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Coronavirus recession of 2020

Coronavirus is not the main cause; but it is a powerful catalyst  as pre-existing conditions, especially the derivatives bubble,  point to the downturn

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COVID-19 can be the catalyst for the economic recession

Neoliberalism created long and often convoluted supply chains to countries with cheap labor. They were temporary disrupted by the epidemic as China slowed down.  in January and February. But as of March China restored over 80% of its production capabilities disrupted by the virus). So now the question is how disruptive will the epidemics for the USA itself. Certain sectors a such are airlines, oil industry, hospitality and restaurants are already feeling the impact. 

As far as I understand that disease (highly infectious virus phenomena) can serve as a catalyst for the economic recession and as such is a very serious economic challenge (betting odds on a US recession recently jumped from 25% to 32% ), much less a public health challenge (despite MSM hyping the threat, the mortality is probably between one and two percent), lower for younger folk and people without serious chronic diseases (especially cardiovascular and lungs related; smokers can be added to the latter category), higher for people over 60 and with chronic diseases.  Data confirm that children and teenagers appear are both  less susceptible to this infection (approx. ten times less that people in their 30th) and if infected (typically in the family) have much better prognosis (almost no critical cases). Like any flu epidemic this infection kills mainly old and already sick folk, especially with heart diseases, lung diseases (including heavy smokers), and suppressed immune system.  

In view of USA media hysteria about Coronavirus COVEL-19, we need to concentrate on facts, not fears. And below I will try to provide some of them (as little as know about this issue, as I am a programmer, not a virologist ;-)  Looks like healthy people younger then 60 have little to fear but fear itself. But fear is addictive snfd it looks like panic, including panic buying had spread. Such events tend to increase the level of government control over population.  That's why they create fearful events or exaggerate naturally occurring events over and over again

As far as I understand that situation this disease (highly infectious virus phenomena) is a serious economic challenge (creating a possibility of "Coronavirus recession"), much less a health challenge (mortality is probably between one and two percent), lower for younger folk and people without serious chronic diseases (especially cardiovascular and lungs related; smokers can be added to the latter category).

Neoliberal MSM, which are practically always are stock market cheerleaders, trying to detail Trump behaved horribly in this respect spreading rumors and fear, often completely unsubstantiated, accelerating economic downturn.  In this sense Trump has a point when is called MSMS coverage of Coronavirus epidemics a hoax (Trump campaign blasts media for 'massively dishonest' claim POTUS called coronavirus a 'hoax' Fox News).  And Trump hit the nail in his famous "Caronovirus" (innocent misspelling) twit: "

Low Ratings Fake News MSDNC (Comcast) & @CNN are doing everything possible to make the Caronavirus look as bad as possible

The main danger is a fact that Coronovirus hit  the globalized supply chains and severely affected several industries such a tourism and air travel.  China slow down affects global production chains and might create a snowball effect. But the slowdown was just two month long. As of March 1, 2020 China  is back to over 80% of production. Still some unpleasant surprises are still possible:

HHH 02/29/2020 at 4:24 pm

If this virus shows up and hits hard in say Saudi Arabia and other oil producing nations the narrative will totally change. It will go from just demand destruction from consuming nations to no supply coming out of producing nations.

Frightened people often behave irrationally and that typically contributes to the economic downturn as well. Not the US economy was especially healthy before this event. In August, a survey of economists by the National Association for Business Economics 72% of analysts expected a US recession by the end of 2021. Of them 38% believed a recession will strike by the end of this year. A UN report published in September similarly warned of a worldwide recession this year.

If coronavirus COVID-19 is like other Coronaviruses it probably, like President Trump suggested,  will “go away” in April, as temperatures warm. Most Coronaviruses are seasonal, but there was an outbreak in Dominical Republic resorts in summer 2018 which was atypical. So it it’s not yet clear if the new virus will follow the same pattern — and experts caution against banking on the weather to resolve this outbreak (Will the New Coronavirus 'Go Away' in April - FactCheck.org)

Several days later, in a White House meeting with state governors, he repeated the idea and was more specific on the outbreak’s timeline.

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

At the time, the Centers for Disease Control and Prevention had confirmed 12 cases in the U.S., although the agency announced an additional case in California that day. As of Feb. 13, the tally had risen to a total of 15.

Later in his remarks to the governors, Trump praised China for “doing a good job” with the outbreak, and again mentioned his call with the Chinese leader. 

“I had a long talk with President Xi — for the people in this room — two nights ago, and he feels very confident,” Trump said. “He feels very confident. And he feels that, again, as I mentioned, by April or during the month of April, the heat, generally speaking, kills this kind of virus.”

But time definitely works against the virus as more sunny days are more deadly for it.

On Feb 27, 2020 US markets just had their fastest ever correction (10% drop of S&P500), and things aren't looking great economically for the next couple of months. Global recession is a real possibility by the middle of the year and central banks don't have mach space for stimulus. In some places  people are already scrambling for supplies, and they are likely panicking because there are numerous infected people confirmed in the local area... not the best situation to be shopping in.

I am also concerned about the global supply chain disruptions, The impact on the supply chain is a delayed effect. Several major manufacturers have already had to completely shut down manufacturing in China. That means that we will likely see spreading shutdowns as well soon.

This page about is mainly unsubstantiated, inflated by MSM panic and false narrative. The level of Fearmongering in US MSM  does not correlate with the known facts about the virus. See also [ORIGINAL VIDEO] Torn - Natalie Imbruglia (#Coronavirus Parody) - YouTube  The panic can do more damage than the virus itself.

 


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[Jul 06, 2020] It is July. By January 2021, the US economy will have suffered a structural collapse in multiple sectors. That is the economic consequence of the pandemic. Restaurants, shopping malls, bars, colleges, hotels, airlines, cruise lines -- easily 15% of the workforce will be unemployed and another 25% seriously underemployed.

Notable quotes:
"... I would submit that the legitimacy of the elite professional and managerial classes is being called into question, for want of performance or any sense of responsibility. The urban PMC are the core constituency of the establishment Democratic Party. The vestigial working class elements and the ideological Left are distant memories and oppressed minorities seeking social justice, mere props. ..."
"... The thing is, the political classes -- the millionaire media pundits, the politicians, the lobbyists, the generals, the journamalists, the manipulative political operatives and propagandists, the pious policy "experts", the highly paid executives and financial managers running monopolies into the ground and non-profits into irrelevance -- they have enacted their neo-liberal agenda and it doesn't work. ..."
"... This in a country that cannot manufacture PPE. Or win a war. Trump, in his fumbling way, might get the U.S. out of Afghanistan, but the NY Times -- who brought us WMD not that long ago -- reports the Russians are paying bounties on American soldiers killed. No report on the treatment of Julian Assange though. Boeing is going to get the 737 Max in the air real soon now. Citibank is borrowing at 0.03 from the Fed and lending to credit card users at 27% and may be insolvent. ..."
"... So, let us assume the Democrats, after nominating an elderly SOB who had a hand in the crime bill that gave the U.S. the highest incarceration rate in the world, the bankruptcy bill that saddled tens of millions with credit card and student debt that cannot be discharged, and every stupid war of the last nearly twenty years, will suddenly see the necessity of radical change. And, after making an alliance with conservative Republicans hostile to even Trump's fake populism in order to elect Biden, seeing the light on radical reform is so likely! So plausible. ..."
Jul 06, 2020 | crookedtimber.org

bruce wilder 07.06.20 at 4:11 am (45 )

mainstream Democrats recognize the need for radical change, and Biden will align with the mainstream position as he always has done

You said you would leave this, your third assumption, to comments, so here is my comment.

The U.S. is in the midst of a deep legitimacy crisis and contrary to popular belief among liberals, it is not Trump particularly whose legitimacy is being called into question. Oh, sure, there have been relentless attacks on him -- from partisan opponents and from much of mainstream media -- but like the "anti-racism" of the recent protests -- much of it is dissembling and distraction. Charges of colluding with Putin to win the 2016 election turned out to be fake news -- rather obviously so from the beginning -- but a big enough mob went down that path with no self-awareness. I am not saying Trump is not an egregiously bad President; he is. But, notice please, before you go assuming that mainstream Democrats are going wake up in 2021 wanting to govern in the real world , that they have not shown much inclination toward truth-telling or critical realism these last 20 years.

It is July. By January 2021, the U.S. economy will have suffered a structural collapse in multiple sectors. That is the economic consequence of the pandemic. Restaurants, shopping malls, bars, colleges, hotels, airlines, cruise lines -- easily 15% of the workforce will be unemployed and another 25% seriously underemployed.

Did I mention that the U.S. is undergoing a legitimacy crisis?? Whose legitimacy is being called into question?

I would submit that the legitimacy of the elite professional and managerial classes is being called into question, for want of performance or any sense of responsibility. The urban PMC are the core constituency of the establishment Democratic Party. The vestigial working class elements and the ideological Left are distant memories and oppressed minorities seeking social justice, mere props.

I would say the Party establishment is confident they can put the re-animated corpse of Biden into the White House. And look how gleefully they welcome Republican never-Trumpers into the clubhouse! If you were one of the fools and tools who thought Obama did not want Republicans to control Congress, you are getting another chance to see how the Obama Alumni Association works with the Lincoln Project, how happy they are to deliver the kind of policy that appeals to rich, old, suburban Republican women.

The thing is, the political classes -- the millionaire media pundits, the politicians, the lobbyists, the generals, the journamalists, the manipulative political operatives and propagandists, the pious policy "experts", the highly paid executives and financial managers running monopolies into the ground and non-profits into irrelevance -- they have enacted their neo-liberal agenda and it doesn't work.

We have just watched the once highly touted CDC completely botch the great Pandemic. They could not devise a test. They screwed up the rules on who could or should be tested. They lied early on about the need to wear masks. They staged a moral panic over a need for ventilators, when ventilators are a terrible therapeutic alternative. In the new Puritanism, they shut down public beaches but they watched passively as liberal heroes like Cuomo set off a holocaust by sending COVID-19 patients to nursing homes.

This in a country that cannot manufacture PPE. Or win a war. Trump, in his fumbling way, might get the U.S. out of Afghanistan, but the NY Times -- who brought us WMD not that long ago -- reports the Russians are paying bounties on American soldiers killed. No report on the treatment of Julian Assange though. Boeing is going to get the 737 Max in the air real soon now. Citibank is borrowing at 0.03 from the Fed and lending to credit card users at 27% and may be insolvent.

So, let us assume the Democrats, after nominating an elderly SOB who had a hand in the crime bill that gave the U.S. the highest incarceration rate in the world, the bankruptcy bill that saddled tens of millions with credit card and student debt that cannot be discharged, and every stupid war of the last nearly twenty years, will suddenly see the necessity of radical change. And, after making an alliance with conservative Republicans hostile to even Trump's fake populism in order to elect Biden, seeing the light on radical reform is so likely! So plausible.

And, what's the play? The carrot of bi-partisan cooperation coupled with the fearful stick of abolishing the filibuster someday somehow if they don't play nice. You do realize that only Republicans are allowed to manipulate the filibuster and only in ways that favor their agenda of, say, stacking the courts? And, the strategic vision? Reinforcing the Rube Goldberg contraption which is Obamacare? You do know Biden is on record as adamantly opposed to Medicare4all? And, that Medicaid is a need-based nightmare of controlled deprivation? In a country where public health is such a shambles that a pandemic is running out of control.

You can do better.

Hidari 07.06.20 at 9:59 am ( 51 )

'All the attention in this thread so far has been on the political dimension of uncertainty, but it seems to me the public health dimension is also crucial and quite up in the air. What will the trajectory of the virus look like in the US over the next several months? Will infections continue to explode out of control?'

Not just the public health, but the economic effects of the public health. As I pointed out in a previous thread, it's not difficult to work out why Trump looked like he was going to win in January: the stock market was booming, unemployment was low, crime was low, there were no new wars it's not a mystery.

People vote with their wallets.

If Trump someone manages to face down the neo-liberals in his own party and arrange for a gigantic stimulus bill (bigger than the last one) and keeps 'benefits' going past August, he is in with a shout. If he doesn't, and if the economy continues its path to free fall, he will lose.

People vote with their wallets. It is not difficult. You don't need to invoke Russia and etc. to work out why Trump won in 2016 (the impact of the Obama stimulus package, which was too small, hadn't et 'percolated through' to people's bank balances at that point). And, if Trump loses in 2020, the reasons will be self-evident and nothing to do with 'people seeing through him' or 'brave liberals averted a turn to fascism'. If he loses it will be because he screwed up on the 'good' economy.

People vote with their wallets.

[Jul 06, 2020] Prins- -We're Living In A Permanent Distortion- -

Jul 06, 2020 | www.zerohedge.com

Via Greg Hunter's USAWatchdog.com,

Three time best-selling book author Nomi Prins says long before the Covid 19 crisis, the global economy was faltering big time. The Fed stepped in with the start of massive money printing in late 2019 to save the day.

Prins explains, " We were already in crisis mode as I mentioned at the end of my last book going into 2019."

"What did we see at the end of 2019? We saw this pivot, and I call it phase two. . . . Central banks had pivoted to easing mode . . . . Come September, October, November and December, the Fed is producing repo operations. Those are short-term lending operations that are supposed to be the purview of the banks . . . . The Fed is not supposed to get involved, but it did. The Fed had all kinds of excuses. It said it was not QE, but it was. . . . The debt at the end of 2019 for the world was three times GDP. For every $3 borrowed, only $1 of economic activity occurred. That's what we started 2020 with. Throw a pandemic into that . . . and you have a long drawn out financial and economic crisis."

Now, the money printing has gone into overdrive to save the system from the virus crisis. The social and economic damage, according to Prins, is profound and not going away. Prins points out,

"We are not going to pay back this debt, and this is global. Nobody is even considering trying to pay back the debt that has been created. Let's think about why that debt has been created. It's not just because the economy slowed down. That's one reason and kind of an excuse. The reality is the Fed is on steroids, and other central banks are on steroids . . . throughout the world in a larger number and larger magnitude than in the wake of the financial crisis of 2008. This means all this new debt created is even cheaper than the debt created going into the 2008 crisis. So, more debt, created more cheaply, means less incentive to pay it back and more incentive to push it down the road and grow it. You've got this snowball of debt rolling down this high mountain, and it's rolling and growing and getting bigger. The mountain, which is the main street economy, is coming down as the snow ball is coming down, and the main street economy itself, that foundation, is really shaky. . . . How does this end? It ends with us, the foundation, which is the main street economy, by both that snowball of debt and the avalanche of the mountain. That's going to be a multi-decade problem. "

Prins says this next stage has a brand new name and explains,

" I call this a 'Permanent Distortion.' I have not used this term in prior books, but I am using it because . . . the disconnect between financial assets, equity markets and the real economy . . . has become massive ...

There is going to be this endless supply of artificial stimulation into the markets. . . . Former New York Fed President Bill Dudley said the Fed's balance sheet is going to $10 trillion. That's what I have been saying, and now he finally said it. That's not going away anytime soon. That's not being unwound anytime soon. That becomes permanent lift to financial assets . . . . In the wake of that, less real capital gets used for infrastructure, research and development, growth and retooling the economy and getting jobs into this new period."

Prins says gold prices are going to "follow the expansion of the Fed's balance sheet." It is that simple, and Prins predicts,

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

"As we saw in the wake of the financial crisis of 2008, gold and silver will have the ability to go up quite substantially as the Fed's book increases in size, which we know it is going to do. We have been told that multiple times by many different words by Federal Reserve Chairman Jerome Powell."

In closing, Prins says, " We are continuing to drive up asset bubbles where we don't have the real economy to back it up..."

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"The more this 'Permanent Distortion' gets bigger, the more the likelihood the next crisis will happen... and it will be from a higher height. It will be from a larger bubble, a bigger snowball accelerating downward more quickly. I don't think we are out of this crisis. I think the markets are going to have a bumpy ride as the economy has a bumpier ride ."

Join Greg Hunter as he goes One-on-One with three time best-selling author Nomi Prins.

https://www.youtube.com/embed/erwrulvyIqk

* * *

To Donate to USAWatchdog.com Click Here


Posa , 6 minutes ago

The Central Banks will buy up the debt and then liquidate it. Some currencies may be re-issued. Get over it. Not the end of the world.

hugin-o-munin , 20 minutes ago

I used to listen closely to what Nomi said before but now it is only more of the usual talk. The world is a very slow place and it takes a long time until new realizations spread but when they do there is little possibility to stop it. Right now the USD is dying as a world reserve currency. It is slow and strictly kept away as a talking point in media.

The US behaves and continues down a path that is only accelerating this process because it is not up to the US what happens to the USD, it is up to the rest of the world. This is a truth that no American wants to accept but it is a fact. The more aggressive and arrogant the US becomes the faster this will happen and a part of me thinks that is precisely the plan. It will not matter what either the Fed or Treasury does.

Nomi talks about price inflation hitting smaller and poorer nations right now but doesn't even come close to the fact that this is also happening in the US right now albeit much slower. Greg Hunter was too stuck on finding ways to praise Trump as usual to even push this question, if he even recognized it. The gospel from Wall Street and most certainly Goldman Sachs that the USD can never be questioned is all over this interview and which is why these 'former' truth tellers are just that - former.

algol_dog , 35 minutes ago

Futures at new highs tonight. This week will break S&P highs for the year. Amazing time ...

Motorhead , 40 minutes ago

We've been hearing the same old stuff for easily 10-15 years from Jim Willie, Eric King, Peter Schiff, various/numerous gold bugs. et al., ad nauseam. Yeah, one day, they might be right, but repeating the same mantra for over a decade, one is bound to be right eventually.

Balance-Sheet , 54 minutes ago

If it is permanent it is reality not a distortion and this is the point. The 1900s are long over and will not be returning nor will the 1800s be returning for that matter.

Will the National Debt ever be paid off? No and there was never any intention to do so.

The Fed is in charge and does not need to account to anyone other than Congress and its Banking and Budgeting committees therefore provides explanations it hopes people can understand though this might be ill advised in and of itself.

Will the Fed balance sheet go to 10T? It might but only if it seems necessary and that depends of future circumstances which in very fluid conditions cannot be forecast accurately especially when politicians snap the economy on and off again and again.

Do taxpayers have to pay back the Fed balance sheet? No.

Does the US Treasury or the Fed crowd out private investment making it less available or at higher interest rates. NO! and obviously not, right? Everyone can see that.

The Gold Standard is o-v-e-r and there are no practical limitations to the amount of dollars that can be authorized by Congress to the level deemed necessary.

Doesn't this mean the USG will issue unlimited e-dollars? No, anything can happen in a thought experiment of course but the target is to make sure that the supply of USD is just a little more than enough.

If a mistake is made can excess USD is issued can the excess be withdrawn? Yes, billions of dollars die every day anyway as loans mature and all UST issues like bonds that mature in Fed custody simply disappear automatically upon maturity. All of the 'dollars' and the bonds are electronic and are simply deleted electronically invisibly and with no PR issues.

Does Nomi Prins know this? Probably but, hey, she is trying to make a living here so must slightly overfulfill your existing expectations. That is just excellent marketing- you want the customer- that's you- to get a slightly heavy pour. :-)

indus creed , 58 minutes ago

Prins has co-hosted the TYT (The Young Turks) program on Youtube. In case you are wondering, TYT are deluded, woke supporters of AOC/The_Squad types.

[Jul 04, 2020] Low-Income American Households Suffer Inflation Shock From Virus

Notable quotes:
"... "In a period of protest and increasing anger about inequality, the differential inflation rate experienced by low- and high-income households is a concern," said Bloomberg Economics' Björn van Roye and Tom Orlik. ..."
Jul 04, 2020 | www.bloomberg.com

The coronavirus is inflicting a price shock on low income Americans that risks further driving up inequality.

In a study released this week, Bloomberg Economics estimated higher grocery and housing costs for lockdown necessities meant those households whose incomes are in the bottom 10% currently face inflation of 1.5% compared with 1.0% for the top 10% and the official 0.1% overall average recorded in May.

Recalculating Inflation

'Have nots' suffered disproportionately as virus changed buying patterns

https://www.bloomberg.com

Sources: Bloomberg Economics, BLS, https://opportunityinsights.org

Note: Inflation for the lowest (highest) 10% takes the alternative CPI basket for the lowest (highest) decile of household income before taxes from the 2018 Consumer Expenditure Survey

The explanation for the difference lies in how the Covid-19 pandemic has changed consumption patterns by forcing households to buy more food while spending less on transportation or recreational activities.

"In a period of protest and increasing anger about inequality, the differential inflation rate experienced by low- and high-income households is a concern," said Bloomberg Economics' Björn van Roye and Tom Orlik.

The suggestion the virus is less disinflationary than many economists believe poses a challenge for the Federal Reserve which is eyeing a slower inflation rate than that experienced by lower earners, who are instead facing a steady erosion of their purchasing power.

"Taken together with concerns about central banks bailing out investors ahead of firms and workers, and the benefits rich, asset-owning households gain from quantitative easing, it adds to the sense that central banks are unintentional contributors to the problem of inequality," van Roye and Orlik said.

[Jul 04, 2020] The Economic Consequences of the Pandemic by JOHN QUIGGIN

Notable quotes:
"... So called “Democrats”, especially Biden himself, and Biden entourage are sellouts to financial oligarchy. They represent defeated in 2016 wing of the US neoliberal elite — adherents to classic neoliberalism and neoliberal globalization. ..."
"... To expect them to attempt anything of value other the kicking the neoliberalism can down the road is extremely naive. ..."
Jul 04, 2020 | crookedtimber.org
J-D 07.04.20 at 7:59 am ( 2 )

The more you tie your analysis of economic consequences to the assumption of a Democratic victory in the Presidential election and a Democratic majority in the Senate, the more of it will be at risk of being rendered moot by the Republicans retaining either the Presidency or a Senate majority or both, but I guess you know that and are implicitly accepting the risk of having to do a lot of rewriting in that event (if the book is supposed to appear after the elections) or of the book rapidly losing value after the elections (if it’s supposed to appear earlier).

By the same logic, the more you tie your analysis of economic consequences to one particular the way the political strategic battle will play out following the election of a Democratic President and Congressional majority, the more of it will be at risk of being rendered moot by the Democrats pursuing a different strategy. Given the initial assumption of a Democratic President with Democratic majorities in both houses of Congress, I suggest you would do better with a short discussion at a very high level of generality about why

I’m assuming that the title is supposed to be a genuine indication of the main topic of the book and not a way of disguising a real topic of ‘What’s Going to Happen Next’ or ‘What Should Happen Next’, which would not be quite the same.

Lee A. Arnold 07.04.20 at 5:20 pm ( 12 )

If the Democrats take the White House and Congress they’ll have a very short window to get anything done. The plutocracy will react by weakening the dollar e.g. by moving small amounts into the euro, cryptocurrencies and/or even the renmimbi. Interest rates will rise, and this will frighten many (or most) of the Democrats into austerity measures to reduce the budget deficit.

Thus will arise the old propaganda refrain that Democrats don’t know what they are doing, and the resulting frustrations, and Fox News falsehoods, might prompt voters to return Congress to Republican control in the midterms.

Therefore the Democrats should adopt a strategy of getting a few irreversible things done at the very beginning by ditching the filibuster and passing some popular programs which might ALSO help the party against Republican propaganda in future elections. This can be done in healthcare, comprehensive immigration reform, infrastructure, and new constitutional amendments.

Amendment against executive misconduct: A. Executive branch inspectors general shall not be removed but by Congressional approval. B. Not complying with Congressional subpoenas is an impeachable offense. C. In the case of House impeachment, “executive privilege” is automatically voided. D. If a President is removed from office, all of his or her pardons are automatically voided and the miscreants returned to jail.

likbez 07.05.20 at 2:29 am

So called “Democrats”, especially Biden himself, and Biden entourage are sellouts to financial oligarchy. They represent defeated in 2016 wing of the US neoliberal elite — adherents to classic neoliberalism and neoliberal globalization.

To expect them to attempt anything of value other the kicking the neoliberalism can down the road is extremely naive.

In this sense Lee A. Arnold post ( 07.04.20 at 5:20 pm #12) is completely detached from reality.

[Jul 03, 2020] The world s economy is in contraction. Although capital, what actual capital exists, will have to try and do something productive, it is confronted by this fact, that everything is facing contraction.

Highly recommended!
Notable quotes:
"... I agree that globalism is/will be heading into the dumpers, but I see no chance that US-based manufacturing is going to make any significant come-back. ..."
"... What market will there be for US-manufactured goods? US "consumers" are heavily in debt and facing continued downward pressures on income. ..."
"... There will certainly be, especially given the eye-opener of COVID-19, a big push to have medical (which includes associated tech) production capacities reinvigorated in the US. ..."
"... More "disposable" income goes toward medical expenditures. Less money goes toward creating export items; wealth creation only occurs through a positive increase in balance of trade. And on the opposite end of the spectrum, death, the US will likely continue, for the mid-term, to export weaponry; but, don't expect enough growth here to mean much (margins will drop as competition increases, so figure downward pressure on net export $$). ..."
"... the planet cannot comply with our economic model's dependency on perpetual growth: there can NOT be perpetual growth on a finite planet. US manufacturing requires, as it always has, export markets; requires ever-increasing exports: this is really true for all others. Higher standards of living in the US (and add in increasing medical costs which factor into cost of goods sold) means that the price of US-manufactured goods will be less affordable to peoples outside of the US. ..."
"... I'll also note that the notion of there being a cycle, a parabolic curve, in civilizations is well noted/documented in Sir John Glubb's The Fate of Empires and Search for Survival (you can find electronic bootlegged copies on the Internet)- HIGHLY recommended reading! ..."
"... All of this is pretty much reflected in Wall Street companies ramp-ups in stock-buy-backs. That's money that's NOT put in R&D or expansion. I'm pretty sure that the brains in all of this KNOW what the situation is: growth is never coming back. ..."
"... Make no mistake, what we're facing is NOT another recession or depression, it's not part of what we think as a downturn in the "business cycle," as though we'll "pull out of it," it's basically an end to the super-cycle ..."
"... We are at the peak (slightly past peak, but not far enough to realize it yet) and there is no returning. Per-capita income and energy consumption have peaked. There's not enough resources and not enough new demand (younger people, people that have wealth) to keep the perpetual growth machine going. ..."
Jul 03, 2020 | www.moonofalabama.org

Seer , Jul 3 2020 10:34 utc | 125

NemesisCalling @ 28

I agree that globalism is/will be heading into the dumpers, but I see no chance that US-based manufacturing is going to make any significant come-back.

The world's economy is in contraction. Although capital, what actual capital exists, will have to try and do something "productive," it is confronted by this fact, that everything is facing contraction. During times of contraction it's a game of acquisition rather than expanding capacity: the sum total is STILL contraction; and the contraction WILL be a reduction in excess, excess manufacturing and labor.

What market will there be for US-manufactured goods? US "consumers" are heavily in debt and facing continued downward pressures on income. China is self-sufficient (enough) other than energy (which can be acquired outside of US markets). Most every other country is in a position of declining wealth (per capita income levels peaked and in decline). And manufacturing continues to increase its automation (less workers means less consumers).

There will certainly be, especially given the eye-opener of COVID-19, a big push to have medical (which includes associated tech) production capacities reinvigorated in the US. One has to look at this in The Big Picture of what it means, and that's that the US population is aging (and in poor health).

More "disposable" income goes toward medical expenditures. Less money goes toward creating export items; wealth creation only occurs through a positive increase in balance of trade. And on the opposite end of the spectrum, death, the US will likely continue, for the mid-term, to export weaponry; but, don't expect enough growth here to mean much (margins will drop as competition increases, so figure downward pressure on net export $$).

Lastly, and it's the reason why global trade is being knocked down, is that the planet cannot comply with our economic model's dependency on perpetual growth: there can NOT be perpetual growth on a finite planet. US manufacturing requires, as it always has, export markets; requires ever-increasing exports: this is really true for all others. Higher standards of living in the US (and add in increasing medical costs which factor into cost of goods sold) means that the price of US-manufactured goods will be less affordable to peoples outside of the US.

And here too is the fact that other countries' populations are also aging. Years ago I dove into the demographics angle/assessment to find out that ALL countries ramp and age and that you can see countries' energy consumption rise and their their net trade balance swing negative- there's a direct correlation: go to the CIA's Factbook and look at demographics and energy and the graphs tell the story.

I'll also note that the notion of there being a cycle, a parabolic curve, in civilizations is well noted/documented in Sir John Glubb's The Fate of Empires and Search for Survival (you can find electronic bootlegged copies on the Internet)- HIGHLY recommended reading!

All of this is pretty much reflected in Wall Street companies ramp-ups in stock-buy-backs. That's money that's NOT put in R&D or expansion. I'm pretty sure that the brains in all of this KNOW what the situation is: growth is never coming back.

MANY years ago I stated that we will one day face "economies of scale in reverse." We NEVER considered that growth couldn't continue forever. There was never a though about what would happen with the reverse "of economies of scale."

Make no mistake, what we're facing is NOT another recession or depression, it's not part of what we think as a downturn in the "business cycle," as though we'll "pull out of it," it's basically an end to the super-cycle.

We will never be able to replicate the state of things as they are. We are at the peak (slightly past peak, but not far enough to realize it yet) and there is no returning. Per-capita income and energy consumption have peaked. There's not enough resources and not enough new demand (younger people, people that have wealth) to keep the perpetual growth machine going.

[Jul 01, 2020] Today, a CEO would be embarrassed to admit he sacrificed profits to protect employees or a community

Jul 01, 2020 | www.amazon.com


J.L. Populist Top Contributor: Guitars

The Close Relationship Between the Rich and Politics.

5.0 out of 5 stars The Close Relationship Between the Rich and Politics. Reviewed in the United States on January 15, 2009 Verified Purchase In this large book Kevin Phillips takes the reader on a lesson of economics and politics. Much of the history in WEALTH AND DEMOCRACY is of the American variety. He does, however, examine Spain, Holland,and Britain and the commonality these past governments have with the current American political and economic scene. The biggest common thread is the shrinking of the middle class a/k/a stratification of wealth.

One of Mr. Phillips observations is that in the 1990s transnational corporations posted record earnings while hiring few Americans. Sometimes slashing employment to boost the bottom line.
Along that line he quotes Peter Cepelli, a professor at Wharton School of Business- "Today, a CEO would be embarrassed to admit he sacrificed profits to protect employees or a community."

He also describes the shifting of the tax burden from corporations to low and middle income individuals through FICA taxes.

His quote on page 242 sums up American politics of the 1890s- "For two or three decades, then, democracy was corrupted at its constitutional core. Control of the Senate secured not just that chamber but the federal courts, the U.S.Supreme Court, and the U.S. Army to the service of American industry and finance."

He demonstrates in this book that wealth has been a factor in the politics of the United States from the very start. Finance (banking) has had it's proponents like Hamilton and some presidents through time while it has also had it's opponents; most notably Thomas Jefferson and Andrew Jackson.

The author takes a look at the worth of some former Cabinet members, Warren Harding's especially, although he wasn't the only president to tap the wealthy for his service.

Another interesting point that Mr. Phillips makes is that globalization can be, and has been in the past, reversed.

One of the curious inclusions in this book is found on page 71. It's an excerpt of a letter from FDR to Col. Edmund Mandell House. (House is a rather controversial, mysterious figure in American political history and the subject of conspiracy theories. He was a close adviser to Woodrow Wilson during his presidency). "The real truth... is, as you and I know, that a financial element in the larger centers has owned the government ever since the days of Andrew Jackson- and I am not wholly excepting the Administration of W.W. The country is going through a repetition of Jackson's fight with the Bank of the United Sates- only on a bigger and broader basis."

The author also quotes such figures as John Kenneth Galbraith and Thorstein Veblen

The moral of WEALTH AND DEMOCRACY as I take it, is that our economic ills now are nothing more than a recurring pattern that has been experienced by various powerful governments in their heydays. Part of the problem is hubris or the belief that it can't happen again.
This is a large book and some sections are laborious to read, but the message of the book is comprehensible and detailed very well. It may just be the most detailed book on the subject of wealth and it's adverse affect on government, especially a democratic form of government.

[Jul 01, 2020] The Covid-BLM Diversion; -Shock Therapy- behind a smokescreen of hysteria and racial incitement by Mike Whitney

Jul 01, 2020 | www.unz.com

The imposition of the nationwide lockdowns required elite consensus. There's no way that a project of that magnitude could have been carried out absent the nearly universal support of establishment elites and their lackeys in the political class. There must have also been a fairly-detailed media strategy that excluded the voices of lockdown opponents while– at the same time– promoting an extremely dubious theory of universal quarantine that had no basis in science, no historical precedent, and no chance of preventing the long-term spread of the infection. All of this suggests that the lockdowns were not a spontaneous overreaction to a fairly-mild virus that kills roughly 1 in 500 mainly-older and infirm victims, but a comprehensive and thoroughly-vetted plan to impose "shock therapy" on the US economy in order to achieve the long-term strategic ambitions of ruling class elites. As one sardonic official opined, "Never let a crisis go to waste."

It was clear from the beginning, that the lockdowns were going to have a catastrophic effect on the economy, and so they have. As of today, 30 million people have lost their jobs, tens of thousands of small and medium-sized businesses have been shuttered, second quarter GDP has plunged to an eye watering -45.5 percent (Atlanta Fed), and the economy has experienced its greatest shock in history. Even so, pundits in the mainstream media, remain steadfast in their opposition to lifting the lockdowns or modifying the medical martial law edicts that have been arbitrarily imposed by mainly-liberal governors across the country. Why? Why would the so-called "experts throw their weight behind such a sketchy policy when they knew how much suffering it was going to cause for ordinary working people? And why has the media continued to attack countries like Sweden who merely settled on a more conventional approach instead of imposing a full-blown lockdown? Swedish leaders and epidemiologists were unaware that adopting their own policy would be seen as a sign of defiance by their global overlords, but it was. Elites have decided that there can be no challenge to their idiotic lockdown model which is why Sweden had to be punished, ridiculed, and dragged through the mud. The treatment of Sweden further underscores the fact that the lockdown policy (and the destruction of the US economy) was not a random and impulsive act, but one part of a broader plan to restructure the economy to better serve the interests of elites. That's what's really going on. The lockdowns are being used to "reset" the economy and impose a new social order.

But why would corporate mandarins agree to a plan that would shrink their earnings and eviscerate short-term profitability?

Why? Because of the the stock market, that's why. The recycling of earnings into financial assets has replaced product sales as the primary driver of profits. As you may have noticed, both the Fed and the US Treasury have taken unprecedented steps to ensure that stock prices will only go higher. To date, the Fed and Treasury have committed $8 trillion dollars to backstopping the weaker areas of the market in an effort to flood the market with liquidity. "Backstopping" is an innocuous-sounding term that analysts use to conceal what is really going on, which is, the Fed is "price fixing", buying up trillions of dollars of corporate debt, ETF's, MBS, and US Treasuries to keep prices artificially high in order to reward the investor class it secretly serves. This is why the corporations and Tech giants are not concerned about the vast devastation that has been inflicted on the economy. They'll still be raking hefty profits via the stock market while the real economy slips deeper into a long-term coma. Besides, when the lockdowns are finally lifted, these same corporations will see a surge of consolidation brought on by the destruction of so many Mom and Pop industries that couldn't survive the downturn. No doubt, the expansion of America's tenacious monopolies factored heavily into the calculation to blow up the economy. Meanwhile, the deepening slump will undoubtedly create a permanent underclass that will eagerly work for a pittance of what they earned before the crash. So, there you have it: Profitability, consolidation and cheap labor. Why wouldn't corporate bosses love the idea of crashing the economy? It's a win-win situation for them.

We should have seen this coming. It's been clear since the Russiagate fiasco that elites had settled on a more aggressive form of social control via nonstop disinformation presented as headline news based on spurious accusations from anonymous sources, none of who were were ever identified, and none of whose claims could ever be verified. The media continued this "breathless" saturation campaign without pause and without the slightest hesitation even after its central claims were exposed as lies. If you are a liberal who watches the liberal cable channels or reads the New York Times, you might still be unaware that the central claim that the emails were stolen from the DNC by Russia (or anyone else for that matter) has not only been disproved, but also, that Mueller, Comey, Clapper etc knew the story was false way back in 2017. Let that sink in for a minute. They all knew it was a lie after the cyber security team (Crowdstrike) that inspected the DNC computers testified that there was no evidence that the emails had been "exfiltrated". In other words, there was no proof the emails were stolen. There was no justification for the Mueller investigation because there was no evidence that the DNC emails had been hacked, downloaded or pilfered. The whole thing was a hoax from the get go.

There's no way to overstate the importance these recent findings, in fact, our understanding of Russiagate must be applied to the lockdowns, the Black Lives Matter protests and other psychological operations still in the making. What's critical to grasp is not simply that the allegations were based on false claims, (which they were) but that a large number of senior-level officials in law enforcement (FBI), intel agencies, media and the White House knew with absolute certainty that the claims were false (from 2017 and on) but continued to propagate fake stories, spy on members of the new administration and use whatever tools they had at their disposal to overthrow an elected president. The guilty parties in this ruse have never admitted their guilt nor have they changed their fictitious storyline which still routinely appears in the media to this day. What we can glean from this incident, is that there is a vast secret state operating within the government, media and the DNC, that does not accept our system of government, does not accept the results of elections and will lie, cheat and steal to achieve their nefarious objectives. . That's the lesson of Russiagate that has to be applied to both the lockdowns and the Black Lives Matter protests. They are just the next phase of the ongoing war on the American people.

The lockdowns are an Americanized version of the "Shock Doctrine", that is, the country has been thrust into a severe crisis that will result in the implementing of neoliberal economic policies such as privatization, deregulation and cuts to social services. Already many of the liberal governors have driven their states into bankruptcy ensuring that budgets will have to be slashed, more jobs will be lost, funding for education and vital infrastructure will shrink, and assistance to the poor and needy will be sharply reduced. Shutting down the US economy, will create a catastrophe unlike anything we have ever seen in the United States. US Treasuries will likely loose their risk-free status while the dollar's as days as the "world's reserve currency" are probably numbered. That "exorbitant privilege" is based on confidence, and confidence in US leadership is at its lowest point in history.

It's not surprising that the Black Lives Matter protests took place at the same time as the lockdowns. The looting, rioting and desecration of statues provided the perfect one-two punch for those who see some tactical advantage in intensifying public anxiety by exacerbating racial tensions and splitting the country into two warring camps. Divide and conquer remains the modus operandi of imperialists everywhere. That same rule applies here. Here's more background from an article at the Off-Guardian:

"It is no coincidence that another Soros funded activism group Black Lives Matter has diverted the spotlight away from the lockdown's broader impact on the fundamental human rights of billions of people, using the reliable methods of divide and rule, to highlight the plight of specific strata's of society, and not all.

It's worth pointing out that BLM's activity spikes every four years . Always prior to the elections in the US, as African Americans make up an important social segment of Democrat votes. The same Democrats who play both sides like any smart gambler would. The Clintons, for example, are investors into BLM"s partner, the anti-fascist ANTIFA. While Hilary Clinton's mentor (and best friend) was former KKK leader Robert Byrd.

BLM is a massively hyped, TV-made, politicized event, that panders to the populist and escapist appetite of the people. Blinding them from their true call to arms in defense of the universal rights of everyone . Cashing in on the youths pent-up aggression . And weaponising the tiger locked in a rattled cage for 3-months, and unleashed by puppet masters as the mob

As a general rule of thumb, it is safe to assume that if a social movement has the backing of big industry, big philanthropy or big politics, then its ideals run contrary to citizen empowerment." (" The Co-opting of Activism by the State ", Off-Guardian)

Black Lives Matter protests provide another significant diversion from the massive destruction of the US economy. This basic plan has been used effectively many times in the past, most notably in the year following the invasion of Iraq. Some readers will remember how Iraqis militants fought US occupation forces following the invasion in 2003. The escalating violence and rising death-toll created a public relations nightmare for the Bush team that finally settled on a plan for crushing the resistance by arming and training Shia death squads. But the Bushies wanted to confuse the public about what they were really up to, so they concocted a narrative about a "sectarian war" that was intended to divert attention from the attacks on American soldiers.

In order to make the narrative more believable, US intel agents devised a plan to blow up the Shia's most sacred religious site, the Golden Dome Mosque of Samarra, and blame it on Sunni extremists. The incident was then used to convince the American people that what was taking place in Iraq was not a war over foreign occupation, but a bitter sectarian conflict between Sunnis and Shia in which the US was just an impartial referee. The killing of George Floyd has been used in much the same way as the implosion of the mosque. It creates a credible narrative for a massive and coordinated protests that have less to do with racial injustice than they do with diverting attention from the destruction of the economy and sowing division among the American people. This is a classic example of how elites use myth and media to conceal their trouble-making and escape any accountability for their actions.

Check out this excerpt from a paper by Carlo Caduff, an academic at King's College London, in a journal called Medical Anthropology Quarterly. It's entitled "What Went Wrong: Corona and the World After the Full Stop":

" Across the world, the pandemic unleashed authoritarian longings in democratic societies allowing governments to seize the opportunity, create states of exception and push political agendas. Commentators have presented the pandemic as a chance for the West to learn authoritarianism from the East. This pandemic risks teaching people to love power and call for its meticulous application . As a result of the unforeseeable social, political and economic consequences of today's sweeping measures, governments across the world have launched record "stimulus" bills costing trillions of dollars, pounds, pesos, rand and rupees . The trillions that governments are spending now as "stimulus" packages surpass even those of the 2008 financial crisis and will need to be paid for somehow. . .. If austerity policies of the past are at the root of the current crisis with overwhelmed healthcare systems in some countries, the rapidly rising public debt is creating the perfect conditions for more austerity in the future. The pandemic response will have major implications for the public funding of education, welfare, social security, environment and health in the future." ( Lockdownskeptics.org )

This is precisely right. The country has been deliberately plunged into another Great Depression with the clear intention of imposing harsh austerity measures that will eviscerate Social Security, Medicare, Medicaid and any other social safteynet programs that benefit ordinary working people, retirees, or anyone else for that matter. None of it is random, spontaneous or spur-of-the-moment policymaking. It's all drawn from a centuries-old Imperial Playbook that's being used by scheming elites to implement their final plan for America: Tear down the statues, destroy the icons and symbols, rewrite the history, crush the populist resistance, create a permanent underclass that will work for pennies on the dollar, pit one group against the other by inciting racial hatred, political polarization and fratricidal warfare, promote the vandals who burn and loot our cities, attack anyone who speaks the truth, and offer unlimited support to the party that has aligned itself with the corrupt Intel agencies, the traitorous media, the sinister deep state, and the tyrannical elites who are determined to control the all the levers of state power and crush anyone who gets in their way.

[Jul 01, 2020] Elites may have to contend with a real economy which becomes so bad it affects the fictitious economy of equities bonds. An economy that no amount of Fed injections can save. And in trying to save it, maybe the Fed will finally injure the dollar to the point where is effectively loses it reserve status.

Jul 01, 2020 | www.unz.com

animalogic , says: June 30, 2020 at 10:04 am GMT

I think there's a lot to what Mike says. However, if we accept his premise we must also accept dangers of that premise.
Essentially, Mike is saying that Elites have used Covid & BLM etc shenanigans to advance a political/economic purpose: ie that the Fed/Treasury will blast huge chunks of liquidity to them via buying up any equities & bonds however dubious or junk they are. Secondary benefits include across the board austerity & working people desperate enough to almost sell themselves into slavery.

Elites have therefore bet BIG. Big returns but a potential for big losses Elites may have to contend with a real economy which becomes so bad it affects the fictitious economy of equities & bonds. An economy that no amount of Fed injections can save. And in trying to save it, maybe the Fed will finally injure the dollar to the point where is effectively loses it reserve status.

Dangerous times.

[Jun 29, 2020] Gilead Will Charge More Than $3,000 For A Course Of COVID-19 Drug Remdesivir

Highly recommended!
Corrupt Fauci, stupid customers. IT the same neoliberal story of profiteering as a virtue all over again.
The government bought by Big Pharma, and Big Pharma out or control with questionable drugs and methods are two side of the same coin
Jun 29, 2020 | www.zerohedge.com

On Monday, Gilead disclosed its pricing plan for Gilead as it prepares to begin charging for the drug at the beginning of next month (several international governments have already placed orders). Given the high demand, thanks in part due to the breathless media coverage despite the drug's still-questionable study data, Gilead apparently feels justified in charging $3,120 for a patient getting the shorter, more common, treatment course, and $5,720 for the longer course for more seriously ill patients. These are the prices for patients with commercial insurance in the US, according to Gilead's official pricing plan.

As per usual, the price charged to those on government plans will be lower, and hospitals will also receive a slight discount. Additionally, the US is the only developed country where Gilead will charge two prices, according to Gilead CEO Daniel O'Day. In much of Europe and Canada, governments negotiate drug prices directly with drugmakers (in the US, laws dictate that drug makers must "discount" their drugs for Medicare and Medicaid plans).

But according to O'Day, the drug is priced "far below the value it brings" to the health-care system.

However, we'd argue that this actually isn't true. Remdesivir was developed by Gilead to treat Ebola, but the drug was never approved by the FDA for this use, which caused Gilead to shelve the drug until COVID-19 presented another opportunity. Even before the first study had finished, the company was already pushing propaganda about the promising nature of the drug. Meanwhile, the CDC, WHO and other organizations were raising doubts about the effectiveness of steroid medications.

Months later, the only study on the steroid dexomethasone, a cheap steroid that costs less than $50 for a 100-dose regimen, has shown that dexomethasone is the only drug so far that has proven effective at lowering COVID-19 related mortality. Remdesivir, despite the fact that it has been tested in several high quality trials, has not.

So, why is the American government in partnership with Gilead still pushing this questionable, and staggeringly expensive, medication on the public?

[Jun 28, 2020] The COVID-Crisis Could Bring A New Era Of Decline For American Core Cities by Ryan McMaken

Jun 26, 2020 | www.zerohedge.com
Authored by Ryan McMaken via The Mises Institute,

Manufacturing company 7-Sigma made headlines when it decided to leave Minneapolis as a result of the company's plant being burned by rioters. "They don't care about my business," 7-Sigma owner Kris Wyrobek old the Star-Tribune . After more than 30 years in the city, the company isn't staying, nor are any of the company's fifty jobs. But the costs of being victimized in protests is just one of many reasons homeowners and businesses may be realizing life and business in central cities has lost its luster. The ongoing threat of more business lockdowns, more riots, higher taxes, and failing schools may induce many Americans to flee, once again, to the suburbs as their parents or grandparents did.

This goes well beyond the fear of the disease many journalists have assumed is behind the observed beginnings of an exodus from cities. Yes, many in the upper classes have fled the cities for their mountain homes and yachts for "health reasons." But these people are relatively few in number and their thinking quixotic. They can afford to drop everything and leave cities overnight.

But the larger impacts are likely to be felt as middle class homeowners and business owners conclude they'd simply rather avoid the edicts and neglect of mayors and city councils in central cities who thinking nothing of issuing job-destroying "stay-at-home" orders while allowing rioters and vandals free rein.

The real cost to cities is likely to emerge over time. It will come in the form of families and shop owners who decide it's best to move their businesses ten miles down the road to a neighboring city that will actually do something about rioters. It will come in the form of families which decide their next home will be just a little bit farther from the urban dictator-mayors who have the heaviest hands in enforcing lockdowns and business closures. It will come in the form of potential new business owners and homeowners will be decide to never purchase property to start a business in central cities in the first place.

The Decline of Cities at Mid-Century

We may be seeing something reminiscent what happened in America's large central cities during the 1970s and 1980s. Many Americans concluded these cities had become unlivable and crime infested. Many concluded these were places that were quite inhospitable to doing business. So they left. (Forced busing for "integration" purposes was a factor as well.)

In some cases, there were dramatic events that illustrated the trend. The late sixties in New York saw several strikes by city workers. Transit and sanitation in the city became a disaster. The 1977 blackout in New York City ended in widespread riots that induced many businesses to pack up and never return. Many households followed.

But for the most part, cities saw an exodus that took many years and slowly hollowed out the finances and tax revenues of big cities. Areas of Detroit fell into ruin. By the mid seventies, New York City was lurching from one fiscal crisis to another.

"Nearly half of large cities lost cities shrank by at least 10 percent" during the 1970s, according to the Kansas City Fed :

St. Louis, Cleveland, Buffalo, and Detroit each shrank by more than 20 percent. Vast stretches of urban land were left virtually deserted.

More than half of large cities lost population from 1950 to 1980.

There were other factors at work as well, of course. The central cities were often hit the hardest as the old Rust Belt went into decline after the region was destroyed by labor unions and city and state laws that made business in the region inefficient and uncompetitive. Business owners and workers who possessed any real ambition or entrepreneurial spirit had good reason to leave the region altogether.

City centers, built on an old manufacturing-based working class never recovered.

The situation today is a bit different. During the 1990s, core cities began to recover from their mid-century decline and many officials and intellectuals in these areas began cultivating the so-called " creative class " (also known as the " bohemian bourgeoisie ") with the idea that young artists, engineers, architects, and tech workers might be convinced to move into city centers and and revitalize local urban economies. It appears to have worked in many cases.

But in 2020 America the hey day of the new techno-city may be over.

Civil Unrest

The case of the Sigma-7 closure in Minneapolis is just the most famous case of central cities' hostility to businesses within their borders. We're not hearing about the many small less-notable businesses that won't re-open in the wake of riots. In other cities, such as Chicago, city officials are now begging retailers to not leave the city.

Meanwhile, a number of small businesses now within the "CHOP" zone in Seattle is suing the city for abandoning businesses to the whims of the leftist mob.

As reported by the local NBC affiliate, local businesses have been threatened and harassed by the bosses of the "Capitol Hill Occupation Protest" (CHOP) zone in the city. The city government, the plaintiffs have concluded, essentially have abandoned these businesses to the new "government":

The City's decision has subjected businesses, employees, and residents of that neighborhood to extensive property damage, public safety dangers, and an inability to use and access their properties.

Minneapolis and Seattle aren't the only cities the prospect of continued civil unrest. with forty million new unemployment filings in recent months, the US faces a worrisome period of highly elevated unemployment. Many of the worst-affected workers will be lower-income populations living in core cities. This won't help the prospect of a speedy return to placid city environments.

Regime Uncertainty

As government experts and media pundits emphasize growth in reported COVID-19 cases, the prospect of renewed lockdowns now looms, as well. This is a threat at the state level and in many suburban local governments. But experience strongly suggests that those political jurisdictions controled by political leftists are likely to embrace the longest and harshest lockdowns. In many states, such as Texas and Colorado and California and Pennsylvania, local governments in big cities embraced lockdowns more enthusiastically than the surrounding regions and at the state capitols. "Regime uncertainty" -- uncertainty about what business-killing regulations a government might embrace next -- appears to be greater in central cities.

Business owners are likely to remember this. In the medium- and long-term, business owners and potential business owners will gravitate to those areas where the threat of harsh lockdowns is smaller.

The Rise of the "Work-at-Home" Trend

If the work-at-home trend persists, core cities will have lost one of their main draws: namely, the prospect of a shorter commute for those who can afford a home close-in to the employment centers. Even if daily commutes are just reduced -- say, to a three-days-per-week schedule -- the commute-time cost of a home in the suburbs falls dramatically. Without the need to sit in traffic five days per week, more expensive city homes and the congrestion and crime of city centers becomes far less attractive.

Declining Tax Revenue and Urban Blight

On top of it all will come big cuts to city budgets as COVID lockdowns decimated tax revenues . All cities and states will be impacted , but if the most productive taxpayers move out of the core cities, it is these areas that will feel the brunt of revenue shortfalls. In other words, a shift of productivity toward the suburbs and small cities will hollow out big city budgets and school district budgets as well. This will only encourage businesses and families to stay away in even larger numbers. Families will seek to avoid school districts and decline, and employers won't want to become part of a shrinking tax base where tax increases are frequently eyed by politicians as a way out.

The Beginnings of a Trend?

All of this will take time to play out. Yes, we've started to see those with means leave big cities already. The New York Times has reported on numerous former residents of New York City who have left for the surrounding regions. The Times asks "is New York City worth it anymore?" and points out "the pandemic send young New Yorkers packing."

Meanwhile, some real estate agents report a "mad rush" of wealthy buyers to get out of the city center and into the wealthy suburbs of San Francisco. These are just the early movers. The exiles of more modest means will come later. Not surprisingly, the median rent in San Francisco for a one-bedroom apartment dropped 9.2 percent in May, compared year-over-year.

But these remains a small percentage of the overall population. Most homeowners, families, and business owners need time to move their businesses, sell their properties, and be convinced it's time to move on.

None of this should be interpreted, however, as a trend away from metropolitan areas overall. There appears to be little risk that large numbers of Americans will be quitting metro areas for rural villages and towns. Some will. But most will notice that metro areas still have most of the jobs, most of the cultural institutions, and most of the health care services. What can't be said is that core cities have a monopoly on these resources. In recent decades, suburbs and small cities have increasingly become places that host a wide variety of sports teams, museums, convention centers, hospitals, and more. Metro areas are still a good place to be. But old core cities? Not so much.

[Jun 28, 2020] Deutsche Lufthansa Deal Shows How Bailouts Should Be Done

History will repeat itself as the grand experiment of bloated private finance capitalist theft unravels and so it is worth reviewing how this transformation was achieved and to avoid old errors and uninformed blunders.
Jun 28, 2020 | www.moonofalabama.org
Deutsche Lufthansa Deal Shows How Bailouts Should Be Done karlof1 , Jun 26 2020 18:47 utc | 5

The corona pandemic has brought many companies to the brink of bankruptcy. Some can and should be saved by the government.

Lufthansa, the 94 years old Germany airline, just made a deal with the German government that shows how this should be done.


bigger

Yesterday the shareholders of Lufthansa voted to accept the government bailout:

Lufthansa (LHAG.DE) shareholders on Thursday backed a 9 billion euro ($10 billion) government bailout, securing the future of Germany's flagship airline after it was brought to the brink of collapse by the COVID-19 pandemic.

The plan, backed by 98% of the shareholder capital that cast a vote at the online meeting, will see Berlin take a 20% stake in Lufthansa and two board seats.

Shares in the company, which employs around 138,000 people, closed 7.1% higher, having risen strongly earlier after top shareholder Heinz Hermann Thiele dropped objections to the deal.

Also on Thursday, European Union regulators approved Lufthansa's 6 billion euro recapitalisation, part of the bailout deal, subject to a ban on dividends, share buybacks and some acquisitions until state support is repaid .

The deal structuring is interesting and quite favorable for the government.

The government bought newly issued Lufthansa shares for a total of $300 million which will give it 20% of the ownership of the company. These shares were valued at a quarter of their current value. The government will additionally provide €5.7 billion in 'silent capital'. That is a loan structured as a form of preferred shares that are entitled to a preferred dividend. This will have to be paid back before other shareholders will again get dividends. Lufthansa has a right to pay back the silent capital. But the 20% of the ownership via shares will stay with the government until it decides to sell it.

An additional 3 billion euro credit line is provided by a government owned bank.

This is a much better deal for the taxpayer than in the U.S. where the airlines which were bailed out only had to provide stock warrants which allow the government to buy some shares if it chooses to.

The Lufthansa deal prevents the bankruptcy of the company and a potentially unfriendly foreign takeover. Lufthansa was quite profitable before the onset of the coronavirus crisis. It is a good airline and it is now likely to survive. In a few years it will again make profits.

Seeking Alpha has more technical details of the deal and says that the current Lufthansa share price is too high :

Currently, the share price is about €10.4, which corresponds to a very generous valuation of about 4 times estimated book value. It is also way higher than the €2.56 per share the German government paid. This discount of more than 75% suggests shares of Deutsche Lufthansa are way overvalued.

The share price may currently be overvalued and may well sink. But without the bailout deal the shares would have been worthless.

There is also a deal that will keep most of Lufthansa's employees in their jobs :

[T]ough decisions lie ahead, with Lufthansa working on a restructuring plan in which up to 22,000 jobs could be at risk - although CEO Carsten Spohr told Bild newspaper that hours and wages could be reduced by a fifth instead of axing a fifth of jobs .

This sounds like a company wide introduction of a four day work week though with only 80% of the former full pay.

The cabin crew union has already agreed to such a deal and the pilot and ground worker unions will likely also do so. There currently ain't many airline jobs available elsewhere so for most of the employees this is a better deal than a potential long term unemployment.

I really like how this has turned out. A good company has been saved. The government has set the right conditions and it may even profit from the deal. The shareholders have taken a large haircut but will not lose all of their money. The employees will keep their jobs but with a reduced time and pay.

It would have been better if all this had not been necessary. But in the current situation it is the best that can be done.

All parties have taken a "we are all in the same boat" attitude to make this happen.

This should be an example for those bailout deals that will still have to be made.

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Posted by b on June 26, 2020 at 18:13 UTC | Permalink Yes, a Galaxy of difference between the cash giveaways called bailouts by the Outlaw US Empire and the partial nationalization of the airline that gains something for the German public in exchange for the infusion of capital. I expect to see more of this sort of activity as the EU begins to overthrow Neoliberalism.


Et Tu , Jun 26 2020 18:31 utc | 2

No comment on the shocking US corporate theft. Actually, here's one: that country is looking worse than the USSR in the late 80's and the Marie Antoinette class will have to offer much more than cake to avoid a revolution...

However, a quick look at Lufthansa's figures for 2019 on Wikipedia reveals:
https://en.wikipedia.org/wiki/Lufthansa

Revenue Increase €36.42 billion (2019
Operating income Decrease €2.0 billion (2019
Net income Decrease €1.21 billion (2019
Total assets Increase €42.66 billion (2019
Total equity Increase €10.15 billion (2019

So the German Gov't paid 10 billion for a 20% stake in a company that yielded only a 3-4 % net profit at 100% of its total equity value. Never mind share valuations... can someone explain how that is actually a good deal for the German Govt please? Perhaps i am just giving the numbers a simplified look. Perhaps, given the immense power of private equity these days, everything has become relative.

MegaMicro , Jun 26 2020 19:20 utc | 9
Better deal ?

--------------------------------
Lufthansa CEO compensation

"According to our data, Deutsche Lufthansa AG ...
... and paid its CEO total annual compensation worth
€4.4m over the year to December 2018"

--------------------------------

Did our carsten spohr CEO:
take a cut, help the TEAM effort, fall on the sword ?

~4,400,000 EUR = carsten's take

Perhaps carsten provide the example to take a 90% cut of ~3,960,000 EUR, leaving him with a "paltry"
~~~440,000 EUR ( ~10 x average_German_salary )

@~~~44,000 EUR salary, then employee cost = ~80,000 EUR

cost-of-employee-in-germany-calculator

49.5 = ( 3.96 Mega EUR ) / ( 80 k EUR )

therefore carsten alone, by taking a pay cut
can save the jobs of
~49.5 average Germans
and still earn ~10x more than average German employee.

PS: i'll do it for 440 k EUR

( there are studies showing that CEOs have almost no impact )

TG , Jun 26 2020 19:39 utc | 11
Granted, the Lufthansa deal is far less toxic than the corporate bailouts we have seen in the United States, which are really just theft, and encouraging financially sloppy behavior and effectively subsidizing stock-buy back programs and other financial engineering rubbish.

But I am still skeptical that it's all THAT good a deal. I mean, don't forget, if a company goes bankrupt its assets don't go up in smoke. It goes into receivership, the stockholders lose money, and the management that steered the company onto the rocks get fired, and replaced with hopefully better managers. The planes are still there, the employees are still working, etc. Granted that a government has a vested interest in not letting it get chopped up and dispersed, there is no need to preserve either stockholders or current management to keep the airline functioning.

The essence of capitalism is that people who make bad investments should lose money.

TG , Jun 26 2020 19:39 utc | 11
Granted, the Lufthansa deal is far less toxic than the corporate bailouts we have seen in the United States, which are really just theft, and encouraging financially sloppy behavior and effectively subsidizing stock-buy back programs and other financial engineering rubbish.

But I am still skeptical that it's all THAT good a deal. I mean, don't forget, if a company goes bankrupt its assets don't go up in smoke. It goes into receivership, the stockholders lose money, and the management that steered the company onto the rocks get fired, and replaced with hopefully better managers. The planes are still there, the employees are still working, etc. Granted that a government has a vested interest in not letting it get chopped up and dispersed, there is no need to preserve either stockholders or current management to keep the airline functioning.

The essence of capitalism is that people who make bad investments should lose money.

Hoarsewhisperer , Jun 26 2020 20:35 utc | 15
QANTAS CEO Alan Joyce took home A$23.9m in 2018.
In March 2020 he offered to work for free for the rest of the year ...
the Financial Year ...
which ends June 30, 2020.
BG13 , Jun 26 2020 20:39 utc | 16
If somebody still calls this "market economy" the normal way would be: bankruptcy, first are served the employees, second the creditors. Shareholders lose, risk doesn't pay off all the time (except you own the government). The trade mark "Lufthansa" would be part of the insolvency estate, as well as all the planes. Used planes would be very cheap following the market rule of high offer vs. low demand. Personal is available as well. Good conditions for creating a new airline ... What exactly is the reason to throw billions of Euros into this? The gouvernement could for a part of this money create a national state owned carrier out of the insolvency estate.
psychohistorian , Jun 26 2020 20:56 utc | 17
The roadway to hell is paved with the best of intentions.

If a government is going to subsidize the transportation industry in its country to the benefit of the most public, why start with airlines that serve the top few of the public.

Is this deal better than what is happening in the US? It is too soon to tell but I think it is quite possible that the shift to fast train increases and airlines are reduced to more intercontinental.

Without this action being done within a larger context of nationalization (partial or otherwise) of segments of core economic sectors, I question its efficacy. Where is the public discussion about bigger picture futures for countries?....crickets!!!

A.L. , Jun 26 2020 21:08 utc | 18
A similar deal as Lufthansa was done between the Hong Kong government and its flag carrier Cathay Pacific. Even though Cathay's employees were some of the most vocal and organisers of strikes and various anti-government protests and riots.

talking about biting the hand that feeds it....

vk , Jun 26 2020 21:14 utc | 19
And, to top it off, this bail out violates one of the most sacred moral principles of capitalism/liberalism: the risk is the onus of the entrepreneur by definition; that's what justifies his absorption of the entire lucre if it pans out.

The worker gave up his freedom of enterprise in exchange for the security and constancy ("fixity") of the wage. Therefore it is his right within the capitalist moral code that he/she be weathered from risk taken by his/her entrepreneur. Those Lufhansa workers should've never have come to the point of taking a 20% cut in their salaries to cover for their bosses' risks. Pandemics are natural disasters, and, for natural disasters, the capitalist system has the insurance industry - which was created exactly for situations like these (as is well historically documented).

Curious fact: in the 2008 meltdown, the USG had to bail out the world's biggest insurance company - AIG - because it flat out went bust (too many of its clients went bankrupt at the same time). Ironies of ironies - or, as I like to say, the farce of the "self-regulating" myth of the "free market".

BraveNewWorld , Jun 26 2020 21:30 utc | 20
Yup, all around the world this is where the real fleecing of the poor and middle class will happen. Take ungodly sums of money from the poor and give it to the rich and then the rich can use loop holes not to pay it back. Any poor person not paying their taxes will go to jail. Any CEO who finds a loop hole to not pay back will be obscenely rewarded. Welcome to the real world Neo.
arby , Jun 27 2020 0:43 utc | 39
Whatever happened to Austerity?
A User , Jun 27 2020 1:05 utc | 40
Similar to the model the Clark government came up with on Air NZ after the idiot private shareholders nearly destroyed the airline in the noughties. Except the government insisted on a complete takeover, then during the Natz term in office the shareholding by government has been reduced to 52%. Everyone else was meant to be kiwi shareholder for such a 'strategic' asset but of course the right left plenty of loopholes and the foreign ownership increased dramatically.
The reason governments even neolib ones move to protect national airlines is simple. They are needed in times of disaster or war to be used for emergency transport but the big one is the way that landing rights were allocated back in the old days still holds largely. Losing an airline to an overseas buyer can mean the destruction of the reciprocal basis upon which international landing rights are allocated, if one allows their national carrier to be bought by an external airline hell can be wrought with tourism.

Lufthansa may have 80 slots a week for landing in NY then departing. Emirates buys into Lufthansa, get controlling stake, then then decides that all the NY slots be routed through Dubai, then Germany loses access for tourists from amerika to Germany. Emirates hooks up the new slots with the China timetable establishing new big route and Lufthansa goes down the gurgler.
This stuff is common because slots at major airports are very hard to come by, no nation state wants to lose them.

Bob , Jun 27 2020 1:07 utc | 41
I dont wish to go deep in the numbers. But im sure the german government is not as corrupt as usa in bailouts. Thats why its citzens still trust in its governing. Here in good o usa no one trust government or even each other
Deimetri , Jun 27 2020 1:14 utc | 42
So, please, get off your high horse.

Posted by: Yeah, Right | Jun 26 2020 23:40 utc | 34

??

Choosing winners/losers has worked out so well in the case of Amtrak to name one example, pointing this out is riding a high horse?

But as you say, it has always been this way, it will always be this way, so we should just ignore the fraud and incompetence that .gov bailout encourage and be a happy little debt slaves..-got it,good point /sarc

Deimetri , Jun 27 2020 1:34 utc | 43
For more see:

https://mises.org/wire/never-ending-story-bailouts-moral-hazard-and-low-economic-growth

A User , Jun 27 2020 1:36 utc | 44
The so called market purists who believe that capitalism is some thing sacred which must be left free of interference from the people who use it pay for it and depend upon it always miss the basic point especially if they are amerikan where high levels of selfish corruption have endured for centuries. Not all administrations are that dissolute, the trick of separating citizens from their government is advanced in amerika so far that most see government as separate entity from citizens, whereas in Germany where standards are decaying they have not decayed to the point that no one trusts all politicians all the time.

Therefore government ownership can be seen as citizen participation which is vital at a time like this because the effects of a national airline failing extend well beyond a few wealthy shareholders losing some wealth.
In the case of Air NZ the board was sacked, most senior execs were shown the door without abnormal compensation & the shareholders were bought out at close to current market valuation, they got pennies for their greedy investment.
I do not know the structure of the Lufthansa buyin but the fact that shareholders resisted indicates that they don't feel as though they are going to do well from the deal.Perhaps they had buyers for Lufthansa's international landing slots already lined up on the side and hoped to make big bucks on that - screw German workers, small businesses dependent on tourism or the public faced with uncertain travel routes.

Antonym , Jun 27 2020 2:00 utc | 45
Lufthansa might have been viable before Covid19 but their stock was and is over valued. US companies like Boeing and banks were zombies in August 2019 and got their first financial IVs already then: Evidence Suggests U.S. Financial Crisis Started on August 14, 2019

One difference is the brand of the fiat notes (money): while Germany has the Euro - fairly ok -, the US has the magic dollar, the world's trade and finance medium, so they can print them almost scot-free.

The German central government deal with Lufthansa is indeed better than the self payment of the privatized FED to its owner banks and friends for all Germans. Democratic governments are openly elected every 4-5 years by the public; not so the FED directors.

vk , Jun 27 2020 2:41 utc | 47
@ Posted by: A User | Jun 27 2020 1:36 utc | 44

The problem is that Germany is a capitalist State. That's not how a capitalist State should work. This is a sign worse things are yet to come (decline). Take for example the human body: you can feel the signs of old age, and you know they mean permanent decline, not the beginning of something new. There is no alchemy in the real world.

I didn't propose Lufthansa to go down: I proposed for Lufthansa management to go down. Chop some upper-management heads off and you get your solvency back. EUR 18 billion is nothing for a company of that size: I'm sure if they gave up one year of their profits would already be more than enough to cover for the hole.

Unless, of course, the hole is bigger than the officially declared.

The management of a company is not the company: the soul of a company is its infrastructure, its organization and its workers - specially its highly specialized workers (the ones with the "know-how"). The first hydroelectric dam of the USSR was built with American engineers - not American management or American money. You don't have to have a bunch of executives to build civilization and wealth; it is the worker who is the soul of civilization and progress.

As I said: if Lufthansa was in such a good shape and only needed mere EUR 18 billion, there would be a line of private banks offering the loan with generously low interest (as it would be an automatic win for the bank, no matter how low the "return on capital"; and wins are rare in today's world, so you can't be too picky). Either it did resort to the government because it could (a show of strength to the German people) or its finances are not so great as the owner of this blog state they are. I hope, for the general welfare of the German people, that it was just a show of strength, because if it is dire finances, then those EUR 18 billion are just the amuse-buche.

P.S.: Governments owning some share of the key national companies is common practice in the First World nations. In France, if I'm not mistaken, there's a Law where the government must be the owner of at least 16% of the shares of every "strategic" companies. The UK frequently nationalizes bankrupt companies it deems strategic - only to re-privatize them later, when they are profitable again (the Thatcher method). If State ownership of shares was equal to socialism, we would've been living in a socialist world many decades ago.

[Jun 28, 2020] David Stockman On What Could Happen If The Fed Loses Control

Jun 27, 2020 | www.zerohedge.com
Via InternationalMan.com,

International Man : Recently, Fed Chairman Jerome Powell said the central bank's money printing is designed to help average Americans, and not Wall Street.

What's your take on this?

David Stockman : Yes, and if dogs could whistle, the world would be a chorus!

The truth is, in an economy encumbered with nearly $78 trillion of debt already -- including $16.2 trillion on households, $16.8 trillion on business, $23 trillion on governments -- the last thing we need is even lower interest rates and even bigger incentives to take on debt and leverage.

In fact, in a debt-saturated system, the Fed's massive bond purchases never transmit anything outside the canyons of Wall Street. This money-printing madness only drives bond prices higher and cap rates lower -- meaning relentless and systematic inflation of financial assets' prices.

As a practical matter, of course, the bottom 90% don't own enough stock or even inflated government and corporate bonds to shake a stick at. Instead, what meager savings they have accumulated languish in bank deposits, CDs or money market funds earning exactly what the Fed has decreed -- nothing!

So, when Powell says he's only trying to help the average American, you have to wonder whether he is just stupid or the greatest lying fraud yet to occupy the big chair at the Fed.

Then again, it doesn't really matter why.

The Fed is now a completely rogue institution that is a clear and present danger to the future of prosperity and liberty in America. The tragedy is that the clueless speculators on Wall Street and politicians in Washington don't even get the joke.

International Man : So far, the Fed has been able to successfully manipulate interest rates to historic lows.

What are some catalysts that could cause the Fed to lose control and interest rates to spike?

David Stockman : They are chasing their tail, faster and faster. The more they expand their balance sheet, thereby injecting into the bond pits a massive artificial bid for governments, corporates, munis, commercial paper and junk, the lower the yields go, and the demand for more debt becomes greater.

Needless to say, when incomes drastically shrink due to the folly of Lockdown Nation, debt should be liquidated, not massively increased. So, the Fed and its fellow-traveling global central banks are setting up our Humpty-Dumpty economy for a very great fall.

That is to say, what will cause the central banks to lose control is the greatest wave of debt defaults in recorded history. On that score, the Fed just issued its Flow of Funds data for Q1, and it leaves nothing to the imagination. Total public and private debt on the US economy now stands at $77.6 trillion, or 3.5X GDP, and we'll be lucky to post at $21 trillion for the full year of 2020 GDP.

Recall that we supposedly got a wakeup call back in 2008, when the economy plunged into financial crisis and the worst recession since the 1930s; way too much debt was widely identified as the fall guy. But back then, total debt outstanding was just $52.6 trillion, meaning that during the last decade of purported recovery, the US economy actually took on $25 trillion of new debt -- a 48% increase.

Moreover, big-spending politicians were not the only culprit. That's because when the central banks drastically falsify interest rates to sub-economic levels, everyone is incentivized to borrow hand-over-fist. And, most often, it's for unproductive purposes, such as more transfer payments in the government sector and more financial engineering among the C-suites.

On the eve of the Great Recession, for example, total business debt (corporate and non-corporate) stood at $10.1 trillion and has subsequently soared to $16.8 trillion. That $6.7 trillion gain represents fully 98% of the $6.85 trillion increase in nominal GDP during the same period.

This orgy of borrowing also means that business debt over the past 13 years has grown by 66.5% -- far more than the 46.7% expansion of nominal GDP. Accordingly, the business debt burden on GDP has now gone off the charts, and at 78% of GDP, is more than double the pre-1970 level:

Business Debt as Percent of GDP:

Stated differently, chronic financial repression and clubbing of interest rates by the central bank have amounted to a slow-motion burial of the business sector in debt; debt that in recent decades has been overwhelmingly allocated to shrinking the equity base of business enterprises, thereby cycling wealth from the productive economy to the rent-capturing precincts of Wall Street.

Indeed, the Fed's cheap credit never really leaves the canyons of Wall Street, where it fulsomely rewards carry-traders and risk asset speculators because zero cost money is always and everywhere the mother's milk of leveraged speculation.

It also causes corporate C-suites to become maniacally obsessed with goosing their stock options via financial engineering gambits like stock buybacks, leveraged recaps and wildly over-priced M&A deals as a substitute for organic growth. Yet these maneuvers merely supplant equity and financial resilience with debt and financial fragility.

So when business bankruptcies soar to unprecedented levels in the month ahead as the economy reels from the folly of Lockdown Nation, the financial fragility part will become crystal clear.

But it also needs to be recalled that even as the interest rate clubbers at the Fed fostered a massive explosion of business debt after the 2008 financial crisis, it did not translate into any growth in productive investment at all.

In fact, real business CapEx minus current capital consumption (depreciation and amortization charged to current period production) is today barely a tad higher than it was 20 years ago on the eve of the dotcom bust.

In short, the Fed has fostered a zombie economy, and it is the collapse of the zombies that will eventually take it down.

International Man : The Fed has printed more money in recent months than it has for its entire history. The government is spending as if trillion is the new billion .

What is going on here?

David Stockman : Here's an eye-opener to put this madness in perspective. Annual federal outlays posted at $3.896 trillion in 2014 and were the product of 225 years of relentless expansion by the Leviathan on the Potomac.

But it now appears quite certain that the annual deficit in FY 2020 will actually be larger than the total spending level that took more than two centuries to achieve.

That's right. Owing to the mushrooming coast-to-coast soup lines hastily erected by Washington in response to the collapse of jobs, incomes and business cash flows brought on by Lockdown Nation and the evaporation of tax revenues, Uncle Sam will borrow more this year than the total spending just six years ago.

Stated differently, back in the day, we struggled to keep total federal spending during 1981 under $700 billion. By contrast, the Donald has borrowed nearly 4X that in the last 90 days!

So, yes, perhaps Trump's one truthful boast is that he is indeed the king of debt.

Needless to say, there is nothing remotely rational, plausible or sustainable about an FY 2020 budget that's going to end up with revenue south of $3 trillion and spending north of $7 trillion.

That's not even banana republic league profligacy; it's just sheer stupidity and madness, bespeaking a bipartisan duopoly in Washington that has had its collective brains turned into sawdust by the relentless, egregious money pumping of the central banks.

For want of doubt, just consider what has happened since March 11 on the eve of the Lockdown Nation's commencement.

Of course, you can't blame the Donald alone for this insanity; he's been enabled by two of the greatest crackpots to hold high economic policy positions in American history -- Treasury Secretary Mnuchin and Fed Chairman Jay Powell.

As it has happened, we have closely observed every combination of Fed chairman and US treasury secretary since 1970, when we headed off for our first job in the Imperial City, eager to better the world and our own prospects, too.

So, we can say without reservation that the current duo is the worst combo of spineless, principle-free empty suits to plague the nation during the last half-century. And it's not a close call -- even against a ship of fools, which include John B. Connally, G. William Miller, Ben Bernanke, Hank Paulson Jr., Timothy Geithner and Janet Yellen, among considerable others.

After all, if the Treasury Secretary and Fed Chairman are utterly clueless about the grave dangers of the fiscal and monetary bacchanalia now rampant in the imperial city, how in the world will it stop except in some fiery collapse?

* * *

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[Jun 28, 2020] Restaurant Of The Future - KFC Unveils Automated Store With Robots And Food Lockers

Jun 28, 2020 | www.zerohedge.com

"Restaurant Of The Future" - KFC Unveils Automated Store With Robots And Food Lockers by Tyler Durden Fri, 06/26/2020 - 22:05 Fast-food chain Kentucky Fried Chicken (KFC) has debuted the "restaurant of the future," one where automation dominates the storefront, and little to no interaction is seen between customers and employees, reported NBC News .

After the chicken is fried and sides are prepped by humans, the order is placed on a conveyor belt and travels to the front of the store. A robotic arm waits for the order to arrive, then grabs it off the conveyor belt and places it into a secured food locker.

KFC Moscow robotic-arm takes the order off the conveyor belt

Customers use their credit/debit cards and or the facial recognition system on the food locker to retrieve their order.

KFC Moscow food locker

A KFC representative told NBC News that the new store is located in Moscow and was built months before the virus outbreak. The representative said the contactless store is the future of frontend fast-food restaurants because it's more sanitary.

KFC Moscow storefront

Disbanding human cashiers and order preppers at the front of a fast-food store will be the next big trend in the industry through 2030. Making these restaurants contactless between customers and employees will lower the probabilities of transmitting the virus.

Automating the frontend of a fast-food restaurant will come at a tremendous cost, that is, significant job loss . Nationwide (as of 2018), there were around 3.8 million employed at fast-food restaurants. Automation and artificial intelligence are set displace millions of jobs in the years ahead.

As for the new automated KFC restaurant in Moscow, well, it's a glimpse of what is coming to America - this will lead to the widespread job loss that will force politicians to unveil universal basic income .

[Jun 26, 2020] The Depression Dominoes Are Toppling

Notable quotes:
"... The lockdown would have been survivable if the economy hadn't been over-indebted, over-leveraged, burdened by insanely high costs, stripmined by greedy monopolies, dependent on stock market fraud, destabilized by extreme inequality, corrupted by political pay-to-play and addicted to speculation. ..."
"... The top 5% technocrat/managerial class have done very well for themselves in the speculative run-up of destabilizing inequality, and since they run the narrative machines, we're swamped with happy stories about the economy, all of which boil down to this absurd fantasy: since I'm doing so well, everyone else must be doing well, too. ..."
"... Zombie corporations are rushing to borrow billions of dollars (thanks to the Federal Reserve) but increasing their debt is only doing more of what created their fragility in the first place . ..."
Jun 25, 2020 | www.zerohedge.com
Authored by Charles Hugh Smith via OfTwoMinds blog,

Once you allow your economy to become dependent on extremes of debt, leverage, inequality, legalized looting, monopoly, pay-to-play politics and speculative asset bubbles, a depression is inevitable.

The pandemic lockdown will be blamed for the Greater Depression, but the lockdown only toppled all the dominoes that were already lined up. The lockdown would have been survivable if the economy hadn't been over-indebted, over-leveraged, burdened by insanely high costs, stripmined by greedy monopolies, dependent on stock market fraud, destabilized by extreme inequality, corrupted by political pay-to-play and addicted to speculation.

The apologists always blame depressions on central banks not printing money fast enough, while overlooking the real drivers: debt, high costs and dependence on speculative bubbles. As noted here many times, revenues and income can quickly slide lower, but debt must be serviced regardless of revenues and income.

Once debt payments dominate expenses, any wobble in revenues / income / cash flow triggers default.

Regarding unbearably high costs that only go higher, year after year: as noted here many times, Sickcare Will Bankrupt the Nation all by itself , never mind soaring higher education / student loan debt serfdom, skyrocketing rents, junk fees, taxes, etc.

U.S. Lifestyle + "Healthcare" = Bankruptcy (June 19, 2008)

How Healthcare Is Dooming the U.S. Economy (Three Charts) (May 2015)

The truth is the cost of living is unaffordable but we can't even acknowledge this obvious fact because even acknowledging it would threaten the entire house of cards. So instead we play-act as if we believe the bogus "inflation is dead" narratives.

The top 5% technocrat/managerial class have done very well for themselves in the speculative run-up of destabilizing inequality, and since they run the narrative machines, we're swamped with happy stories about the economy, all of which boil down to this absurd fantasy: since I'm doing so well, everyone else must be doing well, too.

Since the top 5% own the lion's share of the nation's productive assets--stocks, bonds, business equity, investment real estate, etc.-- the enormous asset bubbles have greatly boosted their wealth and income. This has enabled the wealthy to service their debt or pay it off. The bottom 95% aren't quite so well-placed to survive a decline in income.

Everyone who was barely keeping their head above water in making their debt payments is already in default or will soon be in default. Since the banks and shadow-banking lenders have gorged on the profits skimmed by loaning huge sums to marginal borrowers, now that these marginal borrowers are defaulting en masse the banks and lenders are about to be crushed by one wave of catastrophic losses after another.

Student loans--already in mass default. Credit cards--the wave is rolling in as we speak. Auto loans--looking like Waimea Bay on a big day. Mortgages--better not to look.

Corporate debt has exploded to unprecedented levels, and this is what will break the financial system. Zombie corporations are rushing to borrow billions of dollars (thanks to the Federal Reserve) but increasing their debt is only doing more of what created their fragility in the first place .

Being able to borrow more to service your old debts is not solvency, it's merely the semblance of solvency. We're in the eye of the hurricane right now, as everyone holds their breath and hopes some sort of magic will make all the debt that has to be serviced every month vanish.

It's worth recalling that every dollar of debt is someone else's asset and the source of their income. So when the defaults and bankruptcies sweep through the financial system, they'll obliterate all the "wealth" of those holding bundled student and auto loan securities, mortgage backed securities, corporate bonds, and destroy the income streams these trillions in debt generated.

All the linked fragilities and dependencies of our economy are like lines of dominoes: one default topples the entire line of dominoes of debt, leverage, derivatives, counterparty risk, credit default swaps and most devastating of all, any certainty that borrowers won't default in the future.

If banks and lenders can't lend with a high degree of certainty, lending dries up and profits collapse, along with the consumer spending that was enabled by the borrowing.

Despite their high incomes and net worth, some consequential percentage of top 5% households bringing in $300,000 a year are one layoff away from default: never mind their pristine 830 credit score; that was last month. Next month,next quarter, next year--all bets are off.

Once you allow your economy to become dependent on extremes of debt, leverage, inequality, legalized looting , monopoly, pay-to-play politics and speculative asset bubbles, a depression is inevitable. The only question is "when," and that's been answered, though nobody wants to hear it: 2020 and beyond.

It didn't have to end this way. If our leadership / Power Elites had acted to reduce all these painfully obvious speculative extremes, dependencies and fragilities and made even modest efforts to limit the exploitation of predatory parasites that generated unprecedented inequality and corruption over the past 12 years, the economy would have been much less brittle / fragile.

Unfortunately, the pandemic chart I composed on February 2, 2020 is still playing out, increasing uncertainty.

What's the price of systemic fragility and uncertainty? I fear it will be steeper than we're prepared to pay.

* * *

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[Jun 26, 2020] Wealthy Americans Flock To Turks Caicos During Pandemic

Real estate does not show a signs of collapse, line after2008 crisis.
Jun 26, 2020 | www.zerohedge.com
mad rush " of people leaving the San Francisco Bay Area for rural communities, for Marin County, Napa wine country, and south to Monterey's Carmel Valley.

Despite a plunge in existing home sales in May - Lawrence Yun, National Association of Realtors' chief economist, confirmed the outbound trend of migration from cities to suburbs :

"Relatively better performance of single-family homes in relation to multifamily condominium properties clearly suggests migration from the city centers to the suburbs," Yun said.

" After witnessing several consecutive years of urban revival, the new trend looks to be in the suburbs as more companies allow greater flexibility to work from home ."

And second-home buyers surged...

Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in May, up from 10% in April 2020 and from 13% in May 2019. All-cash sales accounted for 17% of transactions in May, up from 15% in April 2020 and down from 19% in May 2019.

Readers now know that wealthy folks aren't just fleeing cities for rural communities - these folks are leaving the country for the Caribbean as America implodes from within.

[Jun 23, 2020] What America's Economic Troubles Mean for November's Presidential Election (And Trump) The National Interest

Notable quotes:
"... The fitness of U.S. employers was unsteady as well. The 2010s saw C-suites skeletonize their companies by spending profits on stock buybacks rather than CapEx, never mind setting funds aside for a rainy day. As a result, many firms–large and small–are long overdue for restructuring or liquidation, a Darwinian process that could hamper economic growth for years, possibly even a decade. ..."
Jun 23, 2020 | nationalinterest.org

Even to an inveterate bull-like Cramer, it is obvious that the post-coronavirus American economy is as brittle as Faberge eggs.

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Such economic fragility could mean that November's presidential election may not be the game-changer many assume it will be. What is becoming clearer by the day is that the virus is more of an accelerant than a prime mover, an added layer of malodorous excrement on a dung heap already piercing the nostrils. Long before social-distancing went into effect pension systems were teetering, rents and mortgages were unaffordable, real unemployment was higher than the Bureau of Labor Statistics reported, industrial production was anemic, and inflation dwarfed Consumer Price Index (food and energy is excluded). Worse, the most reliable consumers in the U.S. economy heretofore have been Baby Boomers, now the most susceptible demographic to the virus.

The fitness of U.S. employers was unsteady as well. The 2010s saw C-suites skeletonize their companies by spending profits on stock buybacks rather than CapEx, never mind setting funds aside for a rainy day. As a result, many firms–large and small–are long overdue for restructuring or liquidation, a Darwinian process that could hamper economic growth for years, possibly even a decade.

Against these headwinds, the next administration is facing monstrous storms ahead. Contrary to the soothsayers of "V" shaped recoveries, the prospects for a robust rebound are fading by the month. All this is to say that it might not matter who wins in November as much as previously thought. If Biden wins his chances at stimulating economic recovery, then soothing Washington's dysfunctional rancor, and speedily recalibrating U.S. trade vis-à-vis China et al in a deglobalizing world are slim to none. A seasoned Trump second term might fair better but whoever is elected president will experience far less freedom of maneuver as economic turbulence resets the policy agenda.

Trump's struggles might be encouraging to the soporific septuagenarian Joe Biden whose political fortunes appear ascendant, at least for the moment. As the Trump administration scrambles to suppress the coronavirus brush fire and more incendiary economic conflagrations spread democrats are foaming at the mouth. However, while the situation may oust a wobbly Trump the economic woes of the country are severe enough to bury the Democratic Party the way the Great Depression slaughtered the Republicans.

... ... ...

In a sense, elections are often lagging indicators that the unrealized ambitions of bungled administrations allow presidential winners to right the ship by riding the swing of public sentiment from trough to peak. For the next U.S. president, however, it may be a trough-to-trough tenure. Hundreds of billions in federal funds may have saved the economy in 2008 but this time around the economic crisis is far deeper and Washington's tools are far more limited despite Jerome Powell's optimism. Urologist Try This if You Have Enlarged Prostate (Watch) Newhealthylife How Dogs Cry For Help: 3 Warning Signs Your Dog Is Crying For Help Dr. Marty Toxic Enzyme Reveals Root Cause of Hair Loss and How to Fix It Today Revital Hair "They Almost Killed Me" Why Tommy Chong Doesn't Trust CBD Tommy Chong T

On these points, it seems to me that history does not rhyme as much as clarify. It appears as though U.S. politics is headed for a permutation, a fundamental restructuring that will change how Americans are governed every bit as much as it reshapes the economy. Thomas Kuhn's classic The Structure of Scientific Revolutions reminds us that "crisis often proliferates new discoveries," ones that often result in "paradigm destruction." Regardless of who is elected in November, it is very likely the next president is fated to defend a besieged paradigm, a twentieth-century government that lacks the policy tools, financial resources and transmission mechanisms required to solve twenty-first-century economic puzzles.

As the election fast approaches Treasury Secretary Steven Mnuchin and Chairman Jerome Powell–the dynamic duo of the wryly dubbed "Feasury"–are pulling out all the stops to mitigate economic fallout. Many sectors are begging for federal help as are municipalities who fear that recovery without federal money is doubtful. At their request, trillions more in relief are likely on their way. The question is: will there be any ammunition left for the next president, whoever he is, to govern effectively?

Cameron Macgregor is an entrepreneur, blogger and writer. He is the CEO of Ad Actum, a Global Free Speech Alliance.

[Jun 23, 2020] Meet BlackRock, the New Great Vampire Squid by Ellen Brown

Jun 23, 2020 | www.unz.com

Exchange traded funds are bought and sold like shares but operate as index-tracking funds, passively following specific indices such as the S&P 500, the benchmark index of America's largest corporations and the index in which most people invest. Today the fast-growing ETF sector controls nearly half of all investments in US stocks, and it is highly concentrated. The sector is dominated by just three giant American asset managers – BlackRock, Vanguard and State Street, the "Big Three" – with BlackRock the clear global leader. By 2017, the Big Three together had become the largest shareholder in almost 90% of S&P 500 firms, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola. BlackRock also owns major interests in nearly every mega-bank and in major media.

In March 2020, based on its expertise with the Maiden Lane facilities and its sophisticated Aladdin risk-monitoring software, BlackRock got the job of dispensing Federal Reserve funds through eleven "special purpose vehicles" authorized under the CARES Act. Like the Maiden Lane facilities, these vehicles were designed to allow the Fed, which is legally limited to purchasing safe federally-guaranteed assets, to finance the purchase of riskier assets in the market.

Blackrock Bails Itself Out

The national lockdown left states, cities and local businesses in desperate need of federal government aid. But according to David Dayen in The American Prospect , as of May 30 (the Fed's last monthly report), the only purchases made under the Fed's new BlackRock-administered SPVs were ETFs, mainly owned by BlackRock itself. Between May 14 and May 20, about $1.58 billion in ETFs were bought through the Secondary Market Corporate Credit Facility (SMCCF), of which $746 million or about 47% came from BlackRock ETFs. The Fed continued to buy more ETFs after May 20, and investors piled in behind, resulting in huge inflows into BlackRock's corporate bond ETFs.

In fact, these ETFs needed a bailout; and BlackRock used its very favorable position with the government to get one. The complicated mechanisms and risks underlying ETFs are explained in an April 3 article by business law professor Ryan Clements, who begins his post:

Exchange-Traded Funds (ETFs) are at the heart of the COVID-19 financial crisis . Over forty percent of the trading volume during the mid-March selloff was in ETFs .

The ETFs were trading well below the value of their underlying bonds, which were dropping like a rock . Some ETFs were failing altogether. The problem was something critics had long warned of: while ETFs are very liquid, trading on demand like stocks, the assets that make up their portfolios are not. When the market drops and investors flee, the ETFs can have trouble coming up with the funds to settle up without trading at a deep discount; and that is what was happening in March.

According to a May 3 article in The National , "The sector was ultimately saved by the US Federal Reserve's pledge on March 23 to buy investment-grade credit and certain ETFs. This provided the liquidity needed to rescue bonds that had been floundering in a market with no buyers."

Prof. Clements states that if the Fed had not stepped in, "a 'doom loop' could have materialized where continued selling pressure in the ETF market exacerbated a fire-sale in the underlying [bonds], and again vice-versa, in a procyclical pile-on with devastating consequences." He observes:

There's an unsettling form of market alchemy that takes place when illiquid, over-the-counter bonds are transformed into instantly liquid ETFs. ETF "liquidity transformation" is now being supported by the government, just like liquidity transformation in mortgage backed securities and shadow banking was supported in 2008.

Working for Whom?

BlackRock got a bailout with no debate in Congress, no "penalty" interest rate of the sort imposed on states and cities borrowing in the Fed's Municipal Liquidity Facility, no complicated paperwork or waiting in line for scarce Small Business Administration loans, no strings attached. It just quietly bailed itself out.

It might be argued that this bailout was good and necessary, since the market was saved from a disastrous "doom loop," and so were the pension funds and the savings of millions of investors. Although BlackRock has a controlling interest in all the major corporations in the S&P 500, it professes not to "own" the funds. It just acts as a kind of "custodian" for its investors -- or so it claims. But BlackRock and the other Big 3 ETFs vote the corporations' shares; so from the point of view of management, they are the owners. And as observed in a 2017 article from the University of Amsterdam titled " These Three Firms Own Corporate America ," they vote 90% of the time in favor of management. That means they tend to vote against shareholder initiatives, against labor, and against the public interest. BlackRock is not actually working for us, although we the American people have now become its largest client base.

In a 2018 review titled " Blackrock – The Company That Owns the World ", a multinational research group called Investigate Europe concluded that BlackRock "undermines competition through owning shares in competing companies, blurs boundaries between private capital and government affairs by working closely with regulators, and advocates for privatization of pension schemes in order to channel savings capital into its own funds."

Daniela Gabor, Professor of Macroeconomics at the University of Western England in Bristol, concluded after following a number of regulatory debates in Brussels that it was no longer the banks that wielded the financial power; it was the asset managers. She said :

We are often told that a manager is there to invest our money for our old age. But it's much more than that. In my opinion, BlackRock reflects the renunciation of the welfare state. Its rise in power goes hand-in-hand with ongoing structural changes; in finance, but also in the nature of the social contract that unites the citizen and the state.

That these structural changes are planned and deliberate is evident in BlackRock's August 2019 white paper laying out an economic reset that has now been implemented with BlackRock at the helm.

Public policy is made today in ways that favor the stock market, which is considered the barometer of the economy, although it has little to do with the strength of the real, productive economy. Giant pension and other investment funds largely control the stock market, and the asset managers control the funds. That effectively puts BlackRock, the largest and most influential asset manager, in the driver's seat in controlling the economy.

As Peter Ewart notes in a May 14 article on BlackRock titled "Foxes in the Henhouse," today the economic system "is not classical capitalism but rather state monopoly capitalism, where giant enterprises are regularly backstopped with public funds and the boundaries between the state and the financial oligarchy are virtually non-existent."

If the corporate oligarchs are too big and strategically important to be broken up under the antitrust laws, rather than bailing them out they should be nationalized and put directly into the service of the public. At the very least, BlackRock should be regulated as a too-big-to-fail Systemically Important Financial Institution. Better yet would be to regulate it as a public utility. No private, unelected entity should have the power over the economy that BlackRock has, without a legally enforceable fiduciary duty to wield it in the public interest.

Ellen Brown is an attorney, chair of the Public Banking Institute , and author of thirteen books including Web of Debt , The Public Bank Solution , and Banking on the People: Democratizing Money in the Digital Age . She also co-hosts a radio program on PRN.FM called " It's Our Money ." Her 300+ blog articles are posted at EllenBrown.com .


Ad70titusrevenge , says: Show Comment June 22, 2020 at 12:46 am GMT

Wonder who runs BlackRock?
Mustapha Mond , says: Show Comment June 22, 2020 at 4:00 am GMT
To paraphrase a famous line from The Who's, "Won't Get Fooled Again":

Meet the new Squid, same as the old Squid

Ultrafart the Brave , says: Website Show Comment June 22, 2020 at 4:26 am GMT
@jadan

The rich do not understand the concept of "public interest" or "public utility".

Of course they do. They just don't care for it.

Pft , says: Show Comment
Nepemnr , says: Website Show Comment June 22, 2020 at 6:47 am GMT
Those for whom the American economy is a cash cow & a play thing would quite simply never allow nationalization.
Desert Fox , says: Show Comment June 22, 2020 at 1:43 pm GMT
The covid-19 scam was created to bailout wallstreet
Brian O'Brien , says: Website Show Comment June 22, 2020 at 2:16 pm GMT
@jadan I believe Ellen Brown has long called for nationalization of the Fed.

She has been a tireless advocate for state banks and for public control of the money supply, and a leading critic of the private control of the issuance of money through debt.

The Federal Reserve Act was created in conspiracy and its passage was a great crime against the American people.

"You gotta hand it to the conspiracy theorists, because, in fact, there was a conspiracy," Roger Lowenstein told Ky Ryssdall during an interview on NPR about Lowenstein's book "America's Bank."

The men who wrote the Federal Reserve Act even wore disguises and snuck off in the night to a Victorian mansion on the ominously named Jekyll Island where they did their dirty work:

http://thetyrannyofthefederalreserve.blogspot.com/2015/11/lowenstein-and-ghost-of-andrew-jackson.html

Mike321 , says: Show Comment June 22, 2020 at 3:39 pm GMT
@Anonymous Read "Web of Debt" by Helen Brown. I may be a dumb Alabama hic, but I think she went after the Fed in that book .Just sayin'.

[Jun 22, 2020] The neoliberal MSM has found a shiny new object called "Juneteenth" but the catastrophe for 30 million unemployed workers is steady getting worse.

Jun 22, 2020 | www.moonofalabama.org

Trailer Trash , Jun 20 2020 3:13 utc | 87

> Americans have trouble deciding what's fake and what's not
> until reality personally bites them on the ass.
> Posted by: jadan | Jun 20 2020 2:00 utc | 79

They know the economic devastation is real. There are 50,000 unpaid unemployment claims -- just in Kentucky. The establishment press has found a shiny new object called "Juneteenth" but the catastrophe for 30 million unemployed workers is steady getting worse.

For the county I live in, out of 72,000 people, ten got sick and one died, for the past six months. Meanwhile, about 350 people die every six months from all causes (about 1%). So no one here knows anyone sick or dead from the virus, but the crisis, including getting food, is everywhere.

[Jun 21, 2020] A Tidal Wave of Bankruptcies Is Coming

Jun 21, 2020 | www.nakedcapitalism.com

BRADLEY L MAYER , , June 18, 2020 at 6:49 pm

Today's NYT backs up Yves virtually verbatim:

A Tidal Wave of Bankruptcies Is Coming

By Mary Williams Walsh

https://www.nytimes.com/2020/06/18/business/corporate-bankruptcy-coronavirus.html

Almost any passage is quotable, but this caught my eye:

"Expect "a Covid-19 cliff" in the next 30 to 60 days, he said."

It's only a question now of reorg or liquidation bankruptcy.

[Jun 21, 2020] Ivy league universities and low cost state colleges will be OK, while private colleges in the middle are screwed

Notable quotes:
"... State universities have a much larger enrollment (the California State system has 23 campuses with an average of 22K students each) and the elites have featherbedded the Ivies, so both will survive, even if the former have some belt-tightening. ..."
Jun 21, 2020 | www.nakedcapitalism.com

grhabyt , , June 18, 2020 at 7:35 pm

Professor/Administrator in California State University here. I'm on the campus team trying to respond and thus reading everything current in Higher Ed on this. The conclusion is that high end and low end will be OK, but private colleges in the middle are screwed.
Students go to college for four reasons:

a) signalling;
b) networking;
c) skills acquisition; and
d) parties

With instruction online, b) and d) disappear. The elite universities can coast because of a) and endowments, the lower cost state universities like mine are seeing enrollment *increase* because, in a recession, many students on the line about attending college choose c) over unemployment. And as our tuition is only $7K ($12K for out-of-state/international), plenty of the cash-strapped middle class will dial down to us.

But expensive, tuition-driven (eg little endowment) private colleges are going to be hit very hard if they can't offer the whole traditional in-person experience. Most of these have announced that they will be meeting in-person, but the unspoken assumption is that they are lying to their prospective students, and will pull the football away at the last minute.

The media will dwell on "the death of higher education" at length, because these were the colleges that many of them went to.

But the reality is that their share of the pie is relatively small. State universities have a much larger enrollment (the California State system has 23 campuses with an average of 22K students each) and the elites have featherbedded the Ivies, so both will survive, even if the former have some belt-tightening.

Democrita , , June 19, 2020 at 7:16 am

To label 'd' partying is unfair. D is being with their peers, building their first independent relationships, falling in love.

Mine will be a soph in UC system, and is processing the announcement from the school yesterday that only some students will have classes, the rest will be online. They all read that to mean STEM majors will get the in person experience.

He and his friends are all deciding whether they will bother or take a term or two off -- because zoom school sucks. Or, as he put it, "why would we pay $20,000 for me to rent an apartment in Santa Cruz and attend Phoenix University?" Universities may find students not willing to waste resources on distance learning. Especially if there's no job at the end of the rainbow.

BUT if he skips a term, what to do in that time? Jobs hard to come by and risky.

I feel for the kids. Unlike that family blogger Joe Biden.

Re small biz and recovery: my employer got some PPP money, although the impact has not hit our magazine in a big way. Yet.

But we, like other business-niche publishers, made a good bit of money from conferences and such live events. Partly, it's direct earnings, but there are other ways live events fueled our biz. I believe Institutional Investor had basically ditched publishing for the conference business. We hadnt gone that far (we weren't that good at it).

Also, the boss is drooling over the idea that he can ditch the monthly rent for our manhattan offices. Our ship is so tight that I do not worry about getting laid off, only that the entire enterprise could go under. So far that's not happening, but past performance etc.

Yves Smith Post author , , June 19, 2020 at 1:04 am

I'm not as certain as you are that big name unis will not suffer too. I think this is them believing their own PR.

Harvard is already trying to get employees to take early retirement. And in a long interview, Larry Summers went on in a long Business Insider interview about how universities (clearly including Harvard) should close down entire operations that were losing money. He advocated that Harvard should largely abandon live instruction and instead should become a MOOC, since it could easily get 20 million students.

[Jun 20, 2020] Angry Bear " Weekly Indicators for June 15 19 at Seeking Alpha

Jun 20, 2020 | angrybearblog.com

Comments (1)

  1. likbez , June 20, 2020 10:42 pm

    With this "improvement" we hopefully might see the collapse of some of the most reckless hedge funds the next year, or earlier. Adding to them a couple of private equity sharks would be an icing on the cake, but this scum tends to be pretty resilient. They are masters of offloading losses on public.

    Disconnect between the stock market casino and the status of the USA manufacturing is real and it can't last forever. The FIRE sector which dominates the USA GDP is parasitic in nature, and parasite usually weakens the host to the point of collapse.

    Moreover, Covid19 serves as a powerful catalyst for further degrading the neoliberal globalization even in areas that are not connected with the role of China.

    As Herbert Stein put it on a different subject, but which now is fully applicable to the neoliberal globalization:

    If something cannot go on forever, it will stop.

    Per table 1 in https://fas.org/sgp/crs/misc/R45090.pdf , real wages for USA men at the 50% percentile level are down -5.1% over the 1979 to 2018 time frame. Now we can probably talk about over 10%.

    That's another sign that the USA financial casino might eventually go the way of Trump's Taj Mahal.

    And many middle class lemmings who are completely indoctrinated into neoliberalism and connected with it deification of markets might be mercilessly fleeced. Especially those who recklessly play with the stock market having zero understanding of the economics, and relying on some crazy "chartist" recommendations :-)

    Or who stupidly preserved overweighed stocks allocation in the 401K plans after retirement. That might includes some "Vanguard loving" folk, who posts here.

[Jun 20, 2020] Colleges will have a lot of trouble this fall

Another issue with all types of education is that lots of students, especially foreign students, depend very heavily on restarats temp jobs and casual hospitality work.
Jun 20, 2020 | www.nakedcapitalism.com

4. Colleges will have a lot of trouble this fall . First, they are losing nearly all their full-freight-paying Chinese students, between concern over US Covid-19 risks, Administration hostility, and travel restrictions. That alone is a big blow.

On top of that, some are planning to reopen but MIT's announcement yesterday, that it will not allow all students to return to campus, probably represents a new normal. Well-placed MIT alumni read the university's decision as driven significantly by a desire to protect faculty and staff; I hear from sources with contacts at other universities that administrators that they see no way to put kids in dorms without running unacceptably high Covid risks.

Remember, even though kids almost never die of Covid-19, but there is a risk of serious damage. 1/2 the asymptomatic cases on the Diamond Princess now show abnormal lungs. And remember those cruises have half the people on board as crew, and the crew skews young. College is a lot less appealing if you don't stay in a dorm.

Just as diminished activity in central business districts has negative knock-on effects to nearby business, so to do hollowed-out colleges and universities have for their communities, as described in more depth in a recent Bloomberg story .

Krystyn Podgajski , June 18, 2020 at 7:52 am

The coming college semester is a big question mark. The influx of students is entangled with real estate, shopping and the biggest in my town, restaurants and bars. Not to mention the college sports season which supported so many AirBnB's here.

They are starting the year early here (UNC Chapel Hill) and ending it early as well, on Thanksgiving! And up to 1000 new students will be learning from home instead of coming to campus.

Vastydeep , June 18, 2020 at 11:30 am

Big question mark -- MIT's president Reif yesterday noted that

"At least for the fall, we can only bring some of our undergraduates back to campus." and "Everything that can be taught effectively online will be taught online."

Courses are comparatively easy, but labs, research, and sports look doubtful if/when case counts start marching up again.

[Jun 19, 2020] "What's being protected? The social order that feeds the wealthy at the expense of the working poor. "

Highly recommended!
Notable quotes:
"... Racism, especially directed toward blacks, along with “identity wedge,” is a perfect tool for disarming poor white, and suppressing their struggle for a better standard of living, which considerably dropped under neoliberalism. ..."
"... In other words, by providing poor whites with a stratum of the population that has even lower social status, neoliberals manage to co-opt them to support the policies which economically ate detrimental to their standard of living as well as to suppress the protest against the redistribution of wealth up and dismantling of the New Deal capitalist social protection network. ..."
"... This is a pretty sophisticated, pretty evil scheme if you ask me. In a way, “Floydgate” can be viewed as a variation on the same theme. A very dirty game indeed, when the issue of provision of meaningful jobs for working poor, social equality, and social protection for low-income workers of any color is replaced with a real but of secondary importance issue of police violence against blacks. ..."
"... without a contract at all ..."
Jun 19, 2020 | www.nakedcapitalism.com

flora, June 19, 2020 at 1:36 am

Thanks for this post.

"What's being protected? The social order that feeds the wealthy at the expense of the working poor. " -- Neuberger

In the aftermath of these movements, the police increasingly presented themselves as a thin blue line protecting civilization, by which they meant bourgeois civilization, from the disorder of the working class. -- Mitrani

I think this ties in, if only indirectly, with the way so many peaceful recent protests seemed to turn violent after the police showed up. It's possible I suppose the police want to create disorder to frighten not only the protestors with immediate harm but also frighten the bourgeois about the threate of a "dangerous mob". Historically violent protests created a political backlash that usually benefited political conservatives and the wealthy owners. (The current protests may be different in this regard. The violence seems to have

John Anthony La Pietra, June 19, 2020 at 2:20 am

Sorry, but the title sent my mind back to the days of old -- of old Daley, that is, and his immortal quote from 1968: "Gentlemen, let's get the thing straight, once and for all. The policeman isn't there to create disorder; the policeman is there to preserve disorder."

Adam1, June 19, 2020 at 7:39 am

LOL!!! great quote. Talk about saying it the way it is.

It kind of goes along with, "Police violence is focused overwhelmingly on men lowest on the socio-economic ladder: in rural areas outside the South, predominately white men; in the Southwest, disproportionately Hispanic men; in mid-size and major cities, disproportionately black men. Significantly, in the rural South, where the population is racially mixed, white men and black men are killed by police at nearly identical rates."

I bang my head on the table sometimes because poor white men and poor men of color are so often placed at odds when they increasingly face (mostly) the same problems. God forbid someone tried to unite them, there might really be some pearl clutching then.

run75441, June 19, 2020 at 8:23 am

Great response! I am sure you have more to add to this. A while back, I was researching the issues you state in your last paragraph. Was about ten pages into it and had to stop as I was drawn out of state and country. From my research.

While not as overt in the 20th century, the distinction of black slave versus poor white man has kept the class system alive and well in the US in the development of a discriminatory informal caste system. This distraction of a class level lower than the poorest of the white has kept them from concentrating on the disproportionate, and growing, distribution of wealth and income in the US. For the lower class, an allowed luxury, a place in the hierarchy and a sure form of self esteem insurance.

Sennett and Cobb (1972) observed that class distinction sets up a contest between upper and lower class with the lower social class always losing and promulgating a perception amongst themselves the educated and upper classes are in a position to judge and draw a conclusion of them being less than equal. The hidden injury is in the regard to the person perceiving himself as a piece of the woodwork or seen as a function such as "George the Porter." It was not the status or material wealth causing the harsh feelings; but, the feeling of being treated less than equal, having little status, and the resulting shame. The answer for many was violence.

James Gilligan wrote "Violence; Reflections on A National Epidemic." He worked as a prison psychiatrist and talked with many of the inmates of the issues of inequality and feeling less than those around them. His finding are in his book which is not a long read and adds to the discussion.

A little John Adams for you.

" The poor man's conscience is clear . . . he does not feel guilty and has no reason to . . . yet, he is ashamed. Mankind takes no notice of him. He rambles unheeded.

In the midst of a crowd; at a church; in the market . . . he is in as much obscurity as he would be in a garret or a cellar.

He is not disapproved, censured, or reproached; he is not seen . . . To be wholly overlooked, and to know it, are intolerable ."

likbez , June 19, 2020 at 3:18 pm

That’s a very important observation.

Racism, especially directed toward blacks, along with “identity wedge,” is a perfect tool for disarming poor white, and suppressing their struggle for a better standard of living, which considerably dropped under neoliberalism.

In other words, by providing poor whites with a stratum of the population that has even lower social status, neoliberals manage to co-opt them to support the policies which economically ate detrimental to their standard of living as well as to suppress the protest against the redistribution of wealth up and dismantling of the New Deal capitalist social protection network.

This is a pretty sophisticated, pretty evil scheme if you ask me. In a way, “Floydgate” can be viewed as a variation on the same theme. A very dirty game indeed, when the issue of provision of meaningful jobs for working poor, social equality, and social protection for low-income workers of any color is replaced with a real but of secondary importance issue of police violence against blacks.

This is another way to explain “What’s the matter with Kansas” effect.

Carla , June 19, 2020 at 12:39 pm

MLK Jr. tried, and look what happened to him once he really got some traction. If the Rev. William Barber’s Poor People’s Campaign picks up steam, I’m afraid the same thing will happen to him.

I wish it were only pearl-clutching that the money power would resort to, but that’s not the way it works.

km , June 19, 2020 at 11:56 am

In most countries, the police are there solely to protect the Haves from the Have-Nots. In fact, when the average frustrated citizen has trouble, the last people he would consider turning to are the police.

This is why in the Third World, the only job of lower social standing than “policeman” is “police informer”.

cripes , June 19, 2020 at 3:35 am

The anti-rascist identity of the recent protests rests on a much larger base of class warfare waged over the past 40 years against the entire population led by a determined oligarchy and enforced by their political, media and militarized police retainers. This same oligarchy, with a despicable zeal and revolting media-orchestrated campaign–co-branding the movement with it’s usual corporate perpetrators– distorts escalating carceral and economic violence solely through a lens of racial conflict and their time-tested toothless reforms. A few unlucky “peace officers” may have to TOFTT until the furor recedes, can’t be helped.

Crowding out debt relief, single payer health, living wages, affordable housing and actual justice reform from the debate that would benefit African Americans more than any other demographic is the goal.

The handful of Emperors far prefer kabuki theater and random ritual Seppuku than facing the rage of millions of staring down the barrel of zero income, debt, bankruptcy, evictions and dispossession. The Praetorians will follow the money as always.

I suppose we’ll get some boulevards re-named and a paid Juneteenth holiday to compensate for the destruction 100+ years of labor rights struggle, so there’s that..

Boatwright , June 19, 2020 at 7:51 am

Homestead, Ludlow, Haymarket, Matewan — the list is long……

Working men and women asking for justice gunned down by the cops. There will always be men ready to murder on command as long as the orders come from the rich and powerful. We are at a moment in history folks were some of us, today mostly people of color, are willing to put their lives on the line. It’s an ongoing struggle.

MichaelSF , June 19, 2020 at 12:18 pm

Jay Gould, a U.S. robber baron, is supposed to have claimed that he could hire one half of the working class to kill the other half.

https://en.wikipedia.org/wiki/Jay_Gould

rob , June 19, 2020 at 7:58 am

So how can a tier of society(the police)…. be what a society needs…?
When as this story and many others show how and why the police were formed…. to break heads.
When they have been “the tool” of the elite…forever.
when so many of them are such dishonest,immoral ,wanna be fascists.
and the main direction of the US is towards a police state and fascists running the show…. both republican and democrat. With technology being the boot on the neck of the people… and the police are there to take it to the streets.
Can those elusive “good apples” turn the whole rotten barrel into sweet smelling apple pie? That is a big ask.
Or should the structure be liquidated, sell their army toys. fill the ranks with people who are not pathological liars and abusers and /or racists; of one sort or another. Get rid of the mentality of overcompensation by uber machismo. and make them watch the andy griffith show. They ought to learn that they can be respected if they are good people, and that they are not respected because they seek respect through fear and intimidation.
Is that idiot cry of theirs, .. the whole yelling at you; demanding absolute obedience to arbitrary ,assinine orders, really working to get them respect… or is it just something they get off on?
When the police are shown to be bad, they strike by work slowdown, or letting a little chaos loose themselves. So the people know they need them… So any reform of the police will go through the police not doing their jobs…. but then something like better communities may result. less people being busted and harassed , or pulled over for the sake of a quota…. may just show we don’t need so much policing anyway. And then if the new social workers brigade starts intervening in peoples with issues when they are young and in school … maybe fewer will be in the system. Couple that with the police not throwing their family in jail for nothing, and forcing them to pay fines for breaking stupid laws. The system will have less of a load, and the new , better cops without attitudes will be able to handle their communities in a way that works for everyone. Making them a net positive, as opposed to now where they are a net negative.
Also,

The drug war is over.
The cops have only done the bidding of the organized criminal elements who make their bread and butter because of prohibition.
our representatives can legally smoke pot , and grow it in their windowboxes in the capital dc., but people in many places are still living in fear of police using possession of some substance,as a pretext to take all their stuff,throw them in jail.
but besides the cops, there are the prosecutors…. they earn their salaries by stealing it from poor people through fines for things that ought to be legal. This is one way to drain money from poor communities, causing people to go steal from others in society to pay their court costs.
and who is gonna come and bust down your door… when you can’t pay a fine and choose to pay rent and buy your kids food instead…. the cops. just doing their jobs..
Evil is the banality of business as usual

Tom Stone , June 19, 2020 at 8:20 am

The late Kevin R C O’Brien noted that in every case where the Police had been ordered to “Round up the usual suspects” they have done so, and delivered them where ordered.
It did not matter who the “Usual suspects” were, or to what fate they were to be delivered.
They are the King’s men and they do the King’s bidding.

The Rev Kev , June 19, 2020 at 10:10 am

To have a reasonable discussion, I think that it should be recognized that modern police are but one leg of a triad. The first of course is the police who appear to seem themselves as not part of a community but as enforcers in that community. To swipe an idea from Mao, the police should move amongst the people as a fish swims in the sea. Not be a patrolling shark that attacks who they want at will knowing that there will be no repercussions against them. When you get to the point that you have police arresting children in school for infractions of school discipline – giving them a police record – you know that things have gotten out of hand.

The next leg is the courts which of course includes prosecutors. It is my understanding that prosecutors are elected to office in the US and so have incentives to appear to be tough on crime”” . They seem to operate more like ‘Let’s Make a Deal’ from what I have read. When they tell some kid that he has a choice of 1,000 years in prison on trumped up charges or pleads guilty to a smaller offence, you know that that is not justice at work. Judges too operate in their own world and will always take the word of a policeman as a witness.

And the third leg is the prisons which operate as sweatshops for corporate America. It is in the interest of the police and the courts to fill up the prisons to overflowing. Anybody remember the Pennsylvania “kids for cash” scandal where kids lives were being ruined with criminal records that were bogus so that some people could make a profit? And what sort of prison system is it where a private contractor can build a prison without a contract at all , knowing that the government (California in this case) will nonetheless fill it up for a good profit.

In short, in sorting out police doctrine and methods like is happening now, it should be recognized that they are actually only the face of a set of problems.

MLTPB , June 19, 2020 at 11:00 am

How did ancient states police?

Perhaps Wiki is a starting point of this journey…

Per Its entry, Police, in ancient Greece, policing was done by public owned slaves.

In Rome, the army, initially.

In China, prefects…leading to a level of government called prefectures .

Pookah Harvey , June 19, 2020 at 10:54 am

I spent some time in the Silver Valley of northern Idaho. This area was the hot bed of labor unrest during the 1890’s. Federal troops controlled the area 3 separate times,1892, 1894 and 1899. Twice miners hijacked trains loaded them with dynamite and drove them to mining company stamping mills that they then blew up. Dozens of deaths in shoot outs. The entire male population was herded up and placed in concentration camps for weeks. The end result was the assassination of the Governor in 1905.
Interestingly this history has been completely expunged. There is a mining museum in the town which doesn’t mention a word on these events. Even nationwide there seems to be a complete erasure of what real labor unrest can look like..

rob , June 19, 2020 at 11:58 am

Yeah, labor unrest does get swept under the rug.
Howard zinn had examples in his works “the peoples history of the United States”
The pictched battles in upstate new york with the Van Rennselear’s in the 1840’s breaking up rennselearwyk…. the million acre estate of theirs . it was a rent strike.
people remembering , we have been here before doesn’t help the case of the establishment… so they try to not let it happen.
We get experts telling us…. well, this is all new… we need experts… to tell you… what to think.
It is like watching the footage from the past 100 years on film of blacks marching for their rights… and being told.. reform is coming.. the more things change, the more things stay the same. decade after decade.century after century…
time to start figuring this out people.
so, the enemy is us….
now what?

Carolinian , June 19, 2020 at 11:01 am

Doubtless the facts presented above are correct, but shouldn’t one point out that the 21st century is quite different from the 19th and therefore analogizing the current situation to what went on before is quite facile? For example it’s no longer necessary for the police to put down strikes because strike actions barely still exist. In our current US the working class has diminished greatly while the middle class has expanded. We are a much richer country overall with a lot more people–not just those one percenters–concerned about crime. Whatever one thinks of the police, politically an attempt to go back to the 18th century isn’t going to fly.

MLTPB , June 19, 2020 at 11:15 am

Perhaps we are more likely to argue among ourselves, when genetic fallacy is possibly in play.

Pookah Harvey , June 19, 2020 at 11:37 am

” the 21st century is quite different from the 19th ”
From the Guardian

“How Starbucks, Target, Google and Microsoft quietly fund police through private donations”

More than 25 large corporations in the past three years have contributed funding to private police foundations, new report says.

These foundations receive millions of dollars a year from private and corporate donors, according to the report, and are able to use the funds to purchase equipment and weapons with little public input. The analysis notes, for example, how the Los Angeles police department in 2007 used foundation funding to purchase surveillance software from controversial technology firm Palantir. Buying the technology with private foundation funding rather than its public budget allowed the department to bypass requirements to hold public meetings and gain approval from the city council.

The Houston police foundation has purchased for the local police department a variety of equipment, including Swat equipment, sound equipment and dogs for the K-9 unit, according to the report. The Philadelphia police foundation purchased for its police force long guns, drones and ballistic helmets, and the Atlanta police foundation helped fund a major surveillance network of over 12,000 cameras.

In addition to weaponry, foundation funding can also go toward specialized training and support programs that complement the department’s policing strategies, according to one police foundation.

“Not a lot of people are aware of this public-private partnership where corporations and wealthy donors are able to siphon money into police forces with little to no oversight,” said Gin Armstrong, a senior research analyst at LittleSis.

Maybe it is just me, but things don’t seem to be all that different.

Bob , June 19, 2020 at 11:40 am

If we made America Great Again we could go back to the 18th century.

rob , June 19, 2020 at 12:11 pm

While it is true, this is a new century.
knowing how the present came to be, is entirely necessary to be able to attempt any move forward.
The likelihood of making the same old mistakes is almost certain, if one doesn’t try to use the past as a reference.
And considering the effect of propaganda and revisionism in the formation of peoples opinions, we do need ” learning against learning” to borrow a Jesuit strategy against the reformation, but this time it should embrace reality, rather than sow falsehoods.
But I do agree,
We have never been here before, and now is a great time to reset everything. With all due respect to “getting it right” or at least “better”.
and knowing the false fables of righteousness, is what people need to know, before they go about “burning down the house”.

Carolinian , June 19, 2020 at 12:42 pm

You know it’s not as though white people aren’t also afraid of the police. Alfred Hitchcock said he was deathly afraid of police and that paranoia informed many of his movies. Woody Allen has a funny scene in Annie Hall where he is pulled over by a cop and is comically flustered. White people also get shot and killed by the police as the rightwingers are constantly pointing out.

And thousands of people in the streets tell us that police reform is necessary. But the country is not going to get rid of them and replace police with social workers so why even talk about it? I’d say the above is interesting….not terribly relevant.

Mattski , June 19, 2020 at 11:37 am

Straight-up fact: The police weren’t created to preserve and protect. They were created to maintain order, over certain subjected classes and races of people, including–for many white people, too–many of our ancestors, too.*

And the question that arises from this: Are we willing to the subjects in a police state? Are we willing to continue to let our Black and brown brothers and sisters be subjected BY such a police state, and to half-wittingly be party TO it?

Or do we want to exercise AGENCY over “our” government(s), and decide–anew–how we go out our vast, vast array of social ills.

Obviously, armed police officers with an average of six months training–almost all from the white underclass–are a pretty f*cking blunt instrument to bring to bear.

On our own heads. On those who we and history have consigned to second-class citizenship.
Warning: this is a revolutionary situation. We should embrace it.

*Acceding to white supremacy, becoming “white” and often joining that police order, if you were poor, was the road out of such subjectivity. My grandfather’s father, for example, was said to have fled a failed revolution in Bohemia to come here. Look back through history, you will find plenty of reason to feel solidarity, too. Race alone cannot divide us if we are intent on the lessons of that history.

Susan the other , June 19, 2020 at 1:16 pm

It’s a good argument for keeping business small and evenly distributed. Promote the distribution of small enterprises all around the countryside and it’ll be a preventative against mergers and monopolies and giant corporations. Legislate for small business everywhere. When mega corporations turn into godzilla they are no longer efficient. They just tweak the statistics to imply that they are making such a profit that that means they are efficient. Maybe their robots are. Maybe their security forces are. But rapacious capitalism is almost comical, if not pathetic, when there is nothing left to rape. Which is where we now find ourselves. They’ve been allowed to evolve into private monopolies and have sucked the life out of the rest of the economy because they provide no employment, no training, no health care, no responsible maintenance for themselves; they set up tax havens, etc. And they produce way too much crap. We need far less consumption to save the planet. If we need monopolies to create equal distribution let them be state-owned monopolies. States do a good job. I’m thinking here of the State owned liquor stores in Utah. Even tho’ it’d be nice to buy wine in the grocery store, the state does a good job of supplying booze at a good price. (They are in the process now of setting up marijuana stores. Yes, Utah.) And they hire lotsa people. And they generate a nice tax revenue. I think medical care should be the same way – but on a national scale. This way we don’t need to bludgeon the poor. Until we can turn things around, we need to give the poor a state owned and controlled place to live – commonly thought of as a house. We’re gonna need to do food stamps too. If we must put up with private enterprise at the expense of public welfare, just so that we keep a certain optimism toward “free enterprise” and keep it nurtured because: sometimes a great notion, then let’s restrict it from becoming a plague. But let’s not kill capitalism just because it almost killed society. Let’s remake it. As it is now it’s just dragging itself around like a cave troll. It is no longer fit for purpose.

K teh , June 19, 2020 at 2:48 pm

Protect and serve MMT to the 10%. And no, the answer can not be give MMT to everyone and complain about automation replacing the population. Also, slavery is not a white issue; it’s a control issue, going back to Africa, which is once again being pumped with debt.

Looking at how the term redneck was twisted to serve it’s current function is revealing. Fear, insecurity, control. Educate your own.

[Jun 15, 2020] Ending Emergency Unemployment Insurance Supplements

Jun 15, 2020 | angrybearblog.com
  1. anne , June 14, 2020 4:47 pm

    https://cepr.net/ending-emergency-unemployment-insurance-supplements/

    June 10, 2020

    Ending Emergency Unemployment Insurance Supplements
    By DEAN BAKER

    The Republicans have been working hard to ensure that the $600 weekly supplement to unemployment insurance benefits, which was put in place as part of the pandemic rescue package, is not extended beyond the current July 31 cutoff. They argue that we need people to return to work.

    They do have a point. The supplement is equivalent to pay of $15 an hour for someone working a 40-hour week, and this is in addition to a regular benefit that is typically equal to 40 to 50 percent of workers' pay. The supplement translates into an even larger hourly pay rate for workers putting in shorter workweeks, which was the case for most laid off workers in the restaurant and retail sectors.

    It is hard for employers in traditionally low paying sectors to match these pay rates. Even those of us who are big proponents of higher minimum wages would not advocate a jump to more than $20 an hour at a point when businesses are crippled by the pandemic.

    However, there is also the point that we don't want workers to have to expose themselves to the coronavirus. That was the reason for the generous supplement. We wanted to make sure that workers, who in many cases were legally prevented from working, did not suffer as a result.

    There is an obvious solution here. Suppose we reduce or end the supplement in areas where the pandemic is under control.

    This would not be determined by some Trumpian declaration that the pandemic is over, but by solid data. The obvious metric would be positive test rates. Suppose that the supplement was reduced or eliminated in states or counties where the positive test rate is less than 5 percent. (This may not be the right rate.) This would mean that workers going back to work would face relatively little risk of contracting the virus. It would also give states incentive to conduct vigorous testing programs, as well as other control measures, in order to get their positive rates down.

    Our unemployment insurance system is badly broken and it would be desirable to have more generous benefits, and also to focus more on work sharing, as other countries have done. We can recognize this point and still agree that an arbitrary supplement to all benefits is not the right long-term fix even if it was very good policy in the pandemic.

[Jun 14, 2020] Podcast- Pandemic Profiteering - How Billionaires Are Looting American Taxpayers by Mnar Muhawesh Mnar Muhawesh

Notable quotes:
"... MintPress News ..."
"... This program is 100 percent listener supported! You can join the hundreds of financial sponsors who make this show possible by becoming a member on our Patreon page . ..."
Jun 09, 2020 | www.mintpressnews.com

In this episode, we are joined by MintPress News senior staff writer, Alan MacLeod . MacLeod covers everything from socioeconomic inequality, the oligarch class in Western nations, U.S. foreign policy in the Global South, and press freedom. He is also the author of " Bad News From Venezuela: Twenty Years of Fake News and Misreporting and Propaganda in the Information Age: Still Manufacturing Consent. "

https://www.buzzsprout.com/284746/4086824-podcast-pandemic-profiteering-how-billionaires-are-looting-american-taxpayers

Since April, he has uncovered how COVID-19 came to be a boon for the ultra-wealthy , reporting that America's billionaires, including Jeff Bezos, Bill Gates, Warren Buffet, Michael Bloomberg and others, accrued more wealth in the first three weeks of the lockdown than they made in total prior to 1980. Billionaire wealth surged by $484 billion in just three months, while a record 40 million Americans filed for unemployment.

This economic phenomenon, the largest radical transfer of wealth out of the hands of taxpayers and into the hands of billionaires, was the largest taxpayer bailout of the wealthy in American history.

As MacLeod reported,

In the last 30 years, U.S. billionaire wealth soared by over 1100 percent while median household wealth increased by barely five percent. In 1990, the total wealth held by America's billionaire class was $240 billion; today that number stands at $2.95 trillion. Thus, America's billionaires accrued more wealth in just the past three weeks than they made in total prior to 1980."

While the pandemic and subsequent lockdown turned the world upside down for working-class people, forcing upon them school closures, long lines at the grocery store, empty shelves, panic buying, record unemployment, and miles-long bread lines, little media attention was given to the Billionaires buying islands and land where they could enjoy life in first-class bunkers built to withstand a nuclear war.

If anything, the coronavirus has lifted the veil to expose the growing inequality in the United States, an unfortunate reality in the world's richest country.

Macleod leaves us with a salient statistic, explaining that while Amazon owner Jeff Bezos makes $1 million every three minutes, "Amazon staff, directly employed by Bezos, also risk their lives for measly pay. One-third of all Amazon workers in Arizona, for example, are enrolled in the food stamps program, their wages so low that they cannot afford to pay for food."

Alan MacLeod joins MintCast to explain all of this and how the coming economic crash that is expected to contract the economy by 40 percent will only advance the interests of America's ultra-wealthy and increase their wealth even further.

America already faces a reality in which less than one thousand billionaires influence policies that ensure more tax obligations for the working class to the benefit of ultra-wealthy oligarchs. Corporate media ensures this reality by presenting billionaires in a positive light, often as philanthropists who run charitable organizations. Yet, in reality, they are little more than big fish eating off of the hard work of the working class.

This program is 100 percent listener supported! You can join the hundreds of financial sponsors who make this show possible by becoming a member on our Patreon page .

Subscribe to this podcast on iTunes , Spotify and SoundCloud . Please leave us a review and share this segmen t.

Mnar Muhawesh is founder, CEO and editor in chief of MintPress News, and is also a regular speaker on responsible journalism, sexism, neoconservativism within the media and journalism start-ups.

MintPress News is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 International License.

[Jun 13, 2020] CDC Reiterates Mask Recommendations as Virus Continues to Spread - Bloomberg

Admitting their own blunder: Better late then never
Jun 13, 2020 | www.bloomberg.com

Masks "are strongly encouraged in settings where individuals might raise their voice," the CDC guidance said.

The agency also recommended limiting attendance to allow for distancing.

[Jun 12, 2020] Germany Sees Work From Home as Chance for Greener, Better Life

Jun 12, 2020 | www.bloomberg.com

Roughly a third of Germans expect fewer business trips and more video conferences in the years following the outbreak of the coronavirus, according to a study published on Thursday. Explore dynamic updates of the earth's key data points Open the Data Dash Close

While that's slightly less than in the rest of the world, Germany's environment minister sees an opportunity to improve the climate and the quality of life by commuting less.

"Nobody wants life to remain like it was during the pandemic," said Svenja Schulze, who presented the study carried out by Ernst & Young and the Wuppertal Institut think tank. "But we should keep some of the new routines."

About a quarter of employees worked at home at least part of the time during the pandemic, according to the paper. Internet traffic related to video conferences rose 120% in a sample measurement at a digital crosspoint in Frankfurt, the research showed.

According to the authors of the study, passenger traffic could be reduced long-term by around 8% if home office and remote access are promoted.

[Jun 11, 2020] There's a Crisis in US Capitalism but how it will unfold is completely unclear by Richard D. Wolff

Looks like there are some elements of systemic crisis of neoliberalism in the current situation. a revived Cold War (against Russia and China) is a desperate attempt to find a scapegoat and switch attention of population from the subservience of both Party to Wall Street and MIC. To the "Full spectrum Dominance" doctrine which ensure record levels of military spending, sealing money from working class and lower middle class. At the same time top 20% of population still support neoliberalism so the current riots will pass like Occupy Wall Street movement.
Notable quotes:
"... Today's mass unemployment also threatens those still employed, the remaining 120 million members of the U.S. labor force. ..."
"... the predictable results of mass joblessness in the U.S. are deepening social divisions, renewed racism, social protests, and government repression (often violent). ..."
"... By thereby blocking, if only temporarily, a powerful emerging opposition, Democratic Party leaders deterred mass opposition to bailouts, unemployment, minimal COVID-19 testing, and all the government's other failures. They just want to win the November 2020 election. Biden's vague "return to normal" promises are offered as soothing antidotes to the Trump/GOP's crisis-wracked, fear-mongering divisiveness. Trump plunges ahead with a radically pro-capitalist agenda coupled with reactionary cultural and political warfare against civil rights and liberties. ..."
"... Global isolation accompanies the U.S.'s declining economic and political footprints. Its technological supremacy is increasingly challenged globally and especially in and by China. ..."
"... Further China-bashing -- pursued by both major parties -- will only slow global economic growth just when many circumstances converge to make that the least desirable future. Record-breaking levels of government, corporate and household debt make the U.S. economy exceptionally vulnerable to future shocks and cyclical downturns. ..."
"... No "return to normal" after the combined systemic shocks of the COVID-19 pandemic and capitalist depression is likely. ..."
"... Richard D. Wolff, Professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. Wolff's weekly show, "Economic Update," is syndicated by more than 100 radio stations and goes to 55 million TV receivers via Free Speech TV. His two recent books with Democracy at Work are Understanding Marxism and Understanding Socialism, both available at democracyatwork.info. This article was produced by Economy for All , a project of the Independent Media Institute. ..."
"... democracy needs an alternative! ..."
"... In a rather simplistic understanding of these issues, I too have often wondered about this endless "growth" goal. How can we have long-term a system, whose inner logic requires constant growth to remain 'viable' – on a planet with finite resources? A collision of the two seems inevitable at some point. Am I missing something? ..."
"... Economic growth and human population growth have been disasters for much of the animal/plant world (insects, large mammals, forests, oceans). ..."
"... Human focused economists seem to ignore this vitally important earth inhabiting non-human constituency in the quest for the, always assumed necessary, headline economic growth. ..."
Jun 10, 2020 | www.nakedcapitalism.com
June 10, 2020 Capitalism has always had business cycles. The capitalist enterprises that produce goods and services are distinctively organized around the conflicted relationship of employer and employees and the competitive relationship of markets. These central relationships of capitalism together generate cyclical instability. Wherever capitalism became a society's economic system over the last three centuries, business cycles recurred every four to seven years. Capitalism has mechanisms to survive its cycles, but they are painful, especially when employers fire employees. Widespread pain (unemployment, bankruptcies, disrupted public finances, etc.) brought the label "crisis" to capitalism's cyclical downturns. Only on special occasions, and rarely, did the cyclical crises in capitalism become crises of capitalism as a system. That has usually required other non-economic problems (political, cultural, and/or natural) to reach crescendo peaks around the same time as a cyclical economic downturn. Today is a time of crisis both in and of U.S. capitalism.

U.S. economic policy now focuses on what is already the worst business cycle downturn since the 1929 crash. As data accumulate, it may well prove to be the worst in global capitalism's entire history. Forty million jobless U.S. workers find incomes lost, savings disappearing and over-indebted family finances worsening.

Today's mass unemployment also threatens those still employed, the remaining 120 million members of the U.S. labor force. Mass unemployment always invites employers to cut wages, benefits and working conditions. If any of their employees quit, many among the millions of unemployed will accept those abandoned jobs. Knowing that, most employees accept their employers' cuts. Employers will justify them as required by "the pandemic" or by what they say are its effects on their profits.

Led by Trump and the Republicans and tolerated by the Democrats' leaders, U.S. employers are intensifying class war against workers. That is what mass joblessness accomplishes. On one hand, Washington bails out employers with trillions of dollars. On the other, Washington enables (by funding) a mass joblessness that directly undermines the entire working class. Germany and France, for example, could not allow such joblessness because of their labor movements' and socialist parties' social influences. In sharp contrast, the predictable results of mass joblessness in the U.S. are deepening social divisions, renewed racism, social protests, and government repression (often violent).

... ... ...

By thereby blocking, if only temporarily, a powerful emerging opposition, Democratic Party leaders deterred mass opposition to bailouts, unemployment, minimal COVID-19 testing, and all the government's other failures. They just want to win the November 2020 election. Biden's vague "return to normal" promises are offered as soothing antidotes to the Trump/GOP's crisis-wracked, fear-mongering divisiveness. Trump plunges ahead with a radically pro-capitalist agenda coupled with reactionary cultural and political warfare against civil rights and liberties.

It is the old GOP strategy but a much more extreme version. The Democrats counter with reactionary responses: a revived Cold War (against Russia and/or China) and a domestic safety less shredded than what the GOP plans. Culture wars are perhaps the only realm where Democrats sense some votes in not caving further to right-wing pressures.

Alternating Democratic and Republican governments produced today's impasse. Global isolation accompanies the U.S.'s declining economic and political footprints. Its technological supremacy is increasingly challenged globally and especially in and by China. Efforts to break that challenge have not succeeded and will not likely do better in the future. Further China-bashing -- pursued by both major parties -- will only slow global economic growth just when many circumstances converge to make that the least desirable future. Record-breaking levels of government, corporate and household debt make the U.S. economy exceptionally vulnerable to future shocks and cyclical downturns.

The U.S. population below 40 years of age struggles increasingly with unsustainable debts. The jobs and incomes it faces have already undermined access to the "American Dream" they were promised as children. Nor have they much hope for the future as today's pandemic-cum-crash imposes more hardships on them. That protests surge, provoked further by government repression, should surprise no one.

Repeated polls where half the young "prefer socialism over capitalism" reflect growing antipathy to their deteriorating capitalist reality. In the Cold War-shaped U.S. school system since the late 1940s, socialism's substantive theories and practices were not seriously taught. Debates among socialists over how socialism was changing or should change remain largely unknown. Today's growing interests in critiques of capitalism and in socialism's varieties reflect young peoples' rejection of Cold War taboos as well as a capitalism that has failed them.

No "return to normal" after the combined systemic shocks of the COVID-19 pandemic and capitalist depression is likely. Many want no such return because they believe that that normal led to both the pandemic and the economic crash. They also believe that the managers of that old normal -- corporate CEOs in both their private and governmental positions -- should face tough public scrutiny and opposition because of where that normal led and where it will likely lead again.

Those managers are not solving the problems they helped to create: utterly inadequate testing for the virus, bigger-than-ever bailouts for the biggest banks and corporations, mass unemployment, and deepening wealth and income inequalities.

Why then keep those managers in power? We should not expect different results from them now than when conditions were "normal."

Of course protests flared up in and around African American communities. Beyond their long history of suffering social and employment discrimination and police oppression, it is important to remember that those communities suffered worst in the Great Recession of 2008-2009. Their unemployment then shot up, they lost homes disproportionately to foreclosures, etc. They have died from the coronavirus significantly more than white communities. Because of disproportionate reliance on low-paid service sector jobs, they have once again suffered disproportionately in 2020's crash of U.S. capitalism. When a president then blatantly panders to white supremacy and white supremacists, while making and repeating racist comments, the ingredients are in place to provoke protests. However useful for Trump/GOP electoral campaigns, social protests and oppressive police responses add sharp social conflicts to the already disastrous combination of viral pandemic and economic crash.

Trump is a product and sign of U.S. capitalism's exhaustion. The long, cozy governmental alternation between GOP and Democrats after the trauma of the 1930s Great Depression had achieved its purpose. It had undone FDR's redistribution of wealth from the top to the middle and the bottom. It had "fixed" that problem by reversing the redistribution of wealth and income. The ideological cover for that "fix" was bipartisan demonization of domestic socialism combined with bipartisan pursuit of Cold War with the USSR. The major GOP vs. Democratic Party dispute concerned the modes and extents of governmental support for private capitalism (as in Keynes vs. Friedman, etc.). That minor squabble got raised to the status of "the major issue" for politicians, journalists, and academics to debate because they caved to the taboo on debates over capitalism vs. socialism.

Capitalism has so extremely redistributed wealth and income to the top 1 percent, so mired the vast majority in overwork and excess debt, and so extinguished "good jobs" (via relocating them abroad and automation) that the system itself draws ever-deeper disaffection, criticism, and opposition. At first, deepening social divisions expressed the system's disintegration. Now open street protests take the U.S. a step closer to a full-on crisis of the system.

Trump subordinated the old managers of capitalism by politically threatening them with aroused, angry small businesses and middle-income workers. Trump promises the latter a return to what they had before the upwards redistribution of wealth hurt them. He tells the old managers that he and his base alone can secure their social positions atop an upwardly redistributed contemporary capitalism. They will save the old managers from Bernie, "progressivism" and "socialism." The Democratic Party's old, "centrist" leadership offers weak, partial opposition, hoping Trump goes too far and implodes the GOP.

In the wake of the pandemic and the massive unemployment used to "manage" it, wages and benefits will take major hits in the months and years ahead. Wealth will be further redistributed upward. Social divisions will deepen and so will social protests. This crisis in capitalism is also a crisis of capitalism.

Richard D. Wolff, Professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. Wolff's weekly show, "Economic Update," is syndicated by more than 100 radio stations and goes to 55 million TV receivers via Free Speech TV. His two recent books with Democracy at Work are Understanding Marxism and Understanding Socialism, both available at democracyatwork.info. This article was produced by Economy for All , a project of the Independent Media Institute.


Louis Fyne , June 10, 2020 at 10:28 am

(IMO) things could've been righted in 2009-2010, when US capitalism had two wheels over the precipice and the political will was there for systemic change.

instead the system floored the accelerator and the bus is off the cliff

If only Democrats, Pelosi and Bide were around to do something then! (sarc)

Rolf , June 10, 2020 at 2:22 pm

+2 The good ship America, capsized, can right itself and escape what seems to be inevitable submergence by reversing regressive policies embraced by both political parties since the Reagan "revolution". But both parties also seemed doomed to irrelevance, because both have, as Wolff describes, just played musical chairs over four decades. Little surprise that the only growing political affiliation is "Independent": democracy needs an alternative! Even BEFORE COVID-19, those under 40 could not find sustainable employment, and those over 40 were jettisoned as too expensive to maintain. Meanwhile the mainstream media supply a steady diet of trivia and misinformation, gushing over stock market rebounds or growth in Jeff Bezos' literal mountain of wealth, while a realistic 25% of the work force (including those in the darling "gig" economy) don't have a job or a paycheck, and can't make the rent. Unbelievable. And a disgrace in any country with the means to correct it.

The political response to this virus and the ensuing economic collapse is but one preview to our future: we should study it, and hard. A vaccine may take a few years to put in place, but there is no "vaccine" against profound environmental shifts on the horizon, broadly labeled climate change. A response that avoids enormous human suffering requires planning and transformations on space and time scales unlike anything we have faced heretofore. The bad news: these shifts are already manifest and likely irreversible. The good news: a response will require everyone's labor, creativity, and collaboration. This means planning, cooperation, and work , much of which can't be automated easily. These are political and economic transformations in which we will have no choice, if we are to survive.

John Steinbach , June 10, 2020 at 4:48 pm

Emphasizing that there will be radical reduction in energy/resource use in the near future, either planned or unplanned. The Club of Rome models appear to be still spot on.

ChrisFromGeorgia , June 10, 2020 at 10:32 am

Good article that makes many valid points. One I disagree with though is:

will only slow global economic growth just when many circumstances converge to make that the least desirable future

Why is growth always the goal? Given the looming climate change catastrophe, economic growth is the enemy. We must figure out how to live in a zero-growth (i.e. balanced) economy or we will kill off the human race. A lot of the tensions we see are because it is no longer possible to "grow" the economy in a way that benefits all segments of society. Energy and GDP are related. As we run out of the former the latter must adjust.

Olga , June 10, 2020 at 11:46 am

In a rather simplistic understanding of these issues, I too have often wondered about this endless "growth" goal. How can we have long-term a system, whose inner logic requires constant growth to remain 'viable' – on a planet with finite resources? A collision of the two seems inevitable at some point. Am I missing something?

John Wright , June 10, 2020 at 12:40 pm

You are not missing something.

Economic growth and human population growth have been disasters for much of the animal/plant world (insects, large mammals, forests, oceans).

Human focused economists seem to ignore this vitally important earth inhabiting non-human constituency in the quest for the, always assumed necessary, headline economic growth.

As we follow in the path of our already distressed animal/plant kingdom, achieving a "balanced" economy without a great deal of human distress seems unlikely to this reader .

[Jun 10, 2020] Coronavirus vaccine developers are chasing outbreaks before they disappear Washpost - Sic Semper Tyrannis

Jun 10, 2020 | turcopolier.typepad.com

"Coronavirus vaccine developers are chasing outbreaks before they disappear" Washpost

"The top teams rushing to develop coronavirus vaccines are alerting governments, health officials and shareholders that they may have a big problem : The outbreaks in their countries may be getting too small to quickly determine whether vaccines work

A leader of the Oxford University group, one of the furthest ahead with human trials, admits the reality is paradoxical, even "bizarre," but said the declining numbers of new infections this summer could be one of the big hurdles vaccine developers face in the global race to beat down the virus.

Even as new cases are growing worldwide, transmission rates are falling in Britain, China and many of the hardest-hit regions in the United States -- the three countries that have experimental vaccines ready to move into large-scale human testing in June, July and August." Washpost

---------------

Well, pilgrims it would seem that the Post staff does not see the irony in their own writing, or perhaps they do. There have been scattered evidences of rationality there lately. Even as Democrat governors and mayors across the country drag their feet on the re-opening of the American economy, infection rates are falling. In the Faucibirxist view of things everything depends on vaccine development (or herd immunity post holocaust). But, alas there just aren't enough new, vibrant infections to make development of the vaccines convenient. What will happen to the flow of government money to these projects if this phenomenon becomes general knowledge. Someone at the Post should be disciplined for this indiscretion. pl

https://www.washingtonpost.com/world/europe/coronavirus-vaccine-trials-astrazeneca-moderna/2020/06/09/48f28fea-a414-11ea-898e-b21b9a83f792_story.html


Fred , 10 June 2020 at 09:34 AM

"What will happen to the flow of government money to these projects if this phenomenon becomes general knowledge."

Well Fauci is almost 80 so I think he's set for life. I hear the left wants lots of redevelopment funds and jobs programs, with the attendant opportunities for graft that comes with them, for thier cities which we are all assured had neither rioting nor looting.

Jim , 10 June 2020 at 11:50 AM
Thank you Col. Lang for all the posts on novel coronavirus.

For shining light on this, this utter failure by the medical community and their various and sundry enablers in government and in business.

On these liars and charlatans and killers and criminals.

The video below is about an hour long. It is a nurse, who worked in NYC hospital, the alleged epi center of epi centers.

She basically says, without saying directly, but points to the fact that doctors were murdering patients there, it seems.

She paints a picture of doctors not as scientists but as zealots, as neo neanderthals, as craven monsters, who care not about life, the elderly, the sick, the least among us.

As Nurse Ratchets

Towards the end of video, she recounts her last day at this hospital, discussing a patient she had nursed for many days, and who was doing fine, making progress, . . . and how she was removed from his bed on direct orders, sent to the ER where she was not assigned, and 20 minutes later, the man she was caring for is dead.

These sorts of stories abound; this rage is not going away anytime soon. This is the rage, and what caused it, that our "lords and masters" who censor us and tell us black is white, and want to destroy our country. . . this is the rage they don't want to see expressed and exposed. Will they get their way?

http://edwardcurtin.com/the-undercover-epicenter-nurse-watch-weep-and-rage/


-30-

Laura Wilson , 10 June 2020 at 01:04 PM
Well...they can always test their vaccines in the USA. We seem not to be faring as well and can help out. (I believe this is a glass half-full moment.)
Walter Lang , 10 June 2020 at 01:27 PM
Laura Wilson

Still hysteric. if you are not over 65 and not in compromised health the disease is rarely fatal.

optimax , 10 June 2020 at 01:32 PM
Trump needs to stop the $600 a week federal bonus to the unemployed. My neighbor told me about how his daughter-in-law worked one day a week as a barmaid before the virus shut the bar down and made a little over a hundred a week. Oregon unemployment pays her 150 a week and with the added 600 she now makes over 7 times what she did working. How many protesters and rioters are just as flush getting paid to party in the street? Most i'd say. That makes these government funded protests a powerful voice and recruitment tool for the Democratic Party.

Ending the federal subsidy to the unemployed would reduce, if not stop, the demonstrations and mau-mauing of the country.

Fred , 10 June 2020 at 03:17 PM
optimax,

Absolutely. There were howls of protests before Minneapolis when Georgia, Florida and Texas started tellling people that if they recieved a recall to work notice from an employer and refused to go they would be considered a voluntary quit and no longer eligable for unemployment insurance payments. They'll howl again when they figure out this is all taxable income.

LA Sox Fan , 10 June 2020 at 03:21 PM
Take everything the WaPo claims with a grain of salt. There is no real worry over lower covid infections. What made Covid decrease was the lockdowns. Remove the lockdowns and covid infection rates will climb, as we are seeing in the already reopened states.

Then when fall rolls around, and people are stuck indoors again, rates will skyrocket. There will be plenty of test subjects for a vaccine.

rho , 10 June 2020 at 09:29 PM
With the spread rate of the coronavirus, any outbreak of the infection will peter out once the total immunity rate of the population approaches 65-70 percent.

In Bergamo (Italy), 57 percent a population sample have tested positive for coronavirus antibodies, which means that they must have had the infection before and are now most likely immune.

If you are a Karen, then don't listen to me, but take it from the German government's very own propaganda outlet, Deutsche Welle:

"Out of nearly 10,000 Bergamo residents who had their blood tested between April 23 and June 3, 57% had antibodies, indicating they had come into contact with the virus and developed an immune response.

Health authorities said the sample size was 'sufficiently broad' to be a reliable indicator of the presence of SARS-CoV-2 among Bergamo province's population."

https://www.dw.com/en/coronavirus-tests-show-half-of-people-in-italys-bergamo-have-antibodies/a-53739727

Nobody in Bergamo will need a coronavirus vaccine once its development is finished - whenever that may happen, if at all.

[Jun 10, 2020] World Bank is predicting that between 70-100m people will driven back below poverty line

Jun 10, 2020 | www.moonofalabama.org

vk , Jun 10 2020 21:30 utc | 34

Economic news:

World Bank is predicting that between 70-100m people will driven back below poverty line

WB's "poverty line" is just USD 1.90 per day. It was only USD 1.00 until some four years ago, and is outdated.

In reality, if you really take inflation into account, there are much more people living below the real poverty line in the capitalist world.

And no V-shaped recovery for the capitalist world either:

Returning to normal? Hardly, according to OECD projections

World Bank's global forecasts are out:

WB: 5.2 percent contraction in global GDP in 2020

I noticed there are a lot of people here that still have faith in capitalism. The problem is only with the demented variation found in the USA, they say; the European model is the way to go, they say...

Well, this is Germany:

German exports fell 24% in April compared to March; -31% annualized (April 2019) - worst since 1950

Germany's industrial production slumped by 17.9 percent month-over-month in April 2020

As a bonus: Japan's machinery orders fell 52.8% in May (another record).

--//--

It's official: USA is - finally (after 12 years cooking the books and printing trillions of Dollars) - in a recession:

NBER: US economy is in recession and has been since February

Bonus news:

Here's the true graphic of the "V-shaped recovery" of the CNBC post some days ago - pay attention to the yellow circle!:

Stock markets rocketed back to all-time highs as the US reported that its unemployment rate had dropped to 13.3 percent in May 2020

[Jun 09, 2020] Galbraith 'Disillusion' Is America's One Big Growth Sector Right Now

Highly recommended!
Notable quotes:
"... Moreover, people do distinguish between needs and wants. Americans need to eat, but they mostly don't need to eat out. They don't need to travel. Restaurant owners and airlines therefore have two problems: they can't cover costs while their capacity is limited for public-health reasons, and demand would be down even if the coronavirus disappeared. This explains why many businesses are not reopening even though they legally can. Others are reopening, but fear they cannot hold out for long. And the many millions of workers in America's vast services sector are realizing that their jobs are simply not essential. ..."
"... America's economic plight is structural. It is not simply the consequence of Trump's incompetence or House Speaker Nancy Pelosi's poor political strategy. It reflects systemic changes over 50 years that have created an economy based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts. This economy was in many ways prosperous, and it provided jobs and incomes to many millions. Yet it was a house of cards, and COVID-19 has blown it down. ..."
Jun 09, 2020 | www.zerohedge.com

In the 1960s, the US had a balanced economy that produced goods for both businesses and households, at all levels of technology, with a fairly small (and tightly regulated) financial sector. It produced largely for itself, importing mainly commodities.

Today, the US produces for the world, mainly advanced investment goods and services, in sectors such as aerospace, information technology, arms, oilfield services, and finance. And it imports far more consumer goods, such as clothing, electronics, cars, and car parts, than it did a half-century ago.

And whereas cars, televisions, and household appliances drove US consumer demand in the 1960s, a much larger share of domestic spending today goes (or went) to restaurants, bars, hotels, resorts, gyms, salons, coffee shops, and tattoo parlors, as well as college tuition and doctor's visits. Tens of millions of Americans work in these sectors.

Finally, American household spending in the 1960s was powered by rising wages and growing home equity. But wages have been largely stagnant since at least 2000, and spending increases since 2010 were powered by rising personal and corporate debts. House values are now stagnant at best, and will likely fall in the months ahead.

Mainstream economics pays little attention to such structural questions. Instead, it assumes that business investment responds mostly to the consumer, whose spending is dictated equally by income and desire. The distinction between "essential" and "superfluous" does not exist. Debt burdens are largely ignored.

But demand for many US-made capital goods now depends on global conditions. Orders for new aircraft will not recover while half of all existing planes are grounded. At current prices, the global oil industry is not drilling new wells. Even at home, though existing construction projects may be completed, plans for new office towers or retail outlets won't be launched soon. And as people commute less, cars will last longer, so demand for them (and gasoline) will suffer.

Faced with radical uncertainty, US consumers will save more and spend less. Even if the government replaces their lost incomes for a time, people know that stimulus is short term. What they do not know is when the next job offer – or layoff – will come along.

Moreover, people do distinguish between needs and wants. Americans need to eat, but they mostly don't need to eat out. They don't need to travel. Restaurant owners and airlines therefore have two problems: they can't cover costs while their capacity is limited for public-health reasons, and demand would be down even if the coronavirus disappeared. This explains why many businesses are not reopening even though they legally can. Others are reopening, but fear they cannot hold out for long. And the many millions of workers in America's vast services sector are realizing that their jobs are simply not essential.

Meanwhile, US household debts – rent, mortgage, and utility arrears, as well as interest on education and car loans – have continued to mount. True, stimulus checks have helped: defaults have so far been modest, and many landlords have been accommodating. But as people face long periods with lower incomes, they will continue to hoard funds to ensure that they can repay their fixed debts. As if all this were not enough, falling sales- and income-tax revenues are prompting US state and local governments to cut spending, compounding the loss of jobs and incomes.

America's economic plight is structural. It is not simply the consequence of Trump's incompetence or House Speaker Nancy Pelosi's poor political strategy. It reflects systemic changes over 50 years that have created an economy based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts. This economy was in many ways prosperous, and it provided jobs and incomes to many millions. Yet it was a house of cards, and COVID-19 has blown it down.

"Reopen America" is therefore an economic and political fantasy. Incumbent politicians crave a cheery growth rebound, and the depth of the collapse makes possible some attractive short-term numbers. But taking them seriously will merely set the stage for a new round of disillusion. As nationwide protests against systemic racism and police brutality show, disillusion is America's one big growth sector right now.

[Jun 06, 2020] What I find amazing is that no side in the USA even blinked when the Congress authorized spending USD 10 trillion to keep the system afloat. It's like if this never happened, or like if it was a normal thing

Jun 06, 2020 | www.moonofalabama.org

vk , Jun 5 2020 20:02 utc | 20

What I find amazing is that no side in the USA even blinked when the Congress authorized spending USD 10 trillion to keep the system afloat. It's like if this never happened, or like if it was a normal thing.

This is money fetishism at its maximum level.

[Jun 04, 2020] I think the illusion the CDC. was the "world's premier health agency" comes from the fact that the USA has, by far, the largest and most powerful pharmaceutical sector in the world

CDC consist of overpaid idiots. On 20 January, the first confirmed case in South Korea was identified as a 35-year-old Chinese woman. The first South Korean national to be infected occurred three days later was a 55-year-old man who worked in Wuhan and returned for a checkup with flu symptoms. The two infection reports were publicly released on 24 January. [1] At this point team of CDC researchers should already be in South Korea. But nothing was done.
Jun 04, 2020 | www.moonofalabama.org
vk , Jun 3 2020 22:43 utc | 55
The C.D.C. waited 'its entire existence for this moment'. What went wrong?

Propaganda never stops:

The technology was old, the data poor, the bureaucracy slow, the guidance confusing, the administration not in agreement. The coronavirus shook the world's premier health agency , creating a loss of confidence and hampering the U.S. response to the crisis

"World's premier health agency"?

I think the illusion the C.D.C. was the "world's premier health agency" comes from the fact that the USA has, by far, the largest and most powerful pharmaceutical sector in the world (which Americans call "Big Pharma"). If you have the biggest pharma, you will have the most sheer volume of human trials and new drug patents. This, by osmosis, puts your country's C.D.C. at the forefront of most drug regulation - which the rest of the world's C.D.C.s will simply copy and paste for obvious reasons (i.e. they won't do the same work twice). That doesn't mean your C.D.C. is "the premier". For instance, it could simply be the most corrupt, the C.D.C. which is at the right place, the right time. An example for this is the USA's airplane equivalent to the C.D.C., which sold itself off to Boeing, resulting in the 737 MAX fiasco.

[Jun 04, 2020] The stock market is BOOMING! Truly a remarkable recovery. It's almost as if the travails of the last three months never happened.

Jun 04, 2020 | www.moonofalabama.org

snow_watcher , Jun 3 2020 20:13 utc | 36

The stock market is BOOMING! Truly a remarkable recovery. It's almost as if the travails of the last three months never happened. Everyone is happy and right back to where they were financially. The future is so bright we gotta wear shades. Celebration time, come on! DOW 35K by EOY2020!

The government is underwriting a booming stock market!

And no infrastructure related jobs program in sight even though it's been on the table for more than a decade. Apparently the US infrastructure is just fine thank you. But the MIC and intelligence community need more money.

The Democrats are complicit in this fiasco. Biden, LOL, weak.

As already noted by some commentators, the recent protests have almost as much to do with a rapidly collapsing economy with horrible prospects of recovery for millions of people, as with racism. There's a lot of resentment, unease and fear out there. Racism is only one trigger for the ongoing unrest. There's also an element of blowing off some steam after the COVID restrictions.

COVID is still a major issue BTW! But it seems as if the cost for herd immunity has now been factored in and rationalized away and people are going to accept the sacrifices of tens of thousands more dead and handicapped by after effects. Amazing how quickly COVID is becoming a non-issue. The administration has very effectively sidestepped the problem, aided and abetted by the media.

Any meager gains in employee pay and benefits eked out over the last 10 years as low unemployment ("Thank god for all the crappy jobs, I have three of them!") finally pressured some improvement, have been decimated. One step forward, ten back. Watch the Job Quality Index (JQI).

https://www.jobqualityindex.com/

Not only have millions lost their livelihoods but also their crappy healthcare insurance.

The wealth divide is exploding as billionaires are reaping huge government largesse, much of it tax free.

With millions of people remaining unemployed or under-employed over an extended period of time and as the government begins to remove financial aid for the poorest, as homelessness explodes, as people get sick and have no insurance, as personal debt balloons, etc. these recent protests might look like playground tiffs.

It's remarkable to me that the stock market, even if decoupled from the real economy, is this sanguine over future prospects.

Something seems very wrong with this picture. When the youngsters realize how much of their future has been mortgaged to prop all this up, watch out.

I also expect the very heavy militarized responses to civil unrest to continue and amplify. Protests will not be tolerated and a significant portion of the US citizenry will fully support the harsh crackdowns in the name of law and order. The retired 401K set for example. To be a protester will take guts and fortitude.

Well, at least we can look forward to the November election to fix all of this.

[Jun 04, 2020] The case of the USA is that its financialization process has been running for so long that its already existing infrastructure is crumbling

Jun 04, 2020 | www.moonofalabama.org

vk , Jun 3 2020 18:17 utc | 6

You cannot print money into infrastructure. That's money fetishism.

The Marshall Plan would be only USD 100 billion in today's values. It wasn't about the money: the Marshall Plan worked because, in 1946, the USA was the financial center of the world and had an excess industrial capacity large enough to rebuild a much smaller place (Western Europe). USDs flowed into Western Europe, which could only buy American goods and equipment - which the Americans had to sell. American resources then flowed to Western Europe, which in turn flowed back to the USA in USDs. That the USD was backed by gold at the time had nothing to do with this process, but it may have accelerated the universalization of the USD.

The USA (I'm here including all of its provinces: European Peninsula, Latin America, SE-Asia, India, Japan, South Korea, Taiwan, Hong Kong and Australia) is a capitalist society, which means it plans its economy according to the social profit rate. The social profit rate is determined by the national average of profit rates among all the individual capitals in said country. That means economy is always planned by the private, not the public, sector. The White House is impotent here.

Profit rate self-regulates based on the different degrees of organic composition of capital (OCC) of each country/region. To simplify, the tendency is this: value flows from the countries with lesser OCCs to countries with higher OCCs. Taking the European Union as an example, we have that Germany (the country with the higher OCC) will have large and chronic trade surpluses with the rest.

However, the higher the OCC, the lower is the profit rate. As OCC gets to a certain critical level, profit rates begin to plummet, and structural crisis of capitalism occur. In order to stop this process, "financialization" begins.

The case of the USA is that its financialization process has been running for so long that its already existing infrastructure is crumbling. However, the fact that it is crumbling is just the symptom, not the cause. The real cause is that the USA begun to financialize first because it reached an extremely high OCC first.

At first, the USA didn't rebuild its infrastructure simply because it is not profitable. Now, it doesn't do it for the simple fact it can't: with much pain, it managed to bring astronauts beck to the ISS; the infrastructural abyss is now at more than USD 1.1 trn and widening. By now it would have to import a lot of material and expertise from other countries if it really wanted to rebuild and update its infrastructure. Industry lost so much importance in the US economy that, last year, American industry fell to a record level (due to the trade war against China) and the US GDP actually rose - due to the financial sector and services sector compensating for the loss.

The most extreme case of a First World country turning into a mere financial hub is the UK: its trade deficit already is at a gargantuan -14%, and its budget only doesn't collapse because its huge financial hub in London covers that up to more than 7% (i.e. halves).


450.org , Jun 3 2020 18:41 utc | 10

Financial hub? Call it what it is. A laundromat for dirty money and ill-gotten gains. Problem is, or problem for those who aren't the extractive wealthy elite which is most of us, more and more money is dirty money and ill-gotten gains even if it is "made" legally. The most recent multi-trillion dollar handout, looting and pillaging actually, to the wealthy extractive elite as part of the so-called "stimulus package" was perfectly legal but dirty money and ill-gotten gains nonetheless.

The stock market is not only a depravity indicator and an indicator of wealth disparity, it's also a massive laundromat for legal and illegal ill-gotten gains. I would venture that at least 30% of the stock market is comprised of black market illegal money being laundered at any given time.

https://i.pinimg.com/originals/41/4d/c4/414dc453fd61072db52fe5064b1484ab.jpg

karlof1 , Jun 3 2020 19:09 utc | 13
Erelis @5--

FIRE is a term used my Michael Hudson and other likeminded political-economists. He uses it so often it's hard to provide the initial instance. However, Hudson did write two books about how the FIRE sector gained its dominance, Killing the Host & J is for Junk Economics . It this video interview from 2017 , Hudson explains to Max Keiser about the latter book and how it relates to the just completed election, which begins at the 12:45 mark. That website also links to all previous Keiser Reports where I hope to find the specific interview that discusses the FIRE sector. This one does too, but it's not the specific topic discussed. I guarantee you'll learn a lot from the 10.5 minute interview!

Red Ryder , Jun 3 2020 19:14 utc | 15

Petri Krohn wants redistribution of wealth. Let's look at the idea.

The opposing viewpoint says wealth is not a pie. Wealth comes from growth, innovation, creativity. It is many pies.

Of course, you can't bake your own pie without capital. So, how do we redistribute capital?

You can get it from the government via the banks, if they are 'ordered' to grant loans. They aren't. So, you can't get it from government or banks.

You can take it from the already wealthy. Taxes is the historic way to take wealth from the wealthy. But the tax schedule no longer takes significant amounts from the wealthy. And Congress is corrupted by the wealthy so that route is closed also. There will be no major new taxes on the wealthy.

How can we redistribute wealth, then?

Simplest way is Development Zones with no taxes for a 5-10 years. Investors will pour money in from around the world. New businesses can be started, innovation can be nourished and people can prosper.

Use the system to expand the base of participation and do it in the zones of poverty and redevelopment where the poor and disadvantaged are.

China does this. It works. Other nations do it. They call them FTZ (free trade zones). Russia has some.

Trump was going to do this with his original Infrastructure program. The Dems stopped it. Won't allow any progress.

But, this is the way to go. You raise people out of poverty, your increase their options and income, you grow their region, and lots of new pies are baked.

/div> @Red Ryder , Jun 3 2020 19:14 utc | 15
@Red Ryder | Jun 3 2020 19:14 utc | 15
Trisha , Jun 3 2020 19:56 utc | 30

And who, exactly, is going to do the hard labor required of these infrastructure projects?

Certainly none of the horribly obese Americans I see waddling around, nor many of the young folks stuck with their snouts into soma social media. Most of the youngsters I know have zero clue about working with tools, doing a job right, working hard for not much pay, etc. Males of color living in ghettos while their baby-mommas live off welfare? Hardly.

And where are people going to get the training needed? The Polytechnic Science trade school in the city I grew up in - San Francisco - was torn down long ago. Few in the trades can afford to live in San Francisco any more, even if they could get a job.

Maybe folks like my father who wielded a shovel building roads during the WPA and hated it so much he joined the Army. In other words, hardworking immigrants, or first generation born of immigrants with little education (my dad).

dh-mtl , Jun 3 2020 22:10 utc | 51
Posted by: Red Ryder | Jun 3 2020 19:14 utc | 15 says: 'How can we redistribute wealth, then?'

An economy's wealth is what it produces. The U.S. produces a lot less then it consumes, so it is in debt, and half of its population is poor.

The financial elites, who run the U.S. have gotten wealthy, not by producing something of value, but by strip mining the financial assets of the rest of the population.

If you want to produce wealth, and distribute it properly:

1. Get rid of the U.S.$ as the world's reserve currency. This will allow U.S.$ to be radically devalued.

2. With a devalued dollar, the U.S. will be forced into domestic production (i.e. real wealth creation). Good paying jobs, producing real things, is a very effective way of properly distributing wealth.

3. Carry out a massive infrastructure program to rebuild the U.S.' worn-out infrastructure. The infrastructure itselr, as well as the good paying jobs associated with creating it, is an effective way to distribute wealth.

4. Provide basic health-care and education (including university) to all. This is again a very effective way of distributing wealth, while at the same time supplying a work force capable of carrying out high value added jobs necessary for a goods producing economy.

5. Break-up or regulate the cartels. Profit margins and executive salaries have radically expanded in recent years. This is a sign of lack of competition. Wherever there is inadequate competition the economic actors need to be regulated or broken up. Lower prices, resulting from a normalization of profits and exagerated salary disparities, is another excellent way to distribute wealth.

6. Reduce military expenditures. Most of the military expenditures, beyond what is really needed for defense, are nothing but waste, and at the same time a transfer of wealth from the masses to the military industrial complex.

7. Pay for government sponsored health-care, education and infrastructure with a significant increase in taxes on the wealthy.

8. The massive devaluation of the dollar, combined with infrastructure spending and re-industrialization will no doubt cause significant inflation, at least in the short term. Inflation will reduce both the value of financial assets and debt, again representing a redistribution of wealth from the elites to the indebted masses.


Using the GINI index as a gauge ( https://www.census.gov/library/visualizations/2015/demo/gini-index-of-money-income-and-equivalence-adjusted-income--1967.html), Income inequality increased substantially over the past 40 years, from a GINI coefficient of 0.36, moderate, to 0.46, extreme. This change happened as a result of deliberate economic policies designed to enable the transfer of wealth from the masses to the elites. To reverse this mal-distribution of wealth, the policies that led to this need to be reversed as well.

And don't expect the Democrats to do it. They are fully in the pocket of the 'Globalists' who have been the principle beneficiaries of this massive transfer of wealth since 1980.

vk , Jun 3 2020 22:17 utc | 53
@ Posted by: Winni Puu | Jun 3 2020 21:33 utc | 47

The problem with large infrastructure projects is that they do not only get old through physical degeneration, but also through moral degeneration (i.e. they get outdated).

The USA had USD 1.1 trn in old infrastructure (mainly from the 50s-60s) which need repair. However, if the USG spends those USD 1.1 trn, the American people will just be getting what existed before - there's no technological advantage here. So, while the USA spends USD 1.1 trn on 50s technology, China will be spending the same on state-of-the-art, therefore getting a military advantage (because better infrastructure attracts more wealth, both in the form of foreign investment and in the form of rising productivity of labor).

Also, when you do this large-scale technological leap, it just can't be any kind of innovation: it has to be a revolutionary technology, which both greatly increases labor productivity and is future proof (i.e. can last at least 50 years, ideally at least 100 years).

So, this is not just your average bean-counting. When a given national government is so far behind in infrastructure, it has a though decision to make: fix what already exists (with minor and gradual improvements) or do you go all-in with a revolutionary technology to try to do a "great leap"? And that's just the technocratic side of the problem - in capitalism you have the factor that it is the social profit rate that decides what's built and what isn't, by how much and when.

Baron , Jun 3 2020 22:31 utc | 54
The boss of Amazon Jeff Bezos is 65 this year, is worth over a trillion dollars, assuming he lives up the age of 90, converts the assets into cash, does absolutely nothing except spending the money, he has $3 655 347 to run through each hour 24/7 for the rest of his life. If one assumes he has to sleep, eat, go to the bathroom which cuts the number of spending hours (say) by half, he must go through over seven million dollars each and every hour until he drops dead.

This is obscene, it exceeds his needs by such a margin that one cannot but wonder at the sanity of a society that cannot be bothered to address it. This is not to call for income to be distributed equitably, that would destroy the only mechanism that past evidence shows is the driving force for improving living standards for all, but for such distribution to be sane, nothing more nothing else, sanity should inform the creation of laws governing income distribution on every society, including the Republic's. Any such sane arrangements should include the distribution of both income and accumulated wealth, the major disparity in today's society isn't only in income distribution, but even more so in wealth ownership.


[Jun 04, 2020] Where Are the Job Programs It Needs

Jun 04, 2020 | www.moonofalabama.org

The U.S. has a service economy. Some 70% of its gross domestic product is generated by personal consumption. The emergency measures taken to slow down the covid-19 pandemic decreased consumption by a huge margin. The GDPNow model by the Federal Reserve Bank of Atlanta shows the slump :

The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.
...
Latest estimate: -52.8 percent -- June 1, 2020

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -52.8 percent on June 1, down from -51.2 percent on May 29.


Source: GDPnow via The Big Picture - bigger

The GDPnow model gives a snapshot of GDP on any given day. It is not the GDP for the year, which will be down much less, but just a moment in time.

With the lockdowns loosening the GDP will certainly increase again. But a haircut missed due to the lockdown will not result in a desire to get two haircuts. The meals not eaten in a restaurant during the last two month will not be made up by additional meals eaten after the reopening. The losses are for real.

With the end of the lockdown half of the 40 million currently unemployed will likely soon be back to work. The jobs of the other 20 million will not come back for a long time. The travel and hospitality sectors will be most effected. People who do not make money can not spend any.

The unemployed and the economy will not be impressed by Trump's current fake 'law and order' show or by his pandering to Evangelicals.

If Trump is as smart as he claims to be he will ask Congress for a huge amount of money to be spend on infrastructure programs over the next three years. That money should be shared for projects on the national, state and local level. There are plenty of bridges, roads and rails that need repairs or replacements.

But Trump isn't as smart as he claims and the people around him, as well as Trump himself, are from the FIRE economy - the F inance, Insurance, and Real Estate sectors. Such people do not value the real economy where real stuff is made and used.

The stock market, on which Trump is fixated, has long ceased to be a reflection of the real economy. Propping it up again and again, as the Fed and the Treasury do, may well enrich Trump's friends, but it does nothing for the voters he needs to get reelected.

Does he not understand that?

And why, by the way, ain't the Democrats out in front demanding that more be done to create new jobs? They seem to have totally vanished from the scene.

Posted by b on June 3, 2020 at 17:35 UTC | Permalink


David Park , Jun 3 2020 17:50 utc | 1

"And why, by the way, ain't the Democrats out in front demanding that more be done to create new jobs?"

Don't say ain't or your mother will faint.
Your father will fall in a bucket of paint.
Your sister will cry. Your brother will die.
Your dog will call the FBI.

Nathan Mulcahy , Jun 3 2020 17:52 utc | 2
"And why, by the way, ain't the Democrats out in front demanding that more be done to create new jobs? "

Because the Dems are NOT an opposition party. The entire mess we are in, is a bipartisan project accomplished over several decades. Although Trump is in the limelight right now, he is actually a symptom of a much larger underlying disease, caused by both parties.

karlof1 , Jun 3 2020 17:59 utc | 3
Trump's behavior reveals his beliefs/values. His actions are what need to be watched, not the manifold gibberish he tweets & utters.
450.org , Jun 3 2020 17:59 utc | 4
I don't think the Dems want to win. Nobody wants the next four years. Hell, nobody wants the next eight years or twelve or sixteen. Except the criminally insane autocrats.

Not that I think the Dems in control of the executive and legislative branches would change the course of events. The collapse is in full swing. It's a steam roller at this point. A freight train. An avalanche. There's no more blood to squeeze from the rocks. Game over. Except it and manage the decline as humanely and constructively and equitably as possible or else let chaos reign and lead which is an existential gambit for sure but one the extractive elites appear to have chosen.

Erelis , Jun 3 2020 18:16 utc | 5
The individual states need to realize they are on their own. Trump and Congressional gopers and dems have abandoned them in favor of working full time for FIRE (very new and revealing term for me) and various other elite interests. Each state will need to form various alliances with other states to develop proverbial out of the box solutions including developing independent import and trade agreements with China and the EU among others.
vk , Jun 3 2020 18:17 utc | 6
You cannot print money into infrastructure. That's money fetishism.

The Marshall Plan would be only USD 100 billion in today's values. It wasn't about the money: the Marshall Plan worked because, in 1946, the USA was the financial center of the world and had an excess industrial capacity large enough to rebuild a much smaller place (Western Europe). USDs flowed into Western Europe, which could only buy American goods and equipment - which the Americans had to sell. American resources then flowed to Western Europe, which in turn flowed back to the USA in USDs. That the USD was backed by gold at the time had nothing to do with this process, but it may have accelerated the universalization of the USD.

The USA (I'm here including all of its provinces: European Peninsula, Latin America, SE-Asia, India, Japan, South Korea, Taiwan, Hong Kong and Australia) is a capitalist society, which means it plans its economy according to the social profit rate. The social profit rate is determined by the national average of profit rates among all the individual capitals in said country. That means economy is always planned by the private, not the public, sector. The White House is impotent here.

Profit rate self-regulates based on the different degrees of organic composition of capital (OCC) of each country/region. To simplify, the tendency is this: value flows from the countries with lesser OCCs to countries with higher OCCs. Taking the European Union as an example, we have that Germany (the country with the higher OCC) will have large and chronic trade surpluses with the rest.

However, the higher the OCC, the lower is the profit rate. As OCC gets to a certain critical level, profit rates begin to plummet, and structural crisis of capitalism occur. In order to stop this process, "financialization" begins.

The case of the USA is that its financialization process has been running for so long that its already existing infrastructure is crumbling. However, the fact that it is crumbling is just the symptom, not the cause. The real cause is that the USA begun to financialize first because it reached an extremely high OCC first.

At first, the USA didn't rebuild its infrastructure simply because it is not profitable. Now, it doesn't do it for the simple fact it can't: with much pain, it managed to bring astronauts beck to the ISS; the infrastructural abyss is now at more than USD 1.1 trn and widening. By now it would have to import a lot of material and expertise from other countries if it really wanted to rebuild and update its infrastructure. Industry lost so much importance in the US economy that, last year, American industry fell to a record level (due to the trade war against China) and the US GDP actually rose - due to the financial sector and services sector compensating for the loss.

The most extreme case of a First World country turning into a mere financial hub is the UK: its trade deficit already is at a gargantuan -14%, and its budget only doesn't collapse because its huge financial hub in London covers that up to more than 7% (i.e. halves).

Caliman , Jun 3 2020 18:26 utc | 7
While I agree with spending on infrastructure projects like we did during the great depression and more, it should be noted that this is not going to save the service economy. Very few people actually work in construction and allied trades directly. So while in normal times, this kind of spending would be a huge shot in the arm because these folks would then spend in the service economy, coronafear will reduce the effect considerably.

We have destroyed our economy and reduced our civil liberties, perhaps irrevocably, for a virus that kills less than 1% of the population and almost all of whose victims are the elderly and ill, usually both. As recently as a hundred years ago, humanity used to be faced with diseases like smallpox, various plagues, and assorted bacteriological diseases that would routinely kill 30-70% of the population ... and we kept on. What has happened to us?

Petri Krohn , Jun 3 2020 18:27 utc | 8
IT IS NOT ABOUT RACISM

What is the aim of " Revolution 2020 ?" Is this all just part of Hillary's presidential campaign? Or Michelle Obama's?

Star Tribune of Minneapolis is asking for Michelle Obama to stand for Vice President / President in Waiting:

A democracy in crisis needs Michelle Obama

If she joined the ticket as former Vice President Joe Biden's running mate, our broken land might mend.

We collectively must implore a reluctant Michelle Obama to make herself available to join Joe Biden's ticket as the Democratic Party's vice presidential nominee. Let me explain why.

On top of a global pandemic, our cities now are facing massive unrest, violence and destruction, and threats to the social order, arising from yet another series of horrific killings of unarmed African-American men and women by the police -- and all built upon decades of racial injustice and inequality.

No, it is not about racism. Electing a Black president will not save America. The real issue is the economic system. America needs a major redistribution of wealth.

Mark2 , Jun 3 2020 18:30 utc | 9
Does he not understand that ? Yes he does, all to well. Becouse they planned it that way, when they deliberately released the corona virus germ warfare weapon!
As I wrote here 3 months ago 'they won't need so many strawberry pickers becouse ther won't be so many to eat strawberry's! Think about it. Agend 21. Starts 2020.

The democrats are all part of this genocide.

How long has it taken to recruit train and equip the storm troopers on the streets of America right now.
America will regret what it voted for /wished for.

450.org , Jun 3 2020 18:41 utc | 10
Financial hub? Call it what it is. A laundromat for dirty money and ill-gotten gains. Problem is, or problem for those who aren't the extractive wealthy elite which is most of us, more and more money is dirty money and ill-gotten gains even if it is "made" legally. The most recent multi-trillion dollar handout, looting and pillaging actually, to the wealthy extractive elite as part of the so-called "stimulus package" was perfectly legal but dirty money and ill-gotten gains nonetheless.

The stock market is not only a depravity indicator and an indicator of wealth disparity, it's also a massive laundromat for legal and illegal ill-gotten gains. I would venture that at least 30% of the stock market is comprised of black market illegal money being laundered at any given time.

https://i.pinimg.com/originals/41/4d/c4/414dc453fd61072db52fe5064b1484ab.jpg

Skeletor , Jun 3 2020 18:45 utc | 11
If Trump is as smart as he claims to be he will...

He doesn't need to be smart per se.

He just needs to be **smarter** than Joe Biden.

Just like he was smarter than Hillary + all the legacy media in 2016 to such an extent that to deny they had been outsmarted... #Russiagate was born lol

The irony is that Biden is a lowlife who inflames hatred and reinforces divisions while holding up a moral shield. He has always chosen expedient lies over the truth to get elected. Support for him shows a desperate hate of Trump.

Good luck to all and sundry.

Exhilarating times!!!

Kadath , Jun 3 2020 18:47 utc | 12
The Soviet Union collapsed because the Soviet Economic-Political Elite discovered that they could make more money and have more power by breaking the Union apart to devour the public utilities. The US Economic-Political elite have now made a similar decision. But whereas the Soviet Union had hard assets that could be privatised for profit, the US has public expenses that will be eliminated in order to free up resources for more financialization. The US elite will break apart the US as a nation state in order to harvest public pension funds, social security will be privatised and public debt will explode as the government (through the Federal Reserve) will guarantee stock market prices - get ready for DOW 50,000 in the next 5 years and a 40 trillion national debt, also get ready for collapse of the US as a functioning state the day after that.
karlof1 , Jun 3 2020 19:09 utc | 13
Erelis @5--

FIRE is a term used my Michael Hudson and other likeminded political-economists. He uses it so often it's hard to provide the initial instance. However, Hudson did write two books about how the FIRE sector gained its dominance, Killing the Host & J is for Junk Economics . It this video interview from 2017 , Hudson explains to Max Keiser about the latter book and how it relates to the just completed election, which begins at the 12:45 mark. That website also links to all previous Keiser Reports where I hope to find the specific interview that discusses the FIRE sector. This one does too, but it's not the specific topic discussed. I guarantee you'll learn a lot from the 10.5 minute interview!

jayc , Jun 3 2020 19:09 utc | 14
There is some evidence that "cooler heads" are exerting a "veto" influence on the Trump admin, but who exactly they are is not apparent. But so far this year the US was on the brink of a) attacking Iran with Air Force and missiles. b) dropping nuclear option on China through withdrawal of HK privileges, sanctioning CPC officials, and cancelling thousands of student visas. and c) ordering the military into the streets to "dominate" the protesters. All of these events seemed a sure thing until they suddenly didn't in fact occur.

I expect some kind of "unity ticket" will be offered to the American people for November and some degree of mild reforms initiated to help the vast majority get by.

Progressive Democrats had their best opportunity since the 1960s handed to them in the wake of Trumps's election, and most of them effectively squandered it by allowing their energy to be diverted into the Russiagate/impeachment nothing-burger box.

Red Ryder , Jun 3 2020 19:14 utc | 15
Petri Krohn wants redistribution of wealth. Let's look at the idea.

The opposing viewpoint says wealth is not a pie. Wealth comes from growth, innovation, creativity. It is many pies.

Of course, you can't bake your own pie without capital. So, how do we redistribute capital?

You can get it from the government via the banks, if they are 'ordered' to grant loans. They aren't. So, you can't get it from government or banks.

You can take it from the already wealthy. Taxes is the historic way to take wealth from the wealthy. But the tax schedule no longer takes significant amounts from the wealthy. And Congress is corrupted by the wealthy so that route is closed also. There will be no major new taxes on the wealthy.

How can we redistribute wealth, then?

Simplest way is Development Zones with no taxes for a 5-10 years. Investors will pour money in from around the world. New businesses can be started, innovation can be nourished and people can prosper.

Use the system to expand the base of participation and do it in the zones of poverty and redevelopment where the poor and disadvantaged are.

China does this. It works. Other nations do it. They call them FTZ (free trade zones). Russia has some.

Trump was going to do this with his original Infrastructure program. The Dems stopped it. Won't allow any progress.

But, this is the way to go. You raise people out of poverty, your increase their options and income, you grow their region, and lots of new pies are baked.

JC , Jun 3 2020 19:14 utc | 16
I love America. Revolution of our times five demands not one less. The chicken comes home to riots.
JC , Jun 3 2020 19:14 utc | 17
I love America. Revolution of our times five demands not one less. The chicken comes home to riots.
karlof1 , Jun 3 2020 19:21 utc | 18
Kadath @12--

The 1% made their decision to milk all the wealth long before the USSR's implosion. The regeneration of the Rentier Class began in Europe after the 1848 Revolutions and took hold of power during the latter half of the Victorian Age of the British Empire. Hudson explains how the erasure of Classical Economists from college curricula began after WW1 and connects it to the privatization of the Treasury via the Fed in 1913. The demise of Simon Patten and his school of thought was replaced by what became known as the Chicago School. Its first attempt to gain all the wealth was destroyed by the Ponzi Scheme it engineered during the 1920s. Forced underground from 1929-1945, it emerged from WW2 very strong since its manipulation of the university educational system still held, and the Cold War was contrived in part to make the Chicago School THE paramount economic thought center with Harvard as a close second. There's more to the story, but that'll suffice for now.

Christian J Chuba , Jun 3 2020 19:21 utc | 19
'V' Shaped Recovery already underway

At least this is what the brave people on FOX are saying. The ones who feel very secure in their jobs. Just a few weeks ago the talking points were ... 'Democrats are traitors because they are scared that the economic boom is going to start just before the election'.

Consumer driven economy cannot rebound w/terrorized consumers

These people really believe that all you need is another capital gains tax cut and everything will go back to normal. Don't any of these people think about the permanent trauma on the rest of us? Sure, once Fauci gives us the call clear, I'm taking the last of my savings and going to Disneyland and going to go to restaurants. Heck no. I'm terrified. Consumers even the most profligate ones are going to permanently change their behavior. BTW if you are really cynical, many will become more cautious and some just might break down and become drug addicts. I don't see a happy medium here.

No 'V' shaped recovery today.

[Jun 02, 2020] During Coronavirus epidemic, the US has shown itself incompetent and dysfunctional. That threatens the USA status a world hegemon and as the center of neoliberal empire

Notable quotes:
"... The western response to the Coronavirus spoke loudly: The U.S. and Europe have appeared powerful because they projected the illusion of competence; of being able to act effectively; of being strategic in their actions. On Coronavirus, the U.S. has shown itself incompetent, dysfunctional, and indifferent to human affliction. ..."
Jun 02, 2020 | www.strategic-culture.org

The western response to the Coronavirus spoke loudly: The U.S. and Europe have appeared powerful because they projected the illusion of competence; of being able to act effectively; of being strategic in their actions. On Coronavirus, the U.S. has shown itself incompetent, dysfunctional, and indifferent to human affliction.

Trump is fighting an existential war: on the one hand, the coming Election is not merely the most important in the U.S.' history. It will be existential. No more is Blue/Red a contrived theatre for the electorate – this is deadly serious.

For an important segment of the population (no longer the majority), to lose in this coming election would signify their ejection from power and politics, and their substitution by a culturally different class of Americans, with different cosmopolitan and diversity values. It is the tipping point – two irreconcilable visions of American life believe that they can continue only if they own the whole order, and the other side be utterly crushed.

And on the other hand, Trump sees the U.S. fighting a similarly existential war, albeit at a global plane. He is fighting a hidden 'war' to retain America's present dominance over global money (the dollar) – the source of its true power. For Americans to lose this parallel competition to the EU's and China's multilateral values of global co-operation and financial governance, would imply Americans' (i.e. white Anglo Saxon's) ejection from control over the global financial system, and (again) their substitution by a quite different vision (i.e. a Soros-Gates-Pelosi vision), advocating the 'progressive' values of ecological and financial, global governance.

Again – two irreconcilable visions of the global order, with each party believing that it must own the whole order to survive.

Hence Trump's full-spectrum disruption of China (and the whole multilateral ideology) to maintain dollar hegemony. Europe, on one side, exemplifies the shift towards a transnational regulatory and monetary super-state. And China , on the other, is not only Europe's willing partner, but the only power capable of sitting atop this globalist ambition, giving it the (required) financial weight and substance. This constitutes the existential threat to the U.S.' exceptional control of the global financial system – and therefore over global political power.

A sovereignty-ist Russia may not be as drawn to this cosmopolitan vision as China, but really it has little choice. Because, as President Putin repeatedly points out, the dollar constitutes the toxic problem plaguing the world trading system. And in this, Russia cannot stand aloof. The dollar is the problem for the Middle East too, with its noxious corollaries of oil, currency, trade and sanctions wars. The region will not long be able to sit on the fence, keeping distant from this struggle for the global financial order.

The Middle East, as deference to the U.S. illusion of power wanes, has as little choice as has Russia: It will be pushed to view the U.S. as its past, and to 'Look East' for its future.

And Israel will cease to be the pivot around which the Middle East revolves.

[Jun 02, 2020] We re In The Thick Of It Now – What Happens Next

Riots are not a political movement and they will dissipate soon. Leaving just strengthened the national-security state. That's what will happen next.
Notable quotes:
"... If the combination of peaceful protesting, looting and violence witnessed across American cities over the past few days completely caught you off guard, you're likely to come to the worst possible conclusion about what to do next. The knee-jerk response I'm already seeing from many is to crush the dissent by all means necessary, but that's exactly how you give the imperial state and oligarchy more power. Power it will never relinquish. ..."
"... On the one hand, you can't pillage the public so blatantly and consistently for decades while telling them voting will change things and not expect violence once people realize it doesn't. On the other hand, street violence plays perfectly into the hands of those who would take the current moment and use it to advocate for a further loss of civil liberties, more internal militarization, and the emergence of an overt domestic police state that's been itching to fully manifest since 9/11. ..."
Jun 02, 2020 | www.zerohedge.com

Authored by Mike Krieger via Liberty Blitzkrieg blog,

It's with an extremely heavy heart that I sit down to write today's post.

Although widespread civil unrest was easy to predict, it doesn't make the situation any less sad and dangerous. We're in the thick of it now, and how we respond will likely determine the direction of the country for decades to come.

If the combination of peaceful protesting, looting and violence witnessed across American cities over the past few days completely caught you off guard, you're likely to come to the worst possible conclusion about what to do next. The knee-jerk response I'm already seeing from many is to crush the dissent by all means necessary, but that's exactly how you give the imperial state and oligarchy more power. Power it will never relinquish.

What's happening in America right now is what happens in a failed state.

The U.S. is a failed state. Now the imperial national security state is going to flex at home like never before.

I spent the last decade of my life trying to spread the word to avoid this, but here we are.

-- Michael Krieger (@LibertyBlitz) May 31, 2020

I don't think people understand the significance of the President declaring "Antifa" a "terrorist organization". The Patriot Act and provisions of the NDAA of 2012 make this frightening. Because Antifa is informal it puts all protestors in danger--like declaring them un-citizens.

-- Bret Weinstein (@BretWeinstein) June 1, 2020

GOP @SenTomCotton : "If local politicians will not do their most basic job to protect our citizens, let's see how these anarchists respond when the 101st Airborne is on the other side of the street." pic.twitter.com/NyojLoOEAT

-- The American Independent (@AmerIndependent) June 1, 2020

The pressure cooker situation that erupted over the weekend has been building for five decades, but really accelerated over the past twenty years. After every crisis of the 21st century there's been this "do whatever it takes mentality," which resulted in more wealth and power for the national security state and oligarchy, and less resources, opportunities and civil liberties for the many. If anything, it's surprising it took so long to get here, partly a testament to how skilled a salesman for the power structure Obama was.

Your election was a chance to create real change, but instead you chose to protect bankers while looting the economy on behalf of oligarchs.

You and Trump aren't much different when it comes to the big structural problems, you were just better at selling oligarchy and empire. https://t.co/QuSQNApeLY

-- Michael Krieger (@LibertyBlitz) June 1, 2020

The covid-19 pandemic, related societal lockdown and another round of in your face economic looting by Congress and the Federal Reserve merely served as an accelerant, and the only thing missing was some sort of catalyst combined with warmer weather. Now that the eruption has occurred, I hope cooler heads can prevail on all sides.

On the one hand, you can't pillage the public so blatantly and consistently for decades while telling them voting will change things and not expect violence once people realize it doesn't. On the other hand, street violence plays perfectly into the hands of those who would take the current moment and use it to advocate for a further loss of civil liberties, more internal militarization, and the emergence of an overt domestic police state that's been itching to fully manifest since 9/11.

It's my view we need to take the current moment and admit the unrest is a symptom of a deeply entrenched and corrupt bipartisan imperial oligarchy that cares only about its own wealth and power. If people of goodwill across the ideological spectrum don't take a step back and point out who the real looters are, nothing's going to improve and we'll put another bandaid on a systemic cancer as we continue our longstanding march toward less freedom and more authoritarianism

... ... ...

[May 31, 2020] Our Grim Future by Pepe Escobar

A pretty silly rant, but some point might worth your attention...
Notable quotes:
"... I don't believe Marxist Social/Communism is the answer, as it has proven to always fail, as it is at complete odds with human nature. It drains creativity and productivity because they aren't rewarded ..."
"... Protests and Maidan open up fabulous opportunities for protest leaders. Chocolate oligarch Poroshenko became president. The little-known leader of the party faction in the parliament, Yatsenyuk, became prime minister. ..."
May 31, 2020 | www.zerohedge.com

Meanwhile, what is going to happen to assorted fascisms? Eric Hobsbawm showed us in Age of Extremes how the key to the fascist right was always mass mobilization: "Fascists were the revolutionaries of the counter-revolution".

We may be heading further than mere, crude neofascism. Call it Hybrid Neofascism. Their political stars bow to global market imperatives while switching political competition to the cultural arena.

That's what true "illiberalism" is all about: the mix between neoliberalism – unrestricted capital mobility, Central Bank diktats – and political authoritarianism. Here's where we find Trump, Modi and Bolsonaro.

...Even if neoliberalism was dead, and it's not, the world is still encumbered with its corpse – to paraphrase Nietzsche a propos of God.

And even as a triple catastrophe – sanitary, social and climatic – is now unequivocal, the ruling matrix – starring the Masters of the Universe managing the financial casino – won't stop resisting any drive towards change.

... Realpolitik once again points to a post-Lockdown turbo-capitalist framework, where the illiberalism of the 1% – with fascistic elements – and naked turbo-financialization are boosted by reinforced exploitation of an exhausted and now largely unemployed workforce.

Post-Lockdown turbo-capitalism is once again reasserting itself after four decades of Thatcherization, or – to be polite – hardcore neoliberalism. Progressive forces still don't have the ammunition to revert the logic of extremely high profits for the ruling classes – EU governance included – and for large global corporations as well.


-- ALIEN -- , 2 minutes ago

Allowing the continued uncontrolled exploitation of planetary resources will lead to global ecosystem collapse, killing most humans.

Cheap Chinese Crap , 10 minutes ago

Good God, it 's like this guy is giving a seminar in technocratic buzzword salad recognition.

"It takes someone of Marx's caliber to build a full-fledged, 21st century eco-socialist ideology, and capable of long-term, sustained mobilization. Aux armes, citoyens."

Aux armes, indeed. But not to erect an oligarchy of self-appointed experts to rule us with an iron hand. I rather prefer the idea of pulling them off their comfy, government-compensated sinecures and dragging them down into the mud with everyone else.

Anyone who thinks they are better qualified to run your life than you yourself is an enemy of the Enlightenment. Away with them all.

Leguran , 1 hour ago

Something worthwhile to note is missing among Pepe's carnage....

What has happened is that every imaginable organized group from doctors to pilots to lawyers, to farmers, to pharma companies, etc. has carved out a special slice of the economy especially for themselves.

In Feudal times rivers could not be navigated because cockroach lords would charge fees to use the rivers. That is exactly the same arrangement today but instead of using force of arms, laws are used. Our economy is choking on all these impediments.

mtumba , 2 hours ago

I agree that we need a revolution, and that the .01% globalist "elites" have proven to be not only craven, arrogant and greedy - but also stupid beyond redemption.

But I don't believe Marxist Social/Communism is the answer, as it has proven to always fail, as it is at complete odds with human nature. It drains creativity and productivity because they aren't rewarded, and it rewards laziness and inertia, because the absolute minimum of effort results in the barest level needed to survive, which - oddly - is enough for many.

I think it would be great to give actual capitalism a try, with extremely limited govt - a govt that ONLY provides for the common defense and enforcement of contract laws and protection against crimes of violence and property theft. NOT crony-capitalism that takes command over the resources of a nation's klepotcratic govt by the .01% richest and their sycophantic bottom feeder lawyers, lobbyists, corrupt politicians and other enablers.

Snout the First , 3 hours ago

That was sure a lot of words, needlessly making something simple difficult. Here's what it all boils down to:

PKKA , 3 hours ago

Protests and Maidan open up fabulous opportunities for protest leaders. Chocolate oligarch Poroshenko became president. The little-known leader of the party faction in the parliament, Yatsenyuk, became prime minister.

You know that on the project of an epic wall between Ukraine and Russia, Yatsenyuk stole $ 1 billion but did not build a wall. A moron with a certificate from a psycho hospital Andrei Parubiy became the speaker of parliament. You did not know that Parubiy had a certificate of moronity from a psycho hospital? Now you know. Boxer Vitali Klitschko became mayor of Kiev. Vitaly pronounces the words in syllables and wrinkles his forehead for a long time before expressing a thought. You can even physically hear the creak of gears as they spin and creak in Klitschko's head. Do you know what rabble passed in the Ukrainian parliament? Bandits, crooks, nazis, morons, thieves and idiots! So the protests open up fabulous career opportunities and enrichment!

play_arrow
Phillyguy , 4 hours ago

The American public has a front row seat, watching US economic decline. This process has been ongoing since the mid 1970's, as corporate profits slumped. In response the ruling elite enacted a series of Neo-liberal economic policies- multiple tax cuts for the wealthy, attacks on the poor and labor, job outsourcing, financial de-regulation, lack of spending on public and private infrastructure and spending $ trillions of taxpayer money on the Pentagon and strategic debacles in Afghanistan (longest war in US history), Iraq, Libya, Syria and Yemen. In total, these policies have been a disaster for the average American family.

The ruling elite are well aware of American economic decline, accelerated by the Coronavirus pandemic. Fascism comes to the fore when capitalism breaks down, and under extreme conditions, the ruling elite use fascism as an ideological rationale to harness state power- Legislature and police, to maintain class structure and wealth distribution. Western capitalism is incapable of reversing its economic decline and as a result, we are seeing fascism reemerging in the US, EU and Brazil. Donald Trump is the face of American fascism. Michael Parenti provides an excellent historical analysis of fascism. See: Michael Parenti- Functions of Fascism (Real History) 1 of 4 Jan 27, 2008; Link: www.youtube.com/watch?v=n0Bc4KJx2Ao

Vigilante , 4 hours ago

How come 'fascist' Trump is being attacked 24/7 by the Deep State though?

They should be on his side if your assertions are correct

Fascism resides mostly on the Left end of the spectrum...and 'Woke' capital is throwing its lot with the 'progressives' these days

bshirley1968 , 4 hours ago

It's your perception he is being attacked. Dude, wake up.

The best the deep state has to run against Trump is Joe Biden? They are that stupid? They are that weak? If they are that stupid and weak, how can they be a conceivable, real threat.

You are being played. You imagine there are good guys that you can trust......and that is why you are being played.

HomeOfTheHypocrite , 3 hours ago

The ruling class is currently divided between those who are ready to prepare fascism and those who want to continue on with neoliberalism. Trump represents one faction of the ruling class. His political opponents in the Deep State represent another. None of them have any genuine concern for the fate of the American worker. Trump, if judged by his actions and not his words, is nothing but a charlatan who mouths populist phrases while appointing billionaire aristocrats to political positions and lavishing investment bankers with trillions of tax dollars.

CatInTheHat , 2 hours ago

This is the problem with both sides cult followers: the insanity behind the idea that these elite somehow have their hands tied behind their backs as they ALL move is toward fascism.

The 2 party system is a ONE party right wing fascist one. Trump is merely a figure head. People listen to what a politician says and NOT what he does behind their backs.

Trump is 1000% Zionazi just like the rest of them

HomeOfTheHypocrite , 2 hours ago

"basically it looks alot like the age old battle between fascism and communism"

Perhaps on the streets, but not within the ruling class. The ruling class, including the Democrats, are utterly opposed to communism or socialism. Every Democratic congressperson with maybe one exception stood and applauded Trump's anti-socialist rants during his State of the Union addresses. Nancy Pelosi: "We're capitalist and that's just the way it is." Elizabeth Warren (supposedly a radical): "I'm capitalist to my bones."

"Let's say for example these protesters managed to organize well enough to stage a coup d'etat and take over - what next ?"

There's little chance of that. They are completely disorganized and lack any sort of political program. But, if you're giving me the task of developing a political program for them, I'll try to offer some suggestions that could be accomplished without a Pinochet or Stalin-style bloodletting.

1. Busting up the monopolies and cartels
2. Raising taxes on the rich
3. A government jobs program to combat unemployment
4. A massive curtailment of the military budget
5. A massive curtailment of the policing and prison budget
6. Free government healthcare (without banning private-sector healthcare)

The first three of these political tasks were accomplished in the US in the 1930s without the need for "black ops, gulags, secret police, and all the rest of it." Major policy changes have not always required mass repression. But they do require a serious enough political party to disassociate itself entirely from the ruling class Democrats and Republicans. During the 30s there was a significant rise in various populist and socialist parties. Much of FDR's policies and statements were a response to the threat they posed to established power. There is a famous quote where he talks about having to "throw a few of these [millionaires] to the wolves" in order to save America from the crackpot ideas of the "communists" and "Huey Longians."

I completely share your concern related to the use of repression to implement social and economic policies. Neither the fascists nor the communists have a thing to offer a free people so long as they rely on tyranny to enforce their program. Above all democracy and the natural rights of individuals must be preserved.

Jedclampetisdead , 5 hours ago

If this country has any chance, we have to execute the Zionist bankers and their minions

new game , 5 hours ago

What is and will be: Corporate Fascism.

I defy anyone to explain other wise.

Go to the World Economic Forum web page and meet your masters.

Billionaires shaping YOUR future with their fortunes from corporations.

Their wealth was had by joint ventures with bought and paid for politicians and lobbyist

crafted legislation to maximize their wealth. This fakdemic absolutely consolidates more wealth

to fewer corporations by design. Serf and kings/queens. The club personified by immense wealth disparity.

In a continuing process, the social scoring via digital systems will limit freedoms to state approved corporate diktats

that clamp like a boot to the neck. **** here, 6 tissue sections and recycled bug **** for food.

brave new gatsy world right now with the roll out out of 3 pronged vaccine controlling your brains emotions.

It is all so obvious to anyone with an ability to see two steps into the future. navigate the future accordingly.

They are in control, the first denial that must be removed to see clearly the next step. sad but true.

simple **** maynard...

[May 30, 2020] The Feds response to the coronavirus, the connection between monetary and fiscal policy and how it affects the social situation.

May 30, 2020 | www.moonofalabama.org

financial matters , May 30 2020 10:46 utc | 195

Nathan Tankus continues his series on the Feds response to the coronavirus. This one I think is interesting because he makes explicit the connection between monetary and fiscal policy and how it affects the social situation.

The Federal Reserve's Coronavirus Crisis Actions, Explained (Part 7)
Riots, Municipalities and Monetary Policy

https://nathantankus.substack.com/p/the-federal-reserves-coronavirus-468

""It feels a little silly to be publishing a technical series on the Federal Reserve's crisis response while the United States burns from another round of police murdering Black people. On one level, what's happening has very little to do with the intricacies of central banking. On another level, they are intimately related. Our macroeconomic policy mix is centered around monetary policy and our fiscal safety net has been increasingly ripped apart. Since fiscal policy is a much more flexible tool that can be targeted to specific sectors and groups while replacing and increasing income and wealth, it is the best tool for dealing with discrete social problems and making sure that no one is left behind. The last major challenge to our economic policy mix came in the 1970s when Coretta Scott King co-founded the Full Employment Action Council to advocate for a legally enforceable right to a job. . As Coretta said:

When Martin Luther_King, Jr., left us in 1968, he was leading the struggle for jobs and income for every American. Martin Luther King, Jr., understood that the right to sit at a lunch counter is no right at all when you are without a job to pay for the lunch. He knew that the right to_attend a college is no right at all without a job to finance the education. And the right to live in a decent neighborhood is no right at all Without a job to pay the mortgage or rent. Many of the gains of the last two decades are threatened by the disastrous levels of joblessness among mmonty Americans. I fear that the civil rights legislation we struggled for, and some died for, is about to be repealed by the harsh reality of high unemployment and persistent poverty. [...]

In my view, it's important to contextualize monetary policy in this way as these political issues are inseparable from the technical questions of macroeconomic stabilization. Trying to analyze the technical details of monetary policy without this context is at its core an analytical error. People live or die, and uprise or not, based on the macroeconomic and social policy a society pursues. I write about and advocate shifting to a fiscal policy centered macroeconomic policy framework where financial regulation plays a subordinate distributional, and demand restriction, role because I think that framework is the only that's up to the task of responding to climate change and the deprivation that's leading to civil unrest.

That framework may seem unrealistic and far away, but social instability tends to make the seemingly unrealistic possible. The New Deal was unimaginable in the years before it happened- and so was reconstruction

The big announcement from this month, which is mainly a negative one, is the update to the Municipal Liquidity Facility which made it far more restrictive than many had anticipated. It feels like a painful irony that I'm writing about this just as a major metropolitan area erupted. With that said, it's time to dig into the minutiae ...

[May 29, 2020] Interview Jeff Sessions on Trump, Tuberville, and Free Trade 'Religion'

May 29, 2020 | www.theamericanconservative.com

TAC: Looking forward, if you do go back to Washington, what issues would you champion, and what do you think America in 2021 should really focus on?

Sessions: Well, I have come to understand that the neocon foreign policy, the libertarian free market ideology, beyond common sense, was not healthy, and resulting in damage to families and to American citizens . It's our duty as public officials to protect American citizens from damage from unfair foreign competition and other tactics. That's a big deal. I think our Republican agenda has got to be more focused on helping American people fight back against unfair attacks on our businesses, closing our factories, losing our jobs, transporting our jobs. I'll be an advocate for that.

We have a nation, and the government's job is to protect the nation. President Trump said it simply: Other nations protect their interests, why aren't we protecting ours? We don't ever use a tariff? When people cheat you every day, how do you fight back, are you going to drop bombs on them? Why don't you use tariffs, which Alexander Hamilton and George Washington did at the very beginning of the republic, that's a perfectly normal response to an adverse attack on your people. So those are the kind of things that I feel strongly about. I believe in markets, competition, and international trade, but we can no longer sit quietly while are savaged by very clever, devious mercantilists who want to advance their interests and weaken the United States, while we sit there, based on some theory , that we can't impose a tariff. Give me a break!

Also, we need to reestablish a foreign policy for this time in our country's history, and it has to be really bipartisan. You remember the Kennan Long Telegram that laid the foundation for the containment policy against the Soviet Union. It lasted for 40 years with basic bipartisan support. That's the kind of thing we need to be rethinking today.

We cannot continue, as the president has warned us, getting involved in endless wars all over the globe, thinking that we can just remake humanity. That's not conservatism. Conservatism, as Bob Tyrell said, is a cast of mind, it's a thought process, about, 'wait, is this realistic?

You sure this theory is going to work? Are you trying to put a square peg in a round hole? It's just not going there. Aren't you getting feedback from reality, don't you adjust to it?' Our fundamental goals are to make the American people happy, prosperous, and stable. Family, traditions, culture, those kinds of things have got to be defended. And this ideological view that we're not a nation, we're an idea, somehow our constitution is supposed to apply worldwide, is ridiculous.

We have borders, and we have a right to defend those borders, to establish good, healthy conditions within our country. Not just for the billionaires, wages need to go up for working people. For example, for 20 years wages for average Americans did not increase. GDP was going up, that seemed to be all the economists cared about, CEOs were making more and more money, but the wages for the core American people were not going up. They have, under President Trump, some, and we need to focus on that.

TAC: In both military and economic terms, how should we begin confronting China?

For starters, we need to take off the rose-colored glasses. This is a communist regime. We can wish it weren't so, people hoped they would moderate when they got wealthier, but actually the opposite is occurring. Xi Jinping is using technology to repress his people even more ruthlessly. And they are not free market people. They are not free market people, they're communists! They are using our free-market theories -- religion -- against us, to destroy us, to gain market share, and they've been highly successful.

President Trump and I talked about it on the airplane a number of times during the campaign, and he understands one thing: China needs our markets more than we need their products.

We can make those products in the United States, we can make our drugs here, we can buy them from Mexico, our neighbors like that, we can buy them from the Philippines, South Korea, Japan, India, Vietnam, places that aren't threats to us strategically, and who will deal honestly with us.

So we absolutely need to alter that supply chain system that has given China an advantage over all the other nations of the world, and we can do that in a way that does not harm our economy significantly.

[May 29, 2020] They Motherfkers Need To Go Home! - Locals Rage At Rioters As Minneapolis Burns

May 29, 2020 | www.zerohedge.com

As Summit News reports , a video clip shows a black woman and former NAACP chapter president trying to collect medication for her daughter outside a Target store in St. Paul telling rioters "these motherf**kers need to go home!"

"Leave this shit alone – "these motherf**kers need to go home!" she shouts, "these people don't give a damn about George Floyd."

Diane Binns, 70, of St. Paul is angry at the people here. Binns came here to get medication for her daughter. pic.twitter.com/GA1EJpx4XL

-- Ricardo Lopez (@rljourno) May 28, 2020

The woman subsequently identified herself as Diane Binns, former president of the NAACP St. Paul from 2016-2018.

Critically, for the narrative-minded among you, she says she attended the initial protest against the killing of Floyd but after 30 minutes realized "it was going to be a riot, so I left."

America is quickly descending into chaos as social unrest could spread to other major cities this weekend. Wealth inequality in many inner cities is at record levels. More than 40 million people are unemployed with a crashed economy, and people are already furious about virus lockdowns. This all suggests a perfect storm of unrest could flare up across the country.

We warned of the possibility of this in late March, " West Faces "Social Bomb" As Pandemic Sparks Unrest Among Poorest . "

[May 29, 2020] vaxxter.com

May 29, 2020 | vaxxter.com

What's of particular interest is back in 2005, the PREP Act was brought into existence.
In essence the PREP Act provides for unlimited funding for drug companies to develop 'counter measures' , should a Notice of Declaration of National Emergency be declared. Such declaration was made back in March of this year.

Under the PREP Act, drug companies are given COMPLETE IMMUNITY FROM ALL ACCOUNTABILITY, ALL LIABILITY & ALL LAWSUITS.

By her latest count, there are 119 Covid19 vaccines under development worldwide.

2) CDC and AMA have been in cahoots over the flu and vaccines for years!
Read the start of paragraph 3 and all of 4.

https://aspe.hhs.gov/cdc-%E2%80%94-influenza-deaths-request-correction-rfc

[May 29, 2020] The probably biggest lesson we will learn from this pandemic is that we must work to change that selfish neoliberal mentality

May 29, 2020 | www.moonofalabama.org

DontBelieveEitherPr. , May 28 2020 18:48 utc | 3

"The probably biggest lesson we will learn from this pandemic is that we must work to change that selfish mentality."

And this is sadly the biggest challenge of all. After many decades of neoliberal doctrine, coupled with shunning positive patriotism (e.g. serving for the common good of a nation) as "semi-fascist", we now reap what has been sowed.
But it must be the focus point of our work. Without it, every other effort regarding reviving democracy, social security, and even changing the crazy geopolitics of our nations is futile.

Caliman , May 28 2020 19:47 utc | 9

"The "western" cultures allow for more selfishness of the individual. But over the longer timeframe [neoliberal] cultures that emphasizes personal liberty and ignore the common good are likely to see their empire fail.

The probably biggest lesson we will learn from this pandemic is that we must work to change that selfish mentality."

Ah, yes ... the common good ... the Great Leap Forward ... the Brave New World ... individual rights reported as selfishness ... really?

Perhaps it's better to live with some risk and the admitted limited liberty and individual rights afforded by a system of limited government (not that our governors are currently acting in accordance to the laws they have sworn to uphold)?

Or perhaps one would rather have the false security of guaranteed life in a prison?

Btw, "empire failing" would be a great thing ... and individual rights and limited governance are antithetical to empire.

[May 28, 2020] Protestors Criticized For Looting Businesses Without Forming Private Equity Firm First

Highly recommended!
Notable quotes:
"... "I understand that people are angry, but they shouldn't just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations..." ..."
May 28, 2020 | www.zerohedge.com

"I understand that people are angry, but they shouldn't just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations..."

"Look, we all have the right to protest, but that doesn't mean you can just rush in and destroy any business without gathering a group of clandestine investors to purchase it at a severely reduced price and slowly bleed it to death," said Facebook commenter Amy Mulrain, echoing the sentiments of detractors nationwide who blasted the demonstrators for not hiring a consultant group to take stock of a struggling company's assets before plundering.

" I understand that people are angry, but they shouldn't just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations.

It's disgusting to put workers at risk by looting. You do it by chipping away at their health benefits and eventually laying them off. There's a right way and wrong way to do this. "

At press time, critics recommended that protestors hold law enforcement accountable by simply purchasing the Minneapolis police department from taxpayers.

Source: The Onion

[May 28, 2020] U.S. Declares a Vaccine War on the World

Notable quotes:
"... The failure of the United States Centers for Disease Control and Prevention (CDC) against COVID-19, with nearly four times the annual budget of the WHO, is visible to the world. The CDC failed to provide a successful test for SARS-CoV-2 in the critical months of February and March , while ignoring the WHO's successful test kits that were distributed to 120 countries. ..."
"... Trump has yet to hold his administration and the CDC responsible for this criminal bungling. This, more than any other failure , is the reason that the U.S. numbers for COVID-19 are now more than 1.5 million and about a third of all global infections. Contrast this with China, the first to face an unknown epidemic, stopping it at 82,000 infections, and the amazing results that countries such as Vietnam and South Korea have produced. ..."
"... Taiwan was the first to inform the WHO of human-to-human transmissions in December, but was completely ignored. ..."
"... "Just how evil does this situation become? Is the general leadership of the American political economy trying to be evil just for the fun of it?" ..."
"... And at what point does the general indifference to this state of affairs that still, incredibly, obtains, turn over into mass outrage and condemnation? Skrelli, Bayer, and all the rest are frelling evil. Extortion writ large, with easily preventable death and suffering. ..."
"... As you note it's about profits. One of the disturbing condemnations of the now fading American Century, which most USians remain contentedly oblivious to is that during their watch as global hegemon, the US, in what can be seen, in the best light, as bad faith, worked to undermine the democratic functionality of international cooperative organizations like the WHO, the UN, etc. ..."
"... The intention of granting copyrights and patents was noble, to provide a limited monopoly on an invention or literary work for a limited period. IP has been distorted and twisted, extended to insane time limits to protect works that for any common sense thinkers have already become public domain (see, e.g. the Happy Birthday song, Mickey Mouse or re-formulation of a drug that's gone out of patent). Software should have had its own IP regime but that ship has sailed (thanks Bill G.). ..."
May 28, 2020 | www.nakedcapitalism.com

Donald Trump launched a new vaccine war in May, but not against the virus. It was against the world. The United States and the UK were the only two holdouts in the World Health Assembly from the declaration that vaccines and medicines for COVID-19 should be available as public goods , and not under exclusive patent rights. The United States explicitly disassociated itself from the patent pool call, talking instead of "the critical role that intellectual property plays" -- in other words, patents for vaccines and medicines. Having badly botched his COVID-19 response, Trump is trying to redeem his electoral fortunes in the November elections this year by promising an early vaccine. The 2020 version of Trump's "Make America Great Again" slogan is shaping up to be, essentially, " vaccines for us" -- but the rest of the world will have to queue up and pay what big pharma asks, as they will hold the patents.

In contrast, all other countries agreed with the Costa Rican proposal in the World Health Assembly that there should be a patent pool for all COVID-19 vaccines and medicines. President Xi said that Chinese vaccines would be available as a public good , a view also shared by European Union leaders . Among the 10 candidate vaccines in Phase 1 and 2 of clinical trials, the Chinese have five, the United States has three, and the UK and Germany have one each.

Trump has given an ultimatum to the World Health Organization (WHO) with a permanent withdrawal of funds if it does not mend its ways in 30 days. In sharp contrast, in the World Health Assembly (the highest decision-making body of the WHO), almost all countries, including close allies of the United States, rallied behind the WHO. The failure of the United States Centers for Disease Control and Prevention (CDC) against COVID-19, with nearly four times the annual budget of the WHO, is visible to the world. The CDC failed to provide a successful test for SARS-CoV-2 in the critical months of February and March , while ignoring the WHO's successful test kits that were distributed to 120 countries.

Trump has yet to hold his administration and the CDC responsible for this criminal bungling. This, more than any other failure , is the reason that the U.S. numbers for COVID-19 are now more than 1.5 million and about a third of all global infections. Contrast this with China, the first to face an unknown epidemic, stopping it at 82,000 infections, and the amazing results that countries such as Vietnam and South Korea have produced.

One issue is now looming large over the COVID-19 pandemic. If we do not address the intellectual property rights issue in this pandemic, we are likely to see a repeat of the AIDS tragedy . People died for 10 years (1994-2004) as patented AIDS medicine was priced at $10,000 to $15,000 for a year's supply, far beyond their reach. Finally, patent laws in India allowed people to get AIDS medicine at less than a dollar a day , or $350 for a year's supply. Today, 80 percent of the world's AIDS medicine comes from India. For big pharma, profits trumped lives, and they will continue to do so, COVID or no COVID, unless we change the world.

Most countries have compulsory licensing provisions that will allow them to break patents in case of epidemics or health emergencies. Even the WTO, after a bitter fight, accepted in its Doha Declaration (2001) that countries, in a health emergency, have the right to allow any company to manufacture a patented drug without the patent holder's permission, and even import it from other countries.

Why is it, then, that countries are unable to break patents, even if there are provisions in their laws and in the TRIPS Agreement? The answer is their fear of U.S. sanctions against them. Every year, the U.S. Office of the United States Trade Representative (USTR) issues a Special 301 Report that it has used to threaten trade sanctions against any country that tries to compulsorily license any patented product. India figures prominently in this report year after year, for daring to issue a compulsory license in 2012 to Natco for nexavar, a cancer drug Bayer was selling for more than $65,000 a year . Marijn Dekkers, the CEO of Bayer, was quoted widely that this was "theft," and "We did not develop this medicine for Indians We developed it for Western patients who can afford it."

This leaves unanswered how many people even in the affluent West can afford a $65,000 bill for an illness. But there is no question that a bill of this magnitude is a death sentence for anybody but the super-rich in countries like India. Though a number of other drugs were under also consideration for compulsory licensing at that time, India has not exercised this provision again after receiving U.S. threats.

It is the fear that countries can break patents using their compulsory licensing powers that led to proposals for patent pooling. The argument was that since many of these diseases do not affect rich countries, big pharma should either let go of their patents to such patent pools, or philanthropic capital should fund the development of new drugs for this pool. Facing the pandemic of COVID-19, it is this idea of patent pooling that emerged in the recent World Health Assembly , WHA-73. All countries supported this proposal, barring the United States and its loyal camp follower, the UK . The United States also entered its disagreement on the final WHA resolution, being the lone objector to patent pooling of COVID-19 medicines and vaccines, noting "the critical role that intellectual property plays in incentivizing the development of new and improved health products."

While patent pooling is welcome if no other measure is available, it also makes it appear as if countries have no other recourse apart from the charity of big capital. What this hides, as charity always does, is that people and countries have legitimate rights even under TRIPS to break patents under conditions of an epidemic or a health emergency.

The United States, which screams murder if a compulsory license is issued by any country, has no such compunction when its own interests are threatened. During the anthrax scare in 2001, the U.S. Secretary of Health issued a threat to Bayer under "eminent domain for patents" for licensing the anthrax-treatment drug ciprofloxacin to other manufacturers. Bayer folded, and agreed to supply the quantity at a price that the U.S. government had set. And without a whimper. Yes, this is the same Bayer that considers India as a "thief" for issuing a compulsory license!

The vaccination for COVID-19 might need to be repeated each year, as we still do not know the duration of its protection. It is unlikely that a vaccine against SARS-CoV-2 will provide a lifetime immunity like the smallpox vaccine. Unlike AIDS, where the patient numbers were smaller and were unfortunately stigmatized in different ways, COVID-19 is a visible threat for everyone. Any attempt to hold people and governments to ransom on COVID-19 vaccines or medicines could see the collapse of the entire patent edifice of TRIPS that big pharma backed by the United States and major EU countries have built. That is why the more clever in the capitalist world have moved toward a voluntary patent pool for potential COVID-19 medicines and vaccines. A voluntary patent pool means that companies or institutions holding patents on medicines -- such as remdesivir -- or vaccines would voluntarily hand them over to such a pool. The terms and conditions of such a handover, meaning at concessional rates, or for only for certain regions, are still not clear -- leading to criticism that a voluntary patent pool is not a substitute for declaring that all such medicines and vaccines should be declared global public goods during the COVID-19 pandemic.

Unlike clever capital, Trump's response to the COVID-19 vaccine is to thuggishly bully his way through. He believes that with the unlimited money that the United States is now willing to put into the vaccine efforts, it will either beat everybody else to the winning post, or buy the company that is successful . If this strategy succeeds, he can then use "his" COVID-19 vaccine as a new instrument of global power. It is the United States that will then decide which countries get the vaccine (and for how much), and which ones don't.

Trump does not believe in a rule-based global order , even if the rules are biased in favor of the rich. He is walking out of various arms control agreements and has crippled the WTO . He believes that the United States, as the biggest economy and the most powerful military power , should have the untrammeled right to dictate to all countries. Threats of bombing and invasions can be combined with illegal unilateral sanctions ; and the latest weapon in his imaginary arsenal is withholding vaccines.

Trump's little problem is that the days of the United States being a sole global hegemon passed decades ago. The United States has shown itself as a fumbling giant and its epidemic response shambolic . It has been unable to provide virus tests to its people in time, and failed to stop the epidemic through containment/mitigation measures, which a number of other countries have done.

China and the EU have already agreed that any vaccine developed by them will be regarded as a public good. Even without that, once a medicine or a vaccine is known to be successful, any country with a reasonable scientific infrastructure can replicate the medicine or the vaccine, and manufacture it locally. India in particular has one of the largest generic drug and vaccine manufacturing capacities in the world. What prevents India, or any country for that matter, from manufacturing COVID-19 vaccines or drugs once they are developed -- only the empty threat of a failed hegemon on breaking patents?


Noel Nospamington , May 28, 2020 at 4:19 am

Clearly the Trump and Johnson administrations are completely wrong in not supporting that all COVID vaccines and medications be declared as public goods. This is an unprecedented global threat requiring unprecedented global response.

But as a Canadian I have to reluctantly admit, there are legimate reasons to oppose the WHO. Trump like a broken clock can be correct twice a day, even if he is wrong the other 1438 times a day.

The worst offence is that the WHO (World Health Organisation) is suppose to represent the world, and yet it deliberately excludes Taiwan, which it a known part of the world with 24 million people.

Taiwan was the first to inform the WHO of human-to-human transmissions in December, but was completely ignored. And Taiwan has best handled its response to the pandemic.

Personally I think that all countries should stop supporting the WHO until it restores Taiwan's observer status it previous had until 2016. The only other reasonable option would be to create an alternative health organisation to the WHO which does not exclude any part of the world.

The WHO also has other failings, including corruption, exorbitant travel expenses, and an unqualified president beholden to the CCP. But these failings pale in comparison to Taiwan's exclusion, and hopefully the other failings can be fixed within the organisation.

Amfortas the hippie , May 28, 2020 at 7:49 am

"Just how evil does this situation become? Is the general leadership of the American political economy trying to be evil just for the fun of it?"

And at what point does the general indifference to this state of affairs that still, incredibly, obtains, turn over into mass outrage and condemnation?
Skrelli, Bayer, and all the rest are frelling evil. Extortion writ large, with easily preventable death and suffering.

it did NOT begin with trump.It's been there for most of my life. What will it take for ordinary people to get mad enough about it all to do something about it?

Even in this article, the unspoken assumption is that our hands are somehow tied that these corps have agency far beyond anyone else's but those corps can be seized, and exist only at the pleasure of governments in the places they pretend to exist in.

They are a human creation an Egregore, set tottering about as if it were willful and alive but even Lefties treat them as untouchable godlike entities "oh, well lets appeal to "Benevolent Capital, instead "

"Behold, I show you the last man. 'What is love? What is creation? What is longing? What is a star?' thus asks the last man, and blinks. The earth has become small, and on it hops the last man, who makes everything small. His race is as ineradicable as the flea; the last man lives longest. 'We have invented happiness,'say the last men, and they blink. They have left the regions where it was hard to live, for one needs warmth. One still loves one's neighbor and rubs against him, for one needs warmth

One still works, for work is a form of entertainment. But one is careful lest the entertainment be too harrowing. One no longer becomes poor or rich: both require too much exertion. Who still wants to rule? Who obey? Both require too much exertion.

No shepherd and one herd! Everybody wants the same, everybody is the same: whoever feels different goes voluntarily into a madhouse. 'Formerly, all the world was mad,' say the most refined, and they blink

One has one's little pleasure for the day and one's little pleasure for the night: but one has a regard for health. 'We have invented happiness,' say the last men, and they blink.""

-Zarathustra

mpalomar , May 28, 2020 at 8:50 am

As you note it's about profits. One of the disturbing condemnations of the now fading American Century, which most USians remain contentedly oblivious to is that during their watch as global hegemon, the US, in what can be seen, in the best light, as bad faith, worked to undermine the democratic functionality of international cooperative organizations like the WHO, the UN, etc.

Thus when emergencies arise such as international diplomatic crisis or pandemics, it is found these organisations have been rendered untrustworthy, corrupted and unreliable; unsuited to purpose. American exceptionalism?

VietnamVet , May 28, 2020 at 5:55 am

It is clear now that the USA will not fund a national public health system to fight the coronavirus epidemic. The only conclusion is the reason is to allow Pharmaceutical Corporations to make huge profits by marketing patented drugs and vaccines to treat the illness; if and when, they become available sometime in the future.

Due to incompetence, lack of money and bad messengering; the economic reopening of the USA could kill close to a million Americans. To Republicans and Libertarians, this is of no concern. Democrats may acknowledge the deaths but say they are unavoidable.

For the Elite keeping their wealth is more important than spending a portion to prevent the huge costs in lives and treasure that will come once the Wuhan Coronavirus is established across North America like the related common cold.

Alternate Delegate , May 28, 2020 at 6:32 am

This is a teachable moment on the immorality of all "intellectual property". I am pleased to see that so many countries – other than the US and the UK – can get together on the common decency of allowing everyone to live, and set that above the "justice" of paying off intellectual property assignees. But these countries still have some ways to go in understanding that this applies to all information. That the creation of information can never be a living – in contrast to a living based on the creation of essential goods and services, about which we are learning so much right now! – and that information can never be owned.

They do not yet fully comprehend that all claims to own and extract rent from information are in fact crimes against humanity.

But they will. A teachable, as I said, moment.

Bugs Bunny , May 28, 2020 at 7:05 am

The intention of granting copyrights and patents was noble, to provide a limited monopoly on an invention or literary work for a limited period. IP has been distorted and twisted, extended to insane time limits to protect works that for any common sense thinkers have already become public domain (see, e.g. the Happy Birthday song, Mickey Mouse or re-formulation of a drug that's gone out of patent). Software should have had its own IP regime but that ship has sailed (thanks Bill G.).

Either a giant reform is due or people will ignore the law and infringe the IP. Chinese companies do it with impunity. Maybe they're right to do so.

John Wright , May 28, 2020 at 9:59 am

It appears that the USA has some real competition in the intellectual property game.

Per https://en.wikipedia.org/wiki/World_Intellectual_Property_Indicators

Patent applications for the top 20 offices, 2018
Rank Country Patent applications
1 China 1,542,002
2 U.S. 597,141
3 Japan 313,567
4 South Korea 209,992

If one sums up USA patent applications vs Asia (China, Japan, SK), it is USA 597K vs Asia 2066K.

So Asia is putting in patent applications, vs the USA, at a 3.46 multiple vs the USA.

It will be interesting to see if the USA attitude about the sanctity of intellectual property changes when important key patents are held by the rest of the world.

timbers , May 28, 2020 at 8:33 am

Teachable moments. This could get really interesting if China or a non US & associated puppets develops an effect Covid treatment first.

I will dream of something like this: China develops vaccine, offers it free to US on condition it reduce it's Dept of War & Aggression by 80% and honor all existing and recently existing arms control agreement, and withdraws it's Naval forces though out the world and confines them to the North Atlantic and California coast.

ProNewerDeal , May 28, 2020 at 8:55 am

I wonder if a geopolitically powerful nation/bloc of nations such as China/India/etc might announce that they disregard pharma IP, & announce that they will adhere to the economist Dr Dean Baker-type policy of open source pharma R&D/recipe publication, any private manufacturer may manufacture & sell the resultant pharma SKU. I am referring to any type of pharma or medical device (such as ventilators), not just a COVID-19 vaccine. I would guesstimate that the "soft power" & goodwill generated by such a policy would be extremely beneficial to those nation(s). Furthermore, the US if it tried to retaliate via sanctions or other threats would get a corresponding additional decrease in soft power.

Raj , May 28, 2020 at 9:37 am

To be honest, in some instances Indian govt practices on pharma are quite bad. It is extremely hard in some instances to recoup investments at prices they ask for.

[May 28, 2020] What Are the Three Concurrent Crises of the Coronavirus Depression

May 28, 2020 | www.nakedcapitalism.com

What Are the Three Concurrent Crises of the Coronavirus Depression? Posted on May 27, 2020 by Yves Smith Yves here. Like many of those who are taking this crisis (or crises) seriously, Nathan Tankus has proposed launching new government programs as a way to tackle specific problems created by the crisis. While this is eminently logical as well as sound, don't expect anything like that to happen. As political economist Tom Ferguson pointed out in a presentation we discuss today, the US and most other advanced economies are taking a neoliberal approach, channeling money and aid through existing institutions (too often private).

By Nathan Tankus. Originally publishes at Notes on the Crises

In the first month of this newsletter, I wrote a lot of more big picture pieces about the nature of our current crisis. The last major piece I wrote on this topic was "How to Pay for the Pandemic War" . My view hasn't changed much but it's always worth reiterating and restating in new ways what our major problems are in order to conceptualize how to deal with them. One way to think about this crisis is it's really three interrelated crises happening all at once. An Interesting way to frame these crises is to differentiate them by the economists who focused on their unique problems. We will take them in turn.

The Keynes Crisis

This crisis, and its association with Keynes, is the most obvious and straightforward. John Maynard Keynes is renowned as an economic theorist who showed in his book The General Theory of Employment, Interest and Money that there are no automatic processes operating in the private sector to return economies to full employment and, in fact, they can sustain large degrees of unemployment for significant periods of time. He referred to this as an "unemployment equilibrium". While the book itself actually spends very little time on government spending, the obvious conclusion of his work was that government spending had the power to increase incomes and employment and thus could deal with shortages of demand. This lesson, hard learned and easily forgotten, remains as relevant today as when it was first taught during the Great Depression. It remained relevant a decade ago during the Great Financial Crisis. We have a grievous lack of demand today, especially for labor.

The most obvious and straightforward way to increase demand is through government spending and grants. It can be hard for analysts to really focus on this aspect of the crisis because it is relatively analytically uninteresting. What needs to happen is painfully clear to everyone but Donald Trump, congressional leadership and the most ideological economists. The only analytically interesting point regarding the nature of this crisis as a demand crisis is that despite the disruption to production, the demand effects are much more important and foundational. Notwithstanding the difficulty that intellectually solved problems have for holding the attention of analysts, this point needs to be pressed again and again. We have a demand problem. The most persistent and problematic effects of a collapse in demand is the social and skill effects on workers. Thus, a policy to increase demand should focus on direct employment of labor. This problem needs to be responded to and the answer for how much to spend is "Whatever It Takes" .

The Minsky Crisis

The Minsky Crisis is related to, but distinct from, the Keynes crisis. Hyman Minsky was a mid-to-late 20th century economist who built his work on top of Keynes and a number of other economists who were quickly ejected from mainstream conversation. His work grounded concerns about overall demand, and the demand for labor, in balance sheets and cash flows between economic actors. He focused his gaze on the causes of financial crises which he correctly saw as distinct from demand problems. What's important about his work now is that it teaches us that the most urgent problem of the sudden utter and complete collapse of payments which has happened in the past few months is the corresponding collapse in cash flows and the threat of a wave of defaults and bankruptcies. Especially as the production of services can't be safely restarted (and certainly not at its previous level), the immediate cash flow problem can't be solved by increasing demand.

As a result, businesses must be given direct grants from the federal government. The Small Business Association's Payroll Protection Program is meant to do that. As I've discussed at length however , it has a number of problems. My alternative proposal is an emergency basic income for all businesses . Dealing with the cash flow problem in this matter can also help to relieve the Keynes crisis by maintaining and/or increasing the business demand for labor. In addition to the business cash flow problem, there is also the cash flow problem of households. Providing them with direct cash payments is critical, as is extending the supplementary unemployment insurance. In this respect, it's encouraging that the Treasury is now providing unbanked and underbanked people access to their 1200 payments with debit cards . Hopefully this will be expanded and improved upon in the weeks and months to come. Of course, state and local governments also need basic incomes and the safety net needs to be further nationalized. There is no reason that the monetary burden of unemployment insurance should be placed on state governments.

The Means Crisis

The economist that this type of crisis is named after may be the most obscure one on this list. Gardiner Means was one of the most important economists within the New Deal. First at the Agricultural Adjustment Administration within the Agriculture department, then in other positions throughout the government, he theorized both the causes of the Great Depression and ways of remedying it using monetary policy, fiscal policy- and planning . One of his most notable positions was with the National Resources Planning Board. He rejected the idea that there was a "price mechanism" that allocated physical resources to different uses which functioned in the American economy. Instead, he argued that prices were "administered" by industrial businesses, especially the largest corporations. Instead of prices allocating resources, it was the direct resource and spending decisions of businesses and governments which directed them. The Means Crisis is thus the crisis of the physical allocation of resources between different uses. To respond to it, we need to bring back the notion of resource planning and the regulation of supply chains. The idea of resource planning has been severely out of fashion for decades but it's hard to imagine it not making a comeback because of the Coronavirus Depression. If it somehow doesn't revive in this crisis, the Climate crisis will surely revive it.

What his work teaches us is we can't rely on prices to reallocate resources. Existing prices and existing patterns of production and consumption can be sustained relatively easily by private action. However, profit-seeking businesses are bad at reallocating resources in response to crises. The uncertainty of how long the crisis will last and whether the costs of retooling plants and restructuring supply chains can be recouped discourages bold action. It is often perceived to be cheaper to simply leave productive resources unused than go through such expenses and uncertainties. Even farms are letting crops rot and euthanizing animals rather than trying to find ways to reorganize their supply chains. What Means work teaches us is that the government should step into this breach. It should be directly physically reallocating resources and organizing production through hiring workers and guaranteeing private producers markets. Resources left unplanned, are predictably unorganized. Private Sector planning works at dealing with medium and long term resource questions but struggles to move quickly and effectively in times of crisis.

Conclusion

One key ingredient in the policy mix which responds to this crisis should be an "Emergency Responder Corps". As it happens, Representative Tlaib has made just such a proposal . Such a labor force could help respond to all three crises at once. It could be mobilized to facilitate the reallocation of resources, especially their delivery directly to those who need it most. It would provide many households who are now facing unemployment with an income- and thus a cash flow. This wouldn't be a cure-all- we still need the suite of policy programs I described above. This crisis can be managed far better than it is currently being managed. It is impossible to avoid pain- both medical and economic- at this late date. However, we can relieve the worst symptoms and put our economy on the road to permanent resource planning so that we don't ever have to be caught as unprepared ever again. These three concurrent crises have lessons we badly need to learn in order to deal with the next crisis- the Climate crisis.

In case you missed it (it seemed to miss most people's mailbox), here's a round-up of the Second Month Anniversary of this Newsletter Yesterday . If you are impressed by seeing the interviews, prominent citations and praise Nathan Tankus' writing has gotten, please consider supporting that writing by taking a paid subscription here .


VietnamVet , May 27, 2020 at 5:09 am

The future has taken a hard turn towards the cliff. The Coronavirus Pandemic has turned the exceptional nation into a pariah state. The governments of USA, Brazil, UK, Spain, Italy, Sweden, France, Germany and Russia have been proven to be incapable of protecting their populations. Corporations and/or oligarchs corrupted them. They simply serve to funnel money to the 99%. The pandemic also shows that the failed states are incapable of addressing other existential threats; climate change, living with the earth's limited resources or the thousands of nuclear armed ICBMs. When the globe's tribute money stops flowing west, the worldwide unpaid mercenaries will stop fighting. The problem is that in the global chaos, the red button could be pushed and the earth irradiated.

JBird4049 , May 27, 2020 at 5:32 am

Yes, our current governments are incompetent, but I would suggest willfully blind as even governments on the gold standard could provide free food or large building programs; it is not about being able to deal with the crises, but choosing not to as people like Donald Trump, Nancy Pelosi, and Mitch McConnell have access to the same, or better, information as any of us do; they just chose to ignore the screaming and game the crises for their own and their patrons' benefit. The Treasury and the Fed both are saying in their opaque statements that direct stimulus is needed. Our political leadership chooses to ignore the near certainty of a second wave of infections, likely more virulent, and the even greater probability of the economic collapse of the United States with all the likely riots, deaths, and possible uprisings.

Bsoder , May 27, 2020 at 6:48 am

"These three concurrent crises have lessons we badly need to learn in order to deal with the next crisis- the Climate crisis.'' NeedIng to learn, I suppose is ok, needing to act, now, would be preferred. Not knowing how to solve a problem is not ness are in solving it, it is done all the time in physics. It can be made complicated, to what I keep saying is the outcome we are going to get: a much simpler set of living arrangements with reality. I do a lot things on any given day, but I haven't stopped modeling 'reality' using systems theory, since 2006. It always puts me on edge when economists quote other economists and various theories of economics to explain reality. No offense, but all that leads to is some analysis, on iffy data leading to maybe action, but action very limited to the status quo, the cannon, and whatever's in the codex. I do think it was very well written and as far as economics all in the relearn of possibility. People being reasonable and all, which they ain't. The problem, let's call in an 'extinction level event' (really events) is that it needs to be ameliorated, because 'stopping', is long past.

Tomonthebeach , May 27, 2020 at 12:40 pm

Alas, as Tankus points out, we do not need to learn lessons.

The Trump government quite intentionally chose to ignore the problem because the fallout would allow them to achieve their neolib agendas behind the curtain of natural disaster. Just like 9/11, COVID-19 enables further erosion of civil liberties. It will/has suspended inconvenient banking and finance rules, etc.

While it will not restore jobs that were headed for obsolescence anyway, WS will restore the NYSE numbers in time for the November election (barring a pandemic resurgence YTB).

Tony Wright , May 27, 2020 at 5:35 pm

I think "barring a pandemic resurgence" is an unrealistically optimistic assumption, especially given the following:
Social pressure to relax shutdowns, especially in the US,
Lack of Covid19 herd immunity (which has to be well into the majority to be effective),
Likely absence of effective vaccines,
Likely absence of treatments better than marginally effective,
Early anecdotal evidence that even naturally acquired Covid19 antibodies may not confer lasting protection from reinfection,
Likely Covid19 viral mutations (very much a known unknown),
Widespread worldwide Government incompetence, incapacity and uncoordination regarding Covid19 management strategies,
"Cat herding" problems in most countries.
Having said that Powell and Mnuchin are likely to throw every financial kitchen sink that they can print, con, beg, borrow or steal at financial markets in a herculean effort to protect their dear leader's electoral prospects for November.
More "interesting times" ahead I think.

casino implosion , May 27, 2020 at 6:04 am

The solutions discussed here in dry technocratic terms would be a revolutionary change in power, wealth and expectations. They won't be happening unless things get much worse for the decision makers.

Stephen The Tech Critic , May 27, 2020 at 6:32 am

I think this is an excellent break-down, and it's interesting to me that all three of these seem to be weighing substantially on our present situation.

However, I see too much short-term optimism here. As best as I can tell, our elites have gone completely mad and may be irredeemable at this point. I mean this for real. A huge swath of elites and PMCs too believe that robots that can do all the *essential work* are *just around the corner* -- that the elimination of the working class in less than a decade is baked-in. TINA.

Roubini wrote the other day that if our cold war with China escalates, the re-shoring of manufacturing would leave out workers because it'd all be done with automation. He's wrong though. The re-shoring won't happen because all the capital investment will be in apps, software, and robots, like Elon Musk's "alien dreadnought" concept. He *believes* this crap. So do seemingly many Democrats who appear to be trying to legislate the working class out of existence while offering a $4000 "coding school" credit as a consolation prize.

So I would add that there is a fourth economic crisis, which is the economic suicide pact. Elites see Coronavirus as their comet Hale Bopp. They think they can see the robots (aliens? alien robots?) waving at them from the sky. All they have to do is take the plunge -- commit economic suicide -- in order to ascend to a higher state of existence. I think we can name this mad cult the Exit Cult, after planet Exit in Bruno Latour's "A Fictional Planetarium". The Exit doesn't have to be as literal as launching into space or to Mars. For the Silicon Valley true believers, it's as much about *transcendence* from a lower/lesser version of human to a "more advanced" form.

My policy solution for this 4th economic crisis? I think we should fund (whatever it takes) construction of a very large rocket ship, big enough for all the elites to board to make their Exit. Ahh yes, the ship will be pretty crowded, but we can promise them their own private bunker-like dwelling on Mars when they get there. Convince them all to get on-board, and then launch away! I wonder what the economic multiplier on *that* would be.

Musicismath , May 27, 2020 at 10:27 am

Reminds me of this cheerful ditty from FEELS: Post Earth .

GramSci , May 27, 2020 at 7:28 am

Seems to me that a $30/hr minimum wage and a 20 hr work week would go a long way toward righting the ship.

Jesper , May 27, 2020 at 7:44 am

+1

cripes , May 27, 2020 at 3:40 pm

"Seems to me that a $30/hr minimum wage and a 20 hr work week would go a long way toward righting the ship."

The Germans have long done this in economic crashes, insuring low unemployment, partial subsidy of wages, less work hours and guaranteeing return to place of employment.

Can't have stability here though, it would reduce the desperation, poverty, foreclosures, evictions and the capture of all assets and incomes to the pathological hoarders.

Amfortas the hippie , May 27, 2020 at 7:55 am

the third one ( https://en.wikipedia.org/wiki/Gardiner_Means ) interests me the most.
Ive considered myself a Doomer since the Second Invasion of Iraq sent me looking for the unstated reasons.
From peak oil to peak pretty much everything, I went through the stages of grief and finally accepted that This Can't Last ..and that it sure looks like Decline and Fall, to me.
so i started thinking about how to prepare for this, and learned that it does indeed "Take a Village" but this presented it's own difficulty: namely that unless the crisis/crises is/are evident, and more than obvious, people will stick to what they know.
Intellectual Theorising just isn't enough to justify even small disruptions to habit and routine.
So even out here in my little petri dish of a county it's difficult to do anything that is a clear break from Normal like a farmer's market(we have one,finally i have yet to attend(busy or painful) hear tell it's rather bourgeois ) or some kind of functional public transportation(regional and sporadic and authoritarianly unpleasant more and more people walking last 10 years).
But in the midst of a crisis, it's really too late
That the idea of planning ahead outside of Market is regarded as either silly, dangerous or a necessary evil to be handled and passed by, is a testament to how far we've come in the last 40 or so years .rather, how well we've been remade.
Since my Doomer Awakening(lol), I've tried to become an Appendix backupdrive of the alimentary microbiome a library filled with classics, and a working giant garden that relies on fewer and fewer inputs, with the seed saving and general 1850 AD knowledge base that I figured might be useful.
but it won't be enough.
it takes time and resources and effort to switch gears so rapidly(20 years) as well as the will and perceived need for doing so.
we've, instead, been trained to be practically the polar opposite: a shoegazing mob of hyperindividuals myopically grasping at crumbs and stubble.

Jeremy Grimm , May 27, 2020 at 4:49 pm

The writing I see on the wall in big red capital letters: "We near an End".

I believe there is only so much any individual or group or community can do for now. I believe the highest and best actions we can take are to save as much knowledge as possible and make sure it will survive to the next TWO generations. I am not sure the next generation will be able to do much more than survive and help their children survive. To their children will fall the task of rebuilding, reshaping, and reimagining a more Human Society. Knowledge will be the most vital tool catalyzing that process.

I believe your library and your stored and taught ways are a highest and best use of the time we have remaining. However, if you can, you should add knowledge up to circa 1980 to the knowledge up to 1850. The classics are worth saving but I believe they will be less valuable than technical monographs, texbooks, and the patent literatures. Wisdom, if lost, can be relearned. I fear much of our technical knowledge and Science once lost may be lost forever.

Before retirement I worked as an 'engineer' -- a remarkably flexible work category. My schooling, training, and work experiences burden me with a particular regard for technology, Mathematics, and Science -- that 10,000 readings of "Little Home on the Prairie" could never expunge from my soul.

Amfortas the hippie , May 27, 2020 at 6:28 pm

between 2002 and 2009, when the printer finally died, i printed out gobs of material ATTRA, and all manner of diy and hacks for real life and big sand filters with biofilm and just a whole lotsa stuff.
it's in boxes with mothballs and bar-bait.
this in addition to my sort of haphazard collection of textbooks and manuals and the whole Foxfire series.
I worry about acidic paper, and silverfish and whatever else eats paper.
the Library is a funky broken down old trailer house.
there's only so much one can do.

Jeremy Girmm , May 27, 2020 at 7:41 pm

We each do what we can. No one could ask more than that.

The Rev Kev , May 27, 2020 at 8:52 am

I too, was struck by that Gardiner Means. No invisible hand of the market for that boy. It is all really about businesses, especially the largest corporations, doing the actual deciding. That is why so many economies have been decimated. They are run by people who only think in terms of this financial quarter's targets and any bonuses up for grabs. Means has lots of interesting thoughts and if you go to the Wikipedia page on his 1932 book "The Modern Corporation and Private Property", you see the following-

'Berle and Means argued that the structure of corporate law in the United States in the 1930s enforced the separation of ownership and control because the corporate person formally owns a corporate entity even while shareholders own shares in the corporate entity and elect corporate directors who control the company's activities. Compared to the notion of personal private property, say as one's laptop or bicycle, the functioning of modern company law "has destroyed the unity that we commonly call property". This occurred for a number of reasons, foremost being the dispersal of shareholding ownership in big corporations: the typical shareholder is uninterested in the day-to-day affairs of the company, yet thousands of people like him or her make up the majority of owners throughout the economy. The result is that those who are directly interested in day-to-day affairs, the management and the directors, have the ability to manage the resources of companies to their own advantage without effective shareholder scrutiny. '

https://en.wikipedia.org/wiki/The_Modern_Corporation_and_Private_Property

Geof , May 27, 2020 at 1:01 pm

This article about the Beer Game suggests that the problem may be more fundamental:

The Beer Game is an in-person supply chain simulator, where players play in teams of four roles: beer retailer, wholesaler, distributor, and manufacturer. The goal is to minimize costs, with the team who has the lowest costs winning. . . . a single, one-time persistent bump-up in customer demand plunges the system into wild boom-bust oscillations. Consistently. Consistently. Always.

Players communicate only via the market. The system always goes haywire – and stays haywire – in response to shock.

Though having just finished Yanis Varoufakis's excellent Adults in the Room I have little faith in the capacity of contemporary technocrats to plan effectively. The antagonists in the book can be divided into two categories: scoundrels and cowards. The cowards are utterly unreliable (Varoufakis considers some of the most reliable people are former "company men" who turned coat). But even the scoundrels cannot be relied upon because the complexity of the institutions and the cowardice of the people within them drains their ability to act:

The cynic would say that Dr Schäuble was playing a larger game . . . Grexit to him was an instrument with which to pursue his vision of a smaller, more disciplined Eurozone, with the troika firmly entrenched in Paris. The cynic would be almost right. Except it would not be the whole story. As I departed that day, I was not leaving behind me a Machiavellian dictator; I was leaving behind a sunken heart, a man ostensibly more powerful than almost anyone in Europe who nevertheless felt utterly powerless to do what he knew was right. As the great tragedians have taught us, nothing causes greater wretchedness than the combination of supreme authority and wholesale powerlessness.

aleph_0 , May 27, 2020 at 3:11 pm

Fantastic link. I usually think that game theory is a solution looking for a problem, but that discussion of the Beer Game and fragility of supply chains was great.

Jeremy Grimm , May 27, 2020 at 6:01 pm

I first became aware of Gardiner Means through listening to a web-lecture: William Waller: Thorstein Veblen, Business Enterprise, and the Financial Crisis (July 06, 2012). [https://archive.org/details/WilliamWallerThorsteinVeblenBusinessEnterpriseAndTheFinancialCrisis]
On first hearings of this lecture I noted: Veblen has no theory of markets ~minute 9:00 -- prices? Gardiner Means memo on where do Industrial prices come from.

Veblen when asked why he claimed to be an economist but never wrote about markets had quipped "I would write about Markets, but I have never seen one outside of economics texts." [Extremely LOOSE paraphrase]. Near here I recall a reference to Gardiner Means 1935 essay "Industrial Prices and their Relative Inflexibility", published by the US Government Printing Office. Strange after searching for almost an hour for a copy of this document -- which inspired many economics research papers -- I was unable to locate an online copy of the essay [my bad -- even Google Scholar indicated "NOT AVAILABLE" -- strangely?].

Susan the other , May 27, 2020 at 11:31 am

Interesting. Spotlighting our powers of denial. Never heard of Gardiner Means. More on him please.

Mel , May 27, 2020 at 2:04 pm

I've been citing John Kenneth Galbraith's New Industrial State for the notion of large-scale private sector economic planning. Time to dig that book out and look at Galbraith's bibliography.

Jeremy Grimm , May 27, 2020 at 6:15 pm

Please post any references you find that terminate in downloadable papers or books by Gardiner Means. I tried to find a copy of his paper "Industrial Prices and their Relative Inflexibility" published by the US Govt. Printing Office 1935 but I couldn't find any web copies.

The Depression is long enough ago and recent enough to serve as an interesting model for the selective permanence of information.

Jeremy Grimm , May 27, 2020 at 6:20 pm

Nathan Tankus has very neatly described the triple threats of Corona and thereby described some of the avenues for making use of the Corona crisis by those less interested in the Public Good than their own good. I have found similar clarity in his other posts.

[May 28, 2020] A small request after COVID-19 epidemic: Please tell the ruling class to 'go fck themselves'

Voting it still is a way to raise the middle finger to the organized crime ring that currently serves the oligarchs
May 28, 2020 | caucus99percent.com

The easiest way to register your disapproval is with your vote. Will it change things? Absolutely not.
But I'm only asking for you to send a message. Asking you for more than that would be presumptuous of me.

The media is quick to tell you that you only have two choices in our "democracy" - Red Team or Blue Team.
That is a lie. The reality is that you have four choices.

Choice #1) Vote Team Neofeudalism
Do you enjoy being a serf? Then vote for the MSM-endorsed Republican or Democrat. Go Team!
If you think there is any real difference then you aren't paying attention .

Choice #2) Don't Vote
The game is rigged, so why participate?
Well, you got the first part right. It's all rigged, but you obviously don't understand the game if you think you can opt out. We are all trapped in this system, and not voting is a choice.
Think of it this way. Half of all eligible voters don't vote. Do you think that the political class is worried about their legitimacy? Not in the slightest. If the voting rate dropped to just 10% they still wouldn't care.
In fact, a disengaged, apathetic public is a close second preference to Choice #1 for the ruling elite. Want proof? When is the last time (outside of the Sanders campaign) has any politician done anything to increase the electorate? Historically the ruling class has always tried to limit participation.
So the only message that you send by not voting is "I don't care" or "I give up."

Choice #3) Vote for someone you like
A.K.A. Throwing away your vote.
A.K.A. Helping Putin.
A.K.A. Voting for Trump (for people that flunked both math and civics).
The purpose of democracy is to vote for someone that represents your interests. The fact that this logical, rational act has been demonized by the MSM is proof that the ruling elites don't approve of this choice.
So if you want to tell the ruling class FU on their choices, this is an easy way to do it.
It's not the best way, but it is a way.
The reason that it's not the best way to send a message is because the Democratic Party truly doesn't care if it loses to the GOP. The wealthy donors still win.
So as long as only a token number of voters vote for a 3rd party, then the ruling elite still win. They just don't win in a manner that they would prefer, and that slightly annoys them.

Choice #4) Get Active. Get In Their Faces
The only way to really piss off the ruling elites is to threaten their power.
The Democratic Party establishment and the media will always be against everyone on the left.
However, that isn't even the most important parts of the establishment, and it's something that the Left absolutely must fix regardless of whether the strategy is to take over the Democratic Party or jump to another party.

For starters, let's look at the one place where the Left should dominate - Labor Unions.
No left-wing movement worth a damn fails to have labor behind it. The rank-and-file are generally economic leftists, but union leadership has often been totally corrupted.
That has to change.
The same goes for civil rights and enviromentalist groups.
Failure to do this will doom any leftist economic movement or party.

However, changing things > sending a message.

Halfway in between changing things and sending a message is primarying incumbents.
The political establishment gets furious when the grassroots challenges them.
You can tell by all the ways that they'll break every rule and violate every value when this happens.
It's a true FU to the ruling class. It makes them fight over something they thought that they had already won.

While Bernie's defeat (and abandonment of his own movement) was discouraging, there are still people fighting the good fight.
For example, Justice Democrats have a 3 - 2 record in 2020 so far.
The DSA has 13 primary challengers coming up.

This is only a request. You should only do what you are ready to do.
But I think it's not a bad strategy to act in a way most contrary to the wishes of the ruling class.

[May 27, 2020] The CDC Slashed The COVID-19 Fatality Rate To A Fraction Of Earlier Estimate Used To Justify Lockdowns

May 27, 2020 | www.zerohedge.com

Authored by Ryan McMaken via The Mises Institute,

Governments throughout the world and across the US justified extreme, draconian, undemocratic, and unconstitutional (in most US states) "lockdown" and stay-at-home orders on the grounds that the COVID-19 virus was exceptionally fatal.

In March, the World Health Organization (WHO) was claiming that the fatality rate was a very high 3.4 percent .

Yet as time went on, it became increasingly clear that such high estimates were essentially meaningless because researchers had no idea how many people were actually infected with the disease. Tests were largely being conducted on those with symptoms serious enough to end up in emergency rooms or doctor's offices.

By late April, many researchers were publishing new studies showing that the number of people with the disease was actually much higher than was previously thought. Thus, it became clear that the percentage of people with the disease who died from it suddenly became much smaller.

Now, the Centers for Disease Control and Prevention (CDC) has released new estimates suggesting that the real fatality rate is around 0.26 percent.

Specifically, the report concludes that the "symptomatic case fatality ratio" is 0.4 percent. But that's just symptomatic cases. In the same report, the CDC also claims that 35 percent of all cases are asymptomatic.

Or, as the Washington Post reported this week:

The agency offered a "current best estimate" of 0.4 percent. The agency also gave a best estimate that 35 percent of people infected never develop symptoms. Those numbers when put together would produce an infection fatality rate of 0.26, which is lower than many of the estimates produced by scientists and modelers to date."

Of course, not all scientists have been wrong on this. Back in March, Stanford scientist John Ioannidis was much, much closer to the CDC's estimate than the WHO. The Wall Street Journal noted in April :

In a March article for Stat News, Dr. Ioannidis argued that Covid-19 is far less deadly than modelers were assuming. He considered the experience of the Diamond Princess cruise ship, which was quarantined Feb. 4 in Japan. Nine of 700 infected passengers and crew died. Based on the demographics of the ship's population, Dr. Ioannidis estimated that the U.S. fatality rate could be as low as 0.025% to 0.625% and put the upper bound at 0.05% to 1% -- comparable to that of seasonal flu.

Not that this will settle the matter.

Proponents of destroying human rights and the rule of law in order to carry out lockdowns will continue to insist that "we didn't know" what the fatality rate was back in March. The lack of evidence, however, didn't stop proponents of lockdowns from implementing policies that destroyed the ability of families to earn a living, and which also created social conditions that caused child abuse and suicides to spike.

But for more sane people, extraordinary claims require extraordinary evidence. Those who have claimed that lockdowns are "the only option" had virtually no evidence at all to support their position. Indeed, such extreme over-the-top measures such as the general lockdowns required an extreme level of high-quality, nearly irrefutable evidence that lockdowns would work and were necessary in the face of a disease with an extremely high fatality rate. But the only "data" the prolockdown people could offer was speculation and hyperbolic predictions of bodies piling up in the streets.

But that became politically unimportant.

The people who wanted lockdowns had gained the obeisance of powerful people in government institutions and in the media . So actual data, science, or respect for human rights suddenly became meaningless. All that mattered was getting those lockdowns. So the lockdown crowd destroyed the lives of millions in the developed world -- and more than a hundred million in the developing world -- to satisfy the hunches of a tiny handful of politicians and technocrats.

[May 27, 2020] The general election scenario that Democrats are dreading

Notable quotes:
"... "Consumption and hiring started to tick up "in gross terms, not in net terms," Furman said, describing the phenomenon as a "partial rebound." The bounce back "can be very very fast, because people go back to their original job, they get called back from furlough, you put the lights back on in your business. Given how many people were furloughed and how many businesses were closed you can get a big jump out of that. ..."
"... IMO Trump now realizes that he was snookered by the medical equivalent of the Holy Office. Our Auto da Fe has been impressive and nearly fatal but not quite. Trump's statement that he will never shut the economy down again indicates to me that the "scales have fallen" from his eyes. ..."
"... One thing to note are all the diffusion indexes will show large upticks, because of the base effects. U6 will likely be more stubborn. ..."
May 27, 2020 | turcopolier.typepad.com

"... he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound.

The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption, and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industry-wide catastrophe like the Gulf of Mexico oil spill." politico

******

"Consumption and hiring started to tick up "in gross terms, not in net terms," Furman said, describing the phenomenon as a "partial rebound." The bounce back "can be very very fast, because people go back to their original job, they get called back from furlough, you put the lights back on in your business. Given how many people were furloughed and how many businesses were closed you can get a big jump out of that. It will look like a V."" politico

--------------

Well, pilgrims, there you have it. If Politico thinks so, it must be so. Do I think the Democratic Party grandees are deliberately suppressing the economy as long as they can and bitching and whining as the GOP tries to crank up the machine? Yes, I do. Is that criminal? Should it be criminal? IMO it should be but to prevent the disintegration of the Great Republic, we must not treat it as such.

IMO Trump now realizes that he was snookered by the medical equivalent of the Holy Office. Our Auto da Fe has been impressive and nearly fatal but not quite. Trump's statement that he will never shut the economy down again indicates to me that the "scales have fallen" from his eyes.

Are his attempts too little and too late? That could be. Or, maybe not.

The brawny beast that is America is gathering itself up, and looking once again at what CAN BE, not at what is forbidden us by the Globalist nitwits who would destroy us and make us into building blocks for their utopia. pl

https://www.politico.com/news/2020/05/26/2020-election-democrats-281470

What I don't understand is how prolonging the lockdown of reliably blue states like my own WA furthers the Democrat election strategy -- assuming it is what you suggest.

It seems to me that when people in those states feel the totalitarian pinch on their own livelihood, they might be more inclined to vote against the party that's doing it to them, tipping the state into the purple or even red column.

Same goes for the battleground states. Seems like a surefire way to throw the election, not win it.

Can someone explain how this is supposed to work?!?


Jack , 26 May 2020 at 01:10 PM

Sir,

One thing to note are all the diffusion indexes will show large upticks, because of the base effects. U6 will likely be more stubborn.

The best comparisons will be unit volumes relative to prior to lockdown. For example, number of flights or gas consumption prior to and after lockdown ends.

One indicator that I track is used car prices. It is starting a nice uptick particularly for full size trucks. With all the incentives and financing options I would bet we'll see growth in even new truck volumes .

On the flip side, IMO, the increased debt and the trillions that the Fed printed up for Wall St will constrain growth in the medium term.

walrus , 26 May 2020 at 01:52 PM
Col. Lang,

With respect, I don't agree with your view of what has happened from an economic and medical sense although I agree with your view of the political machinations of the democrats.

I said when all this started that the economy would bounce back quickly. I still believe it will. I also believe that the lockdown was necessary, but now it is thought possible to open up because the medical system and logistics have now caught up with the pandemic. The lockdowns bought us time.

Fauci, Birx and Co. were talking of easing up three weeks ago at one of President Trumps press conferences, I watched most of them live. I don't see the medicos as malevolent globalists or anything other than public health officials doing their jobs under great pressure and public scrutiny. I don't think they have drunk any of the numerous glasses of kool aid that were proffered. They appear to me to have stuck stubbornly to the science.

We too are easing lockdown rules - allegedly in "a controlled and measured manner" but that is actually BS. Everyone is sick of being cooped up and can't wait. We too have one State leader - a leftist "democrat" that is dragging their feet in Queensland for political reasons, our equivalent of Florida. Their borders are currently closed - when they reopen there will be an absolute avalanche of tourists heading North, us included, to get some warm weather, that will provide a huge economic spike.

Let's hope we can get vaccines moving PDQ.

LondonBob , 26 May 2020 at 02:25 PM
Problem is things were frothy before covid, financial markets were well overextended, the deficit was out of control, oil won't come back anytime soon. In many ways Trump is a lucky general, gets to blame the slowdown on the virus and any faltering in the recovery on Dem governors.
Eric Newhill , 26 May 2020 at 03:10 PM
Here is a link to a poll that suggests the globalists have screwed up again (see bottom 1/3 of the link). A large % of Americans polled say they will now avoid products made in China and would be willing to pay more for the same product if it's made in the USA. They also think that trade restrictions and tariffs are a good idea. Basically, they like the Trumpian model. China Joe and his boy Hunter are going to be perceived as being on the wrong side of this issue by Trump.

https://fticommunications.com/covid-19/wp-content/uploads/2020/05/FTI-Shifting-Expectations-II-Topline-Results.pdf

turcopolier , 26 May 2020 at 03:21 PM
walrus

you are right. We do not agree. IMO the country wide shutdown was never necessary. What was needed was a strategy of protection for the vulnerable. The rest could have taken care of themselves with anti-flu like treatment while therapies and vaccines were developed.

turcopolier , 26 May 2020 at 03:23 PM
Corkyagain

Yes. In their contempt for those they think "deplorable, they f----d up.

turcopolier , 26 May 2020 at 03:26 PM
LondonBob

The Democrats deserve it and BTW I don't agree with any of the negatives you state with regard to the pre-COVID state of things. You just don't like Trump. Neither do I

turcopolier , 26 May 2020 at 03:32 PM
LondonBob

Lucky is better than skillful. But I disagree about trump. He is a lot more than just lucky.

AK , 26 May 2020 at 03:45 PM
CorkyAgain,

It is the strategy (poorly conceived) of people whose ideology blinds them to extant reality, and who think they can mold that reality to their whims through sheer fervency of their belief in their moral superiority to other, "lesser types." I can't think of a single historical example where such a strategy has worked out, but there you have it. Then again, according to them, history also fits into that concept of "malleable reality" as they see it. They are the makers of history in their own estimation, rather than part of and subject to it. This is why the Left has never been able to grapple with, and is often outright hostile to, the notion of unforeseen consequences.

BillWade , 26 May 2020 at 03:56 PM
This past weekend our hotel parking lots were pretty full, this is normally a slow time in SW Florida. It's likely restaurants will be allowed 100% capacity seating with bars opening this coming Monday.

Reasonable people who want a real economy in the USA should all be voting for President Trump. If he wins, and I think he will, we're going to have a real boom as smart EU money moves into USA equities, particularly the NASDAQ.

Vegetius , 26 May 2020 at 04:49 PM
Trump is the Charlie Brown of American political history.

How many more footballs will he make a go at before (and after) November?

Fred , 26 May 2020 at 05:37 PM
LondonBob,

" blame the slowdown on the virus "
Not gonna happen. He's going to blame the Democrats who issued all those EO declaring who was essential and who was "seperate but equal". He'll blame China, rightfully so, for spreading this as far and wide in the West as possible; he'll blame the academics and professional "resistance" within and without the government for their incompetence and intransigence.

Corky,

"Seems like a surefire way to throw the election, not win it."
it doesn't matter who votes, it only matters now who counts them. Thus the statewide mailings of ballots to maximize ballot harvesting. At the very least lots of local elections will get stolen, probably a congressional one too, even if WA doesn't go for Trump in November.

Terence Gore , 27 May 2020 at 09:20 AM
https://www.scmp.com/news/china/science/article/3086177/coronavirus-uses-same-strategy-hiv-dodge-immune-response-chinese

"Both viruses remove marker molecules on the surface of an infected cell that are used by the immune system to identify invaders, the researchers said in a non-peer reviewed paper posted on preprint website bioRxiv.org on Sunday. They warned that this commonality could mean Sars-CoV-2, the clinical name for the virus, could be around for some time, like HIV...that the coronavirus was showing "some characteristics of viruses causing chronic infection"."

J , 27 May 2020 at 10:52 AM
It appears that an Intelligence report that's come out regarding the CCP and their virus by French Intelligence (DGSE) isn't getting the traction it deserves.

Eleven years, , 'eleven years' BEFORE the EU signed off on the PRC/CCP Wuhan lab construction, French DGSE warned that the PRC/CCP's lab was a construction leak and bio-weapon making facility disaster waiting to happen.

Why was nobody listening at the time? Where were the FIVE EYES in all of this, were they ignoring French Intelligence's warning, what? Where was the CIA in this? They're supposed to be the 'external' watchdog, right? It was the Tenet/Goss handover time frame, 2004. But surely the DGSE warnings had to have been 'flagged' by Langley for a closer scrutiny, right? What was DIA's read on this at the time?

..."French diplomatic and security advisers, who argued that the Chinese reputation for poor bio-security could lead to a catastrophic leak.

They also warned that Paris could lose control of the project, and even suggested that Beijing could harness the technology to make biowarfare weapons."...

Another interesting cavet in the article relates to P4 labs everywhere (including U.S. facilities)..... "A source told the newspaper: 'What you have to understand is that a P4 [high-level bio-security] laboratory is like a nuclear reprocessing plant. It's a bacteriological atomic bomb."

https://www.dailymail.co.uk/news/article-8351113/Wuhan-virus-lab-signed-Michel-Barnier-2004-despite-French-intelligence-warnings.html

Barbara Ann , 27 May 2020 at 03:15 PM
An interesting development yesterday: Twitter have flagged a couple of Trump's tweets on mail-in ballots as "Misleading". A link at the bottom of each tweet says "Get the facts about mail-in ballots" and directs you to a piece written by Twitter on the subject quoting CNN & WaPo as having contrary views to the President - hardly news in itself.

Are we seeing the beginning of another insurance policy, in case the economy recovers? It appears to put Trump in a bind, as shutting down or sanctioning Twitter as a whole would not only deny Trump his (until yesterday) unfiltered comms channel to his base, but also invite cries of censorship by the MSM. If he does nothing, what is to stop Twitter 'correcting' more of this messages? In a later tweet Trump directly accused Twitter of "..interfering in the 2020 Presidential Election". It will be very interesting to see how this develops. Here is the first of the offending tweets:

https://twitter.com/realDonaldTrump/status/1265255835124539392

CK , 27 May 2020 at 03:38 PM
@Barbara
If Israel, Mexico, Great Britain, China, Ukraine, Canada, et.al can interfere in American elections, and the USA can interfere in the elections of any nation it wishes, why should the Masters and Commanders of the internet be forbidden the same hobby?
Have you never watched Network?
https://americanrhetoric.com/MovieSpeeches/moviespeechnetwork4.html
Same as it ever was.

[May 27, 2020] Political Scientist Tom Ferguson on Big Money and Social Conflicts in the Covid-19 Era

Notable quotes:
"... So let's accept reality: median voters aren't driving outcomes anywhere. Bailouts for big business were not popular after 2008 and they are not now, either, especially when ordinary people languish unprotected. Governments and central banks may glance at polls, but they aren't doing what they are doing because of voter sentiment. ..."
"... Let's repeat: What needs to be moved onto the public balance sheet are the costs associated with safely redesigning work. I doubt that most businesses, especially smaller businesses, want to expose their workforces or their customers to serious risk. ..."
"... But if firms are not assisted with the costs of redesigning production for the safety of both, they will cut corners, dig in, and fight many salutary changes. ..."
"... Such aid, obviously, must be monitored closely, which would be easy to do by involving the workforce and looking at real outcomes. Blanket immunity is not a sensible option; whistleblowing laws badly need beefing up in enterprises of all types. ..."
"... The eurozone economy will shrink by 8 to 12 per cent this year, as the "sudden stop of activity" triggers a recession twice as deep as after the 2008 financial crisis, European Central Bank president Christine Lagarde has warned. ..."
"... With the American health care system you would be crazy to risk getting very sick (death might be better :( ) if you understand your health insurance coverage. ..."
"... Infection rates aren't the same everywhere, and the rates of re-opening shouldn't be the same everywhere. In NYC there is still substantial infection, and restrictions should remain. But in my community? I'm not certain that the strict lockdowns were ever warranted. Tens of thousands of people were forced into unemployment, and we've had a handful of deaths in one nursing home. Instead of permitting only the essential, we need to be prohibiting only the clearly dangerous, and using masks for the intermediate situations. Well, at least in my area. ..."
"... Well it's representative of something as the elementary schools reopened 3 weeks ago and retail mostly reopened with mask restrictions. Restaurants are open for takeout and outdoor seating. All to general approval with lines at many establishments. And small gatherings of ten people or less permitted. ..."
"... But are polls and "actual local sentiment" the appropriate parameters to use for making policy decisions, or should we try to quantify actual health risk and use that instead? Most people's ability to evaluate risk is quite poor, and they routinely overestimate the risks of highly visible or publicized dangers while underestimating risks elsewhere. [In my lightly affected area, an office worker is more likely to be killed in an automobile accident on the way to work than by a COVID-19 infection acquired there.] ..."
"... And at some point, we need to let the ~40 million people who lost jobs get back to work. When will that be? Should we wait until COVID-19 is completely stamped out and nobody is scared of it anymore? [That could be years from now, especially if vaccine development efforts go poorly.] If not that, then what metric should be used to determine when re-openings can occur? ..."
"... Paging Slavoj Zizek. The ideological coup de grace administered here where the talking heads managed to blame the quarantine for the virus' damage has been the greatest slight of hand trick in quite some time. ..."
"... Look, you need to realize that there has been no destruction of productive real capital whatsoever. Everything is still standing as it was three months ago. Factories, schools, homes, everything. The crops are (knock on wood) not failing yet either, except for that locust infestation in Eastern Africa and the Middle East that is going on right now. ..."
"... There is absolutely no rational reason why we should not be able to "pause" non-essential activities for however long is necessary to get rid of the virus, then go back to normal life. ..."
"... Things will take a turn for the better only after finance, big corporations and big business admit to their hysteria. They are in pretend mode now. Save face; get some bailout money. Trust us, we can bring the world out of this catastrophe. Because? We are The Free Market, the profit takers; what else is there? If it weren't all so tragic it would be fun watching them crash and burn. In the end they'll probably be as nasty and vindictive about their own self-imposed destruction as Dick Fuld was. Not with a bang; not with a whimper – just with a lot of recrimination and hatred. What else is new? ..."
"... Tom Ferguson made some great points on the social forces, such as how there is no OSHA, no whistleblower process, and no investment by government to help redesign production methods. We were already living in a new gilded age and now it's most likely to get worse. It will happen over 1-7 years, but the social forces look mostly negative. ..."
"... "Get 'em back on the hampster wheel before they start thinking of something better." ..."
May 27, 2020 | www.nakedcapitalism.com

Below we've embedded an important, high-level presentation on the political reverberations of the Covid-19 crisis by Tom Ferguson, who is one of the top experts on money in politics. I wish we had a transcript, but it's not as daunting as it looks. Ferguson's remarks take only the first 45 minutes; the rest is Q&A.

It's worth your time because Ferguson looks at the official responses to the Covid-19 crisis and explains things that might seem nonsensical, above all, why so many governments are "reopening" even though polls pretty much everywhere say citizens want restrictions in place longer. Ferguson cuts into the problem by focusing on worker safety as the real dividing line.

The short version is "follow the money," as in big businesses think ending lockdowns will help commerce, when as we know, that's not proving to be the case. Core observations (at 16:19 and 17:22):

So let's accept reality: median voters aren't driving outcomes anywhere. Bailouts for big business were not popular after 2008 and they are not now, either, especially when ordinary people languish unprotected. Governments and central banks may glance at polls, but they aren't doing what they are doing because of voter sentiment.

So go back to first principles: Investment approach to party competition - only appeals that can be financed can make it in the public policy arena, no matter how many people might benefit in general (Ferguson, 1995). Where labor interests are weak or disorganized, power thus passes by default to blocs of major investor groups. They drives party competition, sometimes with labor groups in alliance. The blocs can be empirically analyzed in multidimensional policy space. Political money is the royal road to understanding, but the full "spectrum of political money" is rarely ascertainable. Some countries do have reasonable data about campaign contributions, but many don't, including many advanced countries - think Germany or Italy. Most social scientists would rather study anything except this subject. Aside: Event analysis often works fine as an approach, e.g., Ferguson and Voth, Quarterly J. of Economics 2008).

That reinforces neoliberalism. Despite the uses of war metaphors, where combatants would set up huge new bureaucracies to mobilize resources and people, governments are making interventions in the Covid-19 crisis though existing firms. But one war analogy that is more apt is that truth is always the first casualty. Ferguson comments on the terrible and inconsistent statistics about infection levels and deaths, which are due not just from the failure to run enough tests but as many suspected, also from the far from accidental failure to do the best job of counting, particularly of nursing home deaths. One reason Belgium has had such bad-looking results is that it's been an exception, with officials making considerable efforts to keep accurate tallies.

The split on protecting workers versus businesses is largely but not entirely on class lines, with private equity playing an outsized role in pushing for an end to lockdowns. Ferguson notes that unions representing construction workers have been quietly pushing to end lockdowns, while white collar workers who are not in a much different position than meatpackers and retail store employees (in terms of working in close, high risk conditions) like health care professional and educators, have been acting in a somewhat radicalized manner (nurses and doctors speaking out; nurses engaging in walkouts; teachers threatening a strike in New York City, which led to school closures). This parallels the at least 200 strikes chronicled by Mike Elk at PayDay Report.

Notice this pushback it taking place despite safety needs operating against protests; Ferguson drily commented on the shrinking of the public space.

Ferguson does think there's a sensible solution, although he recognizes it's not likely to get done despite the relatively modest cost:

Let's repeat: What needs to be moved onto the public balance sheet are the costs associated with safely redesigning work. I doubt that most businesses, especially smaller businesses, want to expose their workforces or their customers to serious risk.

But if firms are not assisted with the costs of redesigning production for the safety of both, they will cut corners, dig in, and fight many salutary changes.

Such aid, obviously, must be monitored closely, which would be easy to do by involving the workforce and looking at real outcomes. Blanket immunity is not a sensible option; whistleblowing laws badly need beefing up in enterprises of all types.

Ferguson also commented that the appearance that things were kinda-sorta stabilizing at a bad new normal (if you consider 25% unemployment, properly measured, a spike in childhood hunger, many unable to pay rents or mortgages and deferrals not long term solution) was deceptive. In the 2008 crisis, where the damage was more localized, even with large sectors impaired (residential real estate in certain countries; the banking system via housing-related derivative bets), there was lots of G-7 and G-20 communication and a good bit of cooperation. Trump's America First policy has put the kibosh on that. Ferguson is particularly concerned about the parlous state of the EU/Eurozone. He sees a not-trivial risk of national politics taking the fore, above all in Germany, leading to actions that could produce another Credit Anstalt (with the most likely blowup taking place in the Italian banking sector).

As he concludes:

The atmosphere between the great powers often more resembles the eve of the (failed) London Conference of 1933 than what happened a decade ago. International economic coordination is just not happening and as in the 1930s, emerging market debt problems look overwhelming. And I am too polite to note the possibility that German domestic politics might yet produce a disaster in the Eurozone that uncomfortably resembles the 1931 breakdown, though the domestic political constellation is not at all comparable. Let's hope somebody develops a vaccine.

There's a lot more meat in the talk and the Q&A, so I hope you can find the time to listen to it.

Sadly, the CEO of Merck confirmed what ought to have been obvious (as your humble blogger and Lambert have repeatedly pointed out in asides in posts and comments): a vaccine in even 18 months would be heroic. The comments from Merck are even more of a dampener by virtue of Merck being a big vaccine player. From the Financial Times today :

Merck chief executive Ken Frazier has cast doubt on the 12 to 18-month timeframe to develop an effective coronavirus vaccine, describing the widely mooted schedule as "very aggressive".

"It is not something I would put out there that I would want to hold Merck to," the US pharmaceutical group's chief told the Financial Times, adding that vaccines should be tested in "very large" clinical trials that take several months if not years to complete.

"You want to make sure that when you put a vaccine into millions if not billions of people, it is safe," he said .

"Our experience suggests those are very aggressive compared to other timelines for getting a safe and effective vaccine," Mr Frazier said when asked whether he thought the oft-repeated goal was realistic.

And Christine Lagarde confirmed that the Eurozone had taken a worse hit than in the financial crisis. Again from the pink paper :

The eurozone economy will shrink by 8 to 12 per cent this year, as the "sudden stop of activity" triggers a recession twice as deep as after the 2008 financial crisis, European Central Bank president Christine Lagarde has warned.

Ms Lagarde painted a gloomy picture of how the eurozone will emerge from the coronavirus pandemic as she told students on a live webinar that they faced "a massive economic crisis and one that was literally unheard of in peacetime for the damage it is causing".

The ECB president, who will next week announce its latest monetary policy decision, said the "mild scenario" it outlined this month for a 5 per cent contraction in the eurozone economy this year was "in my humble view already outdated".

She said the eurozone economy was "very likely" to end up "somewhere in between the medium and the severe scenario", meaning the economy would contract by 8 per cent or 12 per cent. Adding that the bloc's economy shrank 4 to 5 per cent after the financial crisis over a decade ago, she said "here we are talking about probably double that".

As Ferguson said, "If you want a happy ending, watch a Disney movie."

https://www.youtube.com/embed/xmLIsHZw4Xw


divadab , May 27, 2020 at 6:23 am

I don't agree that people are reluctant about reopening. Almost everyone I talk to who is working and not retired in my rural area is all-in for reopening. Sure if you are an urban person with uninterrupted income working from home your calculation may be different – but for those who make their living working with their bodies, (I guess that's a pretty good dividing line between working class and bourgeois), the shutdown has been a disaster and they are getting very impatient with it. And the heavy-handed enforcement.

furies , May 27, 2020 at 9:01 am

My rural area in far northern California also are pushing to open up.

Not seeing much at all in the way of push-back.

ymmv

duffolonious , May 27, 2020 at 10:37 am

I know some more working class people that are leery (they cancelled camping with us) – they know if they get sick it'll be possibly house losing expensive.

And they lost their house in the Great Recession too. This would be in exoburb Madison, WI.

With the American health care system you would be crazy to risk getting very sick (death might be better :( ) if you understand your health insurance coverage.

Grumpy Engineer , May 27, 2020 at 11:30 am

@furies: YMMV indeed. People in my semi-rural area are also pushing to open back up. Of course, this probably has something to do with the fact that our infection rates are well below the national average. [And less than 2% of NYC's rates.] Heck, things are so quiet here that our hospitals ended up laying off staff, having postponed elective procedures and screening exams in preparation for a COVID-19 wave that never came.

Infection rates aren't the same everywhere, and the rates of re-opening shouldn't be the same everywhere. In NYC there is still substantial infection, and restrictions should remain. But in my community? I'm not certain that the strict lockdowns were ever warranted. Tens of thousands of people were forced into unemployment, and we've had a handful of deaths in one nursing home. Instead of permitting only the essential, we need to be prohibiting only the clearly dangerous, and using masks for the intermediate situations. Well, at least in my area.

Yves Smith Post author , May 27, 2020 at 12:20 pm

I suggest you look at Alabama and think twice. Our infection rates are spiking up and it hasn't even been two weeks since restrictions were removed (save schools and colleges not being in session).

Moreover, the urban/non-urban distinction looks spurious. Seoul, which has a big public transportation network and is larger than NYC, has had all of two Covid-19 deaths versus over 20,000 for NYC. Hong Kong, another high density city, got the virus under control despite a bad start. By contrast, low density, low controls Sweden moved into having the highest per capita death rate in the world in the last week.

Divadab , May 27, 2020 at 10:55 am

Well it's representative of something as the elementary schools reopened 3 weeks ago and retail mostly reopened with mask restrictions. Restaurants are open for takeout and outdoor seating. All to general approval with lines at many establishments. And small gatherings of ten people or less permitted.

I'm not a pollster and I generally take them as relatively inaccurate but I get out a lot and life goes on.

Yves Smith Post author , May 27, 2020 at 11:36 am

I suggest you read the post. It appears you didn't.

1. Your local restrictions are still very severe (except for the opening of schools) compared to plenty of places. In most of the South, everything is open except schools, no mask requirements, no limits on gathering size. Some places here for instance, like some gyms and a very few churches, have voluntarily delayed opening to June 1 to get social distancing procedures in place, and I stress those are self-imposed.

2. More important, you don't have any evidence of actual local sentiment. Your perspective appears to reflect consumer, and not worker, sentiment.

Businesses are behind the anti-lockdown pressure and media reporting will reflect government and business messaging. Have you spoken to any health care workers? Retail store employees who are in a position to speak candidly?

Many are still staying home out of fear of coronavirus, so they see the lockdown lifting as premature:

https://www.vox.com/covid-19-coronavirus-economy-recession-stock-market/2020/5/23/21268500/coronavirus-lockdown-poll-business-economy

This poll shows the shift in sentiment in the last month on reopening is largely partisan, ie pro business Republicans favor it:

https://www.politico.com/news/2020/05/21/poll-partisan-divide-273706

Workers refusing to come to work over disease fears is enough of an issue that law firms are offering advice:

https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/coronavirus-when-scared-workers-do-not-report-to-work.aspx

And workers lose unemployment if they refuse to come in:

https://money.com/refuse-to-work-coronavirus-unemployment/

Even office workers are concerned:

https://fortune.com/2020/05/26/going-back-to-work-employee-health-reopen-economy-coronavirus/

Grumpy Engineer , May 27, 2020 at 12:40 pm

But are polls and "actual local sentiment" the appropriate parameters to use for making policy decisions, or should we try to quantify actual health risk and use that instead? Most people's ability to evaluate risk is quite poor, and they routinely overestimate the risks of highly visible or publicized dangers while underestimating risks elsewhere. [In my lightly affected area, an office worker is more likely to be killed in an automobile accident on the way to work than by a COVID-19 infection acquired there.]

And at some point, we need to let the ~40 million people who lost jobs get back to work. When will that be? Should we wait until COVID-19 is completely stamped out and nobody is scared of it anymore? [That could be years from now, especially if vaccine development efforts go poorly.] If not that, then what metric should be used to determine when re-openings can occur?

Grumpy Engineer , May 27, 2020 at 1:44 pm

With all due respect, you didn't answer my question. What metric should be used to determine when re-openings can occur? If now is too early, then when?

And you misread me. I'm not cavalier about COVID-19. I'm well aware of how severe it is. But I'm also alarmed by the job losses. We've literally thrown 20% of the workforce out of work. Now I agree that some of those jobs were doomed anyway (like in the travel and tourism industries), but I personally know nearly a dozen people who were ordered out of work who could have kept working safely by wearing masks, cleaning shared contact surfaces, and taking a few other precautions.

And your previous comments about Hong Kong are interesting. Authorities there imposed restrictions that suppressed the virus even with their high population density, but they did it without the tremendous job losses . I'm having a hard time finding firm statistics, but it appears that fewer than 5% of HK workers lost their jobs. What did they do differently so that people could keep working?

And regarding officials not wearing masks on TV? I totally agree with you. We desperately need to be wearing more masks in the US. I'd just like to see more people be able to do so from work. Especially for those who can't work from their computers at home.

aleph_0 , May 27, 2020 at 5:13 pm

Paging Slavoj Zizek. The ideological coup de grace administered here where the talking heads managed to blame the quarantine for the virus' damage has been the greatest slight of hand trick in quite some time.

Thank you for continuing to hammer home this point, Yves. I feel like I'm having this conversation with almost everyone I know.

GM , May 27, 2020 at 8:56 am

Look, you need to realize that there has been no destruction of productive real capital whatsoever. Everything is still standing as it was three months ago. Factories, schools, homes, everything. The crops are (knock on wood) not failing yet either, except for that locust infestation in Eastern Africa and the Middle East that is going on right now.

There is absolutely no rational reason why we should not be able to "pause" non-essential activities for however long is necessary to get rid of the virus, then go back to normal life.

Not just that, but not doing so ensures there will be no return to normal, because until an effective vaccine that can be produced and distributed in billions of doses becomes available, there will be no return to "normal", whether shelter-in-place orders are in effect or not.

From which it directly follows that the real problem right now is that we have a totally dysfunctional socioeconomic system that is not fit to serve the needs of society and has to go.

Yet who is your anger directed towards?

Looks like it is not the people who designed this system to serve own interest and who are now clearly planning on sacrificing many millions of lives over the coming 2-3 years in order to not have to change it. And on doing so while tricking much of the rest of the population that this is being done for the common good

Democrita , May 27, 2020 at 7:54 am

Me and most of my people are planning to stay locked down and let the yahoos get out and test that herd immunity thing first. (No surprise that we are mostly able to work from home.)

I'd be totally cool with it if it were 100% optional. Let the people have the freedom to infect themselves if they want! But it's not optional if you have to risk exposure to feed your family.

Our big concern had been one relative who works as a prison guard at Rikers. Luckily, she broke her foot and has been on leave. Still, my 19-year-old is dying (!!) to go back to college in Santa Cruz in the fall. I'm worried about that second wave.

Here in Suffolk county Long Island (where those protesters were yelling at the TV newsguy the other day), traffic has been ticking upward since last week.

Looks to be a meaty preso. I will dig into it later.

juno mas , May 27, 2020 at 11:46 am

Unfortunately the freedom to "infect themselves" also increases the likelihood that they will extend the time and extent of the pandemic.

In Orange County, CA where the beaches are crowded with lots of congregating younger people, the number of infections is 3X's higher in the 18-24 Y.O. cohort than in the over 60 cohort. Not until more younger folks get hospitalized (and monetarily burdened) will the concern for spreading the virus improve. Or when they take the virus home and their parents/grandparents succumb.

James M. Vines , May 27, 2020 at 12:09 pm

Follow the money. Who benefits if parents and grandparents die from Covid 19. No downside to partying.

Yves Smith Post author , May 27, 2020 at 12:17 pm

Ferguson points out that he's heard (and he has impeccable contacts at that level) that some central bankers and other government officials discussed how Covid-19 could helpfully reduce pension obligations. So some parties are explicit about wanting to shorten the lifespans of their citizens.

GM , May 27, 2020 at 8:44 am

I like seeing the words "resources" and "management" together. Which reminds me -- has there ever been a starker illustration of the fundamental insanity of our system than the COVID disruption?

So for a brief moment of two to three months we are forced to not waste our limited nonrenewable resources on pointless activities with no long-term benefit to humanity such as jetting around the globe for business meetings whose main goal is figuring out how to destroy everything even faster and on vacations to exotic destinations. And what is the reaction? Everything is falling apart

One would think that not having to waste our precious geological inheritance that will not be regenerated for another 100-200 million years would be a reason to celebrate. But no, instead the system is crashing and everyone is up in arms about why we are not burning our proverbial furniture as fast as we can

Alex Cox , May 27, 2020 at 1:23 pm

+1. And only a small percentage of air travel is for business. The vast majority is considered "leisure travel. "

DTK , May 27, 2020 at 9:00 am

An organized and thorough response from our federal government was necessary for the country to see itself as one. The effort was negligent, disorganized and reflected the management of a real estate swindler. Deficit spending, on behalf of the forty percent of the country with little or no savings, should have been the priority and would be the priority of a right thinking administration. About four one thousandths of the country has become infected. What happens when an event occurs that affects eight one thousandths of our citizens?

Rod , May 27, 2020 at 10:31 am

An organized and thorough response from our federal government was necessary for the country to see itself as one. The effort was negligent, disorganized and reflected the management

A+1–in that first statement– for seeing where step one was so misplaced -- imo also

Shiloh1 , May 27, 2020 at 9:30 am

Kudlow talking about a "back to work bonus". How about a hotline into the TBTF tip sheet boiler room to front-run then dump the next miracle vaccine Scam-Co fraud to be touted on CNBC the next day? SEC will look the other way on their p-rn monitors, as usual.

I'm one of the yahoos out every day, which includes a 90 minute hilly trail run through the woods at a few public "undisclosed locations". Hint: the governor of this state is in no condition to chase me even if I was carrying a 200 pound backpack. Admittedly I'm pretty good in the 60+ year old age group.

Eclair , May 27, 2020 at 11:28 am

Up here in southwestern New York state, the insanely popular ice cream stand, famous in our small village as being the local gathering place from Memorial Day weekend though Labor Day, frequented by ice cream lovers wearing red MAGA caps .. remains closed. You can get your ice cream cone fix at the tiny general store around the corner, but my local information source reports that the ice cream scoopers are unmasked and ungloved, so older people are staying away. We are currently sticking with the half gallon in the freezer and scooping our own.

Kurtismayfield , May 27, 2020 at 1:05 pm

You should see what happened to an ice cream store on Cape Cod when they opened for Mother's Day:

The workers were harrased for following the rules

A Massachusetts ice cream shop temporarily closed and one of its employees quit after the owner says his staff faced an onslaught of harassment when reopening for the first time over the weekend after being shuttered amid the coronavirus pandemic.

..The TV station reported that Lawrence had asked customers to place orders an hour before pickup, but on the first day back, his limited staff faced harsh comments and vulgarity from angry customers who demanded ice cream.

"One of my best workers quit yesterday at the end of her shift, she stuck it through her shift," Lawrence told Boston 25 News. "But the words she was called and the language, you wouldn't even say in a men's locker room. And to say it to a 17-year-old kid, they should be ashamed of themselves."

Because they stuck to ordering over the phone only, and taking the orders out to the customers, they lost their composure. I can't and won't understand this outlook that a business has to cater to me, right now, or I will harass you.

Ignacio , May 27, 2020 at 11:29 am

Regarding the vaccine: IMO, the big shortcut will be 3rd phase of clinical assays which would need at least 60.000 subjects and a long lasting survey on efficacy. IMO we might run, almost directly, for massive vaccinations without knowing the real efficacy and with more or less good indications on safety. There are, here and there, subtle indications this could be the way to accelerate this. Big pharma won't probably be big players in this game as they will guard their backs against any potential problem.

Anectotally, in Madrid, with a neolib regional government, all communications, applications, forms have been diverted to private autentication firms through a fee ignoring the already existing official and free autentication methods. And it is not that easy to notice this is the only way to do it. If someone is doing, for instance an application for the recognition of dependent relatives, which requires certain amount of documentation, a new bussines is contracting an agent that will do the bureocracy for you, and of course, eat on the corresponding economic support for the dependent or those caring them. This is their way to try to reduce the effectiveness of such programs: interposing middlemen here and there.

And yeah, counting, 27.500 deaths so far when excess mortality has been about 43.000. Neoliberals don't give a . on nursing homes even when they are running the businesses. In the late years private equity has been investing heavily on nursing homes cos a growing industry ya know? Let's not start with their business model because it is nauseating.

Ignacio , May 27, 2020 at 11:50 am

Chinese vaccine trials, with so supposedly low disease incidence, will have to move their phase III to, let's say, Africa unless they do these at home with many millions individuals in each trial. For instance the whole Hubei province should be a trial.

Susan the other , May 27, 2020 at 11:59 am

Things will take a turn for the better only after finance, big corporations and big business admit to their hysteria. They are in pretend mode now. Save face; get some bailout money. Trust us, we can bring the world out of this catastrophe. Because? We are The Free Market, the profit takers; what else is there? If it weren't all so tragic it would be fun watching them crash and burn. In the end they'll probably be as nasty and vindictive about their own self-imposed destruction as Dick Fuld was. Not with a bang; not with a whimper – just with a lot of recrimination and hatred. What else is new?

LAS , May 27, 2020 at 12:36 pm

Tom Ferguson made some great points on the social forces, such as how there is no OSHA, no whistleblower process, and no investment by government to help redesign production methods. We were already living in a new gilded age and now it's most likely to get worse. It will happen over 1-7 years, but the social forces look mostly negative.

I frequently think that the push to "open up" now is really a push to prevent people from thinking about transformational politics and systems. Get 'em back on the hampster wheel before they start thinking of something better.

stevesewall , May 27, 2020 at 12:52 pm

"Get 'em back on the hampster wheel before they start thinking of something better."

Perfectly, powerfully put.

carl , May 27, 2020 at 3:57 pm

Yes. And why is limited testing not a purposeful way to avoid responsibility for a better documented catastrophe? Ya wanna look like Belgium? If you don't gather the data, they can't hurt you, says the machine. It's all swept up as fog of war. A well-established practice, which I seldom see considered by analysts.

[May 27, 2020] Re-Opening The Economy Won't Fix What's Broken by Charles Hugh Smith

Some things will be fixed, but some industries will be permanently affected. the amount of long term damage is unclear. Unemployment probably will be higher as many jobs will simply be eliminated and robots take place of regular workers.
May 27, 2020 | www.zerohedge.com
Authored by Charles Hugh Smith via OfTwoMinds blog,

Re-opening a fragile, brittle, bankrupt, hopelessly perverse and corrupt "normal" won't fix what's broken.

The stock market is in a frenzy of euphoria at the re-opening of the economy. Too bad the re-opening won't fix what's broken. As I've been noting recently, the real problem is the systemic fragility of the U.S. economy, which has lurched from one new extreme to the next to maintain a thin, brittle veneer of normalcy.

Fragile economies cannot survive any impact with reality that disrupts the distortions that are keeping the illusion of "growth" from shattering. For the past two decades, every collision with reality cracked the illusion, and the "fix" was to duct-tape the pieces together with new extremes of money-creation, debt, risk and speculative excess.

While the stock market has soared, the real world falls apart. If your region needs a new bridge built, count on about 20 years to get all the "stakeholders" to agree and get the thing actually built. Count on the cost quintupling from $500 million to $2.5 billion. Count on corners being cut as costs skyrocket, so those cheap steel bolts from China that are already rusting before the bridge is even finished? Oops. Replacing them will add millions to the already bloated budget.

Want to add a passenger stop on an existing railroad line? Count on 20 years to get it done. The complexity thicket of every regulatory agency with the power to say "no" basically guarantees the project will never get approved, because every one of these bureaucracies justifies its existence by saying "no." Sorry, you need another study, another environmental review, and so on.

Need a new landfill? I hope you started the process 15 years ago, so you'll get approval in only five more years. Every agency with the power to say "no" will stretch out the approval, so they have guaranteed "work" for another decade or two.

Did your subway fares double? Was the excuse repairing a crumbling system? Did the work get done on budget and on time? You must be joking, right? All the fare increase did was cover the costs of skyrocketing salaries, pensions and administrative costs. Repairs to the tracks and cars-- that's extra. Let's float a $1 billion bond so nobody have to tighten their belts, and have riders pay for it indirectly, through higher taxes to pay the exorbitant costs of 20 years of interest on the bond.

Have you been thrown off your bicycle by the giant potholes in the city's "bike lanes"? The city reluctantly admits that these streets that haven't been maintained for decades--yes, decades. The city once paid for street maintenance out of its general budget, but alas, that's been eaten up by skyrocketing salaries, pensions and administrative costs, so now we need to float $100 million bond to fund filling potholes. If all goes according to plan (ha-ha), we should be able to re-pave the streets that have been crumbling for 20 years in... the next 20 years.

These real-world examples are just four of thousands of manifestations of a broken system. Rather than make tough choices that drain power and wealth from vested interests, we simply borrow more money, in ever increasing amounts, to keep the entrenched interests and elites happy.

There are two "solutions" in the status quo: dump the debt on taxpayers or on powerless debt-serfs--for example, college students. (See chart below of the $1.6 trillion that's stripmining student debt-serfs.)

Who benefits from selling all the municipal bonds, bundled student loans, etc. to investors starving for a yield above 0.1%? Wall Street, of course.

The problem is that while debt has soared, productivity and earned income have stagnated. The statistical narrative has been ruthlessly gamed to hide the erosion of living standards, but even with the bogus "low inflation" of official statistics, wages for the bottom 95% have stagnated for decades.

Measures of productivity have also been gamed to mask the ugly reality that the vast majority of the U.S. economy is stagnating under the weight of interest payments on debt, mal-investments in speculative gambles, higher junk fees and taxes, crushing regulatory compliance, high costs imposed by monopolies and cartels and a well-cloaked decline in the quality of just about everything the bottom 95% uses or owns.

What little productivity gains have been made have been skimmed by the top 5%. Coupled with the Federal Reserve's single-minded goosing of the one signaling device it controls, the stock market, the top 0.1% in America own more wealth than the bottom 80%.

If productivity stagnates and winners take all , the wages of the bottom 95% cannot rise. Real wealth is only created by increases in the productivity of labor and capital; everything else is phantom wealth.

The only way stagnant incomes can support more debt is if interest rates decline. Presto, the Fed dropped interest rates to near-zero a decade ago. Of course you and I can't actually borrow millions for 0.1%; that privilege is reserved for financiers and other financial parasites and predators.

Debt-serfs were able to refinance their crushing mortgages to save a few bucks, and so they can afford to 1) take on more debt and 2) pay higher taxes to fund the ballooning public debt.

Every one of these extremes has increased the systemic fragility of the American economy. This fragility is reflected in the impoverishment of the bottom 95%, the thin line between solvency and bankruptcy, the decay of public trust in institutions run for the benefit of entrenched interests, and the quickening erosion of America's social contract.

Re-opening a fragile, brittle, bankrupt, hopelessly perverse and corrupt "normal" won't fix what's broken.

[May 26, 2020] The severity of coronavirus epidemic in the USA is indirectly connected with neoliberal decimation of healthcare and social safety net

May 26, 2020 | www.moonofalabama.org

VietnamVet , May 25 2020 23:36 utc | 23

The top nine nations with the most coronavirus cases were members of the Western Empire (former democracies weakened by corporations and oligarchs to promote global trade) or the Elite reaching an understanding with Authoritarians. "Profit over lives" was the result. Endless wars, offshoring, corruption, exploitation and despair led to the decreased life expectancy in the USA and England.

The novel coronavirus pandemic is the direct result of these dysfunctional governments. Corporations see the epidemic as a profit center for their magical treatment or vaccine. There is no US national public health system. US hospitals and nursing homes primary purpose is to make money for stockholders and mangers. It is of no matter that nearly 100,000 Americans have died so far with many more to come. No great wealth will be spent to fight the pandemic nationally in the USA using the proven public health practices of universal testing, contact tracing and isolation of the ill.

This is now a bipolar world. The USA and UK are pariah nations quarantined from the nations that have controlled the virus. The Western Empire has fallen.

The Democrats are just as responsible for the mess as the Republicans. I have yet to receive my mail-in ballot for the postponed June 2nd Maryland primary. Besides being incarcerated at home, it looks like I am also disenfranchised. Yet, I am very lucky, once again, but for how long?

Either a democratic constitutional government retakes control of the USA or a second civil war between the credentialed and the left-behind is inevitable. The aristocracy always loses but with wholesale chaos, major loss of life and redistribution of wealth.

This is an extraordinary dangerous time for Homo sapiens due the Pandemic and the resulting Greatest Depression leading to unrest, scapegoating and confrontation which could result in the use of nuclear weapons. Plus, climate change looms ahead. How can this possibly be addressed if the developed world is unable to control a once in a century pandemic; let alone, evolve a sustainable civilization that can survive on a finite planet.

Jackrabbit , May 26 2020 0:31 utc | 26

Big Pharma colluding with Government. Just as some of us have been warning of.

The sense that we are being f*cked with is papable:


That's what we get when we let asshats run rampant (no accountability whatsoever). Only genuine Movements for Democratic reform will change anything.

!!

[May 26, 2020] UK tax revenues are being crushed. All of them. At the national level Income Tax, Corporation Tax, VAT, Business Rates and local level Council Tax plus any others I omit, are cratering. Something will have to give.

May 26, 2020 | www.moonofalabama.org

JohninMK , May 25 2020 21:57 utc | 18

Bevin @13 you seem to have somehow mixed up the future with the present, what you describe is not what the UK is today.

Given the unprecedented outflow of Government funds due to Covid-19 support of society something is going to have to happen to fund it, either borrowing in the markets or taxing it back or letting hyperinflation rip. This would apply regardless of who was in power.

Not only is money being spent but tax revenues are being crushed. All of them. At the national level Income Tax, Corporation Tax, VAT, Business Rates and local level Council Tax plus any others I omit, are cratering. Something will have to give.

Unless Governments perform some kind of miracle and get economic activities back up very quickly what you describe will be coming to a country near you, including the UK. We are heading into the abyss and few understand that the life we have enjoyed was by running up debt on our national credit cards and is in the rear view mirror, the future could be very bleak. Your description of the UK might prove to have been too optimistic.

The Party in power is probably immaterial, but perhaps you could suggest an alternative to "privatising and slashing benefits" as you put it?

I can't see any alternative to selling what assets they can (not much left now to sell)(not many buyers either in the new debt maxed out World), cutting Government operating costs (forget High Speed Rail and Trident replacement), reducing by capping all benefits including all Government funded pensions, Civil Service, military etc as well as the State Pension.


A User , May 25 2020 23:20 utc | 21

Using the fiat system to print money in order to keep some liquidity in a depressed market will not - can not, in fact be inflationary much less the inanely hyperbolic 'hyper' inflationary. The only danger is that rightist dingbats who see the revelation of free money as they call it, may inspire a wake up in the fools who imagine that economies are actually run on the 'balance the books' tosh.

Balance the books, the mantra that all governments, neolib, conservative and fascist have been feeding to the population for the last half century has been a lie. The actual government policies have been counter to that, so as to best enable their backers to steal this nonsense 'money' as they desire.

All this 'money' that has been generated by so called 'financial service industries' is 'free' in exactly the same way and yet that isn't claimed to be inflationary, so it beggars belief that any rational person could claim producing money in exactly the same way but 1) at lower amounts than the city of london plus all the dodgy service industries across the UK who make this 'money' while producing nothing up until the lockdown & 2) distributing that direct to consumers thereby ensuring there will be no asset inflation is suddenly deemed to be destructive. They only thing destroyed will be deceitful economists' & politicians' already dubious credibility.

VietnamVet , May 25 2020 23:36 utc | 23
The top nine nations with the most coronavirus cases were members of the Western Empire (former democracies weakened by corporations and oligarchs to promote global trade) or the Elite reaching an understanding with Authoritarians. "Profit over lives" was the result. Endless wars, offshoring, corruption, exploitation and despair led to the decreased life expectancy in the USA and England.

The novel coronavirus pandemic is the direct result of these dysfunctional governments. Corporations see the epidemic as a profit center for their magical treatment or vaccine. There is no US national public health system. US hospitals and nursing homes primary purpose is to make money for stockholders and mangers. It is of no matter that nearly 100,000 Americans have died so far with many more to come. No great wealth will be spent to fight the pandemic nationally in the USA using the proven public health practices of universal testing, contact tracing and isolation of the ill.

This is now a bipolar world. The USA and UK are pariah nations quarantined from the nations that have controlled the virus. The Western Empire has fallen.

The Democrats are just as responsible for the mess as the Republicans. I have yet to receive my mail-in ballot for the postponed June 2nd Maryland primary. Besides being incarcerated at home, it looks like I am also disenfranchised. Yet, I am very lucky, once again, but for how long?

Either a democratic constitutional government retakes control of the USA or a second civil war between the credentialed and the left-behind is inevitable. The aristocracy always loses but with wholesale chaos, major loss of life and redistribution of wealth.

This is an extraordinary dangerous time for Homo sapiens due the Pandemic and the resulting Greatest Depression leading to unrest, scapegoating and confrontation which could result in the use of nuclear weapons. Plus, climate change looms ahead. How can this possibly be addressed if the developed world is unable to control a once in a century pandemic; let alone, evolve a sustainable civilization that can survive on a finite planet.

bevin , May 26 2020 15:34 utc | 64
This article underlines the point that I have tried to make that we have moved beyond the neo-liberal stage. All that remains is for politicians and their owner/trainers to face up to reality- if they don't make changes, the people will.

http://www.defenddemocracy.press/what-are-the-three-concurrent-crises-of-the-coronavirus-depression/

Already the crisis is well beyond the ability of either the UK or the US governments to manage it- the measures needed involve a total repudiation of the policies of the past half century. The reforms necessary begin with the kind of minimal socialist programme put forward by Corbyn in the last two elections, but they will have to go much further. In the UK House of Commons there are perhaps a dozen members who can see this. The political system is like a beached whale, floundering around as it dies-only a lot less majestic.

It needs to be added, with special reference to those who venerate the EU, that the EU is at least as vulnerable to the problems that its inbuilt bias towards neo-liberalism will cause it as the system disintegrates.

Keynes gave the capitalist ruling class tools to extend its existence, the neo-liberals, contemptuously dismissed them as cowardly compromises- "Real Men bust Unions" is the neo-liberal motto. Now the reckoning is coming and Keynes is suddenly looking very clever. And modern.

[May 26, 2020] Have governments given any thought to the implication of the financial crisis spreading to the middle classes, for whom often their only cushion in life is the inflated value of the house in which they live, but whose price may collapse?

May 26, 2020 | www.moonofalabama.org

karlof1 , May 25 2020 19:24 utc | 104

At the end of his essay today , Alastair Crooke asks a series of questions that many of us have already pondered and mostly written about:

"Have governments given any thought to the implication of the financial crisis spreading to the middle classes, for whom often their only cushion in life is the inflated value of the house in which they live, but whose price may collapse? And if not, do they imagine that their citizens will acquiesce to losing their homes because of Coronavirus? And that the middle classes will still side with the élites?

"So much hangs on the evolutionary course of the virus. But judging this wrongly, risks much. People will not so readily handover their homes and cars to the banks this time, as in they did the wake of great financial crisis of 2008. Why would they? It was not their fault [It wasn't their fault in 2008 either; it was massive Fraud that was never prosecuted and I'm getting rather tired of that fact not being aired]. Convulsions ahead? The decay of an era, and the inevitability of social and political mutation?"

IMO, within the Outlaw US Empire, the issue of state solvency will become paramount thanks to the massive unanticipated shortfalls in revenue, an issue Hudson talks about in the video I linked above. IMO, that issue has the power to cleave the states from the Union given the Union's complete lack of interest in the wellbeing of citizens. It's very much like an abusive marriage--When does the repeatedly beaten wife finally leave home or attempt to kill her spouse? Aside from the very meager benefits from Social Security and Medicare, what ties serve to promote loyalty to Washington, DC over your individual state? If the Union isn't going to work for the goals articulated in the Constitution's Preamble, then why support it any longer?

[May 25, 2020] BIG PHARMA steered public money away from pandemic research and into PROFIT-MAKING projects for years watchdog -- RT World New

Notable quotes:
"... EU money intended for underfunded public-benefit research such as preparing for a pandemic has been diverted by the pharmaceutical industry into areas where it can make more money, according to a scathing new report. ..."
"... The target of the criticism is the Innovative Medicines Initiative (IMI), a public-private partnership that was equally funded, between 2008 and 2020, by the European Federation of Pharmaceutical Industries and Associations (EFPIA) lobbying group and the European Commission to the tune of 5.3 billion euros (US$5.8 billion). The money is supposed to go to areas of "unmet medical or social need," ..."
"... "We were outraged to find evidence that the pharmaceutical industry lobby EFPIA not only did not consider funding biopreparedness (ie, being ready for epidemics such as the one caused by the new coronavirus, COVID-19) but opposed it being included in IMI's work when the possibility was raised by the European Commission in 2017, ..."
"... "The research proposed by the EC in the biopreparedness topic was small in scope," ..."
"... "IMI's projects have contributed, directly or indirectly, to better prepare the research community for the current crisis, the Ebola+ programme or the ZAPI project." ..."
"... "belated interventions when an epidemic is already underway," ..."
"... Think your friends would be interested? Share this story! ..."
May 25, 2020 | www.rt.com
EU money intended for underfunded public-benefit research such as preparing for a pandemic has been diverted by the pharmaceutical industry into areas where it can make more money, according to a scathing new report. Officials in Brussels wanted to co-fund research that would have ensured the European Union (EU) was better prepared for a pandemic akin to the one we are experiencing today. But their partners, the big pharmaceutical companies, rejected the proposal, ensuring that taxpayer money would go instead into studies with more potential for commercial application. In short big-pharma lobbyists were allowed to steer billions of euros of public funds as they saw fit, a damning new report claims.

The target of the criticism is the Innovative Medicines Initiative (IMI), a public-private partnership that was equally funded, between 2008 and 2020, by the European Federation of Pharmaceutical Industries and Associations (EFPIA) lobbying group and the European Commission to the tune of 5.3 billion euros (US$5.8 billion). The money is supposed to go to areas of "unmet medical or social need," but, in practice, corporate priorities dominate the decision-making, according to the non-governmental organization Corporate Observatory Europe (COE).

"We were outraged to find evidence that the pharmaceutical industry lobby EFPIA not only did not consider funding biopreparedness (ie, being ready for epidemics such as the one caused by the new coronavirus, COVID-19) but opposed it being included in IMI's work when the possibility was raised by the European Commission in 2017, " a new COE report said.

Also on rt.com Head of EU's top science body quits after Covid-19 response plans get bogged down by Brussels bureaucracy

The rejected proposal would have directed money into refining computer simulations and the analysis of animal testing models, potentially speeding up regulatory approval of vaccines, according to the Guardian. But a spokeswoman for the IMI called the report "misleading".

"The research proposed by the EC in the biopreparedness topic was small in scope," she said. "IMI's projects have contributed, directly or indirectly, to better prepare the research community for the current crisis, the Ebola+ programme or the ZAPI project."

ZAPI, or the Zoonotic Anticipation and Preparedness Initiative, was launched in 2015 with a budget of 20 million euros (US$21.8 million) after the Ebola epidemic a year prior. The COE report said it exemplifies a pattern of "belated interventions when an epidemic is already underway," much like this year's emergency funding of coronavirus research.

Also on rt.com Hotly-touted Oxford coronavirus VACCINE trial has only 50 percent chance of success, project leader warns

The think tank questioned whether EU public money was well applied through IMI. Much of it went into research into cancer, Alzheimer's disease and diabetes – areas that are potentially profitable and thus are given close attention by private business. But epidemic preparedness, HIV/AIDS, and poverty-related and neglected tropical diseases have been overlooked by the initiative, the report said.

Think your friends would be interested? Share this story!

[May 25, 2020] Military keynesianism in action

May 25, 2020 | irrussianality.wordpress.com
    1. Lyttenburgh says: May 25, 2020 at 5:00 am "I mean, geopolitically. It'll still likely to continue, because money needs to be spent, research needs to continue, and military keynesianism is, I believe, an essential component of the US economy."

      Will a real breadwinner in da house of the US of A please stand up?

      US Defense Firms Hiring Thousands Amid Record Unemployment . Quotes:

      "Lockheed, the world's largest defense company, already has hired more than 2,365 new employees since March when many U.S. companies began furloughing or layoff workers amid coronavirus stay-at-home orders. In addition, Lockheed is "actively recruiting for over 4,600 roles," in 39 states and Washington, D.C., the company said in a statement Friday.

      "Northrop Grumman says it could hire as many 10,000 this year. Raytheon Technologies another 2,000. Boeing, which is preparing to cut 10 percent of its 160,000-employee workforce as the airlines predict at least a three-year drop in sales, is advertising more than 600 open positions in the United States, largely in its defense, space, cybersecurity and intelligence units ."

      [ ]

      "Pay cuts, furloughs and a hiring freeze has hit Raytheon Technologies' commercial business, a major supplier to planemakers. But it's a different story on the defense side of the house where there are 2,000 job openings. Last month, the Air Force chose Raytheon to build a new nuclear cruise missile, a project Hayes said could be worth $10 billion over its lifetime.

      "In recent years, Lockheed has been expanding its missiles and space businesses as the Pentagon has increased focus and spending in these sectors.

      [ ]

      "Northrop Grumman, the fourth-largest U.S. defense company, expects "significant headcount growth this year because of the program volume increases sales growth, as well as the anticipated awards in the latter half of this year," CEO Kathy Warden said on the company's quarterly earnings call last week.

      "The company also has been increasingly winning classified contracts as the U.S. military has shifted spending to develop new weapons to counter China . Northrop is building a new stealth bomber and a new intercontinental ballistic missile for the Air Force.

      ""We are actively recruiting for 10,000 open positions and we hired more than 3,500 people in the first quarter, which included more than 1,300 new hires in March," Warden said."

      Companies Trump said would create thousands of jobs have failed to deliver . Quote:

      "Since [Trump] took office, only Fiat Chrysler and defense contractor Lockheed Martin have added a meaningful number of net new workers.

      Lockheed's U.S. headcount is up about 15%. Fiat's employment is up about 11%, with some gains coming from broader North American operations. The net gain of jobs at the two companies is about 22,800 since the end of 2016, according to company disclosures."

      See? Seeeee? How can you argue against the power of the Money, Professor? Cuz war-machine choo-choo has no brakes.

[May 25, 2020] US oil companies are cutting production much faster than expected -- RT Business News

Notable quotes:
"... "Well, I think it's automatic. Because they're already cutting. I mean, if you look, they're cutting back. Because it's it's market. It's demand. It's supply and demand. They're already cutting back, and they're cutting back very seriously," ..."
May 25, 2020 | www.rt.com

The United States is on track to cut 1.7 million barrels of oil production per day, according to Reuters calculations of state and company data shared on Thursday. It was US President Donald Trump that suggested at the beginning of April, prior to the most recent OPEC deal signing that the United States would cut its oil output as a natural response to the worsening market conditions. The statement was not initially good enough for OPEC, who wanted more of a commitment from the world's largest producer and consumer of crude oil.

"Well, I think it's automatic. Because they're already cutting. I mean, if you look, they're cutting back. Because it's it's market. It's demand. It's supply and demand. They're already cutting back, and they're cutting back very seriously," US President Trump said at a press briefing early last month.

OPEC+ eventually agreed to cut production by 9.7 million bpd -- a landmark figure that is significantly larger than previous OPEC cuts in recent years. Its non-OPEC allies who partnered with OPEC in the deal pledged to cut an additional 10 million bpd. Also on rt.com OPEC+ strikes last-minute deal to cut almost 10 mn barrels a day of oil production

US Energy Secretary said last month that the DoE expected that production in the United States would fall by between two and three million bpd by the end of the year -- it appears the cuts have come even quicker than the department expected.

The need for the production cuts grew more evident as the United States shut down nearly all activity in an attempt to flatten that curve of infections that sought to overwhelm the country's healthcare system. Doing so, however, has idled much of the economy and crippled demand -- and as such, its oil and gas industry that fuels that economy.

READ MORE: The shale suffering has only just begun

The cuts from US producers may seek to quiet the disgruntlement of OPEC and Russia, in particular, who expressed their displeasure that the US would not require its producers to curb production. After all, the US shale industry has benefited greatly from previous rounds of OPEC cuts.

[May 25, 2020] Something's Wrong A Debt-Financed Recession by Joe Carson

Notable quotes:
"... The findings paint a grim picture of the devastating and lasting impact recession has on corporate performance. To be sure, a shocking seventeen percent of the companies failed, were acquired or decided to go private. ..."
"... Meanwhile, three years after the recession forty percent of the companies hadn't recovered to precession sales and profit levels. And, approximately 80% of public companies had not rebounded to their pre-recession growth rates in sales and profits a full three years after the recession. ..."
"... Almost all business people agree that the current crisis marks an inflection point. The business world has changed and firms need to remake (i.e., downsize) their organizations to fit in the new normal. Companies will operate with a smaller footprint, but more debt. ..."
May 24, 2020 | www.zerohedge.com

Submitted by Joe Carson , former chief economist at Allianz

The Fed's debt-bridge policy is designed to improve the flow of credit to businesses to avoid a devastating credit crunch. Never before has one of the monetary policy solutions to combat recession been to extend credit to struggling, profit losing businesses.

There is no precedent for record business borrowing during a recession. The scale of business failures during and after the economy exits recession will far exceed that of the Great Financial Recession.

The Fed's Debt-Bridge Policy

The traditional way for monetary policy to build a bridge from recession to recovery is through the lowering of official interest rates. In time, the reduction of interest rates triggers a refinancing cycle, lowering interest costs, and improving liquidity positions. The "reliquification" process enables firms (and individuals) to exit recession with stronger liquidity and lower debt burdens.

With official interest rates relatively low the "reliquification" process was not a viable policy option to combat the abrupt contraction in the economy. So policymakers were forced to support the flow of credit to the economy by purchasing securities and provide direct financing to sectors where it is not otherwise available or too costly.

So instead of contracting, which is the typical pattern during the recession, the flow of private credit has exploded to the upside. Since the start of 2020, commercial and industrial loans have increased over $750 billion to a record $3.1 trillion. That increase nearly matches the cumulative increase in corporate bank borrowing of the past 6 years.

At the same time, US corporations have tapped the capital markets for hundreds of billions of new debt. Through early May corporations have issued nearly $300 billion in new debt, twice as much as the comparable period one year ago.

An addition of $1 trillion of new liabilities over a few months is a big number in the best of times. Yet, record corporate borrowing during bad times increases the risk of business failures and defaults. Here's why.

A Harvard Business study released in 2010 analyzed corporate performance during three global recessions from 1980 to 2000. Sales and profit performance of 4700 public companies were analyzed three years before and three years after the recession.

The findings paint a grim picture of the devastating and lasting impact recession has on corporate performance. To be sure, a shocking seventeen percent of the companies failed, were acquired or decided to go private.

Meanwhile, three years after the recession forty percent of the companies hadn't recovered to precession sales and profit levels. And, approximately 80% of public companies had not rebounded to their pre-recession growth rates in sales and profits a full three years after the recession.

Almost all business people agree that the current crisis marks an inflection point. The business world has changed and firms need to remake (i.e., downsize) their organizations to fit in the new normal. Companies will operate with a smaller footprint, but more debt.

There is no precedent for record corporate borrowing during a recession. As a result, investors need to brace for an economy unlikely to resemble the one before, with an uneven and slow growth, and record corporate failures.

[May 24, 2020] The world is entering the period of instability and turbulence

May 24, 2020 | www.moonofalabama.org

karlof1 , May 24 2020 20:52 utc | 29

...China's Foreign Minister Yang Yi held a lengthy presser providing detailed answers to many differing questions. The topic of "Wolf Diplomacy" is in the news today and was asked about by CNN:

" Cable News Network : We've seen an increasingly heated 'war of words' between China and the US. Is 'wolf warrior' diplomacy the new norm of China's diplomacy?

Wang Yi : I respect your right to ask the question, but I'm afraid you're not framing the question in the right way. One has to have a sense of right and wrong. Without it, a person cannot be trusted, and a country cannot hold its own in the family of nations .

... ... ...

"The world is undergoing changes of a kind unseen in a century and full of instability and turbulence. Confronted by a growing set of global challenges, we hope all countries will realize that humanity is a community with a shared future. We must render each other more support and cooperation, and there should be less finger-pointing and confrontation. We call on all nations to come together and build a better world for all." [My Emphasis]

... ... ...

[May 24, 2020] The Black Death Killed Feudalism. What Does COVID-19 Mean for Capitalism - FPIF by John Feffer

Notable quotes:
"... The coronavirus crisis has thrown the global economy into cardiac arrest, and now you are acutely aware of the very markets that you had previously just assumed would function as normal. The first indication was the precipitous drop in the stock market that took place in late February. Then, as the United States began to enter quarantine, the labor market collapsed and hundreds of millions of people were suddenly out of work. Shortages in a few key commodities -- masks, ventilators, toilet paper -- began to appear. ..."
Apr 29, 2020 | fpif.org

How will the coronavirus transform the relationship between state and market? A look at oil, food, and finance.


You pay little attention to the systems of your body -- circulatory, digestive, pulmonary -- unless something goes wrong.

These automatic systems ordinarily go about their business, like unseen clockwork, while you think about a vexing problem at work, drink your morning cup of coffee, walk up and down stairs, and head out to your car to begin your morning commute. If you had to focus your attention on breathing, pushing blood through your veins, and metabolizing food, you'd have no time or energy to do anything else. The body abhors the micromanaging of the mind.

The same applies to the world's markets. They whir away in the background of your life, providing loans to your business, coffee beans to your nearby supermarket, labor to build your house, gas to fill your car. You take all of these markets for granted. All you have to concern yourself with is earning enough money to gain access to these goods and services. That's what it means to live in a modern economy. The days of hunting and gathering, of complete self-sufficiency, are long past.

And then, in a series of sickening shifts, the markets go haywire. As with a heart attack, you no longer can take the optimal performance of these systems for granted.

The coronavirus crisis has thrown the global economy into cardiac arrest, and now you are acutely aware of the very markets that you had previously just assumed would function as normal. The first indication was the precipitous drop in the stock market that took place in late February. Then, as the United States began to enter quarantine, the labor market collapsed and hundreds of millions of people were suddenly out of work. Shortages in a few key commodities -- masks, ventilators, toilet paper -- began to appear.

It is one of the central tenets of laissez-faire capitalism that markets behave like automatic systems, that an "invisible hand" regulates supply and demand. Market fundamentalists believe that the less the government interferes with these automatic systems, the better. They argue, to the contrary, that markets should increasingly take over government functions: a privatized post office, for instance, or Social Security accounts subjected to the stock market.

Market fundamentalists are like Christian Scientists. They refuse government intervention just as the faithful reject medical intervention. Much like God's grace, the invisible hand operates independent of human plan.

Then something happens, like a pandemic, which tests this faith. States around the world are now spending trillions of dollars to intervene in the economy: to bail out banks, save businesses, help out the unemployed. Countries are imposing export controls on key commodities. As in wartime, governments are directing manufacturers to produce critical goods to fill an unexpected demand for greater supply.

These are emergency interventions. The market fundamentalist looks forward to the day when stay-at-home restrictions are lifted, people go back to work, the stock market barrels back into bull mode, and the invisible hand, with perhaps a few Band-aids across the knuckles, returns to its job.

But some pandemics fundamentally alter the economy. In such emergencies, people realize that an economy is constructed and thus can be reconstructed. Are we now at just such a moment in world history? Will the coronavirus permanently transform the relationship between the state and the market?

Let's take a look at three key markets -- oil, food, and finance -- to measure the impact of the pandemic and the prospects for transformation.

Oil

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In 2007, Ecuadorian President Rafael Correa offered to forgo digging for oil beneath the Yasuni national park in exchange for $3.6 billion from the international community. No one took him up on the offer.

When the U.S. price of oil went below zero last week, I immediately thought of Correa's offer. The mainstream scoffed at the Ecuadorian leader back in 2007. How on earth could you possibly propose to keep oil under the earth? The world economy runs on fossil fuels. You might as well ask your kid to keep her Halloween candy uneaten in the back of the cupboard.

Today, however, the world is glutted with oil. The global recession has radically reduced the need for oil and gas.

In the United States, transportation absorbs nearly 70 percent of oil consumption. With airplanes grounded, fewer trains and busses in operation, and highways uncongested, the demand for oil has dropped precipitously. Businesses, too, are using less energy. It's not just oil. Companies devoted to pumping natural gas out of shale deposits are filing for bankruptcy as their market value drops precipitously: the price of a share of fracking giant Whiting Petroleum fell from $150 a couple years ago to 67 cents on March 31.

It's gotten to the point that you almost can't give away the stuff.

After all, if you somehow found yourself with a bunch of barrels of oil, where would you store it? Oil-storage tanks in the United State are near capacity. "Oil supertankers are looking like petroleum paparazzi, crowding the Los Angeles shoreline, either as floating storage or waiting on some kind of turn in sentiment," Brian Sullivan writes at CNBC . "With prices higher in coming months, for now it pays to sit on oil and hope to sell it for more money down the pipeline."

Oil-producing nations, after years of boosting their supplies, finally agreed in mid-April to cut production by 10 percent -- about 10 million gallons a day. In other words, they are deciding to leave oil in the ground. Now, however, it doesn't even qualify as a half-measure, since demand has dropped by 35 percent. The oil producers are awaiting the end of recession, when the quarantined go back to work, and everyone jumps on their transport of choice to make up for lost travel. They are awaiting a return to normal.

But the market for fossil fuels is not normal. The notion that the invisible hand will steer economies in a sustainable direction is hogwash. We are long past the moment when we should have paid Correa and everyone else to leave the oil and gas in the ground and move toward a world powered entirely by clean energy. The market treats the environment either as a commodity like any other or as an "externality" that doesn't factor into the final price of goods and services. That is so nineteenth century.

Climate change demands an intervention into the energy markets with restrictions on production, subsidies for clean energies like solar, and government purchases of electric cars. Returning to "normal" after the pandemic is not a viable option.

Food

Shutterstock

Like the oil exporters, food producers in the United States are restricting production as well.

In Delaware and Maryland, chicken producers are euthanizing two million chickens because the processing plants don't have enough workers. Sickness and death in these facilities, which has caused closures that are disrupting the supply chain, has prompted Trump to classify such plants as "critical infrastructure" that needs to remain open. Meanwhile, thousands of acres of fruits and vegetables are rotting in the fields in Florida because of the suspension of bulk food sales to schools, theme parks, and restaurants. The shortage of pickers -- often migrant laborers whose mobility has been restricted -- is complicating harvests.

Unlike oil, however, the overall demand for food remains high. The grocery business is booming . Food banks are overwhelmed by a surge unlike any in recent decades. The U.S. Department of Agriculture ordinarily could swoop in and buy up surplus production -- as it did for soybean growers during the trade war with China -- for use in food banks and other distribution programs. But as with so many other government agencies in the Trump era, the USDA has been slow to act , despite repeated pleas from growers and governors.

The pandemic is highlighting all the problems that have long plagued the food supply. First, there is the mismatch between supply and demand. Around 820 million people globally didn't have enough to eat in 2018, a figure that had been rising for three years in a row, and contrasts with another rising number: the 672 million obese people in the world. In the United States, fully 40 percent of food goes to waste every year. So, obviously the invisible hand does a pretty poor job of achieving market equilibrium.

Second, despite a growing movement to eat locally and seasonally, the food system still eats up a huge amount of energy. The problem lies not so much with bananas arriving by cargo ship, which is relatively efficient, but with perishable items delivered by plane . And it's what we eat, rather than where the products come from, that matters most. "Regardless of whether you compare the footprint of foods in terms of their weight (e.g. one kilogram of cheese versus one kilogram of peas); protein content; or calories, the overall conclusion is the same," writes Hannah Ritchie. "Plant-based foods tend to have a lower carbon footprint than meat and dairy. In many cases a much smaller footprint."

Third, because of economies of scale and abysmal labor practices, food in the industrialized world is too often grown by agribusiness, processed by transnational corporations, and picked or handled by workers who don't even make close to a living wage.

Returning to this kind of food system after the pandemic fades would be truly unappetizing. The livable wage campaign must spread to the countryside, meat substitutes must get an additional lift through government and institutional purchases, and innovative programs like the Too Good to Go app in Europe -- which sells extra restaurant and supermarket food at a discount -- must be brought to the United States to cut down on food waste and get meals to those in need.

Finance global-financial-crisis-capitalism-globalization-finance

Shutterstock

The financial crisis of 2008-2009 exposed the fragility and fundamental inequality of the global financial system. But all along the invisible hand has been pickpocketing poor Peter to pay prosperous Paul. Bankers, stockbrokers, and financial gurus have constructed a casino-like system that occasionally doles out a few pennies to the people playing the slots even as it enriches the house -- the top 1-2 percent -- at every turn.

The most outrageous part of this scheme is that the financial crisis demonstrated just how bad the financiers were at their own game. Not only did they not go to prison for illegal activities, they were with a few exceptions not even punished economically for their market failures. They were either too big, too rich, or too powerful for the government to allow them to fail.

In The New Yorker , Nick Paumgarten quotes a prominent investment banker at a bond fund:

"In the financial crisis, we won the war but lost the peace." Instead of investing in infrastructure, education, and job retraining, we emphasized, via a central-bank policy of quantitative easing (what some people call printing money), the value of risk assets, like stocks. "We collectively fell in love with finance," he said.

After the last financial crisis, the wealthy, who are heavily invested in the stock market, did quite well, while everyone else took a hit. Explains Colin Schultz in Smithsonian magazine: "While families hovering around the average net worth lost 36 percent over the past decade -- dropping from $87,992 in 2003 to $56,335 in 2013 -- people in the top 95th percentile actually gained 14 percent in the same tumultuous period -- going from $740,700 in 2003 to $834,100 in 2013."

The Trump administration is clearly in love with finance. Even before the pandemic hit, Trump's tax reform provided the top six U.S. banks with $32 billion in savings . That's more than what the 2008 bank bailout provided (and remember, banks mostly paid back those earlier loans). The stock market also benefited from an unprecedented upswing in stock buybacks -- $2 trillion combined in 2018 and 2019 -- that enriched shareholders at the expense of workers.

The $2 trillion in initial stimulus funds that the U.S. government is providing this time around has gone to individuals (those Trump-signed checks in the mail), small businesses (except when it went to big businesses), hospitals, and unemployed workers. There's also money for farmers, schools, food stamps, and (alas) the Pentagon. Future rounds of stimulus spending might include infrastructure, more aid to states and localities, and funds for smaller banks.

There's not much enthusiasm, at least publicly, to bail out Wall Street. Stock buybacks were explicitly excluded from the stimulus package. Meanwhile, the stock market has begun to climb out of the basement in the last couple weeks, largely on the strength of the news of all this new money being pumped into the economy.

But just as the tax bill was a covert giveaway to financial institutions, so have been several of the administration's pandemic responses. Quantitative easing, by which the Federal Reserve buys bonds and mortgage-backed securities, has increased the amount of liquidity available to financial institutions.

In the latest effort, the Fed announced that it will buy $500 billion in corporate bonds, but without any of the strings attached to other assistance such as limits on stock buybacks or executive compensation. The banks are even nickel and diming people by seizing stimulus check deposits to cover overdrawn accounts.

Out of a total pie of around $6 trillion in potential stimulus spending, banks and major corporations are well-placed to grab the lion's share. Writes Nomi Prins at TomDispatch:

In the end, according to the president, that could mean $4.5 trillion in support for big banks and corporate entities versus something like $1.4 trillion for regular Americans, small businesses, hospitals, and local and state governments. That 3.5 to 1 ratio signals that, as in 2008, the Treasury and the Fed are focused on big banks and large corporations, not everyday Americans.

Invisible hand? Hardly. That's the very visible hand of government tilting the financial markets even more in favor of the rich. As for the invisible enrichment that goes on beneath the surface, otherwise known as corruption, the Trump administration has gutted the oversight mechanisms that could bring those abuses to light.

It's time to end America's love affair with finance. That means, in the short term, higher taxes on the very rich, limitations on CEO pay built into all bailouts, and reviving all the reasonable proposals for reforming the financial sector that were either left out of or didn't get full implemented in the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in the wake of the last financial crisis.

Post-Pandemic Economics

Shutterstock

The Black Death depopulated Europe, killing as much as 60 percent of the population in the middle of the fourteenth century. Feudalism depended on lots of peasants working the land to support the one percent of that era. By carrying off so many of these workers, the Black Death made a major contribution to eroding the foundations of the dominant economic system of the time.

The coronavirus will not kill anywhere near as many people as the Black Death did. But it may well contribute to exposing the failures of "free markets" and the scandal of governments intervening in the economy on behalf of this era's one percent. The pandemic is already, thanks to huge stimulus packages, undermining the "small government" canard. A state apparatus deliberately hobbled by the Trump administration -- after earlier "reforms" by both parties -- did a piss-poor job of dealing with this crisis. That doesn't bode well for dealing with the even larger challenge of climate change.

The short-term fixes described above in the oil, food, and finance sectors are necessary but insufficient. They shift the balance more toward the government and away from the "free" market. They're not unlike the New Deal: reforming capitalism to save capitalism. But this pandemic is pointing to an even more fundamental transformation, to a new definition of economics.

The tweaking of markets to achieve optimal performance is much like the rejiggering of earth-centric models of the universe that took place in the Middle Ages. These models became more and more complex to account for new astronomical discoveries. Then along came Copernicus with a heliocentric model that accounted for all the new data. It took some time, however, for the old model to lose favor, despite its obvious failures.

The global economy remains market-centered, even though the evidence has been mounting that these markets are failing us and the planet. Tweaking this model isn't good enough. We need a new Copernicus who will provide a new theory that fits our unfolding reality, a new environment-centered economics that can maximize not profit but the well-being of living things. John Feffer is the director of Foreign Policy In Focus.

[May 24, 2020] 'How Could the CDC Make That Mistake?' The government's disease-fighting agency is conflating viral and antibody tests, compromising a few crucial metrics that governors depend on to reopen their economies. Pennsylvania, Georgia, Texas, and other states are doing the same.

Notable quotes:
"... "According to CDC, the disease of obesity affects about 78 million Americans 1 and the ASMBS estimates about 24 million have severe or morbid obesity." ..."
May 24, 2020 | www.moonofalabama.org

Richard Steven Hack , May 24 2020 23:54 utc | 46

And the government botching of this crisis continues...

'How Could the CDC Make That Mistake?' The government's disease-fighting agency is conflating viral and antibody tests, compromising a few crucial metrics that governors depend on to reopen their economies. Pennsylvania, Georgia, Texas, and other states are doing the same.
https://tinyurl.com/y92ea59f

And overseas as well...

'Politicised nature' of lockdown debate delays Imperial report
https://tinyurl.com/y7csboom

And of course, the effect of that...

Nearly half of US states haven't contained their coronavirus outbreaks, a new study finds
https://tinyurl.com/yc72pd8t

And no, Sweden is not doing better...

Just 7.3% of Stockholm had Covid-19 antibodies by end of April, study shows
Official findings add to concerns about Sweden's laissez-faire strategy towards the pandemic
https://tinyurl.com/yahnmb3a

Finally, a large scale study on HCQ - 86,000 patients, with 15,000 receiving HCQ...

Trump drug hydroxychloroquine raises death risk in Covid patients, study says
https://www.bbc.com/news/world-52779309

The color of coronavirus:
COVID-19 deaths by race and ethnicity in the U.S.
https://www.apmresearchlab.org/covid/deaths-by-race

Blacks are *twice* as likely to get it as whites and Latinos. American Indians are *five times* more likely to get it. They conclude the best indicator is poverty.

From The Lancet, a study of New York patients... Epidemiology, clinical course, and outcomes of critically ill adults with COVID-19 in New York City: a prospective cohort study https://tinyurl.com/yblmszsx

Between March 2 and April 1, 2020, 1150 adults were admitted to both hospitals with laboratory-confirmed COVID-19, of which 257 (22%) were critically ill.

The median age of patients was 62 years (IQR 51–72), 171 (67%) were men. 212 (82%) patients had at least one chronic illness, the most common of which were hypertension (162 [63%]) and diabetes (92 [36%]).

119 (46%) patients had obesity.

As of April 28, 2020, 101 (39%) patients had died and 94 (37%) remained hospitalised.

203 (79%) patients received invasive mechanical ventilation for a median of 18 days (IQR 9–28), 170 (66%) of 257 patients received vasopressors and 79 (31%) received renal replacement therapy.

The median time to in-hospital deterioration was 3 days (IQR 1–6).

In the multivariable Cox model, older age (adjusted hazard ratio [aHR] 1·31 [1·09–1·57] per 10-year increase), chronic cardiac disease (aHR 1·76 [1·08–2·86]), chronic pulmonary disease (aHR 2·94 [1·48–5·84]), higher concentrations of interleukin-6 (aHR 1·11 [95%CI 1·02–1·20] per decile increase), and higher concentrations of D-dimer (aHR 1·10 [1·01–1·19] per decile increase) were independently associated with in-hospital mortality.

Note: 36% had diabetes; 46% were fat. Like I've said before, "diabetes" is a code word for "fat." And how many people in the US are fat and thus at risk? "According to CDC, the disease of obesity affects about 78 million Americans 1 and the ASMBS estimates about 24 million have severe or morbid obesity."

So much for "let's just isolate the elderly"...so we can attend our baseball games this summer and stuff ourselves with crap food...

[May 24, 2020] Coronavirus Conspiracies by Israel Shamir

May 24, 2020 | www.unz.com

Now we are coming to the new Digital Revolution, with workers being replaced by smart computers and an AI future. Millions of office workers already function as a human interface to the computer. You may have noticed this as you talk with them: they are trained to avoid making decisions; they say sentences that were scripted for them, and the decisions are made by the computer that was programmed to do their master's will. As lockdown had forced millions to communicate with computers directly, a lot of workers became superfluous.

The process of shedding millions of workers in the existing economic system is likely to be painful for the unemployed. The virus-blamed lockdown and digital control allows the owners of the digital companies to carry out the revolution with minimal risks for them. What would need an army and police involvement against riotous unemployed workers, can be achieved with greater ease under threat of the pandemic. The economy will be modernized and made more efficient. Alas, for us this script presages the fate of highly qualified weavers in 18 th century England, even if we shall avoid the total AI takeover Terminator-style.

Probably the scariest piece of news is not about the numbers of "infected". It is a meaningless word, for there are persistent carriers who do not succumb to disease; the vast majority of the "infected" are asymptomatic, meaning they aren't sick and aren't infectious; the number of "infected" is in direct proportion to the number of tests; the tests are dubious at best, and none is verified by the methods accepted in pre-corona medicine, while the methodology approved and enforced by the WHO can't be described as scientific. It is not about deaths, for we do not experience more deaths than in 2018. Moreover, in many countries, notably in France and in Norway there are 30% fewer deaths in certain weeks of April and May in this year than in the last year.

The scariest piece of news is that Zoom is worth more than the seven biggest airlines . These airlines with their accumulated labour (millions of working hours, hundreds of thousands of employees, highly trained pilots, masses of sophisticated equipment) just can't be worth as much as a job done in a month by a few programmers and which can be done anew in a month. Money and stock market prices are useful tools if they measure human efforts; they do not that anymore. What began with bankers earning more money in a day than a hundred qualified workers and engineers in their lifetime, ended with the hi-tech lords earning more than a million workers in their lifetime. It means that Money had banked on the Digital Economy, a Union made in Hell, while the real economy came up for grabs. Money decided that we won't fly anymore. They, the new masters, will fly in their private jets; the era of mass access is over. You will get satisfied with Zoom and PornHub, instead of the real thing.

Added to this the negative oil future price and the emission centres issuing more and more money, trying to smother the fire with gasoline, and you will get a picture of the coming world. There is probably no place for you and me in this world.

Is the great AI update of technology an objective need, and will it eventually bring good for mankind? Perhaps. But it does not mean the process should be drafted by Money and the Digital Economy, explained by MSM, justified by bio-horrors and carried on at public expense. It has to be done differently if we want to preserve the achievements of the long (1945-2020) peace stretch.

[May 24, 2020] A lockdown in rgw USA seems to be justified on the basis of the fact that even if you are middle aged, the chances of hospitalization are still around 5 percent, and in the US going to the hospital for a several weeks can leave you bankrupt.

May 24, 2020 | www.unz.com

128 , says: Show Comment May 21, 2020 at 12:53 pm GMT

A lockdown in a lot of places seems to be justified on the basis of the fact that even if you are middle aged, the chances of hospitalization are still around 5 percent, and in the US going to the hospital for a week or weeks can leave you bankrupt.
A123 , says: Show Comment May 21, 2020 at 1:36 pm GMT
@AP The interesting & important thing to note is that fatalities are heavily tied to the related factors of pre-existing conditions and advanced age. For example:

https://www.statista.com/statistics/1107913/number-of-coronavirus-deaths-in-sweden-by-age-groups/

With CQ/AZ/ZN available everywhere, the bulk of the economy could reopen immediately with or without masks. Given that psychology is important, odds are mask wearing will make the restart more effective. However, masks provide partial protection at most.

PEACE

Bert , says: Show Comment May 21, 2020 at 5:34 pm GMT
@utu Epidemiology uses R0 for an initial reproductive rate when a pathogen first invades a naive host population. Re is the designation for later when immunity begins to exist and, for human beings in the current pandemic, host behavior changes.

https://www.cebm.net/covid-19/when-will-it-be-over-an-introduction-to-viral-reproduction-numbers-r0-and-re/

[May 24, 2020] While the official lockdowns undoubtedly led to a contraction in economic activity, a huge portion (probably most) of the economic damage would be incurred anyway.

May 24, 2020 | www.unz.com

reiner Tor , says: Show Comment May 21, 2020 at 6:08 pm GMT

@Bert

The most important aspects of economic life can proceed with only those modifications.

Tourism is some 10% of world GDP. It's going to take a massive hit, lockdown or no lockdown. Air travel took a massive hit before the lockdown, empty planes were flying often. While the official lockdowns undoubtedly led to a contraction in economic activity, a huge portion (probably most) of the economic damage would be incurred anyway. For example I will personally not be eating out in the foreseeable future (a vaccine would change that), and I did so at least every other month. It's not very frequent, but I visited relatively expensive restaurants, so my reduced consumption probably disproportionately hits the higher end jobs in the sector. I know people who used to eat out more frequently (and in expensive restaurants), who are now staying home. Lazy people who had a gym membership to soothe their conscience will now feel less guilty if they just cancel it.

Some people believe that if we just restrict or basically shut down huge sectors of the economy, then the rest can still carry on as if nothing happened. That's just wrong. People who work in restaurants or gyms are now going to reduce their own consumption, for example they won't be buying new cars any time soon. This in turn reduces consumption by people employed (or previously employed) in those sectors.

So unfortunately no, I don't think the rest of the economy could carry on like before.

endthefed , says: Show Comment May 21, 2020 at 7:54 pm GMT
@Anatoly Karlin The lockdown actions in the US were, by my estimation, about 6 weeks too late. 6 weeks earlier and maybe actions could have been phased in (monitor results) and not blanket panic. Even in that time frame we had serious suspicion of asymptomatic spread. We could have started masks for everyone, restricting air travel and cruises, isolated nursing home and started shutting down schools. Yes, I know children don't get the large complications however, it beggars belief that stuffed in schools then going home; kids would not be vectors.

In any case the US economy was primed to collapse anyway. Losing the China supply chain was significant and would have happened even if no virus was found in the US.

P.S. I think it's going to get worse; (I'm surprised it already hasn't) but I think unemployment is going to be bankrupting states.

[May 23, 2020] Underscoring 'Grotesque Nature of Unequal Sacrifice,' Richest Americans Have Added $434 Billion in Wealth Since Pandemic Hit

May 23, 2020 | www.commondreams.org

America's billionaires saw their combined net worth soar by $434 billion between March 18 and May 19 while the coronavirus pandemic killed tens of thousands of people and ravaged the U.S. economy, forcing more than 30 million out of work.

That's according to a new analysis released Thursday by Americans for Tax Fairness (ATF) and the Institute for Policy Studies (IPS) titled " Tale of Two Crises: Billionaires Gain as Workers Feel Pandemic Pain ."

The report shows that the five wealthiest billionaires in the U.S. -- Jeff Bezos of Amazon, Bill Gates of Microsoft, Mark Zuckerberg of Facebook, Warren Buffett of Berkshire Hathaway, and Larry Ellison of Oracle -- saw their collective wealth grow by a total of $75.5 billion between March 18 and May 19, a 19% jump.

Bezos -- the world's richest man -- saw his wealth jump by nearly $35 billion in the two-month period. Yet even as Bezos' fortune continues to grow, Amazon announced last week that it will not extend $2-an-hour hazard pay for warehouse workers beyond the end of May.

[May 22, 2020] Battle Covid-19, Not Medicare for All: Doctors Demand Hospital Industry Stop Funding Dark Money Lobby Group

May 22, 2020 | www.commondreams.org

A progressive organization of 23,000 physicians from across the U.S. demanded Thursday that the American Hospital Association (AHA) divest completely from a dark-money lobbying group that has spent millions combating Medicare for All and instead devote those financial resources to the fight against Covid-19 and to better support for patients and healthcare workers.

Dr. Adam Gaffney, president of Physicians for a National Health Program (PNHP), said in a statement that "the Covid-19 pandemic has stretched hospitals' resources to the limit, and the AHA should not waste precious member hospitals' funds lobbying against universal health coverage" as a member of the Partnership for America's Health Care Future (PFAHCF).

Because Medicare for All would provide a lifeline to hospitals in underserved areas that have been hit hard by Covid-19, Gaffney argued, the AHA "cannot claim to represent hospitals while also opposing a single-payer system that would keep struggling hospitals open." The AHA represents around 5,000 hospitals and other healthcare providers in the U.S.

As Common Dreams reported earlier this month, public health officials are accusing the Trump administration of directing billions of dollars in Covid-19 hospital bailout funds to high-revenue providers while restricting money to hospitals that serve low-income areas.

Tenet Healthcare, an investor-owned hospital company that has donated hundreds of thousands to PFAHCF, has received $345 million in Covid-19 bailout funds, Axios reported last month.

"The AHA should immediately leave the PFAHCF," Gaffney said, "and redirect that money to supporting patients and frontline healthcare workers."

"As physicians, we can no longer tolerate a health system that puts profits ahead of patients and public health," Gaffney added. "It's time for health professionals to hold accountable the organizations that claim to represent us."

Formed in the summer of 2018 by an alliance of pharmaceutical, insurance, and hospital lobbyists with the goal of countering the push for universal healthcare, PFAHCF's anti-Medicare for All " army " has grown rapidly since its founding, with the AHA joining the fray in 2019.

As The Intercept reported last October, the for-profit hospital industry has played an "integral role" in the corporate fight against single-payer.

[May 22, 2020] COVID Kills Hospitality Industry, Crushes NYC Hotels, Triggers CMBS Implosion

May 22, 2020 | www.zerohedge.com

COVID Kills Hospitality Industry, Crushes NYC Hotels, Triggers CMBS Implosion by Tyler Durden Fri, 05/22/2020 - 09:15 The global hospitality industry is facing one of the worst crashes in history, and New York City, the epicenter of COVID-19 in the US, has seen its tourism industry decimated. With no rebound in sight, the second great depression for commercial real estate is ahead and could lead to a massive default wave of shopping malls and luxury hotels.

Judging by the ongoing collapse in commercial real estate, as we recently noted , CMBX 6, which track 25 commercial-mortgage-backed securities with high exposure to 2012 shopping mall loans, has tumbled during lockdowns, resulting in a handsome payout for the likes of Carl Icahn, McNamara and others who were short the tranche.

Last week we said, "keep a close eye on CMBX 9" with its "outlier exposure to hotels which have quickly emerged as the most impacted sector from the pandemic, this may well be the next big short."

The various CMBX series are shown in the chart below, with CMBX 9 most notable for its 17% exposure to hotels.

While the broader market has rebounded, CMBX 9 has experienced a swan dive.

Several key observations in the Manhattan hotel industry have been seen this month, suggest the tide is turning for the industry. Let's start with the newest piece of information is that The Times Square Edition, a newly constructed multi-million dollar hotel located in Midtown Manhattan, is set to pull the plug on operations by late summer.

Marriott International Inc. operates the hotel under the Edition brand, says it "has provided advance notice to employees, government officials and union officials" that all operations on the property will grind to a halt on August 13.

This suggests Marriot doesn't see a V-shaped recovery in the tourism industry this year. Maybe Marriot is taking advice from Scott Minerd, the CIO of Guggenheim Investments, who recently said a recovery in the economy could take upwards of "four years ."

Bloomberg reviewed new documents in the ongoing foreclosure proceeding show Marriot informed owner Maefield Development in March that "a cash shortfall due to the outbreak could put the developer in default on its contract with the lodging giant."

Moody's Investors Service valued the mixed-use property at more than $2.4 billion in 2018 -- considering the economic crash and commercial real estate implosion, the value of the property is likely much lower.

Even when New York City reopens, hotels in Manhattan generally rely on international travel and large conferences, which are several things that may not return to 2019 activity trends for several years. This has made it challenging for hotel operators to cover debt payments and labor costs, suggesting defaults and closures could be dead ahead.

Jonathan Falik, CEO at JF Capital Advisors, recently told Bloomberg that too many rooms are empty in the city and warns not all hotels will survive.

Read : NYC Hotel Loans Defaulting At Alarming Rate As Room-Rates Plunge, Tourism Tumbles

Last week, Sunstone Hotel Investors Inc. wrote down its Hilton Times Square hotel to less than its $77 million mortgage. Sunstone is currently in discussions with lenders to either restructure or handover the property.

Data firm Trepp said $1 billion dollars in late payments were seen in CMBSs used to finance New York hotels. The second great depression in commercial real estate has arrived, many shopping malls and hotels may not survive.

[May 22, 2020] Is This Controlled Demolition all over Again, by Gilad Atzmon

Notable quotes:
"... This whole crisis is all about recapitalization or restructuring the debt. The Fed is bailing out the creditors (Big Surprise!) and forcing corporate America through bankruptcy. ..."
May 22, 2020 | www.unz.com

paranoid goy , says: Website Show Comment May 22, 2020 at 1:34 pm GMT

We understood ourselves as the means that make the rich richer.

Then came the latest wisdom: "Money makes money." They have come to believe their own lies, and those lies are being subsidised by our taxes. The moment when "everything" will belong to One Account seems to be upon us. I expect foreclosures and bankruptcies amongst the non-investing classes. All shortfalls to be augmented by tax money. Next, we await Zion unveiling our new King. Once again, not one atom of deviation from the plan as laid out in the Protocols. it is of utter importance that we do not turn upon another. In that sense, I suggest more of Unz's readers start looking at Black people as possible comrades in this engagement, we are confronted by a common enemy, the one that taught us the "value" of racism in the first place. They have divided us, now they will conquer.
Or we can just stand together. If we refuse to fight, it will be us against Bill Gates' robots, and his microcephalic pilots are still too young to be drafted. This is, however, our last chance, I be thinking.
Been wondering some years now, why 'retailing' is such a popular investment, when nobody has no money left to buy stuff with. Now we know.

MrFoSquare , says: Show Comment May 22, 2020 at 1:45 pm GMT
Gilad, these are some thoughts I jotted down a few weeks ago.

This whole crisis is all about recapitalization or restructuring the debt. The Fed is bailing out the creditors (Big Surprise!) and forcing corporate America through bankruptcy. The Virus is being used as a pretext for forcing the economy into a kind of controlled depression (demolition) and debt restructuring. The Virus and China are being used as the fall guys for the collapse. In 2008-09 the Banks and WS were bailed out and not forced into bankruptcy. The Fed then reinflated and drove up asset prices along with more than doubling the debt from levels that were already overextended. In The Great Restructuring that's taking place now, the Money Boys are basically transferring the income and assets of Main Street to the Creditors as they deflate the debt and bail themselves out. The whole scam could more accurately be called "The Great Heist" or the Money Power's perverted or mammonic version of a Debt Jubilee.

[May 22, 2020] Dear Corporate America Take Your Job Shove It by Charles Hugh Smith

May 22, 2020 | www.zerohedge.com

Authored by Charles Hugh Smith via OfTwoMinds blog,

Dear Corporate America: maybe you remember the old Johnny Paycheck tune? Let me refresh your memory: take this job and shove it.

Put yourself in the shoes of a single parent waiting tables in a working-class cafe with lousy tips, a worker stuck with high rent and a soul-deadening commute --one of the tens of millions of America's working poor who have seen their wages stagnate and their income becoming increasingly precarious / uncertain while the cost of living has soared.

Unemployment and the federal stimulus bonus of $600 a week are far more than your regular wages, including tips. Exactly why do you want to go back to your miserable job and low pay? Why wouldn't you take time off and enjoy life a little, which is what you've been wanting to do for years?

Indeed--why not? The pandemic is giving many permission to get what they always wanted. Consider these examples:

1. The Federal Reserve has always pined for the power to bail out the top .01% / the New Nobility the way they deserve, with unlimited money-printing and the Fed being able to buy every rigged, fraudulent asset spewed by the New Nobility's financial and corporate predators and parasites.

Yee-haw, the pandemic genie granted your wish: there's no limits on how many trillions you can shove into the greedy maw of the top .01%, and bail out every single one of their predatory, exploitive, legalized looting bets that went south.

2. Local officials always wanted to commandeer some motels and shove the homeless into them, to clear the sidewalks and parks and then claim "homeless problem solved." Presto, your wish has been granted.

3. Central government authorities have always resented all those pesky civil liberties restraints on their unquenchable desires to control every tiny aspect of life, public and private, and now--voila, the doors to Petty Authoritarian Heaven have opened. Question our authority? A tenner in the gulag for you, Doubter of All That Is Great and Good.

4. Restaurant owners who on camera always have to say how much they love their customers and business, never mind the money, who secretly have come to loathe their over-entitled, self-absorbed, dilettante customers and are sick and tired of the soaring rent, business licenses, insurance, payroll taxes and costs of ingredients.

You know what, pal? Here's the keys, you can re-open whatever the heck you want, I'm outta here. I've been secretly wishing I could get out from underneath this crushing burden and get my life back. Yes, it was exciting way back when, but now it's nothing but an endless grind that wasn't making money even before the pandemic.

5. Since the financiers, Big Tech mini-gods and stock buyback crowd have looted and pillaged their way to immense fortunes by lying, cheating, conniving and gaming, why not follow the money just like the predators and parasites at the top of the heap?

Indeed, why not fudge the application for a federal small business loan and use the "free money" to lease that shiny new Rolls Royce you always desired? Well, haven't the authorities been begging us to borrow and spend like there's no tomorrow?

6. Dear Corporate America: maybe you remember the old Johnny Paycheck tune? Let me refresh your memory: take this job and shove it, I ain't working here no more. If there's a will, there's a way, and I'm stepping off the rat race merry-go-round, thank you very much. You can find some other sucker to do your dirty work and BS work, all for the greater glory and wealth of your New Nobility shareholders. I'm outta here. So I won't get rich, that dream died a long time ago. What I'm interested in now is getting my life back.

The pandemic might not follow the Central Casting script of a V-shaped return to debt-serf, BS-work wonderfulness. Everyone who was sick and tired of their pre-pandemic life and the endless exploitation has had time to think things over, and some consequential percentage of them will welcome "good-bye to all that" and others will decide not to go back, even if that is still an option.

It's called opting out, and it has always characterized the end of imperial pretensions, pillaging, propaganda and predation. Financial parasites, beware the second-order effects of your overweening dominance and limitless greed.

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF) .

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook ): Read the first section for free (PDF) .

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

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[May 22, 2020] With 36 Million Newly Out of Work, Trump Says He s Willing to Let Boosted Unemployment Benefits Expire

Notable quotes:
"... Washington Post ..."
May 22, 2020 | www.commondreams.org

President Donald Trump told Republican senators during a private lunch Tuesday that he is willing to let expanded unemployment benefits expire at the end of July, a decision that would massively slash the incomes of tens of millions of people who have lost their jobs due to the Covid-19 crisis.

The Washington Post reported Tuesday that the president "privately expressed opposition to extending a weekly $600 boost in unemployment insurance for laid-off workers affected by the coronavirus pandemic, according to three officials familiar with his remarks."

House Democrats passed legislation last week that would extend the beefed-up unemployment benefits through January of 2021 as experts and government officials -- including Federal Reserve chair Jerome Powell -- warn the U.S. unemployment rate could soon reach 25%. The unemployment insurance boost under the CARES Act is set to expire on July 31, even as many people have yet to receive their first check.

"With nearly 1 in 5 Americans out of work, Donald Trump's plan is to cut off the boost to unemployment benefits and shower his wealthy buddies with more tax cuts," Sen. Ron Wyden (D-Ore.), one of the architects of the unemployment insurance expansion, told HuffPost . "This is the worst economic crisis in 100 years and Donald Trump is doubling down on Herbert Hoover's economic playbook and pushing workers to risk their health for his political benefit."

Sen. Lindsey Graham (R-S.C.) -- who declared earlier this month that Congress will only extend the boosted unemployment insurance "over our dead bodies" -- said after the private lunch that Trump believes the benefits are "hurting the economic recovery." Graham was one of several Republican senators who opposed the initial expansion of unemployment benefits as too generous.

An analysis released last week by the Hamilton Project, an initiative of the Brookings Institution, found that expanded unemployment benefits offset "roughly half of lost wages and salaries in April." Unemployment insurance has "been essential to families, and is vital for keeping the economy from cratering further," the authors of the analysis noted.

Ernie Tedeschi, a former Treasury Department economist, estimated that "come July 31, if the emergency UI top-up isn't extended, unemployed workers will effectively get a pay cut of 50-75% overnight."

"It's increasingly looking like there won't be enough labor demand to hire them all back at that point," Tedeschi tweeted.

The latest Labor Department statistics showed that more than 36 million people in the U.S. have filed jobless claims since mid-March as mass layoffs continue in the absence of government action to keep workers on company payrolls. Despite the grim numbers, the Post 's Jeff Stein reported Tuesday that the White House is " predicting a swift economic recovery " as it resists additional efforts to provide relief to frontline workers and the unemployed.

On top of rejecting an extension of enhanced unemployment insurance, Trump last month publicly voiced opposition to another round of direct stimulus payments, instead advocating a cut to the tax that funds Social Security and Medicare.

[May 22, 2020] McDonald's Workers Strike Across US to Demand Better Protections From Covid-19

May 22, 2020 | www.commondreams.org

Demanding McDonald's prioritize public health and worker safety over profits, hundreds of employees at the fast food chain went on strike Wednesday, a day before the company was set to hold its annual shareholders' meeting.

Instead of distributing dividends to its shareholders, the striking employees are calling for the company to use its massive profits to pay for safety and financial protections for workers, scores of whom have contracted Covid-19 in at l