Connect with us

Americas

Why at Least America Will Be in Another Great Depression

Published

on

America’s bailout package to overcome the coronavirus ‘recession’ is twofold:

One part is printing money for employees and consumers, so that they won’t be thrown out onto the streets for non-payment of debts such as mortgages, car-loans, credit cards, and student loans.

Another part is printing money for bondholders and stockholders, so that their investments will still have value and there won’t be panicked selling of them as corporations accumulate soaring losses because consumers are staying home and are cutting way back on expenses.

The top-down part of the bailout (the part for investors) will merely add to the wealth of the already-wealthy, while everybody else sinks financially into oblivion. (On April 9th, the Zero Hedge financial site explained in detail why even bailing out the airlines would hurt the economy more than help the economy.) The top-down part supplies the money to the corporations instead of to their employees and consumers, and is therefore supply-boosting instead of demand-boosting. Supplying money to the corporations that the Government selects to protect will enable those corporations to buy up assets and corporations which during the crisis are being auctioned off by the ones that go out of business, and this will leave the nation’s wealth in even fewer hands than before the epidemic struck.  

The bottom-up part (the part for workers and consumers) will be exactly the opposite of that: it will help prevent another Great Depression. By boosting purchases, instead of bailing-out billionaires and such, it will enable the economy to keep functioning, and it will not increase the concentration of wealth.

However, employees and consumers don’t have many lobbyists, but billionaires do, and billionaires also own (through political donations and lobbyists) almost all members of Congress (and also the mainstream press), and they not only own, but are represented by, one inside the White House, who is surrounded there by others, and by representatives of others, so that the concerns of the wealthiest will be very well represented by America’s Government, and will end up dominating the bailouts, so that only the insiders, who are well-connected in Washington, will be protected. (And Joe Biden would be no improvement over Donald Trump, though his rhetoric is different.)

Already, we see, in the ‘news’-reports, that there is ‘chaos’ etc. in the U.S. Government’s response to the crisis, but what’s not being reported in the mainstream ‘news’-media is that there very much is method to this seeming madness, and it is the method of the well-practiced and well-funded takers, definitely not of their victims, from whom they (and their Government) have been, and now increasingly are, taking. The takers own the Deep State, and are protected by it. The vast bulk of the bailouts will go to them. The vast bulk of the bailouts will go to suppliers (investors), not to their workers and consumers.

Printing money for bondholders and stockholders will predominate. It won’t be like Franklin Delano Roosevelt (FDR) did during the first Great Depression, when the federal money went to the public instead of to the megacorporations; it will be the opposite. This will be a supercharged concentration of wealth. Money is power, and the power of billionaires will thus be enormously increased; the power of the public will go to zero.

The inevitable result of this will be enormous spreading poverty, and, ultimately, so many dollars being owned by the billionaires, so that hyperinflation will result if this continues for more than a few months, and it will not be able to be overcome by any form of monetary response, because it will instead be a problem about the distribution of actual wealth (not mere money); and, as Raoul Pal phrased this problem, “Money printing does not make the dollars available. They get stuck in the financial system and hoarded” (by the wealthy), at a time like this. So: there still will be wealth, but increasing percentages of it will be owned by the super-rich; and, so, their corporations will experience plunging sales. Everything (except, perhaps, gold, etc.) will actually be worth less than it was before, even though inflation will be soaring. More dollars will be chasing fewer goods and services that are actually being purchased. The stock and bond markets will then crash. The result will be like Germany during the Weimar Republic. But the cause of it will be different; it won’t be war-reparations payments; it will instead be the almost unimaginable corruption at the very top of the U.S. Government and economy. Whereas Germany had a deeply rooted social-welfare system, America does not, and most of America’s billionaires are Republicans (unapologetically elitist psychopaths), which means they want there to be even less of that: simply dog-eat-dog (survival of the ‘fittest’) amongst everybody else — not their own class. Although Democratic politicians will probably sweep the November elections, those individuals are deeply indebted to Democratic Party billionaires, for their very careers. These billionaires must be served first — it’s the American way, “Greed is good” (at least after 1980).

One of the reasons why Weimar-era Germans gravitated politically rightward was that Germany at that time did not have a right-wing-populist Government; and, so, right-wing-populist politicians didn’t get the blame. Hitler came to power then. America now does have a right-wing-populist Government. Right-wing populism will therefore get the blame. If the leftwing-populist, democratic socialist, Bernie Sanders had been chosen by Democratic Party voters, then America would not be facing its present very dire prospects, and congressional Democrats (because their Presidential candidate would then be leading them) would now be blocking — instead of passing into law (as it now is) — the bailouts for millionaires and billionaires; but there is no such leadership, at this crucial time. (As a leader, Joe Biden is already a failure.) This is why America now faces a near certainty of another Great Depression. It comes from the leadership, and the leadership don’t represent the public.

The result when a right-wing-populist country faces collapse is a police-state, facing a revolution: military guns and tanks, facing the public. If Democrats win the November elections, then Democratic Party billionaires, and not Republican Party ones, will be making the decisions. Biden is no FDR.

Perhaps there exists no close historical precedent for understanding what the outcome of that would be. If there instead turn out to be Republican billionaires continuing to make the decisions, then there will be massive bloodshed, and increasing defections from the Government, and an increasingly unmanageable revolution, which will be a hell for any predictions. But with Democratic Party billionaires taking charge, there will be at least a possibility of fundamental reform. Perhaps someone like FDR will arise after Joe Biden’s corruption and incompetency (he won the nomination by cheating) will have been sufficiently displayed for a few years. Therefore, maybe, starting in 2024 (after Biden’s failure), things will be able to start turning around, for the better, by means of a new set of primaries for the Democratic Party’s nomination (or else by a Constitutional Amendment doing away with political parties and the Electoral College). 

The fundamental problem, right now, is that the sheer corruption at the very top of the U.S. Government will cause trillions of dollars of federal bailouts to go to the very wealthiest Americans, at a time when there is soaring need by the public. The idea that America will be able to succeed no matter how corrupt its Government is, is now being tested, and I don’t see any way that such an idea will be able to pass such a test. But only time will tell. We’re now in an enormous experiment — that’s for sure. 

There is one reason to hope that the bleak scenario described here might be averted. The most advanced software for predicting Covid-19 cases and fatalities in the United States provides projections at the “Health Data” site, which started on April 7th, by projecting that the peak in cases will be on April 15th and that by May 21st there will have been 81,000 deaths, and that by August 4th the final death will be recorded, at 81,766. Three days later, on April 10th, the projections were instead that the peak will be on April 11th and that by May 22nd there will have been 60,000 deaths, and that the final death will be recorded on August 4th, at 60,415. (But that estimate suddenly soared back up on April 13th to 68,841.) This 26% (or now 16%) reduction in the ultimate total death estimate, within only 3 (or 5) days, indicates that perhaps the outlook is less dire than has generally been thought to be the case. However, if optimistic projections turn out to be true, so that almost no Americans will die from Covid-19 after May 22nd, then the question will still remain: With tens of millions of Americans having gone for so long without income, what will be the consequence to the American economy? It will still be another Great Depression. In fact, on April 9th CNBC headlined “JPMorgan now sees economy contracting by 40% in second quarter, and unemployment reaching 20%”. (Total GDP-contraction during the Great Depression was a decline of 46% during 1929-1933, the steepest such plunge in U.S. history. Peak unemployment that was reached during the Great Depression — also a U.S. record — was 19%, in 1938.) But maybe it won’t last as long as the first one did. Furthermore, if the Government’s response to the crisis will be the opposite of what FDR’s was and will bail out the megacorporations instead of bail out only the public, what type of country will there be afterwards? That’s the problem — the insatiable and enormous grabbing by America’s super-rich, by means of their (not  our) Government. As the liberal billionaire Warren Buffett observed in November 2006, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” Now, nearly 14 years later (and especially after the current round of bailouts), we can say, simply: they won. America is a dictatorship by the rich; no longer a government “of the people, by the people, for the people.” Not only do Republican voters want to retain this dictatorship by the rich, but Joe Biden’s victory against Bernie Sanders proves that many Democratic voters also want it to continue. Sanders was the only candidate calling for “revolution,” and that call by him was spurned. That decision by the voters, which was guided by the lobbyists and news-media, which were guided by the billionaires, shapes America’s future.

Also on April 9th, the New York Times bannered “Fed’s  Plan Far Exceeds Its 2008 Rescue”. That’s  virtually unregulated money flowing to investors, unlike what will be going to workers and consumers. The Fed even “stopped short of applying limits on offshoring.” And, as the article also noted, this money that the Treasury will lend through the Fed includes “Help for corporations,” “Limited support for risky debt,” and “Help for state and city governments”; and any of these Fed loans that end up not being repaid will increase Americans’ future federal taxes. Though investors will be protected, “offshoring” of workers’ jobs will continue, and the public’s descendants will be left holding the bag of any losses.

Then, on April 13th was the announcement that “Morgan Stanley warns that a potential second wave of infections could strike around November/December”. The firm said “We believe the path to re-opening the economy is going to be long. It will require turning on and off various forms of social distancing and will only come to an end when vaccines are available, in the spring of 2021 at the earliest.” How will it then be possible to avoid a Second Great Depression? Will the Fed be able to continue printing money without limit? Would an immense financial crash be avoided even if it can? The realistic outlook now appears to be super-grim. Perhaps sooner than anyone now expects, every investor will start selling into paper investment-markets that suddenly have no buyers at anything like today’s prices.

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010

Continue Reading
Comments

Americas

A Disintegrating Trump Administration?

Published

on

If Donald J. Trump wanted a historic presidency, he certainly seems to have achieved it — he is now the only president to have been impeached twice.

According to the rules, the House impeaches followed by a trial in the Senate.  There is precedent for the trial to continue even when the office holder has left office.  Should that trial result in conviction, it prevents him from seeking any future elected office.  Conviction is unlikely, however, as it requires a vote of two-thirds of the members present.

It has been reported that Trump wanted to lead the crowd in the march to the Capitol, but was dissuaded from doing so by the Secret Service who considered it much too dangerous and could not guarantee his safety.

Various sources attest that Trump’s mind is focused on pardons including himself and his family members.  Whether it is legal for him to pardon himself appears to be an unresolved question.  But then Trump enjoys pushing the boundaries of tolerated behavior while his businesses skirt legal limits.

He appears to have been greatly upset with his longtime faithful vice-president after a conversation early on the day of the riot.  As reported by The New York Times, he wanted Mike Pence to overturn the vote instead of simply certifying it as is usual.  The certification is of course a formality after the state votes already certified by the governors have been reported.  Pence is reputed to have said he did not have the power to do so.  Since then Trump has called Vice President Pence a “pussy” and expressed great disappointment in him although there are reports now that fences have been mended.

Trump’s response to the mob attacking the Capitol has also infuriated many, including lawmakers who cowered in the House chamber fearful for their lives.  Instead of holding an immediate press conference calling on the attackers to stop, Trump responded through a recorded message eight hours later.  He called on his supporters to go home but again repeated his claims of a fraudulent election.

Aside from headlining the US as the laughingstock among democracies across the world, the fall-out includes a greater security risk for politicians.  Thus the rehearsal for Biden’s inauguration scheduled for Sunday has been postponed raising questions about the inauguration itself on January 20th.

Worse, the Trump White House appears to be disintegrating as coordination diminishes and people go their own way.  Secretary of State Pompeo has unilaterally removed the curbs on meeting Taiwanese officials put in place originally to mollify China.  If it angers China further, it only exacerbates Biden’s difficulties in restoring fractured relationships. 

Trump is causing havoc as he prepares to leave the White House.  He seems unable to face losing an election and departing with grace.  At the same time, we have to be grateful to him for one major policy shift.  He has tried to pull the country out of its wars and has not started a new one.  He has even attempted the complicated undertaking of peace in Afghanistan, given the numerous actors involved.  We can only hope Biden learned enough from the Obama-Biden administration’s disastrous surge to be able to follow the same path.

Continue Reading

Americas

Flames of Globalization in the Temple of Democracy

Published

on

Authors: Alex Viryasov and Hunter Cawood

On the eve of Orthodox Christmas, an angry mob stormed the “temple of democracy” on Capitol Hill. It’s hard to imagine that such a feat could be deemed possible. The American Parliament resembles an impregnable fortress, girdled by a litany of security checks and metal detectors at every conceivable point of entry. And yet, supporters of Donald Trump somehow found a way.

In the liberal media, there has been an effort to portray them as internal terrorists. President-elect Joe Biden called his fellow citizens who did not vote for him “a raging mob.” The current president, addressing his supporters, calls to avoid violence: “We love you. You are special. I can feel your pain. Go home.”

That said, what will we see when we look into the faces of these protesters? A blend of anger and outrage. But what is behind that indignation? Perhaps it’s pain and frustration. These are the people who elected Trump president in 2016. He promised to save their jobs, to stand up for them in the face of multinational corporations. He appealed to their patriotism, promised to make America great again. Arguably, Donald Trump has challenged the giant we call globalization.

Today, the United States is experiencing a crisis like no other. American society hasn’t been this deeply divided since the Vietnam War. The class struggle has only escalated. America’s heartland with its legions of blue-collar workers is now rebelling against the power of corporate and financial elites. While Wall Street bankers or Silicon Valley programmers fly from New York to London on private jets, an Alabama farmer is filling up his old red pickup truck with his last Abraham Lincoln.

The New York banker has no empathy for the poor residing in the southern states, nothing in common with the coal miners of West Virginia. He invests in the economies of China and India, while his savings sit quietly in Swiss banks. In spirit, he is closer not to his compatriots, but to fellow brokers and bankers from London and Brussels. This profiteer is no longer an American. He is a representative of the global elite.

In the 2020 elections, the globalists took revenge. And yet, more than 70 million Americans still voted for Trump. That represents half of the voting population and more votes than any other Republican has ever received. A staggering majority of them believe that they have been deceived and that Democrats have allegedly rigged this election.

Democrats, meanwhile, are launching another impeachment procedure against the 45th president based on a belief that it has been Donald Trump himself who has provoked this spiral of violence. Indeed, there is merit to this. The protesters proceeded from the White House to storm Congress, after Trump urged them on with his words, “We will never give up, we will never concede.”

As a result, blood was shed in the temple of American democracy. The last time the Capital was captured happened in 1814 when British troops breached it. However, this latest episode, unlike the last, cannot be called a foreign invasion. This time Washington was stormed by protestors waving American flags.

Nonetheless, it is not an exaggeration to say that the poor and downtrodden laborers of America’s Rust Belt currently feel like foreigners in their own country. The United States is not unique in this sense. The poor and downtrodden represent a significant part of the electorate in nearly every country that has been affected by globalization. As a result, a wave of populism is sweeping democratic countries. Politicians around the world are appealing to a sense of national identity. Is it possible to understand the frustrated feelings of people who have failed to integrate into the new global economic order? Absolutely. It’s not too dissimilar from the grief felt by a seamstress who was left without work upon the invention of the sewing machine.

Is it worth trying to resist globalization as did the Luddites of the 19th century, who fought tooth and nail to reverse the inevitability of the industrial revolution? The jury is still out.

The world is becoming more complex and stratified. Economic and political interdependence between countries is growing each and every day. In this sense, globalization is progress and progress is but an irreversible process.

Yet, like the inhumane capitalism of the 19th century so vividly described in Dickens’ novels, globalization carries many hidden threats. We must recognize and address these threats. The emphasis should be on the person, his dignity, needs, and requirements. Global elites in the pursuit of power and superprofits will continue to drive forward the process of globalization. Our task is not to stop or slow them down, but to correct global megatrends so that the flywheel of time does not grind ordinary people to the ground or simply throw nation-states to the sidelines of history.

Continue Reading

Americas

Deliberate efforts were made to give a tough time to President Joe Biden

Published

on

Image credit: Todd Jacobucci/ flickr

President Trump-Administration is over-engaged in creating mess for in-coming President Joe Biden. The recent deliberate efforts are made to give a tough time are:  naming Cuba a state sponsor of terrorism, designating Yemen’s Houthi rebels as a foreign terrorist organization, Terming Iran as a new home to al-Qaida, and lifting restrictions on contacts between American officials and representatives from Taiwan.

The consequence may turn into dire situations, like a return to cold war era tension. Efforts were made to resume Cuba-US relations to normal for decades and were expected to sustain a peaceful co-existence. Any setback to relations with Cuba may destabilize the whole region. Pompeo’s redesignation of Cuba as a sponsor of state terror will possibly have the least material impact, but it signifies a personal loss to Biden and a momentous political win for Trumpism. In doing so, Trump is hitting the final nail in the coffin of Barack Obama’s efforts to normalize relations with Cuba.

Yemen issue was a creation of Arab spring sponsored by the CIA, and after realizing the wrongdoings, the US was trying to cool down the tension between Saudi Arabia and Yemen, but with the recent move to name Yemen’s Houthi rebels as a foreign terrorist organization, may open new hostilities and bloodshed. It has been designated by UNICEF as the “largest humanitarian crisis in the world, with more than 24 million people — some 80 percent of the population — in need of humanitarian assistance, including more than 12 million children.” Such statements may halt humanitarian assistance and may result in a big disaster.

The history of rivalries with Iran goes back to 1953 when the UK and the US jointly overthrew the legitimate government of Prime Minister Mossadeq. But the real tension heightened in 2018 When President Trump withdrew from JCPOA. But the recent allegation that Iran as a new home of al-Qaida may take a new turn and give a tough time to Joe Biden–Administration. Although there is no evidence, however, Secretary of State Pompeo made such an allegation out of his personal grudge against Iran. It can complicate the situation further deteriorate and even may engulf the whole middle-east.

Lifting constraints on contacts between American officials and representatives from Taiwan, is open violation of “One-China Policy.” Since Washington established formal diplomatic relations with Beijing in 1979, it has resisted having official diplomatic associations with Taipei in order to avoid a confrontation with the PR China, which still comprehends the island — home to around 24 million people — as part of China. Chinese are very sensitive to the Taiwan issue and struggling for peaceful unification. However, China posses the capabilities to take over by force, yet, have not done so far. Secretary of State Mr. Pompeo’s statement may be aiming to instigate China and forcing toward military re-unification. It might leave a challenging concern for Joe Biden-Administration.

Raffaello Pantucci, a senior fellow at Singapore’s S. Rajaratnam School of International Studies, said, “The Trump administration is locking in place a series of conflicts that change the starting point for Biden walking into the office on the world stage.”

Even Mr. Pompeo had a plan to travel to Europe to create further hurdles for in-coming administration, but fortunately, some of the European countries refused to entertain him, and desperately he has to cancel his trip at the eleventh hours.

It is just like a losing army, which destroys all ammunition, weapons, bridges, infrastructures, etc., before surrendering. Although President Trump’s days in office are numbered, his administration is over-engaged in destruction and creating hurdles for the next administration. He is deliberately creating hurdles and difficulties for President-Elect Joe Biden.

President Joe Biden has many challenges to face like Pandemic, unrest in the society, a falling economy, losing reputation, etc. Some of them might be natural, but few are specially created!

Continue Reading

Publications

Latest

Trending