.

We also know the government can afford almost $30 trillion to bail out the banks. One sixth of this could provide a $12,000 annual basic income, which would cost $3.8 trillion annually, doubling Social Security payments to $22,000 annually, which would cost $662 billion, a $10,000 bonus for all US public school teachers, which would cost $11 billion, free college for all high school graduates, which would cost $318 billion, and universal preschool, which would cost $38 billion. National improved Medicare for all would actually save the nation trillions of dollars over a decade. We can afford to provide for the necessities of the people.

We can look to Iceland for an example of how to handle the next crisis. In 2008, they jailed the bankers, let the banks fail without taking on their debt and put controls in place to protect the economy. They recovered more quickly than other countries and with less pain.

How did they do it? In part, through protest. They held sustained and noisy protests, banging pots and pans outside their parliament building for five months. The number of people participating in the protests grew over time. They created democratized platforms for gathering public input and sharing information widely. And they created new political parties, the Pirate Party and the Best Party, which offered agendas informed by that popular input.

So, when the next crash comes. Let’s put forward a People’s Agenda. Let’s be like Iceland and mobilize for policies that put people first. Collectively, we have the power to overcome the political elites and their donor class.