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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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Old News ;-)

[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)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section 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 least 16 states so far.

Employees and strike organizers at the fair wage advocacy group Fight for $15 are demanding hazard pay during the pandemic of "$15X2," paid sick leave, sufficient protective gear for workers, and company-wide policy of closing a restaurant for two weeks when an employee becomes infected, with workers being fully paid.

The strike is taking place at stores in at least 20 cities. Fight for $15 and the SEIU, which is also supporting the action, say it's the first nationwide coordinated effort targeting the company since the coronavirus pandemic began in March.

[May 21, 2020] The neoliberal globalization myth fostered the delusion of labour in which Western societies could prosper from the ideas and computer startups, while the dirty work of actually making things is left to low-wage countries. One result: a drastic shortage of face masks

Notable quotes:
"... In France, confinement has been generally well accepted as necessary, but that does not mean people are content with the government -- on the contrary. Every evening at eight, people go to their windows to cheer for health workers and others doing essential tasks, but the applause is not for President Macron. ..."
"... What we have witnessed is the failure of what used to be one of the very best public health services in the world. It has been degraded by years of cost-cutting. In recent years, the number of hospital beds per capita has declined steadily. Many hospitals have been shut down and those that remain are drastically understaffed. Public hospital facilities have been reduced to a state of perpetual saturation, so that when a new epidemic comes along, on top of all the other usual illnesses, there is simply not the capacity to deal with it all at once. ..."
"... The neoliberal globalization myth fostered the delusion that advanced Western societies could prosper from their superior brains, thanks to ideas and computer startups, while the dirty work of actually making things is left to low-wage countries. One result: a drastic shortage of face masks. The government let a factory that produced masks and other surgical equipment be sold off and shut down. Having outsourced its textile industry, France had no immediate way to produce the masks it needed. ..."
"... In late March, French media reported that a large stock of masks ordered and paid for by the southeastern region of France was virtually hijacked on the tarmac of a Chinese airport by Americans, who tripled the price and had the cargo flown to the United States. There are also reports of Polish and Czech airport authorities intercepting Chinese or Russian shipments of masks intended for hard-hit Italy and keeping them for their own use. ..."
"... The Covid–19 crisis makes it just that much clearer that the European Union is no more than a complex economic arrangement, with neither the sentiment nor the popular leaders that hold together a nation. For a generation, schools, media, politicians have instilled the belief that the "nation" is an obsolete entity. But in a crisis, people find that they are in France, or Germany, or Italy, or Belgium -- but not in "Europe." The European Union is structured to care about trade, investment, competition, debt, economic growth. Public health is merely an economic indicator. For decades, the European Commission has put irresistible pressure on nations to reduce the costs of their public health facilities in order to open competition for contracts to the private sector -- which is international by nature. ..."
"... Scapegoating China may seem the way to try to hold the declining Western world together, even as Europeans' long-standing admiration for America turns to dismay. ..."
"... The countries that have suffered most from the epidemic are among the most indebted of the EU member states, starting with Italy. The economic damage from the lockdown obliges them to borrow further. As their debt increases, so do interest rates charged by commercial banks. They turned to the EU for help, for instance by issuing eurobonds that would share the debt at lower interest rates. This has increased tension between debtor countries in the south and creditor countries in the north, which said nein . Countries in the eurozone cannot borrow from the European Central Bank as the U.S. Treasury borrows from the Fed. And their own national central banks take orders from the ECB, which controls the euro. ..."
"... The great irony is that "a common currency" was conceived by its sponsors as the key to European unity. On the contrary, the euro has a polarizing effect -- with Greece at the bottom and Germany at the top. And Italy sinking. But Italy is much bigger than Greece and won't go quietly. ..."
"... A major paradox is that the left and the Yellow Vests call for economic and social policies that are impossible under EU rules, and yet many on the left shy away from even thinking of leaving the EU. For over a generation, the French left has made an imaginary "social Europe" the center of its utopian ambitions. ..."
"... Russia is a living part of European history and culture. Its exclusion is totally unnatural and artificial. Brzezinski [the late Zbigniew Brzezinski, the Carter administration's national security adviser] spelled it out in The Great Chessboard : The U.S. maintains world hegemony by keeping the Eurasian landmass divided. ..."
"... But this policy can be seen to be inherited from the British. It was Churchill who proclaimed -- in fact welcomed -- the Iron Curtain that kept continental Europe divided. In retrospect, the Cold War was basically part of the divide-and-rule strategy, since it persists with greater intensity than ever after its ostensible cause -- the Communist threat -- is long gone. ..."
"... The whole Ukrainian operation of 2014 [the U.S.–cultivated coup in Kyiv, February 2014] was lavishly financed and stimulated by the United States in order to create a new conflict with Russia. Joe Biden has been the Deep State's main front man in turning Ukraine into an American satellite, used as a battering ram to weaken Russia and destroy its natural trade and cultural relations with Western Europe. ..."
"... I think France is likelier than Germany to break with the U.S.–imposed Russophobia simply because, thanks to de Gaulle, France is not quite as thoroughly under U.S. occupation. Moreover, friendship with Russia is a traditional French balance against German domination -- which is currently being felt and resented. ..."
"... "Decades of indoctrination in the ideology of "Europe" has instilled the belief that the nation-state is a bad thing of the past. The result is that people raised in the European Union faith tend to regard any suggestion of return to national sovereignty as a fatal step toward fascism. This fear of contagion from "the right" is an obstacle to clear analysis which weakens the left and favors the right, which dares be patriotic." ..."
"... Since WWII the US has itself been occupied by tyrants, using Russophobia to demand power as fake defenders. ..."
"... " French philosophy .By constantly attacking, deconstructing, and denouncing every remnant of human "power" they could spot, the intellectual rebels left the power of "the markets" unimpeded, and did nothing to stand in the way of the expansion of U.S. military power all around the world " ..."
"... From her groundbreaking work on the NATO empire's sickening war on sovereign Serbia, the dead end of identity politics and trans bathroom debates, to her critique of unfettered immigration and open borders, and her dismissal of the absurd Russsiagate baloney, better than anyone else, Johnstone has kept her intellect carefully honed to the real genuine kitchen table bread and butter issues that truly matter. She recognized before most of the world's scholars the perils of rampant inequality and saw the writing on the wall as to where this grotesque economic system is taking us all: down a dystopian slope into penury and police-state heavy-handedness, with millions unable to come up with $500 for an emergency car repair or dental bill. ..."
"... The mask competition and fiasco shows the importance of a country simply making things in their own country, not on the other side of the world, it's not nationalism it's just a better way to logistically deliver reliable products to the citizens. ..."
"... Some hold that they never departed, but mutated tools including CFA zones and "intelligence" relations in furtherance of "changing" to remain qualitatively the same. Just as "The United States of America" is a system of coercive relations not synonymous with the political geographical area designated "The United States of America", the colonialism of former and present "colonial powers" continues to exist, since the "independence" of the colonised was always, and continues to be, framed within linear systems of coercive relations, facilitated by the complicity of "local elites" on the basis of perceived self-interest, and the acquiescence of "local others" for myriad reasons. ..."
"... After reading Circle in the Darkness, I have ordered and am now reading her books on Hillary Clinton (Queen of Chaos) and the Yugoslav wars (Fool's Crusade), which are very worthwhile and important. I would recommend that her many articles over the years, appearing in such publications such as In These Times, Counterpunch and Consortium News, be reprinted and published together as an anthology. Through Circle in the Darkness, we have Diana Johnstone's "Life", but it would be good also to have her "Letters". ..."
"... Mr. de Gaulle like other "leaders" of colonial powers did understand that the moment of overt coercive relations of colonialism had passed and that colonialism to remain qualitatively the same, required covert coercive relations facilitated by the complicity of local "elites" on the basis of perceived self-interest. ..."
May 21, 2020 | consortiumnews.com

In France, confinement has been generally well accepted as necessary, but that does not mean people are content with the government -- on the contrary. Every evening at eight, people go to their windows to cheer for health workers and others doing essential tasks, but the applause is not for President Macron.

Macron and his government are criticized for hesitating too long to confine the population, for vacillating about the need for masks and tests, or about when or how much to end the confinement. Their confusion and indecision at least defend them from the wild accusation of having staged the whole thing in order to lock up the population.

What we have witnessed is the failure of what used to be one of the very best public health services in the world. It has been degraded by years of cost-cutting. In recent years, the number of hospital beds per capita has declined steadily. Many hospitals have been shut down and those that remain are drastically understaffed. Public hospital facilities have been reduced to a state of perpetual saturation, so that when a new epidemic comes along, on top of all the other usual illnesses, there is simply not the capacity to deal with it all at once.

The neoliberal globalization myth fostered the delusion that advanced Western societies could prosper from their superior brains, thanks to ideas and computer startups, while the dirty work of actually making things is left to low-wage countries. One result: a drastic shortage of face masks. The government let a factory that produced masks and other surgical equipment be sold off and shut down. Having outsourced its textile industry, France had no immediate way to produce the masks it needed.

Meanwhile, in early April, Vietnam donated hundreds of thousands of antimicrobial face masks to European countries and is producing them by the million. Employing tests and selective isolation, Vietnam has fought off the epidemic with only a few hundred cases and no deaths.

You must have thoughts as to the question of Western unity in response to Covid–19.

In late March, French media reported that a large stock of masks ordered and paid for by the southeastern region of France was virtually hijacked on the tarmac of a Chinese airport by Americans, who tripled the price and had the cargo flown to the United States. There are also reports of Polish and Czech airport authorities intercepting Chinese or Russian shipments of masks intended for hard-hit Italy and keeping them for their own use.

The absence of European solidarity has been shockingly clear. Better-equipped Germany banned exports of masks to Italy. In the depth of its crisis, Italy found that the German and Dutch governments were mainly concerned with making sure Italy pays its debts. Meanwhile, a team of Chinese experts arrived in Rome to help Italy with its Covid–19 crisis, displaying a banner reading "We are waves of the same sea, leaves of the same tree, flowers of the same garden." The European institutions lack such humanistic poetry. Their founding value is not solidarity but the neoliberal principle of "free unimpeded competition."

How do you think this reflects on the European Union?

The Covid–19 crisis makes it just that much clearer that the European Union is no more than a complex economic arrangement, with neither the sentiment nor the popular leaders that hold together a nation. For a generation, schools, media, politicians have instilled the belief that the "nation" is an obsolete entity. But in a crisis, people find that they are in France, or Germany, or Italy, or Belgium -- but not in "Europe." The European Union is structured to care about trade, investment, competition, debt, economic growth. Public health is merely an economic indicator. For decades, the European Commission has put irresistible pressure on nations to reduce the costs of their public health facilities in order to open competition for contracts to the private sector -- which is international by nature.

Globalization has hastened the spread of the pandemic, but it has not strengthened internationalist solidarity. Initial gratitude for Chinese aid is being brutally opposed by European Atlanticists. In early May, Mathias Döpfner, CEO of the Springer publishing giant, bluntly called on Germany to ally with the U.S. -- against China. Scapegoating China may seem the way to try to hold the declining Western world together, even as Europeans' long-standing admiration for America turns to dismay.

Meanwhile, relations between EU member states have never been worse. In Italy and to a greater extent in France, the coronavirus crisis has enforced growing disillusion with the European Union and an ill-defined desire to restore national sovereignty.

Corollary question: What are the prospects that Europe will produce leaders capable of seizing that right moment, that assertion of independence? What do you reckon such leaders would be like?

The EU is likely to be a central issue in the near future, but this issue can be exploited in very different ways, depending on which leaders get hold of it. The coronavirus crisis has intensified the centrifugal forces already undermining the European Union. The countries that have suffered most from the epidemic are among the most indebted of the EU member states, starting with Italy. The economic damage from the lockdown obliges them to borrow further. As their debt increases, so do interest rates charged by commercial banks. They turned to the EU for help, for instance by issuing eurobonds that would share the debt at lower interest rates. This has increased tension between debtor countries in the south and creditor countries in the north, which said nein . Countries in the eurozone cannot borrow from the European Central Bank as the U.S. Treasury borrows from the Fed. And their own national central banks take orders from the ECB, which controls the euro.

What does the crisis mean for the euro? I confess I've lost faith in this project, given how disadvantaged it leaves the nations on the Continent's southern rim.

The great irony is that "a common currency" was conceived by its sponsors as the key to European unity. On the contrary, the euro has a polarizing effect -- with Greece at the bottom and Germany at the top. And Italy sinking. But Italy is much bigger than Greece and won't go quietly.

The German constitutional court in Karlsruhe recently issued a long judgment making it clear who is boss. It recalled and insisted that Germany agreed to the euro only on the grounds that the main mission of the European Central Bank was to fight inflation, and that it could not directly finance member states. If these rules were not followed, the Bundesbank, the German central bank, would be obliged to pull out of the ECB. And since the Bundesbank is the ECB's main creditor, that is that. There can be no generous financial help to troubled governments within the eurozone. Period.

Is there a possibility of disintegration here?

The idea of leaving the EU is most developed in France. The Union Populaire Républicaine, founded in 2007 by former senior functionary François Asselineau, calls for France to leave the euro, the European Union, and NATO.

The party has been a didactic success, spreading its ideas and attracting around 20,000 active militants without scoring any electoral success. A main argument for leaving the EU is to escape from the constraints of EU competition rules in order to protect its vital industry, agriculture, and above all its public services.

A major paradox is that the left and the Yellow Vests call for economic and social policies that are impossible under EU rules, and yet many on the left shy away from even thinking of leaving the EU. For over a generation, the French left has made an imaginary "social Europe" the center of its utopian ambitions.

" Europe" as an idea or an ideal, you mean.

Decades of indoctrination in the ideology of "Europe" has instilled the belief that the nation-state is a bad thing of the past. The result is that people raised in the European Union faith tend to regard any suggestion of return to national sovereignty as a fatal step toward fascism. This fear of contagion from "the right" is an obstacle to clear analysis which weakens the left and favors the right, which dares be patriotic.

Two and a half months of coronavirus crisis have brought to light a factor that makes any predictions about future leaders even more problematic. That factor is a widespread distrust and rejection of all established authority. This makes rational political programs extremely difficult, because rejection of one authority implies acceptance of another. For instance, the way to liberate public services and pharmaceuticals from the distortions of the profit motive is nationalization. If you distrust the power of one as much as the other, there is nowhere to go.

Such radical distrust can be explained by two main factors -- the inevitable feeling of helplessness in our technologically advanced world, combined with the deliberate and even transparent lies on the part of mainstream politicians and media. But it sets the stage for the emergence of manipulated saviors or opportunistic charlatans every bit as deceptive as the leaders we already have, or even more so. I hope these irrational tendencies are less pronounced in France than in some other countries.

I'm eager to talk about Russia. There are signs that relations with Russia are another source of European dissatisfaction as "junior partners" within the U.S.–led Atlantic alliance. Macron is outspoken on this point, "junior partners" being his phrase. The Germans -- business people, some senior officials in government -- are quite plainly restive.

Russia is a living part of European history and culture. Its exclusion is totally unnatural and artificial. Brzezinski [the late Zbigniew Brzezinski, the Carter administration's national security adviser] spelled it out in The Great Chessboard : The U.S. maintains world hegemony by keeping the Eurasian landmass divided.

But this policy can be seen to be inherited from the British. It was Churchill who proclaimed -- in fact welcomed -- the Iron Curtain that kept continental Europe divided. In retrospect, the Cold War was basically part of the divide-and-rule strategy, since it persists with greater intensity than ever after its ostensible cause -- the Communist threat -- is long gone.

I hadn't put our current circumstance in this context. US-backed, violent coup in Ukraine, 2014.

The whole Ukrainian operation of 2014 [the U.S.–cultivated coup in Kyiv, February 2014] was lavishly financed and stimulated by the United States in order to create a new conflict with Russia. Joe Biden has been the Deep State's main front man in turning Ukraine into an American satellite, used as a battering ram to weaken Russia and destroy its natural trade and cultural relations with Western Europe.

U.S. sanctions are particularly contrary to German business interests, and NATO's aggressive gestures put Germany on the front lines of an eventual war.

But Germany has been an occupied country -- militarily and politically -- for 75 years, and I suspect that many German political leaders (usually vetted by Washington) have learned to fit their projects into U.S. policies. I think that under the cover of Atlantic loyalty, there are some frustrated imperialists lurking in the German establishment, who think they can use Washington's Russophobia as an instrument to make a comeback as a world military power.

But I also think that the political debate in Germany is overwhelmingly hypocritical, with concrete aims veiled by fake issues such as human rights and, of course, devotion to Israel.

We should remember that the U.S. does not merely use its allies -- its allies, or rather their leaders, figure they are using the U.S. for some purposes of their own.

What about what the French have been saying since the G–7 session in Biarritz two years ago, that Europe should forge its own relations with Russia according to Europe's interests, not America's?

At G7 Summit in Biarritz, France, Aug. 26, 2019. (White House)

I think France is likelier than Germany to break with the U.S.–imposed Russophobia simply because, thanks to de Gaulle, France is not quite as thoroughly under U.S. occupation. Moreover, friendship with Russia is a traditional French balance against German domination -- which is currently being felt and resented.

Stepping back for a broader look, do you think Europe's position on the western flank of the Eurasian landmass will inevitably shape its position with regard not only to Russia but also China? To put this another way, is Europe destined to become an independent pole of power in the course of this century, standing between West and East?

At present, what we have standing between West and East is not Europe but Russia, and what matters is which way Russia leans. Including Russia, Europe might become an independent pole of power. The U.S. is currently doing everything to prevent this. But there is a school of strategic thought in Washington which considers this a mistake, because it pushes Russia into the arms of China. This school is in the ascendant with the campaign to denounce China as responsible for the pandemic. As mentioned, the Atlanticists in Europe are leaping into the anti–China propaganda battle. But they are not displaying any particular affection for Russia, which shows no sign of sacrificing its partnership with China for the unreliable Europeans.

If Russia were allowed to become a friendly bridge between China and Europe, the U.S. would be obliged to abandon its pretensions of world hegemony. But we are far from that peaceful prospect.

Patrick Lawrence, a correspondent abroad for many years, chiefly for the International Herald Tribune , is a columnist, essayist, author and lecturer. His most recent book is "Time No Longer: Americans After the American Century" (Yale). Follow him on Twitter @thefloutist . His web site is Patrick Lawrence . Support his work via his Patreon site .


Josep , May 19, 2020 at 02:04

It recalled and insisted that Germany agreed to the euro only on the grounds that the main mission of the European Central Bank was to fight inflation, and that it could not directly finance member states.

I once read a comment elsewhere saying that, back in 1989, both Britain (under Margaret Thatcher) and the US objected to German reunification. Since they could not stop the reunification, they insisted that Germany accept the incoming euro. A heap of German university professors jumped up and protested, knowing fully well what the game was: namely the creation of a banker's empire in Europe controlled by private bankers.

Thorben Sunkimat , May 20, 2020 at 13:45

France and Britain rejected the german reunification. The americans were supportive, even though they had their demands. Mainly privatisation of german public utilities. After agreeing to those demands the americans persuaded the british and pressured the french who agreed to german reunification after germany agreed to the euro.

So why did france want the euro?

The German central bank crashed the European economy after reunification with high interest rates. This was because of above average growth rates mainly in Eastern Germany. Main function of the Bundesbank is to keep inflation low, which is more important to them than anything else. Since Germany's D Mark was the leading currency in Europe the rest of Europe had to heighten their interest rates too, witch lead to great economic problems within Europe. Including France.

OlyaPola , May 21, 2020 at 05:30

"namely the creation of a banker's empire in Europe controlled by private bankers."

Resort to binaries (controlled/not controlled) is a practice of self-imposed blindness. In any interactive system no absolutes exist only analogues of varying assays since "control" is limited and variable. In respect of what became the German Empire this relationship predated and facilitated the German Empire through financing the war with Denmark in 1864 courtesy of the arrangements between Mr. von Bismark and Mr. Bleichroder. The assay of "control of bankers" has varied/increased subsequently but never attained the absolute.

It is true that finance capital perceived and continues to perceive the European Union as an opportunity to increase their assay of "control" – the Austrian banks in conjunction with German bank assigning a level of priority to resurrecting spheres of influence existing prior to 1918 and until 1945.

One of the joint projects at a level of planning in the early 1990's was development of the Danube and its hinterland from Regensburg to Cerna Voda/Constanta in Romania but this was delayed in the hope of curtailment by some when NATO bombed Serbia in 1999 (Serbia not being the only target – so much for honesty-amongst-theives.)

This project was resurrected in a limited form primarily downstream from Vidin/Calafat from 2015 onwards given that some states of the former Yugoslavia were not members of the European Union and some were within spheres of influence of "The United States of America".

As to France, "Vichy" and Europa also facilitated the resurrection of finance capital and increase in its assay of control after the 1930's, some of the practices of the 1940's still being subject to dispute in France.

mkb29 , May 18, 2020 at 16:33

I've always admired Diana Johnstone's clear headed analyses of world/European/U.S./ China/Israel-Palestine/Russia/ interactions and the motivation of its "players". She has given some credence to what as been known as French rationalism and enlightenment. (Albeit as an American expat) Think Descartes, Diderot, Sartre , and She loves France in her own rationalist-humanist way.

Linda J , May 18, 2020 at 13:21

I have admired Ms. Johnstone's work for quite awhile. This enlightening interview spurs me to get a copy of the book and to contribute to Consortium News.

Others may be interested in the two-part video discovered yesterday featuring Douglas Valentine's analysis of the CIA's corporate backers and their global choke-hold on governments and their influencers in every region of the world.

Part 1
see:youtu(dot)be/cP15Ehx1yvI

Part 2
see:youtu(dot)be/IYvvEn_N1sE

worldblee , May 18, 2020 at 12:26

Not many have the long distance perspective on the world, let alone Europe, that Diana Johnstone has. Great interview!

Drew Hunkins , May 18, 2020 at 11:03

"Decades of indoctrination in the ideology of "Europe" has instilled the belief that the nation-state is a bad thing of the past. The result is that people raised in the European Union faith tend to regard any suggestion of return to national sovereignty as a fatal step toward fascism. This fear of contagion from "the right" is an obstacle to clear analysis which weakens the left and favors the right, which dares be patriotic."

Bingo! A marvelous point indeed! Quick little example -- Bernard Sanders should have worn an American flag pin on his suit during the 2020 Dem primary campaign.

chris , May 18, 2020 at 04:46

A very good analysis. As an American who has relocated to Spain several years ago, I am always disappointed that discussions of European politics always assume that Europe ends at the Pyrenees. Admittedly, Spanish politics is very complicated and confusing. Forty years of an unreconstructed dictatorship have left their mark, but the country´s socialist, communist and anarchic currents never went away. I like to say that the country is very conservative, but at least the population is aware of what is going on.

Perhaps what Ms. Johnston says about the French being just worn out, with no stomach for more violent conflict also applies to the Spanish since their great ideological struggle is more recent. The American influence during the Transition (which changed little – as the expression goes: The same dog but with a different collar) was very strong, and remains so. Even so, there is popular support for foreign and domestic policies independent of American and neoliberal control, but by and large the political and economic powers are not on board. I do not think Spain is willing to make a break alone, but would align itself with an European shift away from American control.

As Ms. Johnston says, Europe currently lacks leaders willing to take the plunge, but we will see what the coming year brings.

Sam F , May 17, 2020 at 17:45

Thank you Diana, these are valuable insights. Since WWII the US has itself been occupied by tyrants, using Russophobia to demand power as fake defenders.

1. Waving the flag and praising the lord on mass media, claiming concern with human rights and "Israel"; while
2. Subverting the Constitution with large scale bribery, surveillance, and genocides, all business as usual nowadays.
In the US, the form of government has become bribery and marketing lies; it truly knows no other way.

It may be better that Russia and China keep their distance from the US and maybe even the EU:
1. The US and EU would have to produce what they consume, eventually empowering workers;
2. Neither the US nor EU are a political or economic model for anyone, and should be ignored;
3. Neither the US nor EU produces much that Russia and China cannot, by investing more in cars and soybeans.

It will be best for the EU if it also rejects the US and its "neolib" economic and political tyranny mechanisms:
1. Alliance with Russia and China will cause substantial gains in stability and economic strength;
2. Forcing the US to abandon its "pretensions of world hegemony" will soon yield more peaceful prospects; and
3. Isolating the US will force it to improve its utterly corrupt government and society, maybe 40 to 60 years hence.

Drew Hunkins , May 17, 2020 at 15:40

" French philosophy .By constantly attacking, deconstructing, and denouncing every remnant of human "power" they could spot, the intellectual rebels left the power of "the markets" unimpeded, and did nothing to stand in the way of the expansion of U.S. military power all around the world "

Brilliant. Exactly right. This was the progenitor to our contemporary I.D. politics which seems to be solely obsessed with vocabulary, semantics and non-economic cultural issues while rarely having a critique of corporate capitalism, militarism, massive inequality and Zionism. And it almost never advocates for robust economic populist proposals like Med4All, U.B.I., debt jubilee, and the fight for $15.

Drew Hunkins , May 17, 2020 at 15:10

The book is phenomenal. I posted a customer review over on Amazon for this stupendous work. Below is a copy of my review:

(5 stars) One of the most important intellects pens her magisterial lasting legacy
Reviewed in the United States on March 31, 2020

Johnstone's been an idol of mine ever since I started reading her in the 1990s. She's clearly proved her worthiness over the decades by bucking the mainstream trend of apologetics for corporate capitalism, neoliberalism, globalism and imperialistic militarism her entire career and this astonishing memoir details it all in what will likely be the finest book of 2020 and perhaps the entire decade.

Her writing style is beyond superb, her grasp of the overarching politico-socio-economic issues that have rocked the world over the past 60 years is as astute and spot-on as you will find from any global thinker. She's right up there with Michael Parenti, James Petras, John Pilger and Noam Chomsky as seminal figures who have documented and brought light to tens of thousands (millions?) of people across the globe via their writings, interviews and speaking engagements.

Johnstone has never been one to shy away from controversial topics and issues. Why? Simple, she has the facts and truth on her side, she always has. Circle in the Darkness proves all this and more, she marshals the documentation and lays it out as an exquisite gift for struggling working people around the world.

From her groundbreaking work on the NATO empire's sickening war on sovereign Serbia, the dead end of identity politics and trans bathroom debates, to her critique of unfettered immigration and open borders, and her dismissal of the absurd Russsiagate baloney, better than anyone else, Johnstone has kept her intellect carefully honed to the real genuine kitchen table bread and butter issues that truly matter. She recognized before most of the world's scholars the perils of rampant inequality and saw the writing on the wall as to where this grotesque economic system is taking us all: down a dystopian slope into penury and police-state heavy-handedness, with millions unable to come up with $500 for an emergency car repair or dental bill.

Whenever she comes out with a new article or essay I immediately drop everything and devour it, often reading it twice to let her wisdom really soak in. So too Circle of Darkness is an extremely well written beautiful work that will scream out to be re-read every few years by those with a hunger to know exactly what was going on since the Korean War era through today regarding liberal thought, neocon and neoliberal dominance with its capitalist global hegemony and the take over of Western governments by the parasitic financial elite.

There will never be another Diana Johnstone. Circle in the Darkness will stand as her lasting legacy to all of us.

Bob Van Noy , May 17, 2020 at 14:43

"As our circle of knowledge expands, so does the circumference of darkness surrounding it" ~Albert Einstein

Many Thanks CN, Patrick Lawrence, and Joe Lauria. Once again I must commend CN for picking just the appropriate response to our contemporary dilemma.

The quote above leads Diana Johnstone's new book and succinctly describes both the universe and our contemporary experience with our digital age. President Kennedy and Charles de Gaulle of France would agree that colonialism was past and that a new world (geopolitical) approach would become necessary, but that philosophy would put them against some great local and world powers. Each of them necessarily had different approaches as to how this might be accomplished. They were never allowed to present their specific proposals on a world stage. Let's hope a wiser population will once again "see" this possibility and find a way to resolve it

Aaron , May 17, 2020 at 14:18

Well over the span of all of those decades, the consistent, inexorable theme seems to be a trend of the rich getting richer and the poor getting poorer, a small number of individuals, not really states, gaining wealth and power, so everybody else fights over the crumbs, blaming this or that party, alliance, event or whatever, but behind it all there are two flower gardens, indeed the rich are all flowers of their golden garden, and the poor are all flowers of their garden.

It's like the Europeans and the 99 percent in America have all fallen for the myth of the American dream, that if we are just allowed more free, unfettered economic opportunity, it's just up to us to pick ourselves up by the bootstraps and become a billionaire.

The mask competition and fiasco shows the importance of a country simply making things in their own country, not on the other side of the world, it's not nationalism it's just a better way to logistically deliver reliable products to the citizens.

AnneR , May 17, 2020 at 13:42

Regarding French colonialism – as I recall the French were especially brutal in their forced withdrawal from Algeria, both toward Algerians in their homeland and to Algerians within France itself.

And the French were hardly willing, non-violent colonialists when being fought by the Vietnamese who wanted to be free of them (quite rightly so).

As for the French in Sub-Saharan Africa – they have yet to truly give up on their presumed right to have troops within these countries. They did not depart any of their colonies happily, willingly – like every other colonial power, including the UK.

And, as for WWII – she seems, in her reminiscences, to have mislaid Vichy France, the Velodrome roundups of French Jews, and so on ..

Ms Johnstone clearly has been looking backwards with rose-tinted specs on when it comes to France.

Randal Marlin , May 18, 2020 at 13:00

There may be some truth to AnneR's claim that Ms Johnstone has been looking with rose-tinted specs when it comes to France, but it is highly misleading for her to talk about "the French" regarding Algeria. I spent 1963-64 in Aix-en-Provence teaching at the Institute for American Universities and talked with some of the "pieds-noirs," (French born in Algeria).

After French President Charles de Gaulle decided to relinquish French control over Algeria, having previously reassured the colonial population that "Je vous ai compris" ("I have understood you"), there followed death threats to many French colonizers who had to flee Algeria immediately within 24 hours or get their throats slit – "La valise ou le cercueil" (the suitcase or the coffin).

In the fall of 1961, I saw Parisian police stations with machine-gun armed men behind concrete barriers, as an invasion by the colonial French paratroopers against mainland France was expected. The "Organisation Armée Secrète," OAS, (Secret Armed Organization) of the colonial powers, threatened at the time to invade Paris.

As an aside, giving a sense of the anger and passion involved, when the death of John F.Kennedy in November 1963 was announced in the historic, right-wing café in Aix, Les Deux Garçons, a huge cheer went up when the media announcer proclaimed "Le Président est assassinée. Only, that was because they thought de Gaulle was the president in question. A huge disappointment when they heard it was President Kennedy. To get a sense of the whole situation regarding France and Algeria I recommend Alistair Horne's "A Savage War of Peace."

OlyaPola , May 19, 2020 at 11:23

"They did not depart any of their colonies happily"

Some hold that they never departed, but mutated tools including CFA zones and "intelligence" relations in furtherance of "changing" to remain qualitatively the same. Just as "The United States of America" is a system of coercive relations not synonymous with the political geographical area designated "The United States of America", the colonialism of former and present "colonial powers" continues to exist, since the "independence" of the colonised was always, and continues to be, framed within linear systems of coercive relations, facilitated by the complicity of "local elites" on the basis of perceived self-interest, and the acquiescence of "local others" for myriad reasons.

Despite the "best" efforts of the opponents and partly in consequence of the opponents' complicity, the PRC and the Russian Federation like "The United States of America" are not synonymous with the political geographical areas designated as "The People's Republic of China and The Russian Federation", are in lateral process of transcending linear systems of coercive relations and hence pose existential threats to "The United States of America".

The opponents are not complete fools but the drowning tend to act precipitously including flailing out whilst drowning; encouraging some to dispense with rose- tinted glasses, despite such accessories being quite fashionable and fetching.

OlyaPola , May 20, 2020 at 04:32

" .. their colonies "

Perception of and practice of social relations are not wholly synonymous. A construct whose founding myths included liberty, egality and fraternity – property being discarded at the last moment since it was judged too provocative – experienced/experiences ideological/perceptual oxymorons in regard to its colonial relations, which were addressed in part by rendering their "colonies" department of France thereby facilitating increased perceptual dissonance.

Like many, Randal Marlin draws attention below to the perceptions and practices of the pied-noir, but omits to address the perceptions and practices of the harkis whom were also immersed in the proselytised notion of departmental France, and to some degree continue to be.

This understanding continues to inform the practices and problems of the French state.

Lolita , May 17, 2020 at 12:05

The analysis is very much inspired from "Comprendre l'Empire" by Alain Soral.

Dave , May 17, 2020 at 11:27

Do not fail to read this interview in its entirety. Ms Johnstone analyzes and describes many issues of national and global importance from the perspective of an USA expat who has spent most of her career in the pursuit of what may be termed disinterested journalism. Whether one agrees or disagrees in whole or in part the perspectives she presents, particularly those which pertain to the demise (hopefully) of the American Empire are worthy of perusal.

Remember that this is not a polemic; it's a memoir of a lifetime devoted to reporting and analyzing and discussion of most of the significant issues confronting global and national politics and their social ramifications. And a big thanks to Patrick Lawrence and Consortium News for posting the interview.

PEG , May 17, 2020 at 09:11

Diana Johnstone is one of the most intelligent, clear-minded and honest observers of international politics today, and her book "Circle in the Darkness" – which expands on the topics and insights touched on in this interview – is certainly among the best and most compelling books I have ever read, putting the events of the last 75 years into objective context and focus (normally something which only historians can do, if at all, generations after the fact).

After reading Circle in the Darkness, I have ordered and am now reading her books on Hillary Clinton (Queen of Chaos) and the Yugoslav wars (Fool's Crusade), which are very worthwhile and important. I would recommend that her many articles over the years, appearing in such publications such as In These Times, Counterpunch and Consortium News, be reprinted and published together as an anthology. Through Circle in the Darkness, we have Diana Johnstone's "Life", but it would be good also to have her "Letters".

Herman , May 17, 2020 at 09:00

Interesting comparison between the aspirations of De Gaulle and Putin.

"Having a sense of history, de Gaulle saw that colonialism had been a moment in history that was past. His policy was to foster friendly relations on equal terms with all parts of the world, regardless of ideological differences. I think that Putin's concept of a multipolar world is similar. It is clearly a concept that horrifies the exceptionalists."

Agree with Johnstone.

OlyaPola , May 19, 2020 at 11:55

"Having a sense of history, de Gaulle saw that colonialism had been a moment in history that was past. "

Mr. de Gaulle like other "leaders" of colonial powers did understand that the moment of overt coercive relations of colonialism had passed and that colonialism to remain qualitatively the same, required covert coercive relations facilitated by the complicity of local "elites" on the basis of perceived self-interest.

The exceptions to such strategies lay within constructs of settler colonialism which were addressed primarily through warfare – "The United States of America", Vietnam/Laos/Cambodia, Indonesia, Algeria, Kenya, Rhodesia, Mozambique, Angola refer – to facilitate such future strategies.

"I think that Putin's concept of a multipolar world is similar."

As outlined elsewhere the concept of a multi-polar world is not synonymous with the concept of colonialism except for the colonialists who consistently seek to encourage such conflation through myths of we-are-all-in-this-togetherness.

[May 21, 2020] The Collapse Will Be Very Visible For Lease And Space Available Signs Are Going Up All Across America

May 21, 2020 | www.zerohedge.com

The Collapse Will Be Very Visible: "For Lease" And "Space Available" Signs Are Going Up All Across America by Tyler Durden Thu, 05/21/2020 - 14:50 Authored by Michael Snyder via TheMostImportantNews.com,

Initially, we were told that the coronavirus lockdowns would just "temporarily" disrupt the U.S. economy, but now it is becoming clear that a lot of the damage will be permanent.

We are starting to see businesses go belly up all over the country, and this includes some of the most iconic names in the retail world. When J.C. Penney announced that it would be declaring bankruptcy and closing hundreds of stores , I warned that would just be the tip of the iceberg , and that has definitely turned out to be the case. In fact, on Wednesday many analysts were absolutely shocked when news broke that Victoria's Secret has decided to shut down about 250 stores

Victoria's Secret plans to permanently close approximately 250 stores in the U.S. and Canada in 2020, its parent company L Brands announced Wednesday.

L Brands also plans to permanently close 50 Bath & Body Works stores in the U.S. and one in Canada, according to information the company posted online as part of its quarterly earnings.

If this pandemic had passed quickly, perhaps those stores wouldn't have needed to be shut down. But at this point it has become obvious that this virus is going to be with us for a long time to come. In fact, the WHO just announced that on a global basis we just witnessed the largest number of newly confirmed cases on a single day so far.

Another major retailer that is closing down stores is Pier 1 Imports. In fact, it is being reported that not a single one of their locations will survive

Pier 1 Imports, which previously said it would close half of its fleet of stores, now plans to close all of its locations.

The retailer, based in Fort Worth, Texas, announced in a news release Tuesday that it was seeking bankruptcy court approval to begin an "orderly wind-down" when stores are able to reopen "following the government-mandated closures during the COVID-19 pandemic."

I was never a huge fan of Pier 1 Imports, but my wife liked to visit and see what they had, but now we will never be able to do that again.

Something about that really saddens me.

Of course it isn't just retailers that are collapsing. Car rental giant Hertz "is on the verge of bankrutpcy" , and things are not looking good at all

Hertz is on the verge of bankruptcy. At the end of April, it disclosed it had missed a large amount of lease payments on its rental cars. Since then, it has entered into forbearance and waiver agreements with these lenders that give it until May 22 to come up with the money and a plan. Its cars, now parked at various parking lots around the country, are collateral for this debt.

Some of you old timers might remember the old Hertz commercials featuring O.J. Simpson . Those were much simpler times, and to be honest I really miss them.

Unfortunately, times have really changed, and I seriously doubt that Hertz will be able to survive much longer in this very harsh economic environment.

Needless to say, a lot of businesses are going to die in the weeks and months ahead of us. As I discussed the other day , it is now being projected that approximately one out of every four restaurants in the United States will be closing down permanently.

Can you imagine what this is going to look like?

We are going to have abandoned buildings all over the place, and this will especially be true in our more impoverished communities.

The only chance we have of pulling out of this economic death spiral is if there is a full scale return to normal economic activity all across America, but that isn't going to happen any time soon.

Fear of COVID-19 is going to paralyze small and big businesses alike for the foreseeable future, and every new outbreak is going to spark more overreactions.

For instance, Ford just shut down two major production facilities just a few days after "reopening" them

Just days after reopening its American assembly plants, Ford temporarily shut down two separate factories because employees tested positive for Covid-19.

One plant in Chicago that builds the Ford Explorer, the Lincoln Aviator and the Ford Interceptor police car stopped operations Tuesday afternoon after two employees tested positive for Covid-19. Then, Ford's plant in Dearborn Michigan that makes its bestselling F-150 pickup, shut down Wednesday.

If we keep shutting things down every time someone gets sick, our economic problems are just going to get worse and worse.

Look, the truth is that lots more people are going to get sick and lots more people are going to die. In fact, one new study has concluded that the U.S. death toll will more than triple by the end of 2020 "even if current social distancing habits continue for months on end"

A new study suggests the number of Americans who will die after contracting the novel coronavirus is likely to more than triple by the end of the year, even if current social distancing habits continue for months on end.

The study, conducted by the Comparative Health Outcomes, Policy and Economics Institute at the University of Washington's School of Pharmacy, found that 1.3 percent of those who show symptoms of COVID-19 die, an infection fatality rate that is 13 times higher than a bad influenza season.

Of course it certainly doesn't help that we continue to allow people from other countries where COVID-19 is raging to fly into the U.S. without any special screening whatsoever

A glamorous Russian blogger says she has proved that the US is open for foreign tourism again, despite the pandemic, according to video obtained by DailyMail.com .

Sofia Semyonova, 33, a fitness model, told how she traveled on a crammed Aeroflot flight with 500-plus passengers with 'no social distancing' from Moscow to New York City.

She used her B2 tourist visa to enter America from Russia's coronavirus epicentre 'in 30 seconds without any extra questions'.

I don't know how this could possibly be happening, but apparently it is.

Eventually, COVID-19 will literally be just about everywhere, and almost everyone in the entire country will be exposed to it.

And fear of this virus will paralyze our economy for the foreseeable future.

So the truth is that the "for lease" and "space available" signs that you are now seeing are just the start.

A lot more are coming, and it is going to be a very dark chapter for our nation.

[May 20, 2020] Due to Coronavirus the Grim Reaper was deprived of his seasonally adjusted mortality quota missing 21K in 12 weeks by David Stockman

Highly recommended!
Apr 28, 2020 | ronpaulinstitute.org

According to the CDC's long established mortality models, 687,000 Americans were supposed to die during the 12 weeks between February 1 and April 18.

But only 666,000 actually complied. So the Grim Reaper was deprived of his seasonally adjusted mortality quota, even as 21,000 families were spared, at least temporarily, of the loss and grief which accompanies the passing of a loved one.

Either way, how in the hell does that square with Lockdown Nation -- an unprecedented government ordered economic heart attack purportedly designed to prevent a Black Plague of illness and death?

To be sure, a better than garden variety recession was already due after a record 129- month long business expansion. But it was the sudden, virulent eruption of the Covid Death Hysteria in the halls of government that turned a scheduled business cycle contraction into a monumental catastrophe.

[May 20, 2020] This Is Despotism, Plain Simple - Of Power-Drunk Politicians Sociopathic Oligarchs

Notable quotes:
"... Yes it took parasites, sociopathic oligarchs and a power drunk national security state to bring us to our current state of affairs, but it also took the rest of us. For far too long we as a people have been apathetic, hoodwinked spectators to the life unfolding around us. Voting for "the lesser of two evils" for decade upon decade thinking it might be different this time. Putting up with the economic game that's been put in front of us, despite the fact that it demonstrably and systematically rewards and incentivizes predatory and destructive behavior. As a people, we have been superficial, indifferent and gleefully ignorant of reality. It's time to change all that. ..."
"... I think one reason mass media puts so much emphasis on voting at the national level is the owners of these propaganda channels know voting will change absolutely nothing. The oligarchy and national security state are fully in charge, and they're not going to allow the pesky rabble to get in the way of such a lucrative racket by voting. Getting those who are politically inclined to spend all their time and energy on a rigged and completely corrupt phantom democracy in D.C. is a great way to keep them busy with nonsense. It's also a perfect way to demoralize that portion of the population which understands it's just theater. If you can be convinced that voting at the national level is the only way to change things, you're much more likely to recede into apathy and become intentionally disengaged. This happens to a lot of people, but it's a big mistake. ..."
May 19, 2020 | www.zerohedge.com
Authored by Mike Krieger via Liberty Blitzkrieg blog, It's Time To Step Into The Arena

There's a passage in Teddy Roosevelt's famous 1910 "Citizenship in a Republic" speech I want to share with you today:

If a man's efficiency is not guided and regulated by a moral sense, then the more efficient he is the worse he is, the more dangerous to the body politic. Courage, intellect, all the masterful qualities, serve but to make a man more evil if they are merely used for that man's own advancement, with brutal indifference to the rights of others. It speaks ill for the community if the community worships those qualities and treats their possessors as heroes regardless of whether the qualities are used rightly or wrongly. It makes no difference as to the precise way in which this sinister efficiency is shown. It makes no difference whether such a man's force and ability betray themselves in a career of money-maker or politician, soldier or orator, journalist or popular leader. If the man works for evil, then the more successful he is the more he should be despised and condemned by all upright and far-seeing men. To judge a man merely by success is an abhorrent wrong; and if the people at large habitually so judge men, if they grow to condone wickedness because the wicked man triumphs, they show their inability to understand that in the last analysis free institutions rest upon the character of citizenship, and that by such admiration of evil they prove themselves unfit for liberty.

The above words strike me as a perfect description of the deep hole we find ourselves in presently throughout these United States of America. It takes a whole nation to screw things up as badly as we have, and boy have we ever.

Yes it took parasites, sociopathic oligarchs and a power drunk national security state to bring us to our current state of affairs, but it also took the rest of us. For far too long we as a people have been apathetic, hoodwinked spectators to the life unfolding around us. Voting for "the lesser of two evils" for decade upon decade thinking it might be different this time. Putting up with the economic game that's been put in front of us, despite the fact that it demonstrably and systematically rewards and incentivizes predatory and destructive behavior. As a people, we have been superficial, indifferent and gleefully ignorant of reality. It's time to change all that.

You can consider today's post a rallying cry to step into the arena. Stepping into the arena is often portrayed as becoming involved in national politics or some other large platform action, but I see it differently. If you think the only way to have a real impact is by voting or running for Congress, you're likely to give up and remain passive. The truth is your entire life can be repurposed to be an expression of increased kindness, wisdom and strength. It's the most impactful long-term action most of us can have on this earth, and anyone can do it.

Change yourself before trying to change the world. If enough people did this the world would change without you even trying.

-- Michael Krieger (@LibertyBlitz) May 15, 2020

I think what keeps a lot of people on the sidelines of a conscious life is an inability to intimately process the above. Many people discount the little things, the countless actions of daily existence that impact those around you and cumulatively make you who you are.

I think one reason mass media puts so much emphasis on voting at the national level is the owners of these propaganda channels know voting will change absolutely nothing. The oligarchy and national security state are fully in charge, and they're not going to allow the pesky rabble to get in the way of such a lucrative racket by voting. Getting those who are politically inclined to spend all their time and energy on a rigged and completely corrupt phantom democracy in D.C. is a great way to keep them busy with nonsense. It's also a perfect way to demoralize that portion of the population which understands it's just theater. If you can be convinced that voting at the national level is the only way to change things, you're much more likely to recede into apathy and become intentionally disengaged. This happens to a lot of people, but it's a big mistake.

When I look back at my life thus far, it was during my decade on Wall Street when I was the most ignorant and superficial . So focused on stroking my ego, making a bunch of money and career advancement, I lost a lot of who I am at my core during that time. I often wonder if that's the case for a lot of people who achieve conventional success within the current paradigm. It's fortunate I removed myself from that situation and began thinking more deeply about who I am and what really matters.

Stepping up and getting into the arena will mean something different for each of us, but the one word that keeps popping into my head is resilience. There are several clear ways to become more resilient. There's mental and emotional resiliency, there's financial resiliency and there's physical resiliency (where and how you live). I see all three as fundamentally important and functioning best when working together. Resiliency starts at the most basic level because if you and your family aren't resilient, then you won't be much use to anyone else. If the people of a community or nation lack resiliency it provides the perfect space for authoritarianism and evil to manifest and flourish.

Case in point, see the following comments by Alan Dershowitz during a recent interview.

"You have no right not to be vaccinated, you have no right not to wear a mask... If you refuse to be vaccinated the state has the right to take you to a dr's office & plunge a needle in your arm." @AlanDersh take on vaccines & masks is vile & un-American. pic.twitter.com/j2C1Rk3d7h

-- Robby Starbuck (@robbystarbuck) May 18, 2020

This is despotism plain and simple, and it's being expressed by a guy who still has considerable influence despite his many Jeffrey Epstein related controversies. It's going to take a resilient, courageous and ethical public to stand up to scoundrels like this and just say NO. No, you will not grab me, drag me off somewhere and inject something into my body without my consent. We've been passive spectators in the destruction of our society for far too long. It's time to both say no and to create something better.

When I walked away from New York City and Wall Street ten years ago it was clear what sort of trajectory the country was on, and it's only gotten worse since. We're now in the crucial period spanning 2020-2025 that will decide what the next several decades look like. The big battle for the future is here. Right now. If there's ever been a time in your life to step up, this is it.

* * *

Liberty Blitzkrieg is an ad-free website. If you enjoyed this post and my work in general, visit the Support Page where you can donate and contribute to my efforts.

[May 20, 2020] Our government and much of our industry, especially defense and fintec, appear to be incapable of maneuver. They're justself-seeking individuals with no loyalty to each other, their clients, citizenry, or their country.

May 20, 2020 | www.unz.com

Godfree Roberts , says: Show Comment May 8, 2020 at 12:43 am GMT

@Harold Smith There is an innocuous military term, incapable of maneuver , to describe an army which is nothing more than a group of people in uniforms. They look like an army but, when things go bad, they prove incapable of responding in a disciplined, purposive manner. Arab armies come to mind.

Our government and much of our industry, especially defense and fintec, appear to be incapable of maneuver. They're justself-seeking individuals with no loyalty to each other, their clients, citizenry, or their country.

If we don't want to suffer an interim dystopia, we need to start work on a new constitution because the old one is worn out and we're going over a cliff.

I keep harping on China because they read our Constitution and foundation documents and, in 1950, drafted a 20th century constitution which is well worth reading. They've convened every 10 years since then and amended it to keep it current. For them, the constitution is a living document, not a totem, and they take it very seriously.

[May 19, 2020] White House Vaccine Czar Sells $12 Million Slug Of Moderna Options For Massive Profit

May 19, 2020 | www.zerohedge.com

Last night, as dozens of biotech companies rushed to issue stock following the massive spike in Moderna shares on some extremely preliminary trial results inspired the biggest short-squeeze in US equities since the beginning of May, we warned that Moderna shareholders might be in for a bruising "bait-and-switch" as reports about insider share sales emerged, and Moderna, along with dozens of other biotech companies the company, seized on the demand to issue more shares.

But it's not only Moderna's billionaire founder/CEO Stephane Bancel - once compared to a post-scandal Elizabeth Holmes - who stands to profit from the action: the White House's new vaccine czar also holds - or rather, held - more than 150,000 options contracts on Moderna shares worht more than $12 million, and had resisted pressure to divest them despite the blatant conflict of interest. We were joking yesterday when we speculated that he would probably be glad to exercise these options at current prices. But just as every joke contains a nugget of truth, that one turned out to be prophetic, too.

[May 19, 2020] The pretence that US and Europe have competent and resilient neoliberal political and economic structures is fake

May 19, 2020 | www.moonofalabama.org

karlof1 , May 18 2020 17:14 utc | 36

Alastair Crooke's in fine form today bringing Jung, Euripides, the Outlaw US Empire's Culture Wars, and Zionist Imperialism together to illustrate "Our Civilisational Quagmire" and the imperative of "Looking Truth in the Eye." But all that's initially hidden as he begins by intoning:

"First, the bottom line: If you don't solve the biology, the economy won't recover."

A Truth far too many mostly in the West don't seem capable of grasping:

"But the biology is not solved, and the tension of trying to point in opposite directions simultaneously is igniting a separate, raging political brushfire....

"The pretence that the U.S. and the global economy is about to snap back, as soon as virus mitigation is lifted; the pretence that Covid-19 is either a fake (just another 'flu); or, is 'over'; the pretence that U.S. and Europe have competent and resilient political and economic structures – and the pretence that once Covid is over, we will all return to a world, just as it was?"

I wrote awhile ago that the pandemic provided an opportunity to use an analytical tool known as the Franklin Reality Model to see the values and beliefs held by differing nations and their cultures and ideologies as it exposes them so graphically they cannot be hidden by any amount of spin or propaganda. The revelations provided my empirical basis for judging Trump's response specifically and the West's generally to be one of complete Moral Failure. And not just Trump, but Pelosi, Biden and the vast majority of Democrats, too--their shared Neoliberal ideology's Immoral basis and Parasitic nature being one of the main roots of the problem.


karlof1 , May 18 2020 17:29 utc | 39

Thomas Briggs @35--

I suggest you read this Atlantic article , "We Are Living in a Failed State: The coronavirus didn't break America. It revealed what was already broken." And either before or during, take a gander at this Real GDP graph that still understates the genuine amount of GDP shrinkage since parasitic financial "gains" are added to GDP instead of subtracted as a cost to the real economy. Essentially since GHW Bush's recession, the real economy of the Outlaw US Empire's shrunk about 1.5% annually or @45% overall with the vast majority of economic gains accruing to the top 10%. That grim reality is the #1 reason why Trump won in 2016, and why he stands a very good chance of losing in 2020--"It's the economy, stupid."

Nancy E. Sutton , May 18 2020 17:42 utc | 40
Re: Karl, did the 'West' (Anglo-Zionist world) buy (or actually promote) the 80's 'Greed is Good' line, and ignore what Greenspan supposedly learned..."I have found a flaw...I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms."

Even the average American might be able to see that 'socialism' (i.e., Social Security, et al) is better than 'trickle down'... to put it in simple terms. Neo-liberalism appears to be killing many of us right now. The problem, seems to me, is how to turn the light bulb on for Amerian non-voters... obviously Bernie would have 'had a heart attack' if he'd gotten the nomination.

[May 19, 2020] Will coronavirus fasten the end of "shareholde vlue" mantra?

May 19, 2020 | www.moonofalabama.org

Nancy E. Sutton , May 18 2020 17:42 utc | 40

Re: Karl, did the 'West' (Anglo-Zionist world) buy (or actually promote) the 80's 'Greed is Good' line, and ignore what Greenspan supposedly learned..."I have found a flaw...I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms."

Even the average American might be able to see that 'socialism' (i.e., Social Security, et al) is better than 'trickle down'... to put it in simple terms. Neo-liberalism appears to be killing many of us right now. The problem, seems to me, is how to turn the light bulb on for Amerian non-voters... obviously Bernie would have 'had a heart attack' if he'd gotten the nomination.

karlof1 , May 18 2020 18:38 utc | 54

Nancy E. Sutton @40--

Greenspan issued his belated and stupendously weak mea culpa long after the horse left the corral and had galloped several time around the planet. One vital component was already deeply emplaced prior to his tenure that allowed those entities to "protect" themselves--Regulatory Capture. Recall "Banking Crises" began to become regular occurrences during Reagan/Bush. One of Hudson's great contributions is looking into how political-economic theory was captured and transformed into just economic theory, which he castigates as "Junk Economics" in his book of that title. At his website, there're numerous essays that deal with that topic; out of the several dozen I might link to is this one from 2011 . Discovering how we were manipulated into the Neoliberal religion must be understood if we are to get out from under its boot, which is a tall task since millions must become informed, and the Neoliberals control the media. You asked How. My answer is for us to become informed such that we can inform others, which is why Hudson's written an excellent series of books that make it all easy to comprehend and transmit--I taught introductory college economics and know Hudson's works are vastly superior to the texts we used. The two pertinent books for debunking Neoliberalism are Killing the Host and J is for Junk Economics . For the overall historical perspective, his trilogy that begins with and forgive them their debts will be a must, the second book he says will be ready for publication by New Years.

[May 19, 2020] Accoding to sharo goverment statisitcs site, since GHW Bush's recession, the real economy of the US Empire's shrunk

May 19, 2020 | www.moonofalabama.org

karlof1 , May 18 2020 17:29 utc | 39

I suggest you read this Atlantic article , "We Are Living in a Failed State: The coronavirus didn't break America. It revealed what was already broken."

And either before or during, take a gander at this Real GDP graph that still understates the genuine amount of GDP shrinkage since parasitic financial "gains" are added to GDP instead of subtracted as a cost to the real economy.

Essentially since GHW Bush's recession, the real economy of the Outlaw US Empire's shrunk about 1.5% annually or @45% overall with the vast majority of economic gains accruing to the top 10%. That grim reality is the #1 reason why Trump won in 2016, and why he stands a very good chance of losing in 2020--"It's the economy, stupid."

[May 18, 2020] Donald Trump says Americans won't stand for stay-at-home orders anymore

May 18, 2020 | www.washingtontimes.com

me name=

President Trump said Wednesday the coronavirus crisis is worse than the 9/11 terrorist attacks, and Americans won't allow it to go on any longer.

"I don't think people will stand for it," Mr. Trump told reporters in the Oval Office. "The country won't stand for it. It's not sustainable."

He said the pandemic "is worse than Pearl Harbor."

...Asked about soaring unemployment being a potential liability for him in an election year, the president replied, "Nobody's blaming me for that. I built the greatest economy and I'm going to rebuild it again. This was an artificially induced unemployment."

[May 17, 2020] US Coronavirus Bailout Scam is $6 Trillion Giveaway to Wall Street by Michael Hudson

May 17, 2020 | www.unz.com

US Coronavirus "Bailout" Scam Is $6 Trillion Giveaway to Wall Street Michael Hudson April 21, 2020 6,800 Words 73 Comments Reply

Facing the Covid-19 pandemic, the US Congress rammed through the CARES Act -- which economist Michael Hudson explains is not a "bailout" but a massive, $6 trillion giveaway to Wall Street, banks, large corporations, and stockholders.

Max Blumenthal and Ben Norton discuss the enormous financial scam with Hudson, who reveals how the economy actually works, with the Federal Reserve printing money so rich elites don't lose their investments.

Michael Hudson's website: michael-hudson.com

Michael Hudson, " A debt jubilee is the only way to avoid a depression ," The Washington Post, March 21, 2020

https://www.youtube.com/embed/N-8m5fBbLgQ?feature=oembed

Transcript

(Teaser – 0:03)

MICHAEL HUDSON: Just think of when, in the debates with Bernie Sanders during the spring, Biden and Klobuchar kept saying, 'What we're paying for Medicare-for-All will be $1 trillion over 10 years.' Well, here the Fed can create $1.5 trillion in one week just to buy stocks.

Why is it okay for the Fed to create $1.5 trillion to buy stocks to prevent rich people from losing on their stocks, when it's not okay to print only $1 trillion to pay for free Medicare for the entire population? This is crazy!

The idea is that only the rich should be allowed to print money for themselves, but the government should not be allowed to print money for any public purpose, any social purpose -- not for medicine, not for schools, not for personal budgets, not for full employment -- but only to give to the 1 percent.

People hesitate to think that. They think, 'It can't possibly be this bad.' But for those of us who have worked on Wall Street, for 60 years in my case, that's what the numbers show.

But you don't have the media talking about actual numbers. They talk about just words, and they use euphemisms. It's a kind of Orwellian vocabulary, describing an inside-out world.

(Intro – 1:58)

BEN NORTON: The world is suffering right now from one of the worst economic crises in modern history. Definitely the worst crisis since the 2008 financial crash. And many economics experts are saying that we're living through the worst recession actually since the Great Depression of 1929.

Well joining us to discuss this today, we have one of the best contemporary economists, who is really well prepared to explain what has been going on in this global recession during the coronavirus pandemic. And specifically today we're gonna talk about the $6 trillion bailout package that the US Congress has passed.

The Trump administration is basically taking Obama's corporate bailout on steroids, and injecting trillions of dollars into the corporate sector. And today to discuss what exactly the coronavirus bailout means, we are joined by the economist Michael Hudson.

He is the author of many books. And in the second part of this episode we're gonna talk about his book Super Imperialism: The Economic Strategy of American Empire . So that'll be much more in the vein of kind of traditional Moderate Rebels episodes, where we talk about imperialism, US foreign policy, and all of that.

Michael Hudson is also a former Wall Street financial analyst, so he's very well prepared to talk about the financial thievery that goes on on Wall Street. And he is a distinguished research professor of economics at the University of Missouri, Kansas City.

So Michael, let's just get started here. Can you respond to this global depression that we're living through right now amid the Covid-19 pandemic? And what do you think about this new bailout that was passed?

(3:50)

MICHAEL HUDSON: Well the word bailout, as you just pointed out, really was used by Obama and only applies to the banks. The word coronavirus is just put in as an advertising slogan.

Banks and corporations, airlines, have a whole wish list that they had their lawyers and lobbyists prepare for just such an opportunity. And when the opportunity comes up -- whether it's 9/11 with the Patriot Act, or whether it's today's coronavirus -- they just pasted the word coronavirus onto an act, which should be called a giveaway to the big banking sector.

Let's talk about who's not bailed out. Who's not bailed out are the small business owners, the restaurants, the companies that you walk down the street in New York or other cities, and they're all shuttered with closed signs. Their rent is accumulating, month after month.

Restaurants, gyms and stores are small-markup businesses, small-margin businesses, where, once you have no sales for maybe three months and rent accruing for three months, they're not going to have enough money to earn the profits to pay the rents that have mounted up for the last three months.

The other people that are not being bailed out are the workers -- especially the people they call the prime necessary workers, which is their euphemism for minimum-wage workers without any job security. There have been huge layoffs of minimum-wage labor, manual labor, all sorts of labor.

They're not getting income, but their rents are accruing. And their utility bills are accruing. Their student loans are accruing. And their credit card debts are mounting up at interest and penalty rates, which are even larger than the interest rates. So all of these debts are accruing.

The real explosion is going to come in three months, when all of a sudden, this money falls due. The governor of New York has said, "Well we have a moratorium on actually evicting people for three months." So there are restaurants and other people, individuals, wage-earners, who are going to be able to live in their apartments and not be evicted. But at the end of three months, that's when the eviction notices are going to come. And people are going to decide, is it worth it?

Well, especially restaurants are going to decide. And they're going to say, "There is no way that we can make the money to pay, because we haven't had the income to pay." They're going to go out of business. They're not going to be helped.

The similar type of giveaway occurred after 9/11. I had a house for 20 years in Tribeca, one block from the World Trade Center. The money was given by the government to the landlords but not to the small businesses that rented there -- the Xerox shops and the other things. The landlords took all of the ostensible rent loss for themselves, and still tried to charge rent to the xerox shops, the food shops, and ended up collecting twice, and driving them out.

So you're having the pretense of a bailout, but the bailout really is an Obama-style bailout. It goes to the banks; it goes to those companies that have drawn up wish lists by their lobbyists, such as the airlines, Boeing and the large banks.

The banks and the real estate interests are going to be the biggest gainers. They have changed the real estate law so that the real estate owners, for a generation, will be income tax free. They are allowed to charge depreciation, and have other fast write-offs to pretend that their real estate is losing value, regardless of whether it's going up and up in value.

Donald Trump says that he loves depreciation, because he can claim that he's losing money, and gets a tax write-off, even while his property prices go up.

So there's a lot of small print. The devil is in the small print of the giveaway. And then President Trump has his own half-a-trillion-dollar slush fund that he says he doesn't have to inform a Congress or be subject to any Freedom of Information law. He gets to give to his backers in the Republican States.

And states and municipalities are left broke. Imagine New York City and other states. Most states and cities, have balanced budget constitutional restrictions. That means they're not allowed to run a deficit.

Now if these states and cities have to pay unemployment insurance, and have to pay carrying charges on the schools and public services, but are not getting the sales taxes, not getting the income taxes, from the restaurants and all the businesses that are closed, or from the workers that are laid off, they're going to be left with a huge deficit.

Nothing is done about that. There has been no attempt to save them. So three months from now, you're going to have broke states, broke municipalities, labor that cannot, whose savings was wiped out.

As I'm sure you've reported on your show, the Federal Reserve says that half of Americans do not have $400 for emergency saving. Well now they're going to be running up thousands of dollars of rent and monthly bills.

So the disaster is about to hit. They will not be bailed out. But no major investor, really will lose. You've seen last week, the stock market made the largest jump since the depression -- the largest jump in in 90 years. And that's because Trump says, "The economy is the stock market, and the stock market is the One Percent."

So from the very beginning, his point of reference for the market and for the economy is the One Percent. The 99 Percent are simply overhead. Industry is an overhead. Agriculture is an overhead. And labor is an overhead, to what really is a financialized economy that is writing the whole bailout.

It's not a bailout -- it's a huge giveaway that makes them richer than they ever were before.

(10:48)

BEN NORTON: Yeah and Michael, related to that -- you mentioned that fine print is important. But I also have a kind of bigger question. And I don't really know where exactly these numbers come from.

Officially the bailout is $2 trillion. Many media outlets reported it as effectively $4 trillion. But actually, according to Larry Kudlow -- who is the director of the US National Economic Council, he's the Trump administration's kind of chief economist -- Larry Kudlow is now saying that it's actually $6 trillion in total, which is a quarter of all of US GDP.

And that includes $4 trillion in lending power for the Federal Reserve, as well as $2 trillion in the aid package.

So there is discussion of this aid package, but actually the aid package of $2 trillion is actually half the size of the $4 trillion that is given to the Federal Reserve.

What exactly is that $4 trillion that the Federal Reserve has? Is this some kind of slush fund, or how does it work?

(11:52)

MICHAEL HUDSON: No, the Federal Reserve was given special powers to create 10 times as many loans or swaps as others. The Federal Reserve represents the commercial banks and commercial investors.

Now here's the problem: a lot of companies were issuing junk bonds. They were going way down in price, especially junk bonds for the fracking industry. The Federal Reserve says, "We're going to be backed up by the Treasury. We can just create -- as you know, Modern Monetary Theory -- we can just create money on a computer, and swap. So we will, say, 'Give us your poor.' It's like the Statue of Liberty: 'Give us your poor, your oppressed,' or Aladdin's old lamps for new: Give us your junk bonds, and we will give you a bona fide Federal Reserve deposit."

So the Federal Reserve has been pumping trillions and trillions of dollars into the stock market. That's what's been pushing up the stock market, the Federal Reserve. The bailout has gone to the stock market. As if the stock market got coronavirus! Stocks don't get coronavirus! They don't get sick on the virus! And yet it's the stock market that's going up through the Federal Reserve.

There's also another $2 trillion dollars, $2 to $4 trillion that the US government has, over and above the $2 trillion that's going to the people. So most of the calculations that have been published cite it as a $10 trillion bailout. Of which the newspapers, to avoid embarrassing Mr. Trump, only refer to the money given to the the wage earners. And they're sort of embarrassed that the vast majority are given to the financial sector that doesn't need a bailout, but that doesn't want to lose a single penny from the virus.

So when you see the stock market recovered almost to what it was before the virus, while the economy is going down, you realize, wait a minute they're saving the 1 percent, or the 10 percent of the population that own 85 percent of the stocks and bonds. They're saving the banks. They're not saving the people, and they're not saving the economy; they're not saving industry; and they're not saving small businesses.

So it's an amazing hypocrisy that the mainstream press is not discussing, which is why your show is so important.

(14:29)

MAX BLUMENTHAL: Yeah and here in Washington, DC, we got I think $500 million from the, I guess what you accurately describe as the stock market bailout. And that's a lot less than a number of red states that are less populous than Washington, DC got. So there's a massive shafting here.

And then the city has only been able to provide for certain parts of the economy. Undocumented immigrants, who do a lot of work here, got nothing from the city. Vendors, which are a big part of the informal economy in DC, even though they have to be regulated, got nothing.

And then you mention all of these sectors of the economy -- young people, college-educated young people who are deep in debt, and therefore less inclined to spend -- are getting shafted here.

So you have called for a solution -- well I guess, knowing so many of those people, they contribute so little to the economy because they can't; they're just putting all their money into debt. So you have called for a debt jubilee.

You say that debts that can't be paid won't be, and this is the best way out.

Maybe you can explain to our viewers and listeners what that is and why it would be the best remedy?

(15:42)

MICHAEL HUDSON: Well here's what happens if you don't write down the debts that are just going to accrue in the next three months: If you don't say, "The rents will not have to be paid, and workers will not have to pay the debts that mount up," if you leave those debts on the books, and you make the workers liable to keep paying the student debts, and the other debts, and the mortgage debts, and the rents, then they're not going to have any money left to buy goods and services.

When it's all over, they're going to get their paychecks, and off the top is going to be the wage withholding, and the tax withholding, and the Medicare, and if they don't want to get kicked out of their houses, they're going to have to pay all of this money that's accrued while they're not making an income.

So you're going to have a shrinkage of the economy, a vast shrinkage. How can they afford to buy anything but the most basic necessities, the cheapest food, the necessary transport? Obviously they're not going to buy the kinds of goods and services that are supposed to be part of the circular flow.

Economics textbooks say employers pay the workers so the workers can have enough money to buy what they produce. But the workers don't spend their income only on what they produce. They spend most of their income on rent, on debt service, on taxes, on finance, insurance, and real estate. And this is the only part of the economy that is being enabled to survive.

So how can you have the superstructure of rents and debts, of insurance charges, on an economy that doesn't have the income to buy goods and services? And if they can't buy goods and services, you're going to have the stores closing down, because people can't afford to buy what the stores are selling.

You're going to have a whole wave of closures. And you're going to go down the streets, and certainly in cities like New York, or where I live in Queens, just outside of Manhattan, where block after block, they're going to be "For rent" signs. It's going to be empty.

And the only way to avoid that is for a debt write-down.

Now you've had this occurring for 5,000 years. I'll give you an example that may be easy to understand.

In Babylonia, we have the Laws of Hammurabi, in 1800 BC. One of the laws says that when you would buy beer or other things, they would write it on a tab in the bar, in the ale house, and all the debts were owed when the harvest was in. You'd pay the debt seasonally.

Well Hammurabi said, if there's a drought, or if there's a flood, then you don't have to pay the debts. Most debts were owed to the palace, and others.

The implied policy is that, "The reason we're doing this is, if we don't do that, then you're going to have these debtors become debt servants, bond servants to the creditors; they're going to owe their labor to the creditors; they're going to lose their land to the creditors; and they won't be able to work on public infrastructure projects; they won't work for Babylonia; they won't serve in the army, and we can be invaded; and they won't be able to use their crops as taxes, because they'll owe the crops as debts. So we're going to write it down."

So the whole idea for thousands of years, of every Near Eastern ruler starting his reign by writing down the debts, was to begin everything in balance.

Because they realized, just mathematically, debts grow at compound interest. You've seen the coronavirus increase at an exponential rate. That's how debts accumulate interest, at an exponential rate.

But the economy grows in an S-curve, and then it tapers off. The American economy, the GDP since the Obama bailouts of 2008, the entire growth of the GDP has only accrued to 5 percent of the population. 95 percent of the GDP. But the population for 95 percent, the industry and agriculture, that's actually gone down.

So we're already in a 12-year depression, the Obama depression, that they like to call a recession, because most of the media are Democratic Party people.

But you're going to have this recession turn into a genuine depression, and it will continue until the public debt, that is state and local debts, are written down; the mortgage debts written down; and the personal debts written down, starting with the student loans, the most obviously unpayable debt.

And the choice is, do you want to depression, or do you want the banks to be able to collect all the economic surplus for themselves? Well Donald Trump, supported unanimously by the Democratic Congress, says, "We want to protect the banks, not the population, not the economy. Let the economy shrink, as long as our constituents, the donor class, are able to avoid making a loss. Let's make the loss borne by the 99 percent, not our donor class."

(21:17)

BEN NORTON: Yeah, and Michael, you mentioned something, getting back to the Federal Reserve and understanding how this whole system works. I mean frankly it seems to me to kind of be a house of cards.

But you mentioned this idea of Modern Monetary Theory and just kind of creating money out of nothing. Can you talk more about that? You know this is a term that's become more prominent, especially on the left: MMT, modern monetary theory.

There are socialists who argue in support of MMT and then there are others who are kind of skeptical of the whole notion that you can just print all this money to fund these social programs that you want to create, and that it won't create inflation.

But at the same time, you and other people point out that that's exactly how the economy already works. Where for instance, you want to fund a war, there's never -- you know frequently when someone on the left asks for universal health care or free public education, members not only of the Republican Party but many neoliberal Democrats often say, "Well yeah, where are you gonna get the money from?" And the response of some of the MMT supporters is, "Well we just fund the program, and we just create the money because we control the creation of the dollar."

And we see that same attitude used actually by the Federal Reserve right now, but to bail out Wall Street. "Yeah we're just gonna print" -- they printed $1.5 trillion, and then just gave it, they just injected it right into Wall Street.

So does that not create inflation, or what exactly is happening economically there? I mean to me, it seems like a scam; it seems like totally a scam.

(22:59)

MICHAEL HUDSON: Since 2008, you have had the greatest inflation of money in history. And you have also had the greatest inflation in history, but it's entirely asset price inflation.

You're absolutely right: the money has gone into the stock market and the bond market, to support bond prices, meaning you've had the biggest bond boom in history. You've had a huge stock market boom. But consumer prices have gone down. So here you have an enormous amount of money creation, and consumer prices and real wages have been drifting down.

So they are really two economies. The question is, are you going to create money for public purposes by spending it into the economy, on industry, agriculture, and the goods and service production and consumption economy Or, are you going to put it into the financial economy?

Well the whole way of our banking system is that banks create credit. If you go into a bank and you take out a loan, you say, I'm gonna borrow $5,000 for something. The banker doesn't go and say, let me see if we have any money to loan you; he says, okay I will write a loan on my computer. I will credit your deposit with $5,000, and you will sign this IOU, and we have an asset. And the asset is $5000, on which we're going to charge interest on what we pay you.

So it's just done by computer, on a balance sheet. And as long as money is created on a computer, the only cost is the electricity used to make that debt record.

Now the banks, when they make loans, 80 percent are against real estate. So they say, in case you can't pay, you're pledging your real estate – the home you're buying, or the commercial building you're buying, as collateral. So we'll lend you up to 80 percent, maybe 100 percent, of the value of what you're buying, and that's the collateral we have.

So they lend against collateral. Well, if you lend the money against collateral to buy a building, or to buy stocks and bonds, which are the other collateral, then obviously this money you're creating to buy houses, or commercial real estate, or stocks and bonds are going to bid the price up.

Banks don't give loans for people who say, I want to go shopping and buy more goods because I need the money. That may be a little bit, that's what credit cards are for, but that's a small portion of the overall money supply. So banks don't make loans to buy goods and services; they make loans to buy assets that obviously inflate the price of assets.

And the more money that you pay for houses that are rising in price, or medical insurance, or stocks and bonds, to make a retirement income for your pension fund; the more money you pay for houses that are inflating in price because of bank credit, the less money you have to buy goods and services.

So actually, the more money they create, the more consumer prices for goods and services fall. It's the exact opposite of the usual theory.

On my website I have many articles about that, and I have something today in Counterpunch on that. It's on how the economy works the opposite of the way the textbook says.

Now unfortunately the left-wing doesn't really study finance and money much. The discussion of finance and money has been monopolized by the right-wing, so left-wingers think, they don't realize that they're picking up a kind of junk theory of monetary relations and debt relations that's all picked up from the right-wing of the political spectrum.

It's a kind of parallel universe. That's not how the economy really works, but in a way that sort of is easy to understand. And it's very easy to make an erroneous, oversimplified view of the world easy to understand.

And when it's repeated again and again and again, in the media, the New York Times and MSNBC, people really think that, well, maybe that's how the world works -- more money is going to push up prices, so we better not push for it, we better go along with trickle-down theory.

And most of the left believes in trickle-down theory. The Democratic Party leadership is absolutely convinced, if you just give enough money to the top 1 percent, or 5 percent, or Wall Street, it'll all trickle down.

(27:49)

BEN NORTON: Well of course the Democratic Party is not the left.

MICHAEL HUDSON: That's right, but it pretends to be. And it has crowded out the left. You can see in the recent election primaries that its job is to protect the Republican Party from any critique by the left, interjecting itself in between the Republican Party and any possible reform movement.

BEN NORTON: Exactly.

(28:20)

MAX BLUMENTHAL: Well they stood up really strongly against the bailout -- I mean what was it, 96 to nothing? And in the voice vote, I was listening to the voice vote last night in the House; I didn't hear AOC's voice against it.

MICHAEL HUDSON: They did a voice so that everybody could say, "Oh it wasn't me!"

MAX BLUMENTHAL: No, no! So you mentioned that foreclosure king Steve Mnnuchin gets like a $500 billion slush fund. I haven't heard much discussion about that. What will he do with this sort of opaque slush fund, and how will this -- I mean it's a leading question, but how will this kind of reinforce or consolidate inequality for the next generation?

(29:10)

MICHAEL HUDSON: Well gee, I hope he gives some of it to Kamala Harris, who was the attorney general who let him do all of this, and who thoroughly backed him and led the foreclosure, was the iron fist behind his foreclosure program. So I'm sure he'll press for Kamala to be the vice president on the ticket.

The Democrats have a problem. How can they guarantee that they have their candidate win? Their candidate is Donald Trump. How can they make sure that they have such a weak candidate that he's sure to lose to Donald Trump? And the choice is, we'll get a vice president that's so unpopular that they're sure to lose.

Now it's a race between Kamala Harris and the Minnesota lady.

MAX BLUMENTHAL: Klobuchar? The one who throws staplers at her staff. She seems very charming.

MICHAEL HUDSON: Uh, I don't know about that. But my wife can't even look at her on television. But I think that the pretense is that she'll help get Minnesota, as if Minnesotans, where I'm from, are so dumb just to vote for somebody from there. But by getting Minnesota, they'll lose the whole rest of the country.

So I think she'll be the vice president, because that guarantees a Trump victory. And that will enable the Democrats to say, here -- they'll have the president they want, that is for their donor class, but they can say, "That's not us; that's the Republicans." So that's the Democratic strategy.

MAX BLUMENTHAL: Right, then they can raise loads of money for the "Resistance," and all of the outside think tanks. And that was the old Republican, William F. Buckley strategy, is we're better throwing rocks outside the building and raising a ton of money for the National Review than actually having to govern. And that seems like the Democratic strategy.

But I guess I was asking about how you see the economy transforming, because the Obama bailout sort of transformed it or consolidated the gig economy, where everyone has to work three to five jobs, and what was supposed to be a highly educated middle class is deeply in debt.

Where do you see it after this next tranche of stock market bailouts?

(31:29)

MICHAEL HUDSON: Ok, let's look at three months from now. Smaller companies are going to be squeezed, because all of their expenses are going to go up. Small companies have had to run up debts, and they have all sorts of other problems, and their earnings, their prospective profits, are not going to look that good. Because there's not going to be a market for the things that they sell, because of the debt deflation that I talked about.

So what's going to happen? You're going to have a bonanza for private equity capital. The liquid, the 1 percent that have access to bank credit and have their own equity capital are going to come in and pick up a lot of real estate that's going to be defaulted on -- just like they did after Obama evicted his constituency, the mob with pitchforks, and evicted them.

Blackstone will pick up more real estate. Big companies are going to pick up small companies. You're going to emerge with a highly monopolized economy, much more centralized.

The important thing to realize about free-market economics and libertarianism, is libertarians advocate central planning, The Chicago School of monetarists advocate central planning; the free marketers want central planning. But the banks are to be the planners, not the government. They want to exclude the government from planning, except to the extent that they can take over the government, as Trump has done, and plan all of the income to be transferred to themselves from the rest of the economy.

So we're going to have a much more centrally planned by a coalition of monopolies and the government. In the 1930s, that was called fascism.

MAX BLUMENTHAL: It's what we call a "public-private partnership" or something.

MICHAEL HUDSON: Right.

MAX BLUMENTHAL: Just really quickly, and maybe we can kind of transition after this, but you mentioned Blackstone. I think this is one of the key components of the bailout. They own so much stake in so many of the companies getting bailed out. Can you just describe their role and what they are?

(33:38)

MICHAEL HUDSON: It's appropriate that they were put in charge of bailout. So if they're the largest company buying up defaulted real estate and buying, picking up the weak -- it's called moving assets from the weak hands to the strong -- then they might as well be put in charge, because they're going to be the company doing all the grabbing. So of course they're in charge of it.

It's called grabitization. That was the Russian word for privatization in the 1990s. So grabitization is I think a better word than public-private partnership. It's not really a partner; it's sort of a one-way partnership; there's one subsidiary partner. It's really financialization and grabitization.

MAX BLUMENTHAL: Right, just the looting of state assets.

BEN NORTON: Going back one step here, Michael, you were talking about the way that people should think about how the economy actually works. And I mentioned MMT. Can you kind of just walk through that again? Because you were talking about how actually, when the Fed creates -- I mean really to me, as someone, I'm definitely not an economics expert, I just don't understand really how this whole process works, because to me it just seems simply like, they're literally just creating money and just giving it to banks, and corporate elites, and rich people.

I mean maybe that's what it is. But I don't understand, this is like the biggest scheme I can imagine, where the Federal Reserve is creating all of this money, printing -- they're physically printing money is my understanding. And then they're just giving it to these banks, to bondholders. And then, but you said that what does is, instead of actually creating inflation, all that does is, if I understood correctly, it boosts the value of assets like real estate, while at the same time deflating wages and commodity prices.

So if that's the case, then how should people who are advocating for socialized programs like Medicare for All, free public education, and maternity leave, and childcare, and all of these programs that the Bernie Sanders campaign and movement have been advocating for, how should we talk about the way to pay for all of those programs, if the reality of the economy is that the Fed is printing trillions of dollars, and then just giving that cash to banks?

(36:11)

MICHAEL HUDSON: Well I think the reason you're having trouble understanding MMT is because what you described is what's happening, but you think, "But that's unfair!" And there's a tendency to think, if it's unfair --

MAX BLUMENTHAL: It's not just unfair. It's the biggest scheme I can imagine. There's no other word other than just a con scheme.

MICHAEL HUDSON: Yes, and the brain recoils from thinking, "Can the government really be doing that to us?" Well, yes it can.

And just think of when, in the debates with Bernie Sanders during the spring, Biden, and Klobuchar keep saying, 'What we're paying for Medicare-for-All will be $1 trillion over 10 years.' Well here the Fed can create $1.5 trillion in one week just to buy stocks.

Why is it okay for the Fed to create $1.5 trillion to buy stocks to prevent rich people from losing on their stocks, when it's not okay to print only $1 trillion to pay for free Medicare for the entire population? This is crazy!

The idea that only the rich should be allowed to print money for themselves, but the government should not be allowed to print money for any public purpose, any social purpose -- not for medicine, not for schools, not for personal budgets, not for full employment -- but only to give to the 1 percent.

People hesitate to think that. They think, 'It can't possibly be this bad.' But for those of us who have worked on Wall Street, for 60 years in my case, that's what the numbers show.

But you don't have the media talking about actual numbers. They talk about just words, and they use euphemisms. It's a kind of Orwellian vocabulary, describing an inside-out world that they're talking about.

They will buy stock; they'll say we're going to buy a million shares of Boeing; they'll just write a check, and the check will be from the Federal Reserve, and Boeing will get the money. The Federal Reserve can create a deposit, just like a banker will write you a loan when you go in and borrow. It's done on a computer – without levying taxes. The Fed can do the same thing.

Stephanie Kelton, my department chairman for many years at the University of Missouri at Kansas City, describes this. The University of Missouri's website, New Economic Perspectives has a description of it. So if people want to google either her, UMKC, or what I've written, or Randall Wray at the Levy Institute, you'll get walked through.

If you're not already thinking in terms of balance sheets, which most people don't, you have to sort of just read it again and again, and then all of a sudden, "Ah, now I get. It's a ripoff! It's created out of nothing. Now I get it."

BEN NORTON: It's just a house of cards. To me it proves the kind -- there used to be this kind of very blunt orthodox Marxist view that the economy strictly follows politics, and it seems to me this is a case where the economy is just created by politics.

MICHAEL HUDSON: That's true, and that's not an un-Marxist position. Marx did distinguish between oligarchies and democracies, and finance capitalist economies and industrial capitalist economies.

MAX BLUMENTHAL: Right. And the $17 billion for "urgent national security measures" was straight into the pockets of Boeing, which had its 737 maxes falling out of the sky, and had been clamoring for this bailout for a long time.

I mean you saw 3M, the maker of these masks which are suddenly unavailable, gained a total exemption from lawsuits, if the masks that it mass-produced now somehow failed.

So all of these things stuffed into the bailout were what industry and finance had been clamoring for for years. And they finally had the opportunity to do it.

(Outro – 40:38)

BEN NORTON: All right, we're gonna take a pause there. That was the end of part one of our interview here with the economist Michael Hudson. He is a Wall Street financial analyst, a distinguished research professor of economics at the University of Missouri Kansas City, and of course the author of many books on economics.

You can find some of his work at michael-hudson.com . We will link to that in the show notes. He has interviews with transcripts and articles.

You can also find some of his economics work and the work of some of his like-minded colleagues at the economics department at the University of Missouri Kansas City website. I will link to that as well in the show notes. You can find the show notes at moderaterebels.com .

In part two of this episode, we're going to continue our discussion of the house of cards that is the international financial system, the economic system. And in the second part we're going to talk about his book "Super Imperialism: The Economic Strategy of American Empire."

This is an incredible book. You know here at Moderate Rebels, Max and I frequently talk about the political and military side of imperialism. Michael Hudson just spells out, in easy-to-understand terms, how imperialism works at an economic level, how the US government and the Treasury, through the backing of military force, force countries around the world to buy US bonds, Treasury bonds, and how there's basically just a con scheme where countries pay for their own US military occupation through buying US Treasury bonds.

Michael Hudson explains that all in really simple terms. And we also talk about the rise of China, and how China does pose a so-called threat, in scare quotes, to not the American people but rather to the hegemony of the US financial system -- and the main financial instruments, the weapons that the US uses to maintain that hegemony, the International Monetary Fund, the IMF, and the World Bank.

And Hudson describes how, in his terms, the IMF, and the World Bank, specifically, are some of the most evil institutions that are really maintaining the American dictatorial, authoritarian chokehold on the global financial system.

If you want to support this program, Moderate Rebels, and the kind of independent interviews we do like this, giving a platform to some of these voices who you're never going to hear in mainstream corporate media, you can go to Patreon.com/ModerateRebels . Please consider supporting us. And definitely join us in part. See you soon.

[May 17, 2020] Questions, questions: Was the COVID-19 epidemic used for the second bail-out of overleveraged financial sector, which was in troble already in September, 2019

May 17, 2020 | www.moonofalabama.org

jared , May 17 2020 17:54 utc | 16

Oh and seems increasingly evident that the response to the virus was planned and exaggerated in effort to distract from imminent financial collapse and provide cover for yet again another bank and government bailout. While the people cower in their hovels the bankers are popping champagne poolside on private refuges.

This effect is most notable in US maybe the erstwhile sole remaining "solvent" western nation - only because they own the printer for worlds currency.

[May 17, 2020] The World is Round Shifting Supply Chains and a Fragmented World Order

May 17, 2020 | nationalinterest.org

... ... ...

Coronavirus has already begun to undermine the legitimacy of the European project in a greater manner that nationalist movements had hoped to achieve. European finance ministers have clashed over all EU nations sharing "corona bonds" debt, while France and Germany responded to Italy's request for ventilators with a refusal accompanied by closing their borders with Italy. At around the same time, the United States imposed a unilateral ban on commercial flights with the EU.

China's economic growth strategy and foreign policy aspirations are being frustrated in the wake of Coronavirus, as developing countries are likely to scrutinize China's Belt Road Initiative. Among Western policymakers anti-China sentiment is increasing. In the UK, there is mounting opposition to Huawei building its fifth-generation mobile networks. In late March, the United States abandoned its long-standing policy of maintaining a status quo vis a vis Taiwan. President Donald Trump signed into law The Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) Act, which increases U.S. support for Taiwan and "alters" engagement with nations that undermine Taiwan's security or prosperity. Beijing responded that it would respond forcefully if the law was implemented, all the while China increases its military drills around Taiwan. This is increasingly likely to occur while the United States increasingly supports Hong Kong's independence movement and demonstrates willingness to confront China in the South China Seas. Similarly, Washington is likely to be drawn into a confrontation with North Korea as the collapse of North Korea's health system may threaten Kim Jong-un's regime leading him to militarily lash out.

The latest phase of globalization spearheaded by the West entailed that service economies were not responsible for the manufacture of the products they consumed. Instead, they depended upon outsourcing production of cheap goods in distant shores creating unprecedented levels of economic prosperity, which at its root was artificial. Liberal democracies did not reach "the end of history," where conflict was to be consigned to the dustbin of history, but could easily be unraveled by a virus emanating from a society it was reliant upon that did not share its norms. In a similar vein, the Roman Empire's apex contained the seeds of its decay as it had become overstretched and difficult to manage. The historian Edward Gibbon, in his 1776 book The Decline and Fall of the Roman Empire , notes that Romans had become weak and responded to the challenges of hyperinflation, civil wars and revolts by outsourcing their duties to defend their empire in far flung regions to "barbarian" mercenaries such as the Visigoths. Blowback occurred as these barbarians' increased economic production and their ability to conduct warfare, which led them, ultimately, to turn against their benefactors and sack the Roman Empire. Similarly, the West increased the prosperity of faraway nations and ironically, as a result their military assertiveness by being beholden to extended global supply chains. This along with the risk of globalization unravelling increases the prospects of inter-state and great power conflict. All it took was a virus to detonate the fuse that was shorter than anyone expected.

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at  @BarakSeener .

[May 16, 2020] In a Pandemic, Military Spending Is an Extravagant Waste by Conn Hallinan

Notable quotes:
"... The US has spent over $200 billion on antimissile systems, and once they come off the drawing boards, none of them work very well, if at all. ..."
May 16, 2020 | original.antiwar.com

In the very near future, countries are going to have to choose whether they make guns or vaccines

"There have been as many plagues as wars in history, yet plagues and wars take people equally by surprise."
~ Albert Camus, "The Plague"

Camus' novel of a lethal contagion in the North African city of Oran is filled with characters all too recognizable today: indifferent or incompetent officials, short sighted and selfish citizens, and lots of great courage. What not even Camus could imagine, however, is a society in the midst of a deadly epidemic pouring vast amounts of wealth into instruments of death.

Welcome to the world of the hypersonic weapons, devices that are not only superfluous, but which will almost certainly not work. They will, however, cost enormous amounts of money. At a time when countries across the globe are facing economic chaos, financial deficits, and unemployment at Great Depression levels, arms manufacturers are set to cash in big.

A Hypersonic Arms Race

Hypersonic weapons are missiles that go five times faster than sound – 3,800 mph – although some reportedly can reach speeds of Mach 20, 15,000 mph. They come in two basic varieties. One is powered by a high-speed scramjet. The other, launched from a plane or missile, glides to its target. The idea behind the weapons is that their speed and maneuverability will make them virtually invulnerable to anti-missile systems.

Currently there is a hypersonic arms race going on among China, Russia, and the U.S., and, according to the Pentagon, the Americans are desperately trying to catch up with its two adversaries.

Truth is the first casualty in an arms race.

In the 1950s, it was the "bomber gap" between the Americans and the Soviets. In the 1960s, it was the "missile gap" between the two powers. Neither gap existed, but vast amounts of national treasure were nonetheless poured into long-range aircraft and thousands of intercontinental ballistic missiles (ICBMs). The enormous expenditures on those weapons, in turn, heightened tensions between the major powers and on at least three occasions came very close to touching off a nuclear war.

In the current hypersonic arms race, "hype" is the operational word. "The development of hypersonic weapons in the United States," says physicist James Acton of the Carnegie Endowment for International Peace, "has been largely motivated by technology, not by strategy. In other words, technologists have decided to try and develop hypersonic weapons because it seems like they should be useful for something, not because there is a clearly defined mission need for them to fulfill."

They have certainly been "useful" to Lockheed Martin , the largest arms manufacturer in the world. The company has already received $3.5 billion to develop the Advanced Hypersonic Weapon (Arrow) glide missile, and the scramjet-driven Falcon Hypersonic Technology Vehicle (Hacksaw) missile.

The Russians also have several hypersonic missiles, including the Avangard glide vehicle, a missile said to be capable of Mach 20. China is developing several hypersonic missiles, including the DF-ZF, supposedly capable of taking out aircraft carriers.

"No Advantage Whatsoever"

In theory hypersonic missiles are unstoppable. In real life, not so much.

The first problem is basic physics: speed in the atmosphere produces heat. High speed generates lots of it. ICBMs avoid this problem with a blunt nose cone that deflects the enormous heat of re-entering the atmosphere as the missile approaches its target. But it only has to endure heat for a short time because much of its flight is in frictionless low earth orbit.

Hypersonic missiles, however, stay in the atmosphere their entire flight. That is the whole idea. An ICBM follows a predictable ballistic curve, much like an inverted U and, in theory, can be intercepted. A missile traveling as fast as an ICBM but at low altitude, however, is much more difficult to spot or engage.

But that's when physics shows up and does a Las Vegas: what happens on the drawing board stays on the drawing board.

Without a heat deflecting nose cone, high-speed missiles are built like big needles, since they need to decrease the area exposed to the atmosphere. Even so, they are going to run very hot. And if they try to maneuver, that heat will increase. Since they can't carry a large payload, they will have to be very accurate – but as a study by the Union of Concerned Scientists points out, that is "problematic."

According to the Union, an object traveling Mach 5 for a period of time "slowly tears itself apart during the flight." The heat is so great it creates a "plasma" around the craft that makes it difficult "to reference GPS or receive outside course correction commands."

If the target is moving, as with an aircraft carrier or a mobile missile, it will be almost impossible to alter the weapon's flight path to intercept it. And any external radar array would never survive the heat or else be so small that it would have very limited range. In short, you can't get from here to there.

Lockheed Martin says the tests are going just fine, but then Lockheed Martin is the company that builds the F-35, a fifth generation stealth fighter that simply doesn't work. It does, however, cost $1.5 trillion, the most expensive weapons system in US history. The company has apparently dropped the scramjet engine because it tears itself apart, hardly a surprise.

The Russians and Chinese claim success with their hypersonic weapons and have even begun deploying them. But Pierre Sprey, a Pentagon designer associated with the two very successful aircraft – the F-16 and the A-10 – told defense analyst Andrew Cockburn that he is suspicious of the tests.

"I very much doubt those test birds would have reached the advertised range had they maneuvered unpredictably," he told Cockburn. "More likely they were forced to fly a straight, predictable path. In which case hypersonics offer no advantage whatsoever over traditional ballistic missiles."

Guns or Vaccines

While Russia, China, and the US lead the field in the development of hypersonics, Britain, France, India, and Japan have joined the race too.

Why is everyone building them?

At least the Russians and the Chinese have a rationale. The Russians fear the US antimissile system might cancel out their ICBMs, so they want a missile that can maneuver. The Chinese would like to keep US aircraft carriers away from their shores.

But antimissile systems can be easily fooled by the use of cheap decoys, and the carriers are vulnerable to much more cost effective conventional weapons. In any case hypersonic missiles can't do what they are advertised to do.

For the Americans, hypersonics are little more than a very expensive subsidy for the arms corporations. Making and deploying weapons that don't work is nothing new. The F-35 is a case in point, but nevertheless, there have been many systems produced over the years that were deeply flawed.

The US has spent over $200 billion on antimissile systems, and once they come off the drawing boards, none of them work very well, if at all.

Probably the one that takes the prize is the Mark-28 tactical nuke, nicknamed the "Davy Crockett," and its M-388 warhead. Because the M-388 was too delicate to be used in conventional artillery, it was fired from a recoil-less rife with a range of 2.5 miles. Problem: if the wind was blowing in the wrong direction, the Crockett cooked its three-man crew. It was only tested once and found to be "totally inaccurate."

So, end of story? Not exactly. A total of 2,100 were produced and deployed, mostly in Europe.

While the official military budget is $738 billion, if one pulls all US defense related spending together, the actual cost for taxpayers is $1.25 trillion a year, according to William Hartung of the Center for International Policy. Half that amount would go a long way toward providing not only adequate medical support during the Covid-19 crisis – it would also pay jobless Americans a salary.

Given that there are more than 31 million Americans now unemployed and the possibility that numerous small businesses – restaurants in particular – will never reopen, building and deploying a new generation of weapons is a luxury the US and other countries cannot afford.

In the very near future, countries are going to have to choose whether they make guns or vaccines.

Foreign Policy In Focus columnist Conn Hallinan can be read at www.dispatchesfromtheedgeblog.wordpress.com and www.middleempireseries.wordpress.com .

[May 16, 2020] The next step from neoliberalisn can be neofeudalism

May 16, 2020 | www.moonofalabama.org

karlof1 , May 15 2020 19:04 utc | 9

And just in time, we have this essay, "How Biosecurity Is Enabling Digital Neo-Feudalism" by Pepe Escobar. Seven years ago, this prediction was made:

"In the worst-case scenario projected for a pandemic, Zylberman predicted that 'sanitary terror' would be used as an instrument of governance....

"Agamben did square the circle: it's not that citizens across the West have the right to health safety; now they are juridically forced (italics [Pepe's]) to be healthy. That, in a nutshell, is what biosecurity is all about.

"So no wonder biosecurity is an ultra-efficient governance paradigm. Citizens had it administered down their throats with no political debate whatsoever. And the enforcement, writes Agamben, kills 'any political activity and any social relation as the maximum example of civic participation.'"

Escobar's topic's been the subject of heated discussion here. How much of "reopening" in meant to combat the implied totalitarian potential? Perhaps an entire thread ought to be devoted? That such was a planned additional benefit of the COVID-19 attack seems very reasonable. Since it was thought of, discussed and had books published about it seems to indicate it ought to become a central topic at MoA.

[May 16, 2020] Putin's Call For A New System and the 1944 Battle Of Bretton Woods

Highly recommended!
Notable quotes:
"... Our Job in the Pacific ..."
"... "supposed the President was more literate, economically speaking." ..."
"... General Theory of Employment, Interest and Money ..."
"... "contemplates the dismantling of the British and Dutch empires." ..."
May 16, 2020 | off-guardian.org

On the one side, figures allied to American President Franklin Delano Roosevelt's vision for an anti-Imperial world order lined up behind FDR's champion Harry Dexter White while those powerful forces committed to maintaining the structures of a bankers' dictatorship (Britain was always primarily a banker's empire) lined up behind the figure of John Maynard Keynes[ 1 ].

John Maynard Keynes was a leading Fabian Society controller and treasurer of the British Eugenics Association (which served as a model for Hitler's Eugenics protocols before and during the war). During the Bretton Woods Conference, Keynes pushed hard for the new system to be premised upon a one world currency controlled entirely by the Bank of England known as the Bancor. He proposed a global bank called the Clearing Union to be controlled by the Bank of England which would use the Bancor (exchangeable with national currencies) and serve as unit of account to measure trade surpluses or deficits under the mathematical mandate of maintaining "equilibrium" of the system.

Harry Dexter White, on the other hand, fought relentlessly to keep the City of London out of the drivers' seat of global finance and instead defended the institution of national sovereignty and sovereign currencies based on long term scientific and technological growth.

Although White and FDR demanded that US dollars become the reserve currency in the new world system of fixed exchange rates, it was not done to create a "new American Empire" as most modern analysts have assumed, but rather was designed to use America's status as the strongest productive global power to ensure an anti-speculative stability among international currencies which entirely lacked stability in the wake of WWII.

Their fight for fixed exchange rates and principles of "parity pricing" were designed by FDR and White strictly around the need to abolish the forms of chaotic flux of the un-regulated markets which made speculation rampant under British Free Trade and destroyed the capacity to think and plan for the sort of long term development needed to modernize nation states. Theirs was not a drive for "mathematical equilibrium" but rather a drive to "end poverty" through REAL physical economic growth of colonies who would thereby win real economic independence.

As figures like Henry Wallace (FDR's loyal Vice President and 1948 3rd party candidate), Representative Wendell Wilkie (FDR's republican lieutenant and New Dealer), and Dexter White all advocated repeatedly, the mechanisms of the World Bank, IMF, and United Nations were meant to become drivers of an internationalization of the New Deal which transformed America from a backwater cesspool in 1932 to becoming a modern advanced manufacturing powerhouse 12 years later. All of these Interntional New Dealers were loud advocates of US-Russia –China leadership in the post war world which is a forgotten fact of paramount importance.

In his 1944 book Our Job in the Pacific , Wallace said:

It is vital to the United States, it is vital to China and it is vital to Russia that there be peaceful and friendly relations between China and Russia, China and America and Russia and America. China and Russia Complement and supplement each other on the continent of Asia and the two together complement and supplement America's position in the Pacific.

Contradicting the mythos that FDR was a Keynesian, FDR's assistant Francis Perkins recorded the 1934 interaction between the two men when Roosevelt told her:

"I saw your friend Keynes. He left a whole rigmarole of figures. He must be a mathematician rather than a political economist."

In response Keynes, who was then trying to coopt the intellectual narrative of the New Deal stated he had "supposed the President was more literate, economically speaking."

In his 1936 German edition of his General Theory of Employment, Interest and Money , Keynes wrote:

For I confess that much of the following book is illustrated and expounded mainly with reference to the conditions existing in the Anglo Saxon countries. Nevertheless, the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state.

While Keynes represented the "soft imperialism" for the "left" of Britain's intelligentsia, Churchill represented the hard unapologetic imperialism of the Old, less sophisticated empire that preferred the heavy fisted use of brute force to subdue the savages. Both however were unapologetic racists and fascists (Churchill even wrote admiringly of Mussolini's black shirts) and both represented the most vile practices of British Imperialism.

FDR's Forgotten Anti-Colonial Vision Revited

FDR's battle with Churchill on the matter of empire is better known than his differences with Keynes whom he only met on a few occasions. This well documented clash was best illustrated in his son/assistant Elliot Roosevelt's book As He Saw It (1946) who quoted his father:

I've tried to make it clear that while we're [Britain's] allies and in it to victory by their side, they must never get the idea that we're in it just to help them hang on to their archaic, medieval empire ideas I hope they realize they're not senior partner; that we are not going to sit by and watch their system stultify the growth of every country in Asia and half the countries in Europe to boot.

[ ]

The colonial system means war. Exploit the resources of an India, a Burma, a Java; take all the wealth out of these countries, but never put anything back into them, things like education, decent standards of living, minimum health requirements – all you're doing is storing up the kind of trouble that leads to war. All you're doing is negating the value of any kind of organizational structure for peace before it begins.

Writing from Washington in a hysteria to Churchill, Foreign Secretary Anthony Eden said that Roosevelt "contemplates the dismantling of the British and Dutch empires."

Unfortunately for the world, FDR died on April 12, 1945. A coup within the Democratic establishment, then replete with Fabians and Rhodes Scholars, had already ensured that Henry Wallace would lose the 1944 Vice Presidency in favor of Anglophile Wall Street Stooge Harry Truman.

Truman was quick to reverse all of FDR's intentions, cleansing American intelligence of all remaining patriots with the shutdown of the OSS and creation of the CIA, the launching of un-necessary nuclear bombs on Japan and establishment of the Anglo-American special relationship.

Truman's embrace of Churchill's New World Order destroyed the positive relationship with Russia and China which FDR, White and Wallace sought and soon America had become Britain's dumb giant.

The Post 1945 Takeover of the Modern Deep State

FDR warned his son before his death of his understanding of the British takeover of American foreign policy, but still could not reverse this agenda. His son recounted his father's ominous insight:

You know, any number of times the men in the State Department have tried to conceal messages to me, delay them, hold them up somehow, just because some of those career diplomats over there aren't in accord with what they know I think. They should be working for Winston.

As a matter of fact, a lot of the time, they are [working for Churchill]. Stop to think of 'em: any number of 'em are convinced that the way for America to conduct its foreign policy is to find out what the British are doing and then copy that!" I was told six years ago, to clean out that State Department. It's like the British Foreign Office

Before being fired from Truman's cabinet for his advocacy of US-Russia friendship during the Cold War, Wallace stated:

American fascism" which has come to be known in recent years as the Deep State [ ] Fascism in the postwar inevitably will push steadily for Anglo-Saxon imperialism and eventually for war with Russia. Already American fascists are talking and writing about this conflict and using it as an excuse for their internal hatreds and intolerances toward certain races, creeds and classes.

In his 1946 Soviet Asia Mission, Wallace said:

Before the blood of our boys is scarcely dry on the field of battle, these enemies of peace try to lay the foundation for World War III. These people must not succeed in their foul enterprise. We must offset their poison by following the policies of Roosevelt in cultivating the friendship of Russia in peace as well as in war.

Indeed this is exactly what occurred. Dexter White's three year run as head of the International Monetary Fund was clouded by his constant attacks as being a Soviet stooge which haunted him until the day he died in 1948 after a grueling inquisition session at the House of Un-American Activities.

White had previously been supporting the election of his friend Wallace for the presidency alongside fellow patriots Paul Robeson and Albert Einstein.

Today the world has captured a second chance to revive the FDR's dream of an anti-colonial world . In the 21st century, this great dream has taken the form of the New Silk Road, led by Russia and China (and joined by a growing chorus of nations yearning to exit the invisible cage of colonialism).

If western nations wish to survive the oncoming collapse, then they would do well to heed Putin's call for a New International system, join the BRI, and reject the Keynesian technocrats advocating a false "New Bretton Woods" and "Green New Deal" .

Originally published on The Saker

[1] You may be thinking "wait! Wasn't FDR and his New Deal premised on Keynes' theories??" How could Keynes have represented an opposing force to FDR's system if this is the case? This paradox only exists in the minds of many people today due to the success of the Fabian Society's and Round Table Movement's armada of revisionist historians who have consistently created a lying narrative of history to make it appear to future generations trying to learn from past mistakes that those figures like FDR who opposed empire were themselves following imperial principles.

Another example of this sleight of hand can be seen by the sheer number of people who sincerely think themselves informed and yet believe that America's 1776 revolution was driven by British Imperial philosophical thought stemming from Adam Smith, Bentham and John Locke.

Matthew Ehret is the Editor-in-Chief of the Canadian Patriot Review , a BRI Expert on Tactical talk , regular author with Strategic Culture, the Duran and Fort Russ and has authored 3 volumes of 'Untold History of Canada' book series. In 2019 he co-founded the Montreal-based Rising Tide Foundation and can be reached at matt.ehret@tutamail.com

[May 16, 2020] America's Chilling Experiment in Human Sacrifice

Neoliberalism is a dangerous, evil secular religion.
May 16, 2020 | www.nakedcapitalism.com

Since the days of Adam Smith, free market capitalists have held that human beings are rational actors who pursue economic gain for self-interested motives. But here is Patrick, a free marketer if there ever was one, talking about a gift-sacrifice economy model in which people – some people, at least – lay down their lives to keep the economic engines revved.

Patrick's words reveal an unspoken truth about capitalism. For the system to work smoothly, there have always been requirements of human sacrifice -- a certain portion of the population was expected to act not as self-serving homo economicus, but self-sacrificing homo communis , focused upon what benefits the collective at their own expense. If these people can't social distance at the workplace, they are expected to show up anyway. If there isn't enough safety equipment, they are declared essential workers who must put their lives and that of their families at risk for the greater good.

But for whom and for what is this sacrifice intended? How much dying will be figured into state budgets and gross domestic product (GDP)? When ranked by GDP, the U.S. is the wealthiest economy in the world, but is a country's wealth something totally separate from, or even contrary to, the health and life the majority of its citizens?

Wealth v. "illth"

To help us navigate these questions, it is useful turn to someone who offered potent challenges to the economic calculus of his day: John Ruskin , the 19 th -century art critic-turned-political economist. He was one of the most outspoken critics of capitalism and prevailing economic ideas of the Victorian era , and his work presciently points to shortcomings that have followed us into the present day.

Ruskin questions the premises on which free market capitalism is based, returning to first principles: what is wealth? What do we value? How should we understand the relationship between people, the economy, and the state?

In his view, economies are, above all, social systems whose true end is to benefit the people, and not, as the Texan politician would have it, the other way around. Anticipating the behavioral economics of our own day, Ruskin rejected the idea advocated by such economists as John Stuart Mill that there could be a deductive science of economics based on the assumption that the human being is "a covetous machine" that when applied to actual situations could take "the social affections," the non-rational aspects of human behavior, into account. Ruskin recognized that such a system implicitly removed the marketplace from the constraints of religion and morality that are supposed to apply to all human behavior. He compared it to an assumption that humans are essentially a skeleton with flesh, blood and consciousness as add-ons founding "an ossifiant theory of progress on this negation of a soul."

Ruskin defined wealth quite differently from many of his contemporaries, and ours. For him, wealth is anything that supports life and health, from the supplies in your storeroom to the song in your heart: "There is no wealth but life. Life, including all its powers of love, of joy, and of admiration. That country is the richest which nourishes the greatest number of noble and happy human beings; that man is richest who, having perfected the functions of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others." ( Unto this Last ).

By that definition, America is looking increasingly impoverished. And it is not a virus which is stealing our wealth away.

Playing on the root of the word "wealth" from the Old English word "weal," signifying health, Ruskin proposed that while wealth was anything life-supporting that could be used and enjoyed, it had a dark counterpart that he called "illth" from the Old Norse word for bad – the things that make people ill, their lives stunted and despairing, their environment polluted. Wealth cannot be produced without illth, but great fortunes have been made by extracting the means of wealth without paying the cost of illth. To take a Ruskinian example, a factory that pollutes the water it uses, fouls the air and pays its workers below what a healthy life requires will be more profitable than a business that cleans up after itself and pays a living wage, but its illth becomes a form of national debt expressed in damage to the health of others and the environment. Think of something like a toxic Superfund site.

Economists have a term for Ruskin's concept of illth, referring to it as "negative externalities," even though they are not external to the capitalist economic system, but intrinsic to it. The most daunting problems of the current age, environmental disaster and inequality, are fueled by illth.

The Covid-19 crisis has merely amplified trends of rising illth, of despair, sickness, and alienation, which have been on the rise for decades as globalization, money-driven politics, decimated workers' rights, and privatization have tipped the economic balance far in favor of the very few. If we are to judge a country's health not by GDP, which rises in the face of a massive oil spill , but according to the criteria of the World Happiness Report (WHR), which measures things like social trust and faith in institutions, America is in bad shape when it comes to the ratio of wealth to illth. Scandinavian countries top the WHR, while the U.S. ranks a dismal 19 th .

According to the Columbia University study of the 2020 WHR report , the key factors that account for the relative happiness of Scandinavian countries -- what makes them wealthy in Ruskin's terms -- are precisely those that have been under pressure or cut back in the U.S. since the rise of neoliberalism: "emancipation from market dependency in terms of pensions, income maintenance for the ill or disabled, and unemployment benefits" together with labor market regulation such as a high minimum wage. Of course, no one likes to pay taxes, but Scandinavian "citizens' satisfaction with public and common goods such as health care, education, and public transportation that progressive taxation helps to fund," meets with approval at all income levels.

Pandemics are exacerbated by illth. We can see it in communities of color where the coronavirus strikes down those whose resources and access to health care have been limited by discriminatory policies and high contact employment. We can see it in factory farms where broken supply chains have caused farmers to euthanize livestock and plow under crops while people across the country go hungry. Airlines got immediate stimulus aid in the U.S., but there has been no subsidy for the restaurant supply chain that could be diverted for distribution by food banks and favorably located restaurants thus sustaining at least some of our much-vaunted small businesses. No one has to fly, but everyone must eat.

We sense illth accumulating in the comments of Las Vegas mayor Carolyn Goodman, who, in her eagerness to get the casinos back in business, told an astonished Anderson Cooper on CNN that she would offer up the city's workers as a " control group " in a reopening experiment. If they weren't able to social distance, Goodman was unconcerned: "In my opinion, you have to go ahead," she said . "Every day you get up, it's a gamble."

Ruskin saw the capitalists of his day as gamblers heedless of the costs they foisted onto ordinary people: "But they neither know who keeps the bank of the gambling-house, nor what other games may be played with the same cards, nor what other losses and gains, far away among the dark streets, are essentially, though invisibly, dependent upon theirs in lighted rooms." ( Unto This Last ).

In other words, not only do capitalists gamble with other peoples' lives; they are oblivious to the fact that there are other ways to arrange society, to deal the cards differently, more fairly.

Witness the post-Covid reality imagined by Governor Cuomo. Instead of focusing on what changes could better support the health and lives of ordinary people, he has called in Google CEO Eric Schmidt to head a commission to reimagine New York state with more technology permanently inserted into every dimension of civic life. A better deal for Silicon Valley, to be sure. But what is in the cards for everyone else? When educational platforms and health protocols are mapped by gigantic and unaccountable corporations, who gets lost? Surely the answer is those who can least afford it.

President Trump says that it is time to move on from the coronavirus and get on with economy. Ruskin would have recognized the deity worshipped by country's leader, which he called the "Goddess of getting on." Only Ruskin recognized that she tended to favor "not of everybody's getting on – but only of somebody's getting on," -- what he called a "vital, or rather deathful, distinction." For capitalists, getting on post-Covid means executives working remotely while the rank and file return to the factory floor without adequate face masks, and large corporations, not public input, determines the blueprints for our lives.

The issue of worker safety does matter to Senate Majority Leader Mitch McConnell, but not because he fears that some will get sick or die, but for a potential " epidemic of litigation ." In the next pandemic relief legislation, McConnell is looking to solve the problem of worker safety by shielding corporations from lawsuits rather than supporting Centers for Disease Control (CDC) mandated regulations that would both promote safety and sort out what is and is not actionable.

The Visible Hand

Instead of Adam Smith's Invisible Hand, Ruskin advocated a Visible Hand of reasoned management, a government which could allocate resources effectively and create stores of what citizens most needed in a crisis. In our day this need not be a literal storehouse but surge capacity. The Obama administration, for example, contracted with Halyard Health to design a machine that could turn out 1.5 million N95 masks per day. They were ready to build the machine in 2018 when the Trump administration cancelled the program .

In Ruskin's view, the Visible Hand was the guardian of the lives of the citizens, especially the poor, whose health and lives were their essential property. Ruskin actually defined an economy as the wise management of labor, applying labor, carefully preserving what it produces, and wisely distributing those products. A country's wealth is in the people's strength and health, not their illness and death.

Ruskin's concepts of wealth and illth help us understand the centrality of ethics and responsibility to economic activity, and how economies are not an assemblage of atomistic human units but whole systems of people interacting, where the activities of some impact the lives of all. His work indicates the need for a whole systems approach to a crisis in which what happens on the beaches of Georgia impacts a nursing home in North Carolina, and visitors to New York City or New Orleans can carry the infection home. The decisions of one business in a complex international supply chain can impact the fate of millions.

In unregulated capitalism, Ruskin sussed out what Sigmund Freud might have recognized as the death drive. Decisions about the economy, he held, must be informed by the essential biologic basis of life itself: "The real science of political economy, which has yet to be distinguished from the bastard science, as medicine from witchcraft, and astronomy from astrology, is that which teaches nations to desire and labour for the things that lead to life; and which teaches them to scorn and destroy the things that lead to destruction" ( Unto This Last ).

The Covid crisis has exposed contradictions in market and America First ideology. Without federal aid to state and local governments, essential personnel are being laid off even as we declare them heroes. Employer based insurance is failing, but few American politicians are willing to fully embrace single payer insurance. Meat plant workers are declared essential, but still subject to deportation, as if famed Revolutionary patriot Nathan Hale had said, "I only regret that you have but one life to give for my country."

Ultimately, the most dangerous pestilence that threatens the country is not a packet of RNA called Covid-19 but an economic and political system that does not value true wealth, and promotes the life of the few while condemning the many to literal sickness unto death.


Henry Moon Pie , May 15, 2020 at 5:38 am

Excellent piece by Parramore. Ruskin is an interesting thinker whose ideas have direct application to our situation. This was central:

President Trump says that it is time to move on from the coronavirus and get on with economy. Ruskin would have recognized the deity worshipped by country's leader, which he called the "Goddess of getting on." Only Ruskin recognized that she tended to favor "not of everybody's getting on – but only of somebody's getting on," -- what he called a "vital, or rather deathful, distinction." For capitalists, getting on post-Covid means executives working remotely while the rank and file return to the factory floor without adequate face masks, and large corporations, not public input, determines the blueprints for our lives.

There's one thing I hope the Left learns before too long. Human beings have a religious impulse. It's not as powerful or as central to our existence as the sexual impulse, but it's there in all of us, even Richard Dawkins. Like the sexual impulse, the real question is where will this religious impulse lead us. For the Right, their twisted unChristian conception of Christianity is a powerful force within their political movement. In fact, it might be said to be what holds it together and provides the energy for their unfortunate efforts.

Meanwhile, the Left, considering itself too firmly ensconced in modernity to recognize the reality of the religious impulse despite modern science's identification of it, denies the existence of this basic and potentially powerful human trait. We saw some of the activists and organizers in Bernie's campaign employ deep organizing techniques which are basically spiritual exercises. We know Thomas Berry's calls for a new religion focused on humanity's relationship to the Earth and its creatures. The Left needs to acknowledge our spiritual aspects and work to turn our religious impulse away from patriarchalism, misogyny and homophobia of the Right and toward love for the Earth, our fellow humans and our fellow creatures. That's where reside the power and persistence necessary to overcome our religiously misinspired opponents.

Bsoder , May 15, 2020 at 9:34 am

There is a gene that creates within the brain a structure that either perceives 'god' (my view), or generates a sense of spirituality in [sic] reality. The university of Waterloo has been doing studies on this for at least thirty years. Anything we have evolved has a calorie cost to maintain, so it must serve purpose in furthering life. There have been many debates about this gene but no one can argue it's not about spirituality, and/or god, and/or what the Druids what call magic. To me there's always been, that question, we can go back and have data to 1/billion of 1/billion to 1/billion⁶⁶⁷(minus) of a second before the inflation singularity that created this universe. But then, why? As the said in the 'Little Prince', 'it's only with the heart one sees rightly'.

Susan the other , May 15, 2020 at 10:07 am

The little prince is right. What we call spirituality is intelligence above what is necessary our daily existence. Our "daily bread". Our sixth sense is probably more accurate and reliable than all our rationalizations combined. But it is a thing that can't be orchestrated by religion or politics. What happens between people in groups when fear is eliminated is a sudden change toward choices that are the most sensible. As long as the process isn't interfered with. That's the difficulty. It's like leaving nature alone long enough for it to recover from human devastation.

Clive , May 15, 2020 at 10:28 am

What we call spirituality is intelligence above what is necessary our daily existence.

(although if I was trying to do your comment complete justice, I would have to simply re-quote the whole thing, it was that good)

Sometimes Susan the other, you're so profound, it almost hurts!

Certainly for me, I've got very little, comparatively, in my life right. I've passed on opportunities which would made me rich beyond the dreams of avarice. And much else besides. Mostly because I've overanalysed and rationalised things away. What I've got right has been, conversely, down to following my intuition. If humanity could unlock that potential within us, just think what we could do.

Susan the other , May 15, 2020 at 1:21 pm

If I'm profound Clive it's because I look to you and a handful of other VSP for inspiration.

RBHoughton , May 15, 2020 at 8:48 pm

That's what makes NC unique – the sense of honor and respect amongst supporters.

SAKMAN , May 15, 2020 at 10:29 am

If we are talking about VMAT2 here, then its also been implicated in opiod dependence. . . just another example of god I guess? To some for sure.

Susan the other , May 15, 2020 at 9:58 am

Neo-transcendentalism please.

ChiGal in Carolina , May 15, 2020 at 10:41 am

The Sun
mary oliver

Have you ever seen
anything
in your life
more wonderful

than the way the sun,
every evening,
relaxed and easy,
floats toward the horizon

and into the clouds or the hills,
or the rumpled sea,
and is gone–
and how it slides again

out of the blackness,
every morning,
on the other side of the world,
like a red flower

streaming upward on its heavenly oils,
say, on a morning in early summer,
at its perfect imperial distance–
and have you ever felt for anything
such wild love–
do you think there is anywhere, in any language,
a word billowing enough
for the pleasure

that fills you,
as the sun
reaches out,
as it warms you

as you stand there,
empty-handed–
or have you too
turned from this world–

or have you too
gone crazy
for power,
for things?

Henry Moon Pie , May 15, 2020 at 11:01 am

A response to Oliver's powerful poem from Thomas Berry:

The continuity between the human and the cosmic was experienced with special sensitivity in the Chinese world [A] sense of the sacred dimension of the Earth is involved, a type of awareness less available from our traditional Western religions. This lack of intimacy with the natural was further extended when Descartes proposed that the living world was best described as a mechanism, because there was no vital principle integrating, guiding, and sustaining the activities of what we generally refer to as the living world.

Yet, strangely enough, a new sense of the sacred dimension of the universe and the planet Earth is becoming available from our more recent scientific endeavors. The observational sciences, principally through the theories of relativity, quantum physics, Heisenberg's Uncertainty Principle, the sense of a self-organizing universe, and the more recent chaos theories have taken us beyond a mechanistic understanding of an objective world. We know there is a subjectivity in all our knowledge and that we ourselves, precisely as intelligent beings, activate one of the deepest dimensions of the universe. Once again, we realize that knowledge is less a subject-object relationship than it is a communion of subjects, .

Thomas Berry, "The Gaia Hypothesis: Its Religious Implications" in The Sacred Universe

Susan the other , May 15, 2020 at 1:26 pm

I'm reading Rovelli's The Order of Time right now and every few pages I just stop, my jaw drops and I get lost in the realization.

Rod , May 15, 2020 at 9:59 am

I'm glad you are making this point to acknowledge:

Human beings have a religious impulse.

From my direct experience, Native Americans seem to center their activism in a Spiritual Context. Prayer for Guidance–for courage–for wisdom–for compassion–before starting up on anything. imo, it keeps the priorities in focus.

Petter , May 15, 2020 at 3:12 pm

I'm posting in this thread even though I'm not sure it fits. The religious or spiritual impulse appears to be universal, there doesn't seem any doubt about that. Here's an interesting article on Big Gods, or moralizing Gods.
Big data analyses suggest that moralizing gods are rather the product than the drivers of social complexity:
https://www.sciencedaily.com/releases/2019/03/190320141116.htm
-- -- -- -- --
One prominent theory, the big or moralizing gods hypothesis, assumes that religious beliefs were key. According to this theory people are more likely to cooperate fairly if they believe in gods who will punish them if they don't. "To our surprise, our data strongly contradict this hypothesis," says lead author Harvey Whitehouse. "In almost every world region for which we have data, moralizing gods tended to follow, not precede, increases in social complexity." Even more so, standardized rituals tended on average to appear hundreds of years before gods who cared about human morality.

Such rituals create a collective identity and feelings of belonging that act as social glue, making people to behave more cooperatively. "Our results suggest that collective identities are more important to facilitate cooperation in societies than religious beliefs," says Harvey Whitehouse.
-- -- -- -

Amfortas the hippie , May 15, 2020 at 6:14 am

I can definitely recommend Ruskin's "Unto This Last". I obtained it(among several others that had been on my list(from NC) for a while) just before Covid.
short book wonderfully written.
and kicks you in the gut like some new revelation.
turns out that divorcing "Economics" from "Political Economy" was a mistake.
treating the former as if it were a natural science, like Physics or Chemistry let alone Pure Mathematics is deleterious.
It ignores and neglects all the amorphous and ephemeral things that make this Life worth living .how can you quantify a sunset or a moonrise or the smell of your newborn's hair or a first kiss?
the Economists have taken reductive essentialism to absurd extremes .and somehow convinced a great many of us to go along to our ultimate destruction.
https://www.youtube.com/watch?v=MHOhD0RT9NU

Marx called this sort of thing Reification .giving something a Quality it doesn't truly possess. Money as the Holy Cracker in the Temple of Moloch.
or, the morality of a Serpent: I shall Devour.(see: Joseph Campbell:"a serpent is a "motile alimentary canal")
we're expected to feed ourselves and our children into the flaming bronze maw of their idol( https://en.wikipedia.org/wiki/Moloch )
as if "The Economy" is some thunderstorm or Holy Mountain, instead of a Human Creation.
"There is no such thing as Society" .and "TINA" .and these moronic "protesters" holding signs that say "Arbiet macht frie" apparently unaware of the provenance of that phrase .after all , we stopped really teaching the Humanities like History quite a while ago.
we forget that "They" require our assent and consent to this "sacrifice"(L:"to make holy") that without that consent, they have nothing not even their precious wealth(which is what, these days? electrons moving in a database, somewhere?).

now, "They" have as much as admitted that things like the Stock Market are disconnected from Reality that the Casino doesn't need Main Street and Human Beings to function.
This, after decades of training us to believe just the opposite. Why else put a stock market ticker at the bottom of every cable news channel as if all that mattered to us'n's?
One of my favorite words is Eudaimonia ( https://en.wikipedia.org/wiki/Eudaimonia ) but you only learn about that from the Humanities.
another of my favorite words is Thaumazein "Wonder", or "Awe" also from ancient Greek Philosophy
we've allowed the most withered souls to define the Good for us
Now, when all their works lie in ruins around us .and their narrow and anti-humanist, mechanistic absurdity and cruelty are on full display has there ever been a better time to turn away? To sit and think about what matters?
Withdraw your Consent.

" O happiness! O happiness! Wilt thou perhaps sing, O my soul? Thou liest in the grass. But this is the secret, solemn hour, when no shepherd playeth his pipe.
Take care! Hot noontide sleepeth on the fields. Do not sing! Hush! The world is perfect.
Do not sing, thou prairie-bird, my soul! Do not even whisper! Lo- hush! The old noontide sleepeth, it moveth its mouth: doth it not just now drink a drop of happiness --
-- An old brown drop of golden happiness, golden wine? Something whisketh over it, its happiness laugheth. Thus -- laugheth a God. Hush! --
-- 'For happiness, how little sufficeth for happiness!' Thus spake I once and thought myself wise. But it was a blasphemy: that have I now learned. Wise fools speak better.
The least thing precisely, the gentlest thing, the lightest thing, a lizard's rustling, a breath, a whisk, an eye-glance -- little maketh up the best happiness. Hush!
-- What hath befallen me: Hark! Hath time flown away? Do I not fall? Have I not fallen -- hark! into the well of eternity?
-- What happeneth to me? Hush! It stingeth me -- alas -- to the heart? To the heart! Oh, break up, break up, my heart, after such happiness, after such a sting!
-- What? Hath not the world just now become perfect? Round and ripe? Oh, for the golden round ring -- whither doth it fly? Let me run after it! Quick!"
( http://4umi.com/nietzsche/zarathustra/70 )

Bsoder , May 15, 2020 at 9:43 am

Good day it you sir, you are in rare and most excellent form, Amfortas. Amen.

McKillop , May 15, 2020 at 3:00 pm

Hey Amphortas the Hippie!
I enjoy reading your comments and the slices of your life served up to us – you are an interesting guy and a good antidote to me whenever I am disheartened by the stuff I am bombarded with by the exceptional Americans foisted upon the world as typical.
Who would believe that I read Thus spake Zarathustra 'cause of your comments? I sent the link on to my son who is 16 and has been physically separated from us for months caught in this vortex. We'll see how it is taken compared to Mnm.
Thanks

Amfortas the hippie , May 15, 2020 at 3:21 pm

Aww. Thanks, dude/dudette.
zarathustra is very accessible.
i've noticed that lots of people(like my wife) have been taught somehow that they can't read stuff like that, so don't even try.
just another crime against us all.
aristotle can be pretty dense as can a lot of the more familiar philosophers(hegel=ugh–) but Nietszche is pretty easy to get into, due to his style .although some translations are better than others(I like the translation linked above for Zarathustra the KJV Tone works for me.)
One shouldn't be intimidated by Marcus Aurelius, Herodotus or Boethius, either.

rob , May 15, 2020 at 7:42 am

Isn't it ironic, that ruskin was able to see our issues and spoke to people with such force as to effect our lives and in a sense is partly responsible for the world we have today.
When he spoke at oxford in 1870 cecil rhodes was so impressed he supposedly carried a copy of it with him in the future.
The ideas expressed by ruskin convinced rhodes that he needed to save "good english society" from "the masses"(the poor english and all the rest of the savages who wouldn't understand how to be proper."
Rhodes and his cohorts,in the british upper crust and media establishment created "the british rountable" in 1891. These roundtablers did lots of things..Both through official channels and by ways of running the largest newspapers who really perfected propaganda, decades before goebbels. Eventually they formed in 1919, "the royal institute of international relations" in britian. and "the council on foreign relations" in new york"
Generations of these members have really "made" the world that exists today. Which is why the "conspiracy theories" exist . when people look at the lists of who
Personally, I think there ought to be study in the relationships these people had with each other and with history. As with any family, they may be related, but not always on the same page but still have the power of the family name and the prestige.
The council on foreign relations is the wellspring of "neoliberalism" neo consevatism too , for that matter. Their place in history is central. This is the axis of the "anglo-american establishment"

rob , May 15, 2020 at 9:02 am

oops, that is "royal institute of international affairs" or as people refer to it "chatham house"

Off The Street , May 15, 2020 at 9:21 am

Upon first reading the headline about America's Chilling Experiment in Human Sacrifice , I wondered: Which one?

Now back to Ruskin.

shinola , May 15, 2020 at 10:02 am

Dan Patrick's attitude is a prime example of a principle that regular NC readers may have seen a time or two:

Because Markets / Go Die

anon2 , May 15, 2020 at 11:26 am

Hence the folly of an economy based on debt rather than equity: it must continue to run or risk cascading defaults.

Then why do we have government privileges for private debt creation in the first place? Because subtle theft is easier and more "efficient" than honest sharing?

Alex Cox , May 15, 2020 at 12:15 pm

Perhaps science is the religion of the PMC. An unquestioning belief in anything scientists/big pharma/tech wizzards throw on the table, whether it's GMOs, vaccines containing mercury, thalidomide, social media, driverless cars or trips to Mars.

JBird4049 , May 15, 2020 at 2:14 pm

I use to go to Nevada regularly and mostly via the Donner Pass. Just a roundabout way of suggesting that some might consider the Donner Party as the right way to have a society. They almost made it over the pass, missing it by a couple of days, despite taking a shortcut that was actually a longcut using bad information from a book, IIRC. They were told repeatedly by those who had gone West before not to do so, but

They remind me of today's times.

Dwight , May 15, 2020 at 2:32 pm

In Nashville, TN last month, a masked protester at the state capitol carried a sign "Sacrifice the Weak." I was shocked when a local news show reported on protesters and filmed this sign along with other signs and protesters, and the reporter did not comment on this horrible, Nazi-like statement.

p fitzsimon , May 15, 2020 at 4:32 pm

Have there been any prominent religious leaders who have given counsel on the sacrificial nature of a return to work to save the economy. At what point is the risk to human life and health compensated by an economic return?

Hepativore , May 15, 2020 at 11:00 pm

Come to think of it, does it not seem odd that with many prominent religious figures, none of them seem to be willing to speak up on how greed is destroying the world and all of the wealthy owners of capital that are its promoters? Greed is a major sin in almost every religion, yet you hardly ever see any religious clergy give sermons on how widespread and dangerous greed is or publicly admonish Wall Street if they hold themselves up to be the moral leaders of society.

Henry Moon Pie , May 15, 2020 at 7:20 pm

The great way is low and plain,
but people like shortcuts over the mountains.

From Ursula K. Le Guin's translation of the Tao te Ching #53

It's an old problem.

Chris , May 15, 2020 at 10:01 pm

The fundamental problem we have with all the "very smart people" who think economics is a science is that I can't write an equation that will convince these masters of the universe that they shouldn't be @$$holes.

I can't tell anyone that even if it doesn't profit you there's a reason to choose to help your fellow humans.

I also can't define a relationship that explains why even if you can figure out how to stay within the letter of the law and exploit a loop hole to make more money but only in way that hurts other people, you shouldn't do it. Or why you shouldn't write a law or lobby for a law that exists only so it can be abused.

These guys will never accept the concept of illth because it challenges their concept of wealth. And so it goes

eg , May 16, 2020 at 4:59 am

One of the best educated persons I know shared this with me: the most valuable thing is a hierarchy of values.

rob , May 16, 2020 at 8:15 am

I thought it was a trust fund in a tax haven.
Silly me.

DHG , May 16, 2020 at 4:25 pm

I dont gamble with my life. The shrewd will take the necessary precautions and keep themselves concealed as much as possible. The stupid will not take these precautions, likely get sick and some will perish .

Karen , May 16, 2020 at 5:46 pm

It amazes me that protesters and policymakers are still treating this as an impossible tradeoff -- a false dichotomy -- between life and money, when it's clear that success lies with practical solutions, of which there are many, to achieve both. Starting with masks!

I love the idea of billionaires leading the way, demonstrating the efficacy of their reopening plans through personal example.

[May 16, 2020] In the "brutal economics" of capitalism, the lives lost to the COVID-19 pandemic are simply the cost of doing business. While trillions of dollars have been spent propping up financial markets, no serious efforts have been made to contain the pandemic

May 16, 2020 | www.moonofalabama.org

bevin , May 16 2020 15:31 utc | 104

An excellent article on the WSWS:
"...In the "brutal economics" of capitalism, the lives lost to the COVID-19 pandemic are simply the cost of doing business. While trillions of dollars have been spent propping up financial markets, no serious efforts have been made to contain the pandemic, and whatever mitigation measures have been put in place, including the closure of businesses, are being rapidly abandoned.

"The efforts by the ruling class to counterpose workers' lives to livelihoods is an entirely false choice. Both can be defended with the necessary allocation of social resources to stop and eradicate COVID-19 and all other communicable diseases. Non-essential workplaces must remain closed for as long as it takes for these measures to be put in place.

"But containing the pandemic requires an investment in social infrastructure that the capitalist class is not willing to make. The COVID-19 pandemic has made clear the utter incompatibility of the capitalist system with the preservation of the most basic social right: the right to life."
https://www.wsws.org/en/articles/2020/05/16/pers-m16.html


"I also don't know why you would quote a Wapo article, uncritically, in response to fairleft. Why would I care what they say about anything? They represent power. I consider them no more reliable on pharma imperialism as they are on military imperialism."
oglalla@102
You answer the question yourself. Nobody is suggesting that anyone read the Washington Post uncritically. I am surprised that you should accuse b of having done so. The evidence is that he has read the Post critically-as we all have to do in a culture in which the major source of news, for everyone, is a media compromised enormously by its allegiances, particularly its allegiance to capitalism.
Read the Wapo critically and you will be left with a residue of information which can be cross checked by various means, once you have done that you can evaluate the importance of its conclusions. It is what we all have to do.

[May 16, 2020] "Three of the largest for-profit nursing home operators in Ontario, which have had disproportionately high numbers of COVID-19 cases and deaths, have together paid out more than $1.5 billion in dividends to shareholders over the last decade, the Star has found.

May 16, 2020 | www.moonofalabama.org

bevin , May 16 2020 13:39 utc | 87

Maybe this story from the Toronto Star will help explain why so many people are dying:

"Three of the largest for-profit nursing home operators in Ontario, which have had disproportionately high numbers of COVID-19 cases and deaths, have together paid out more than $1.5 billion in dividends to shareholders over the last decade, the Star has found.

"This massive sum does not include $138 million paid in executive compensation and $20 million in stock buybacks (a technique that can boost share prices), according to the financial reports of the province's three biggest publicly traded long-term-care home companies, Extendicare, Sienna Senior Living and Chartwell Retirement Residences.

"That's a total of more than $1.7 billion taken out of their businesses."

Beneath all the uninformed, pretentious anecdote swapping about stats and panaceas, the drivelling over whether or not there is a pandemic or whether Bill Gates, Soros or the KKK planned and executed it on behalf of haute finance, something very simple is taking place.
Capitalism, which devours people and turns lives into capital, having made a pandemic disease of the sort now surrounding us inevitable, is protecting itself. Its major fear is that if there are too many victims-cf The Black Death- the price of labour may rise to the extent that it impinges on the rate of profit. It dare not consider the possibility that the working class will organise itself to put an end to the system, as an alternative to doing what men have done throughout the history of epidemics- blaming everything on an angry deity or an elite such as the Illuminati, the Council for Foreign Affairs or bloggers corrupted by money.

[May 16, 2020] Wall Street's Useful Idiot Financial Times Shills for CLOs....as Fed Hasn't Bailed Them Out

May 16, 2020 | www.nakedcapitalism.com

It's not a popular position to point out that a particular financial risk is overblown. But when everyone in Corporate America and investor-land is in "Where's my bailout?" mode, the usual motivations are reversed. Normally, "Nothing to see here, move along" is the default position when the great unwashed public worries about too much leverage, opacity, and tricky practices. But when central banks are doling out trillions, sounding alarms, whether warranted or not, is the way to get someone else to eat the risks you took for fun and profit. And as we'll demonstrate, the Financial Times looks to have become an unwitting tool of CLO (collateralized loan obligation) investors who haven't yet gotten their Fed handout.

The article in question is headlined: CLOs: ground zero for the next stage of the financial crisis? The headline and the breathless tone set the reader up for the idea that these complex structures will blow up the financial system, just the way their cousins, collateralized debt obligations, did in the financial crisis.

But as we'll explain, the absolute size of the CLO market, and banks' not-much exposure to the risky parts of it, means that absent fraud (or a systemically important bank and wobbly bank having gotten high and binged, and the pink paper and others would likey have gotten wind of that by now), there's no risk to the banking system. And in the hoary old days of the crisis just past and its predecessors, that was the justification for throwing official money in big volumes to clean up bad lending decisions: that as much as it would seem proper to let incompetent institutions go tits up, letting banks fail tends to engulf even healthy banks, since no one can tell from the outside very well how solvent a particular institution is, and hurts innocents like depositors (even with deposit insurance, it is pretty much impossible for a business of any size not to have way above the guaranteed amount in its accounts regularly, if nothing else when it issues payroll).

So what the Financial Times piece is effectively getting worked out about is that some investors will lose money. Newflash! Investing involves risk! Who'd have thunk it!

In other words, this Financial Times piece is implicitly selling the idea that the consequences of some deep pockets taking hits is just oh-too-dangerous. This is Greenspan put thinking on steroids. And sadly, it seems to be treated as a reasonable line of thinking. Wealth must be spared. The hell with those who live from labor income.

What CLOs Are and Why Comparisons to CDOs Are Spurious

By way of background, a pet peeve of ours is that the financial crisis is widely depicted as a housing crisis when it was in fact a derivatives crisis. If we had merely had subprime and Alt-A loans go bust, the result would have been on the order of the S&L crisis plus maybe another 50%. Bad but nothing like the seize up of the global financial markets that took place in September 2008.

As we explained long-form in ECONNED, collateralized debt obligations consisting substantially of the risky tranches of subprime mortgage bonds (the BBB and BBB- layers) dressed up the part of of subprime securitizations that no one wanted to buy. The top tranches of those CDOs, comprising 60+% of par value, were rated AAA.

But even that wasn't sufficient to blow up the global financial system. Demand by subprime shorts and banks seeking protection for the loans they were advancing to the likes of subprime lenders like New Century and IndyMac led to the use of substantially synthetic (made mainly of credit default swaps rather than tranches of actual bonds with actual mortgage loans behind them) as a way to generate artificially cheap insurance on the riskiest rated layer of subprime debt. Those derivate exposure have been estimated at 4-6X the real economy exposures. The reason the financial system blew up is that the side bets were a significant multiple of real economy activity, and the parties on the wrong side of those wagers were systemically important, highly leveraged players like AIG, the monolines, Eurobanks, Citigroup, and Merrill.

It is also important to remember the base line. Banks have repeatedly managed to blow themselves up in entirely conventional ways, with good old fashioned loans. Remember the Latin American debt crisis? The commodities bust of the early 1990s, which crated energy and real estate lenders in the oil patch? The afore-mentioned S&L crisis? The not as well publicized LBO loan crisis of the late 1980s and early 1990s? Oh, and how about one of the mothers of bad lending, the Japanese commercial (and to a lesser degree residential) real estate bubble and bust?

Now let's look at CLOs. They are intrinsically less risky than asset-backed-securities CDOs, which the press took to calling just "CDOs".

Those CDOs were resecuritizations. They were created from the riskiest parts of mortgage securitizations made of risky loans, as in subprime or Alt-As. Those tranches usually represented only 3% of the entire deal. They'd be worth 100% if the losses on the subprime RMBS was 8% or less, and totally wiped out if the losses were higher than 11%. Since subprime losses averaged more like 40%, nearly all these CDOs were complete wipeouts.

By contrast CLOs are made from risky corporate loans, so-called "leveraged loans" typically made when a private equity firm is buying a portfolio company. So they are more analogous to a subprime RMBS (residential mortgage backed securitization) in terms of the risk level of the assets. 1 Note that even with the high level of subprime losses, AAA tranches of RMBS lost only 0.42% on average .

Even though there was a tidal wave of risky "leveraged loans" to fund deals at sky-high prices right before the last crisis, and a lot of them wound up in CLOs, while their value traded down afterwards there were no losses. Admittedly, the Fed dropping interest rates and manipulating long-term rates lower allowed many of the pre-crisis loans to be refied at lower rates. But the Fed didn't engage in measure intended to rescue corporate borrowers; they were just lucky beneficiaries.

Nevertheless, CLO structures have been made more conservative since the last crisis. See here for geeky details .

But with the bottom dropping out of the entire economy, a lot of former sure-looking bets won't work out so well.

But should we even care about CLOs? First, the market isn't all that large. S&P in early 2020 pegged it at $675 billion. By contrast, the subprime market, depending on whether or not you included Alt-As, was estimated back in the day at $1.3 trillion to a bit over $2 trillion. And US GDP was $14.5 trillion in 2007 versus $21 trillion in 2019. Using Pimco's forecast of 5% contraction for the full year, you still get roughly $20 trillion, showing that the relative importance of subprime lending has fallen even further. And that's before you factor in the way that credit default swaps greatly magnified the real economy exposures and concentrated them at systemically important, fragile players.

This chart from Guggenheim Investors is a little dated, since it shows a smaller CLO market size but it gives a good idea of who buys what:

The key bit: what do banks own? They are the ones that have to be saved even when they do really dumb things; the other players are supposed to be savvy investors who can take losses.

You can see that banks are the big owners of the AAA tranches, which have shown over time to have enough loss protection that you'll get all your money. And they are listed third as owners of other investment grade tranches, which means they are less important players than insurers and money managers.

More detail from S&P in March 2020 :

CLO holdings at U.S. banks increased by roughly 12% in 2019, to $99.5 billion, with a number of banks growing their CLO securities exposure by double-digit rates, according to year-end filings with the Federal Reserve .

What is perhaps most striking about the results is the high degree of concentration of CLO debt inside the three banking entities, relative to the rest of the banking sector. At $80.2 billion, the three largest holders make up nearly 81% of all U.S. bank CLO holdings.

However, the size of CLO holdings as a percentage of the top-three banks' investment portfolios is relatively small. For JPMorgan Chase, Wells Fargo, and Citigroup, CLOs as a percentage of total securities on book are 7.5%, 6.9%, and 6.0%, according to Y-9C data.

Now, at just under $100 billion, total U.S. bank exposure represents roughly 15% of the $675 billion CLO market. Assuming that U.S. CLO AAA supply is around $400 billion and that most of U.S. bank CLO holdings are AAA, then U.S. banks can be said to hold roughly 25% of all AAA supply, according to researchers from Wells Fargo.

Japanese banks can also be expected to hold near the same amount, or around 25% of the total AAA supply of U.S. CLOs, according to Wells Fargo.

So who is at risk? Apparently the equity tranche, the bottom 8.5% in the chart above:

Waterfall of payments in CLOs, via Morgan Stanley, which estimates that 85% of outstanding CLOs in the U.S. may fail their junior over-collateralization (OC) tests as leveraged loans default. pic.twitter.com/cx2GFlAXL5

-- Tracy Alloway (@tracyalloway) May 7, 2020

To translate: securitizations have risk buffers in the form of overcollateralization and excess spread. "Overcollateralization" results from the fact that the loans in a securitization have a higher principal amount that than the total par amount of all the tranches. Say $100 of loans have $103 of loans. The $3 is the overcollateralization and the CLO documents describe who gets how much benefit from it. 2

What the tweet is saying is that the losses on the loans look like they'll get to be high enough that the equity layer in some (many? most?) CLOs will stop getting interest payments. But again, why should we care? If all the equity tranches stop paying out, that was shy of $60 billion in par value. And it's not a total bust since they got payments in full before their investment crapped out. And the owners are primarily hedge funds. This is just not worth getting lathered up about, particularly in comparison to all the other exploding loss-bombs.

Likely Reason for the Financial Times' Hyperventilating

Despite being a "Long Read," meaning it presents itself as having more reporting behind it than a typical story, it's remarkable to see the Financial Times duck the real story, private equity leverage, which predictably leads lots of lenders holding the bag at the end of every financial cycle.

And the article also sidesteps another key question: did CLOs make the situation worse than the old-fasioned approach of syndicating leveraged loans (which foreign banks took down in size in the first LBO wave in the 1980s)? Quite honestly, I suspect you can argue it both ways. On the one hand, unless the benefit of CLO risk slicing and dicing went entirely to the sponsors and packagers (possible), investors presumably were willing to accept lower interest rates to get more finely tuned risk exposures. That would somewhat lower the cost of private equity lending, but it's not clear that this made anything more than a marginal difference. 3

On the other, CLOs per the discussion above really did move a lot of the risky exposures out of the hands of usually self-destructive banks and over to investors who bill themselves as sophisticated and able to take risk.

The Financial Times account does provide market size (using JP Morgan data, which gives a slightly higher level that S&P did), albeit a bit of the way into the piece, but no distribution of exposures by rating or who the various investors are. And before the authors get to that, they hand wring over a debt restructuring of medical staffing company Envision Health. As vlade pointed out by e-mail:

The headline is fearmongering and a lot of comments lapped it up.

Thinking about it, the picking of the health company and saying how it's going to suffer is also there, implying "if you don't bail out the debt, look at how bad things will happen."

Vlade is not exaggerating. The article waves the "saving us from coronavirus" flag:

In the midst of a global pandemic, emergency rooms across the US have fallen strangely quiet as patients with other illnesses have stayed away for fear of contracting Covid-19. As a result, one of the surprising corporate casualties of the coronavirus crisis could be some of the companies that provide staff for hospitals.

Envision, one of the largest medical staffing companies, completed a restructuring of its roughly $7bn of debt this month as it moved to stave off bankruptcy.

US readers of this site know better than to see Envision as a good actor. As we've written several times, based on the gumshoe work of private equity expert Eileen Appelbaum, KKR-owned Envision and Blackstone's Team Health have been lead players in the "surprise billing" and other price gouging schemes. The fact that Congress and some states have been working on legislation to end surprise billing is why Envision's bonds are in trouble. And that reaction also shows how important the fleecing is to the company's bottom line.

In fact, one has to wonder if the Envision staffing cuts mentioned later in the piece are a shot across legislators' bows: "Nice ERs you have. Shame if something were to happen to them."

This chart also serves to exaggerate how bad things are:

The viewer's eye naturally goes to the top line, for the BB tranches the yields have risen the most. Those BB instruments are a mere 3-4% of the total value of the CLO market! They are rounding error. By contrast, the AAA tranches are yielding pretty much what they did in later 2019. Yes, they aren't trading the same as other AAA instruments, but seasoned structured credit investors ought to know that these AAA creations can and often do trade down in crises, unlike Treasuries and government guaranteed credits.

Moreover, eyeballing the charts, yields have improved since mid-late April, meaning investors are less edgy, when even then, Reuters reported that new CLO deals were getting done on reasonable terms. From an April 22 story :

There has been US $39.4bn of US CLOs arranged this year through April 19, inline with the US$38.7bn sold during the same period last year, according to the data from LPC, a unit of Refinitiv. A record US$128.1bn of US CLOs was arranged in 2018.

US CLO issuance this year has been challenged as spreads on Triple A tranches, the largest and most senior piece of the funds, have continued to widen, hitting an average of 136.2bp in March, slightly tighter than the more than two-year wide of 138bp in February, according to the data. The wide spreads can cut into returns paid to equity holders, who are paid last after all other debtholders receive their distributions, and may cut into overall issuance.

"Spread levels on US CLOs still look relatively attractive compared to other securitized products and corporates," Collin Chan, a CLO strategist at Bank of America Merrill Lynch, said in an email

"Although the arbitrage for new-issue deals has compressed, (CLOs) are still getting done because equity investors still find the levels acceptable," Chan said. "Insofar that we do not see significant spread tightening in the loan market while CLO spreads stay wide, dealflow could certainly continue."

Now as the Financial Times article points out, some CLOs are more wobbly:

More than 100 CLOs were failing at least one trigger brought on by escalating triple C loans, according to April data compiled by Barclays, with 40 failing tests for their triple B rated tranche or higher -- debt that is regarded as investment grade. Twelve have also failed tests up to the double-A rated tranche, according to BofA.

It's hard to know how significant this is without having dollar values. The Financial Times also warns that one-third of the BBB tranches are on review for a downgrade, but again, I find it hard to be sympathetic. If you bought BBB paper, you knew there was decent risk it would decay into junk. However some of these bonds are held by life insurers, who are restricted in how much they hold in non-rated/non-investment grade assets. They usually max out that bucket with real estate. So if their BBBs get downgraded, they'd probably have to sell.

So why all this unseemly whining? The most obvious explanation is that the Fed isn't doing much for CLOs. One has to wonder if money men have been playing up how bad things supposedly are to get more rescue money. From the Wall Street Journal on April 22 :

The Federal Reserve will lend $2.3 trillion to support the economy The Fed excluded some securities tied to corporate loans and commercial real estate that were among the newest, fastest-growing segments of the bond markets

The [$100 billion] TALF program won't include the vast majority of a popular structured security known as a collateralized loan obligation, which is made up of corporate debt generally used to finance buyouts. The program does include so-called static CLOs which don't allow for reinvestment of loan proceeds, but those account for only a small share of the market. The vast majority of CLOs allow such reinvestment and aren't included.

The central bank threw some small additional bones to the CLO market earlier this week, but still left most CLOs ineligible. From Bloomberg :

The Federal Reserve revised its Term Asset-Backed Securities Loan Facility to allow CLOs that hold a broader range of leveraged loans to be used as collateral.

The Fed will now accept new AAA CLOs with leveraged loans, including refinanced loans, that priced as far back as January 2019, according to a statement Tuesday on the central bank's website. Previously, eligible collateralized loan obligations could only hold newly-originated loans .

Yet the changes will only go so far, market watchers say. The terms still require eligible CLOs be static vehicles wherein managers can't actively trade the loans underpinning the deals, a structure that makes up only a small portion of the market.

It is really a shame to see what has happened to the Financial Times. It was the only major media outlet before the crisis where quite a few writers, particularly Gillian Tett but also John Authers, Martin Wolf, and John Dizard, saw that risk was being underprices across all credit markets and sent clear warnings that things could end very badly, when the US financial press was uniformly in la-la land.

Since the crisis, the paper has gone firmly neoliberal, and perhaps due to the lack of time to do reporting on top of being now the US editor, Tett veers from doing extremely insightful pieces reminiscent of her glory days as capital markets reporter, to doing far too many articles that have all the hallmarks of her having spent too much time with people talking their book. Similarly, this CLO article does show the authors did a lot of legwork, yet somehow missed or chose not to address the most important questions.

_____

1 And remember, at least so far, we don't have evidence of widespread lending fraud, a big feature of the subprime mania. However, a key difference is that with mortgage-backed securities, the mortgages are transferred through several intermediaries to a trust and they stay there. Certificates are then sold that represent the rights to interest and principal payments made to that trust. With CLOs and CDOs, they can be "static" meaning the loans (or RMBS tranches) are set at the get-go and don't change, or "active," meaning a manager can trade assets in and out from time to time, subject to overall restrictions. Most CLOs are active.

2 I haven't seen any actual CLO documents, so some of my interpretations from CDOs and RMBs may be a bit wide of the mark. RMBS had distinct waterfalls for principal and interest payments. This chart covers only interest payments. It doesn't mention that the deals almost certainly had "excess spread", meaning that loans that paid, say, an average of 7.5% across the CLO would have total interest payments of only 7.2% across all CLO tranches. This chart presupposes that the excess spread is already gone and required interest payments are at risk, so the equity tranche takes the hit first.

The article does have good detail on this issue. Basically, downgrades of loans are producing breaches of collateral quality tests, and that looks set to cut interest payments to the equity layer:

Typically, CLOs are permitted under their own rules to hold up to 7.5 per cent of their assets in triple C rated debt. If they stay within this threshold then managers of the CLOs can treat the loans they own as if they are worth 100 cents on the dollar.

This is because when a CLO is created, the underlying portfolio of loans is larger than managers need to pay off debt investors. This is known as over-collateralisation. So long as the number of loans that are near to defaulting remains below the 7.5 per cent threshold, the portfolio is treated as though there will be enough money left at the end to pay investors.

However, if a CLO exceeds its triple C bucket, as many now have, then the lowest priced loans above the threshold are required to be valued at a market price. In a crisis, with loan prices having fallen sharply, this lowers the overall value of the portfolio of loans reported by the CLO. That in turn can impact how investors are paid.

If the value of excess collateral slips by more than a few percentage points, managers typically first cut off 50 per cent of any interest payments on the underlying loans that would have gone to equity holders and use it to buy more loans, with the aim of increasing the value of the portfolio and correcting the breach.

If the value of the underlying loans falls further, then all money is cut off to equity investors. That money is used not only to pay interest to debt investors but to start paying back the principal of the debt, beginning with the triple A rated bonds.

3 Even if private equity firms could achieve somewhat higher leverage levels, that's not a big bennie. Private equity has for many years been sitting on tons of "dry powder," meaning uncalled capital. So their equity isn't a scarce commodity. Thus the gain is a marginal decrease in interest charges. Helpful but hard to see as significant.


vlade , May 15, 2020 at 7:13 am

The article is actually fascinating case of journalism.

It's obvious it's a reasonably well researched and all, but the main conclusions (CLOs will kill us all, and securitised products per se are nuke equivalents) it draws (which are actually not spelled out in the article as explicitly as in the headline) are just nothingburgers when it could have been a great article on the PE leverage and how it makes the current economic crisis worse.

One has to wonder whether the authors are dumb (unlikely, as the article has a lot of detail), naive, or actively shilling for the investors (remember, FT is now owned by Nikkei, and largest CLO holder is a Japanese bank) or some combination.

Colonel Smithers , May 15, 2020 at 9:32 am

Thank you, Vlade.

I know some of the FT's journalists. From conversations with them over the past dozen years, your final phrase is spot on.

Shilling is probably the main cause. Why? Some of the younger journalists see colleagues like Martin Wolf, Gillian Tett and Rana Foroohar on the celebrity circuit, appearing on talk shows and at Davos and getting commissions from publishers. They wish to join these circles, but financial institutions and other investors are gatekeepers, so they must cooperate.

If they can't join that celebrity circuit, they can advise governments and lecture at Harvard like Camilla Cavendish, who never stops bragging about being responsible for the UK's sugar tax and wagging her upper middle class finger at us plebs, or they can head public affairs at big corporations or act as public relations advisers to oligarchs.

There are two classes of journalists at the FT. It does feel class based. There are the reporters on the daily output, e.g. the banking team, and the weekly shills like Simon Kuper, Robert Shrimsley and Jim Pickard.

Editorial control is more tightly exercised by Nikkei as time goes on.

Do you remember the FT's expose of the Presidents' Club a few years ago? That gathering had been going on for thirty years and was an open secret. In order to show its right on credentials and target a new readership, the FT deployed a dozen plus hacks, well, hackettes, to infiltrate the gathering.

vlade , May 15, 2020 at 10:19 am

I'd add another class to the FT journous – FT Alphaville. For me, FTA is the only part of FT worth reading. Paradoxically, it's the only one that's free.

H. Alexander Ivey , May 15, 2020 at 8:07 pm

As a regular reader of FT Alphaville and a subscriber to FT itself, I have to agree with Ives' and vlade's observations on what once was a reasonable mainstream paper. They have drunk the kool-aid.

But don't give up totally on the comments, there're plenty of ankle biters out there.

Harry , May 15, 2020 at 7:48 am

So I will put my quibbling hat on, and I should prophylactic-ally note I pretty much agree with everything you wrote subject to a couple of caveats.

I wrote something up as a consultancy exercise on this early last year, which is why I am under the misapprehension that I know a little about it. Also I know Mr. Rosner has been all over this subject for a year, at least! Indeed definitely longer. Indeed Mr. Rosner has been warning about the risks associated with this, and the BDC-type lending for quite some time! But that is his "victory lap" to take.

1) BoE estimated global leveraged loan market as being around $3.2bn. They would have agreed with Guggenheim about around 45%-50% of that market being CLOs. So its probably a bigger market than S&P estimated. I think the BIS suggested $2.4bn for LL and once again about 50% of that being CLOs. I suspect S&P were looking at only North America. But I would still have guessed that $600bn number is too small. Europe?

2) Lobbying for free money! Yup, thats exactly why you hire financial PRs. If everyone else is getting bailed out then, the Fin PRs need to show they are doing something. Call Tracey Alloway! I am told the trade groups in DC are lobbying like crazy on behalf of the shadow banks too! MBS REITS etc.

3) Totally agree re private equity being behind the push to rescue these guys. Personally, I think they do have a nasty problem. The underlying leveraged loans need to eventually be refinanced. If you deplete the pool of equity in the deals you will struggle to find more. The CLOs will enter run-off mode and will not participate in new financings. That will happen around 7.5% CCC content. The PE guys desperate need the CLOs to remain alive. In this kind of structured credit, a shortage of any type of credit, either equity, mezz or one of the higher credit tranches will kill new or rollover deals. So if you want to prevent a cascading series of defaults resulting in pretty much ALL CLOs going into runoff mode, then you need the Fed to step in.

4) Vlade is right. Japan in the form of Norinchukin or Japan Post own about 10% of all the AAA tranches. The FSA did a review and suggested they lighten up a while back. Last time i looked they had been doing so the glacial way, by allowing maturities to slowly reduce their position.

It looks a lot like a death spiral too me.

All that said, I have a very tiny violin in my hands. While I dont blame our PE overlords for trying to steal more money from the tax payers, I dont know why the tax payer should play ball. Apologies for the inevitable typos and forgive if I have misunderstood or misreported myself.

vlade , May 15, 2020 at 9:37 am

I think the whole CLO market is around 1trln (give or take a few hundred bln). So still a small fraction of say junk bonds market, or even RMBS market.

The important thing is as Yves notes, in 2008 the RMBS market was overlaid by massive derivative positions. I'm not aware of the CLO derivative market being there much. I know that 15 years ago you had a lot of synthetic CLOs, but those went out of favour as the CDS market liquidity (and especially CDS on leveraged loans) evaporated. They did start coming back a bit, not still nowhwere near the glory days of 2005-6.

Anything with a substantial leverage will kill the financial system. Conversely, only a few things that are not levered will.

My worry on EU banks are actually covered bonds. If the EU RE market tanks, it would kill covered bond markets where they often require 80 or better LTV in the pool. And covered bonds are a crucial funding vehicle for a lot of EU banks, so the states would have to step in (if they were allowed to).

Colonel Smithers , May 15, 2020 at 1:43 pm

Thank you, Vlade.

I agree with you about covered bonds, hence their prudential treatment being less expensive under the EU's Capital Requirements Directive IV.

Harry , May 15, 2020 at 9:37 pm

Yes, I agree all your points. FWLTW of course!

Colonel Smithers , May 15, 2020 at 1:48 pm

Thank you, Harry.

Working for two of the scummiest originators, I know well about the two Japanese banks you name. For some reason, they allow another Japanese securities house to advise them into this abyss.

Harry , May 16, 2020 at 11:28 am

Its not much fun being an investor these days. What exactly are you gonna buy?

A fortiori for Japanese real money!

TomDority , May 15, 2020 at 9:14 am

Because interest rates should be indicative of risk – at least I think that is how it used to work – then no bail for investors as all risk can have loss and total loss at that.
The reason the last crisis was so bad in 2008 was, in my opinion and for the reason as follows –
All business, all consumers, all people need certain basics to survive – Food – Water -Shelter and Land upon which to do all the above.
-- -- So with all the lending – as much as possible then and today with PE and leverage; risk be damned as they knew bailouts would be used in that great con and it's new version of the old today- -- Its only outcome was to raise the cost of housing – rent (land), business overhead, farm land prices thus products therefrom and everything produced on the planet (people playing the real estate game and realtors and all associated, wrongly believed they were gaining wealth but – it was zero gain because if you wanted to continue living you had to pay the higher costs wrought by the great con game – this con perpetrated by financial puffers and criminals – aided by many of the rest of us who were conned into thinking this great inflation of assets was and is the only way – the brave, heroic, patriotic – survival of the fittest, smartest, hard earned way to get ahead – and be damned those who didn't jump on board the great gravy train robbery –
Of course, as this is all now the norm, and all made proper by great grants made to the institutions of higher learning (to make sure the proper economic and finance learning is taught) and larger grants made to the institutions of government (to make sure the proper economic and financial governing is practiced) so the rest of can be assured that the criminals the corruption and fraud is protected by law and the aristocracy is free to do as they wish – as of course is their inherited right.

So the planet burns and a virus is showing us how the (current false definition) Free Market has – and continues to screw the vast majority of the planet out of the planet.

I hope that more people really start to examine and propose alternatives to the current FIRE sector Free Market which is and continues to be the true and only impediment to solving the worlds problems IE sixth extinction event and global geochemical disaster (global warming is one).

I propose taxing the crap out of rentier activities and financial predation – Tax the crap out of those things known to cause asset price inflation and are destructive to the planet and raise the cost of living.
The Free Market needs to mean Free From Rentier, Preditory, and Unnecessary overhead tolls.
Currently the negative is taxed lightly and the positive is burdened –
Switch the burdens around and the easy money would be made by doing the right thing – it would make earning money through financial predation much more difficult.
Anyway – some random thought to chew on –
And yes – should investors ever take losses on money lent on interest? – sure they should – why I thought that is why interest was charged – shows ya how little I know.
And if investors take losses based on False Warranties and Representations made by the financial engineers – well let them engineers make it up to the investors – instead of what happened in 2008 when Obama (I voted for him which makes me a sucker) saved em from pitchforks.

Mary Lou Isaacson , May 15, 2020 at 10:40 am

Thank you for your well articulated comments! You expressed my thoughts better than I could ever have done.

JTMcPhee , May 15, 2020 at 10:11 am

Any betting on whether the CLO holders or the public comes out on top in this game?

JohnnyGL , May 15, 2020 at 10:54 am

Hi all, this one is right in my wheelhouse as I spent 10+ years working for one of the big CLO Trustees.

Yves' take is generally correct. What I find most comforting is that there was never a return of structures that incorporated a ton of CDS contracts. In fact, I haven't seen any kind of return of CDS contracts at all. Good riddance! Those things were poison!

Lehman did a ton of those pre-crisis and when they went bust, they left a big legal and financial mess as the deals couldn't function without Lehman in the middle of them. They had way too many conflicting roles. I suspect a lot of them were created for Lehman to lay off risk onto their wealth management customers and other marks.

vlade , May 15, 2020 at 10:57 am

CDSese trade, especially the indices and names that are in the indices, but those generally tend to have a fairly liquid underlying bond market. And the overall CDS market is fraction of what it used to be.

Fortunately though the more idiotic CDSes (like the LCDS – CDS on leveraged loans) are gone, and as you say, the synthetic CLOs too..

Susan the other , May 15, 2020 at 11:19 am

Thank you for these details. A little surprising. And as if I didn't already hate PE enough. One of the surprising things is that the Fed did actually show some restraint. I hope it holds. I think we need to emancipate PE from the Market altogether.

Peter Canning , May 15, 2020 at 1:44 pm

wow Yves! great takedown in the Swiftian style (hilaris in triste) of savage indignation.

rd , May 15, 2020 at 2:26 pm

Some economists have studied what happened to those $1,200 stimulus checks. People who made less than $1,000/month spent them quickly while people making over $5,000/month mainly saved the stimulus money. https://www.marketwatch.com/story/this-is-how-fast-americans-are-spending-their-stimulus-checks-and-heres-a-breakdown-of-what-theyre-buying-2020-05-15?mod=home-page

The obvious conclusion from this study is that future stimulus money should be focused on the wealthy so they can keep their asset base intact.

flora , May 15, 2020 at 3:54 pm

Great post and comments. Thanks.

Sound of the Suburbs , May 16, 2020 at 3:42 am

How did we get here?

Economics, the time line:
Classical economics – observations and deductions from the world of small state, unregulated capitalism around them
Neoclassical economics – Where did that come from?
Keynesian economics – observations, deductions and fixes for the problems of neoclassical economics
Neoclassical economics – Why is that back again?

We thought small state, unregulated capitalism was something that it wasn't as our ideas came from neoclassical economics, which has little connection with classical economics.
On bringing it back again, we had lost everything that had been learned in the 1930s, by which time it had already demonstrated its flaws.
The Mont Pelerin society developed the parallel universe of neoliberalism from neoclassical economics.

FDR saved capitalism from itself with the New Deal.
Many right wingers weren't happy about this at all and longed for the good old days when they had the economic freedom to make lots of money and bring capitalism to its knees.
Of course, they didn't take any responsibility for the problems they had caused and they plotted to get back to the way things had been before.
In the 1980s they succeeded, but all the old problems would re-emerge.

1929 and 2008 look so similar because they are, it's the same economics and thinking.
https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6
At 18 mins.

As a CEO, I can use the company's money to do share buybacks, boost the share price, cash in my share options and get my bonus.
Share buybacks were found to be a cause of the 1929 crash and made illegal in the 1930s.
What lifted US stocks to 1929 levels in 1929?
Margin lending and share buybacks.
What lifted US stocks to 1929 levels in 2019?
Margin lending and share buybacks.
A former US congressman has been looking at the data.
https://www.youtube.com/watch?v=7zu3SgXx3q4

At the end of the 1920s, the US was a ponzi scheme of over-inflated asset prices.
The use of neoclassical economics and the belief in free markets, made them think that over-inflated asset prices represented real wealth accumulation.
1929 – Wakey, wakey time

Let's have another go.
Oh blimey, it's still the same.

Why did it cause the US financial system to collapse?
Bankers get to create money out of nothing, through bank loans, and get to charge interest on it.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
What could possibly go wrong?
Bankers do need to ensure the vast majority of that money gets paid back, and this is where they keep falling flat on their faces.
Banking requires prudent lending.
If someone can't repay a loan, they need to repossess that asset and sell it to recoup that money. If they use bank loans to inflate asset prices they get into a world of trouble when those asset prices collapse.
As the real estate and stock market collapsed the banks became insolvent as their assets didn't cover their liabilities.
They could no longer repossess and sell those assets to cover the outstanding loans and they do need to get most of the money they lend out back again to balance their books.
The banks become insolvent and collapsed, along with the US economy.

When banks have been lending to inflate asset prices the financial system is in a precarious state and can easily collapse.
"It's nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world" All the Presidents Bankers, Nomi Prins.
When this little lot lost almost all its value overnight, the Western banking system became insolvent.
Western taxpayers had to recapitalise the banks and make up for all the loses the bankers had made on bad loans they had made to inflate asset prices.

Sound of the Suburbs , May 16, 2020 at 3:44 am

Free market thinking split into two separate paths in the 1930s.
We took the wrong path.

In the 1930s, Hayek was as the London School of Economics trying to put a new slant on old ideas, while the Americans were working out what had gone wrong in the 1920s.
The University of Chicago had worked out what had gone wrong with free market thinking before, but we followed Hayek who hadn't.

In the 1930s, the University of Chicago realised it was the bank's ability to create money that had upset their free market theories.
The Chicago Plan was named after its strongest proponent, Henry Simons, from the University of Chicago.
He wanted free markets in every other area, but Government created money.
To get meaningful price signals from the markets they had to take away the bank's ability to create money.

Henry Simons was a founder member of the Chicago School of Economics and he had worked out what was wrong with his beliefs in free markets in the 1930s.
Banks can inflate asset prices with the money they create from bank loans.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money.
"Simons envisioned banks that would have a choice of two types of holdings: long-term bonds and cash. Simultaneously, they would hold increased reserves, up to 100%. Simons saw this as beneficial in that its ultimate consequences would be the prevention of "bank-financed inflation of securities and real estate" through the leveraged creation of secondary forms of money."
https://www.newworldencyclopedia.org/entry/Henry_Calvert_Simons
Real estate lending was actually the biggest problem lending category leading to 1929.
Richard Vague had noticed real estate lending balloon from 5 trillion to 10 trillion from 2001 – 2007 and went back to look at the data before 1929.

Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money.
"Stocks have reached what looks like a permanently high plateau." Irving Fisher 1929.
This 1920's neoclassical economist that believed in free markets knew this was a stable equilibrium. He became a laughing stock, but worked out where he had gone wrong.
Banks can inflate asset prices with the money they create from bank loans, and he knew his belief in free markets was dependent on the Chicago Plan, as he had worked out the cause of his earlier mistake.
Margin lending had inflated the US stock market to ridiculous levels.

The IMF re-visited the Chicago plan after 2008.
https://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

Sound of the Suburbs , May 16, 2020 at 3:55 am

" . they plotted to get back to the way things had been before."

I've got a good idea, you'll like this.
You can attract modern liberals to dodgy, old, 1920's neoclassical economics if you bolt on identity politics.

Inequality exists on two axes:
Y-axis – top to bottom
X-axis – Across genders, races, etc ..
The traditional Left work on the Y-axis and would be a problem as you want to increase Y-axis inequality.
The Liberal Left will work on the X-axis.
You can increase Y-axis inequality while the Liberal left are busy on the X-axis.

Sound of the Suburbs , May 16, 2020 at 5:23 am

The 1930's solution of the Chicago Plan was one way of keeping bank credit out of the markets.
There are other ways.

You could use the corset controls the UK used before 1980.
This kept bank credit away from financial speculation and debt grew with GDP.
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
Before 1980 – banks lending into the right places that result in GDP growth (business and industry, creating new products and services in the economy)
Debt grows with GDP
After 1980 – banks lending into the wrong places that don't result in GDP growth (real estate and financial speculation)
Debt rises faster than GDP

OR ..

Richard Werner worked out what went wrong in Japan.
The BoJ used to use window/credit guidance to steer bank credit away from financial speculation and towards business and industry.
This was the basis for all the Asian Tiger economies, until they discovered financial liberalisation and the Asian Crisis followed shortly after that.

OR ..

Germany uses small non-profit banks that are very local to communities and businesses.
There is no gain from financial speculation and they are closely tied to the people they serve.

Slim Sopata , May 16, 2020 at 11:33 am

Awesome piece, Yves! Remember your outstanding work from 10 years go) Couple of questions:

1. Dont you think the derivatives will be a problem again? This time due to corporate credit risk and FX moves? CDS exposure to GM, GE, Ford is many times their cash debt and should they go down (even if the Fed holds bonds) the CDS losses could be in many trillions if we account for all possible corporate defaults. Also, FX derivatives notional is orders of magnitude larger than credit one and large swings in euro/dollar etc could also kill a lot of players.

2. Isn't PE in trouble? Some of them are clearly OK but is it really true that all of PE players are sitting on mountains of cash? I am far from this market, could anybody opine on which PE firms could be hurt?)) TIA!))

[May 15, 2020] US Unemployment Update

Notable quotes:
"... @apenultimate ..."
May 15, 2020 | caucus99percent.com

apenultimate on Thu, 05/14/2020 - 9:50am The past week's unemployment claims came out today, and add another 2.98 million to the pile. This brings total unemployment claims for the past 8 weeks (two months or so) to 36.5 million.

Determining unemployment percentages depends on what data you use. The Bureau of Labor Statistics (BLS) shows the employment numbers for the United States in August 2019 as ~157 million ( https://www.bls.gov/cps/cpsaat08.htm ). Admittedly, that's not March 2020 statistics, but employment numbers would not change all that much in half of a year.

The St. Louis Federal Reserve has a different set of statistics that show 205.5 million Americans employed in March 2020 ( https://fred.stlouisfed.org/series/LFWA64TTUSM647S ). (They show the August 2019 period with employment at 206 million.)

Why the huge difference? I have no idea. But going forward, I'll use both to determine unemployment numbers. Remember that in early March 2020, unemployment was already around 3%.

Using the BLS statistics, we get an unemployment rate of 23.16% for the past 8 weeks. Add on the previous 3% of people unemployed, and you reach 26.16% unemployment.

Using the St. Louis Fed statistics, we get an unemployment rate of 17.76% for the past 8 weeks. Add on the previous 3% of people unemployed, and you reach 20.76% unemployment.

The peak rate of unemployment during The Great Depression was 24.9%. The peak rate of unemployment during the the Great Recession in 2008 was 10%.

According to BLS statistics, we are already greater than Great Depression unemployment numbers.

According to the St. Louis Fed, we are already more than double Great Recession numbers and only about 4 percentage points away from Great Depression peaks.

The Labor Department last week reported April unemployment for the United states at 14.7%, but this according to their own admission was undercounting the real rates. Be careful of any numbers coming out of the mainstream media or government sources.

https://www.sfchronicle.com/business/article/Coronavirus-job-loss-Weekly...

Some jobs will definitely come back, but many will not. For example, JC Penny's reported that they are permanently closing 200 of their 850 nationwide stores. Those jobs will not be coming back. There are weekly reports of many cafes, restaurants, and small businesses shuttering their doors for good. Those jobs will not be coming back.

Even for the companies that do not shut down, it may be a long haul before economic activity has picked up enough to bring workers back. In most cases, it will not be a quick recovery.

Hang on for a very rough ride. 2 users have voted.

ggersh on Thu, 05/14/2020 - 10:52am
This is the place to go for stats

@apenultimate and like everything else our govt does, the unemployment number is just pure BS

http://www.shadowstats.com/article/csfu1435

• Headline April 2020 Unemployment Really Was Around 20%, Not 15%
• Bureau of Labor Statistics Disclosed Erroneous Unemployment Surveying for a Second Month
• About 7.5 Million People in the April Household Survey Were Misclassified as Employed Instead of Unemployed, per the BLS
• Headline April U.3 Unemployment at 14.7%, Should Have Been 19.5%
• The BLS Had Disclosed the Same Surveying Error Last Month; Where Headline March 2020 U.3 Was 4.4%, It Should Have Been 5.3%
• Per the BLS, Headline Data Will Not Be Corrected: "To maintain data integrity, no ad hoc actions are taken to reclassify survey responses."
• Nonetheless, Headline April Unemployment Soared to Historic Highs from March: U.3 from 4.4% to 14.7%, U.6 from 8.7% to 22.8% and ShadowStats from 22.9% to 35.4%
• More Realistic, Those Same Unemployment Numbers, Corrected: U.3 from 5.3 % to 19.5%, U.6 from 9.6% to 27.7% and ShadowStats from 23.7% to 39.6%
• April 2020 Payrolls Collapsed by an Unprecedented 20.5 Million Jobs
• Annual Growth in April 2020 Money Supply Measures Soared to Historic Highs
• U.S. Economic Activity Has Collapsed to Great Depression Levels, with the Federal Reserve Creating Unlimited Money

apenultimate on Thu, 05/14/2020 - 10:58am
Nice

@ggersh

Thanks for that. Seems like a large percentage of the difference is that BLS says 7.5 million were mis-classified as employed.

At the very least, it seems the BLS does a bit of correcting, whereas the Fed does not.

gulfgal98 on Thu, 05/14/2020 - 1:13pm
Federal Reserve Chair Jerome Powell

stated in the very beginning of this video, that of people who were employed in February of this year, nearly 40% of those earning $40,000 or less have become unemployed. This is an unprecedented human tragedy that Congress in all their bailouts now totalling about $8 Trillion have seen fit to throw a one time pittance of $1,200. With mountains of cash going to corporations and lobbyists, Congress insultingly gave real suffering Americans a few pennies and in effect told them that their lives do not matter to Washington DC.

//www.youtube.com/embed/AROXMTDOkjw?modestbranding=0&html5=1&rel=0&autoplay=0&wmode=opaque&loop=0&controls=1&autohide=0&showinfo=0&theme=dark&color=red&enablejsapi=0

[May 15, 2020] April jobs report disastrous, but not as cataclysmic as feared; lower paid part time workers take the biggest hit

May 15, 2020 | angrybearblog.com

I am still highlighting these because of their leading nature for the economy overall. These were uniformly very negative:

  1. Amateur Socialist , May 9, 2020 8:43 am

    This disaster is only getting started. Uncertainty regarding employment stability is hitting health care workers. In the middle of a worldwide pandemic. People with relatively secure jobs are wondering about their families and loved ones needing additional support. Which will continue to limit discretionary spending and on it goes.

    I apologize for providing this link in two places but it's an important and sobering summary of how financialization of assets has failed. https://www.nakedcapitalism.com/2020/05/people-and-jobs-or-wealth-the-government-has-to-decide-which-to-prioritise-and-there-is-only-one-right-answer.html

    "Debts which cannot be repaid will not be repaid" as Michael Hudson has been warning for decades. The thing about capitalism is that it works fine as a theory but it's just not practical in the real world. The one that includes humans who are not economists.

the virus results to the population pale in comparison to the economic/social aspects.

We now know far more about Covid19 – the Lockdown should end

https://off-guardian.org/2020/05/08/we-now-know-far-more-about-covid19-the-lockdown-should-end/

Total N.Y. hospitalizations less than half of number at peak (down to 8,196, from more than 18,000) Bloomberg

NJ Hospitalizations have declined by 1,000 in the past week.

Evidence mounts that outside is safer when it comes to COVID-19 TheHill

Gottlieb pointed to a study, which has not yet been peer-reviewed, that examined outbreaks in 320 Chinese cities outside Hubei province, where the coronavirus is believed to have originated, between Jan. 4 and Feb. 11 and found only one outbreak that occurred outdoors.

New York City's iconic 24-hour subway has begun shutting down overnight for deep cleaning, the first deliberate closure in the system's history – a move triggered by the Covid-19 pandemic and a growing homeless presence on trains. Too little, too late Shock as NY subway cleaned overnight for FIRST time in 115 years amid Covid-19 crisis -- RT USA News

Lloyd Blankfein Explains Why Reopening The Economy Might Actually Save Lives Zero Hedge

But we digress: Blankfein actually made some good points about the situation facing the American economy during one of his longest and most casual interviews since leaving Goldman more than a year ago. The notion - pushed by CNN, MSNBC, etc - that President Trump is picking 'saving the economy' over 'saving lives' isn't really accurate, Blankfein explained, because - and he's parroting an argument made by an actual real-life ER doctor here - leaving the economy and more importantly the health-care system closed for months risks serious repercussions for the public health.

"It's really health vs health, because poverty, GDP is really a health issue," Blankfein said.

When I was in Sweden last summer, I was perplexed how unhealthy many Swedes look. The picture in Denmark was completely different. Curiously, the Covid-19 incidence rates in Denmark, Norway and Sweden mostly mirror my (superficial and subjective) impression of the health of the citizens of these countries. Lots of obesity in Sweden, lots of cyclists in Denmark.

Posted by: Lurk | May 6 2020 20:31 utc | 11

For people looking for numbers here is one..

here are the numbers of deaths " due" to corona in Switzerland .
00 -19 years old 0 death
20 -29 years old 1 death
30 -39 years old 4 deaths
40 -49 years old 2 deaths
50 -59 years old 23 deaths
60 -69 years old 84 deaths
70 -79 years old 243 deaths
80+ years old 776 deaths
Total for that country 1133

Posted by: Igor Bundy | May 6 2020 20:56 utc | 16

[May 14, 2020] Leverage, neoliberalism and COVID-19

Notable quotes:
"... It should be obvious that if leverage is used to fund the purchase of financial assets those assets will inflate in price greatly. If the leverage is not used for financial assets and is used instead for funding new production then financial assets stay in proportion to GDP. That is of course currently the fundamental weakness in western economies. ..."
May 14, 2020 | www.moonofalabama.org

jinn , May 13 2020 20:35 utc | 245

guidomann wrote:

When augmented with leverage, the exponential dynamic inherent in debt guarantees that financial value runs away far ahead of any amount of GDP implied.
_________________________________________________
You changed the subject slightly.

It should be obvious that if leverage is used to fund the purchase of financial assets those assets will inflate in price greatly. If the leverage is not used for financial assets and is used instead for funding new production then financial assets stay in proportion to GDP. That is of course currently the fundamental weakness in western economies.

So when firms issue bonds and use the money to buy back their own stock then stocks become over-inflated while obviously production stagnates. That practice used to be illegal and will likely become illegal again when the recent damage this practice is eventually realized.

Richard Werner does a good job of explaining these malfunctions in the economy
https://www.youtube.com/watch?v=EC0G7pY4wRE

You are correct that the boom and bust cycles that are the direct consequence of the instability that results from the mismatch of financial assets to productive assets is the mechanism, for those who can take advantage of it, to transfer wealth from others to themselves.
But just like a virus if the parasites become too lethal to the host the parasites will die also.


[May 13, 2020] What The Pandemic Revealed A Morally Bankrupt [Neoliberal] Culture by Charles Hugh Smith

Notable quotes:
"... What was "normal" for the past two decades was to turn a blind eye to the moral and financial bankruptcy of the American culture, the rot at the heart of its social, political and economic orders. The pandemic has shredded the putrid facade and revealed the rot, much to the dismay of the multitude of minions tasked with sanitizing the rot behind narratives promoting the normalization of predation, fraud and exploitation. ..."
"... As for winner takes all , this legalized looting is presented as a form of economic Darwinism that is nothing but the healthy manifestation of a free market. This is the Devil's handiwork, of course, presenting legalized looting that only benefits the few as the inevitable result of open markets. ..."
"... The greater the outrage of the technocrats and monopolists at being called what they are--evil--the greater the confirmation that the accusation is spot-on. The predators, looters and exploiters must strip away any moral assessment of their actions, as even the smallest shred of moral or karmic justice threatens their empires. And so economics has been reduced to bloodless quantifications of profits, costs and sales and obfuscatory mathematics designed to drain the risk of moral consequences from the parasitic pillage. ..."
May 13, 2020 | www.zerohedge.com

Authored by Charles Hugh Smith via OfTwoMinds blog,

Monopolies, quasi-monopolies and cartels are inherently exploitive and thus evil.

What was "normal" for the past two decades was to turn a blind eye to the moral and financial bankruptcy of the American culture, the rot at the heart of its social, political and economic orders. The pandemic has shredded the putrid facade and revealed the rot, much to the dismay of the multitude of minions tasked with sanitizing the rot behind narratives promoting the normalization of predation, fraud and exploitation.

What's been absolutely verboten is to call legalized pillage and predation what they really are: evil. We've normalized exploitation and predation by the usual means: denial, legal justifications, making excuses for the predators and the system that defends predation, and by erasing the memory of a time when moral bankruptcy, predation and institutionalized fraud were not yet normalized.

People have always been self-absorbed and greedy, so goes the excuse; or, greed is good because that's the magic of the invisible hand at work.

By stripping fraud and predation of moral consequence, we've covered the putrid rot with a thoroughly modern amorality which we can summarize as anything goes and winner takes all. Monopoly, quasi-monopoly and cartels (i.e. Warren Buffett's entire portfolio) are presented as the natural order of things rather than an evil construct of predation and exploitation that benefits the few at the expense of the many.

Nothing outrages the apologists and the lackeys enriching themselves in the dens of thieves more than accusations of evil, or indeed, anything smacking of moral standards or judgments. Anything goes not just for individual choices, but for capital's choices as well, and so it's simply not PC to question the morality of capital's predations.

As for winner takes all , this legalized looting is presented as a form of economic Darwinism that is nothing but the healthy manifestation of a free market. This is the Devil's handiwork, of course, presenting legalized looting that only benefits the few as the inevitable result of open markets.

The greater the outrage of the technocrats and monopolists at being called what they are--evil--the greater the confirmation that the accusation is spot-on. The predators, looters and exploiters must strip away any moral assessment of their actions, as even the smallest shred of moral or karmic justice threatens their empires. And so economics has been reduced to bloodless quantifications of profits, costs and sales and obfuscatory mathematics designed to drain the risk of moral consequences from the parasitic pillage.

... ... ...

* * *

My recent books:

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If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com .

[May 11, 2020] COVID-Contagion by Patrick Armstrong

May 11, 2020 | www.zerohedge.com

by Tyler Durden Sun, 05/10/2020 - 22:00 Authored by Patrick Armstrong via The Strategic Culture Foundation,

Washington deflects its failure by blaming China. But here too it's lost its competence: here's U.S. Secretary of State Pompeo asserting at the same time that it's manmade and that it isn't :

POMPEO: Look, the best experts so far seem to think it was manmade. I have no reason to disbelieve that at this point.

RADDATZ: Your -- your Office of the DNI says the consensus, the scientific consensus was not manmade or genetically modified.

POMPEO: That's right. I -- I -- I agree with that. Yes. I've -- I've seen their analysis. I've seen the summary that you saw that was released publicly. I have no reason to doubt that that is accurate at this point.

To say nothing of Fauci's money in the Wuhan lab . China may not even be the point of origin: France has just discovered a case from December and there may be a U.S. case from November . The breathlessly reported Five-Eyes assessment blaming China is fast collapsing: " mostly based on news reports and contained no material from intelligence gathering " says one of the Eyes. Washington may lash its minions into a coffle, but the rest of the world will scorn it as a pitiful attempt to distract. There will be increased rejection of the West's assumption of competence and veracity. And, in the West itself, more will doubt the words of "experts" (especially those from Imperial College and its professors ), "authorities and "trusted media sources".

Most of the West is still shut down but China is opening. Observers know that China is becoming the world's top economy – the World Bank had already given it that title in PPP terms in 2013 – and COVID-19 is sure to accelerate the process by giving it a head start out of the economic slowdown. With cheap energy too .

" Soft power " is a useful term that describes the appeal of a given culture to others. For many years this was a potent arrow in the America quiver – I often think of the character played by Gregory Peck in Roman Holiday as the exemplar: open, honest, honourable and modern, but content to be an example and never to take advantage of her. Propaganda, to be sure, but effective propaganda. COVID-19 shows something else: in the simplest terms China has given assistance to many countries and the " U.S. accused of 'modern piracy' after diversion of masks meant for Europe ". Piffle like "T he United States and President Trump are leading the global effort to combat this pandemic " or " America remains the world's leading light of humanitarian goodness " just make it more obvious. From the EU we get word salads: reaffirms/recognises/supports/recalls . And only three months ago the " West is winning ". It has be-clowned itself.

Of the downstream effects of the COVID-19 black swan, we can see at least three:

  1. great and possibly fatal damage to the assumption of American and Western competence;
  2. a widening of the economic gap with China;
  3. a further change in the world soft power balance.

The "blame China" diversion (not forgetting the rest of the current Enemy Package – Russia and Iran ) is childish and will earn disgust.

None of these changes is to the benefit of the Imperium Americanum.

[May 11, 2020] Neoliberalism Is Over. Welcome to the Era of Neo-Illiberalism!

May 11, 2020 | www.nakedcapitalism.com

Neoliberalism Is Over. Welcome to the Era of Neo-Illiberalism! Posted on May 10, 2020 by Lambert Strether Lambert here: This is an interesting, broad-gauge piece. I don't know about "Neo-Illiberalism" as a neologism; it's not euphonious. Just spitballing here, but perhaps "geo-fascism" or "globo-fascism" might do better. Perhaps debt + the platforms (both global, by the way) provide a functional replacement for the beatdowns of the " mass-based party of committed nationalist militants ." Scholars and students of fascism please comment!

By Reijer Hendrikse, a postdoctoral researcher based at Vrije Universiteit Brussel, Belgium. Originally published at Open Democracy .

Crisis Redux

As the coronavirus and its political combatants hold the world hostage, it is pertinent to scrutinize the (geo) political and economic context within which the pandemic has emerged. Many analyses view neoliberalism as the culprit, having given rise to a dismantling and marketization of public services such as healthcare for which we are now paying the price. The virus confirms the bankruptcy of neoliberal capitalism, based upon global production networks of western corporations and Chinese factories, allowing the virus to spread across the globe. Alas, neoliberalism is in trouble once again, perhaps terminally ill.

That said, the death of neoliberalism has been pronounced before, not least in the wake of the 2007-08 financial crisis, from which it however quickly resurfaced stronger than before. Moreover, western neoliberalism has witnessed a significant mutation over the last years, not least to better accommodate the changing logics of global capitalism.

The coronavirus offers an opening to change the world for the better, not least by undoing decades of neoliberalization to give vital professions in health care and education the appreciation they deserve. Unfortunately, as detailed in Naomi Klein's ' The Shock Doctrine ', crises also offer ample opportunity for the established order to realize ambitions which are inconceivable in normal times. The global political economy before the outbreak of corona was defined by the rise of a global billionaire class, tech platforms, and illiberal(izing) nationalist politics, having jointly propelled a novel wave of (geo) political-economic restructuring which I have called neo-illiberalism . What will be the effects of coronavirus on this new status quo?

The New Normal

Alongside the 2008 financial crisis, the votes for Brexit and Trump have often been described as ruptures to the neoliberal status quo. But as in the wake of 2008, the aftermath of 2016 also brought about more of the same: more tax cuts for corporations and the rich, more environmental and financial deregulation, more cuts in public services i.e. more policies of neoliberal signature. That said, the politics peddling the same neoliberal policies has substantially changed. Where preceding waves of neoliberalization have been variably executed by centrist parties, seeing the center right commit itself to progressive politics in exchange for center-left support for economic neoliberalization, since 2016 a new alliance has emerged between center and far right, seeing the latter mainstream as center-right parties such as the US Republicans and UK Conservatives have steadily radicalized themselves, thereby forsaking their erstwhile commitment to what Tariq Ali has called 'the extreme center' . Notwithstanding the fact that center-right parties co-produced the neoliberal world order, they have since come to reinvent themselves as nationalist challengers to the 'globalist' status quo, which they habitually present as leftist.

Where preceding waves of neoliberalization resulted in the limitation of democratic control over economic policymaking, the present nationalist wave captained by Donald Trump and his copycats is defined by efforts of political illiberalization , brazenly seeking to undo the institutional setup of liberal-democratic checks and balances, seeing legislative and judicial branches of government subjected to a power-hungry executive. Wider societal counter-powers are also under attack, from academia and media to NGOs, along with attacks on a range of constitutional basic and/or fundamental rights constraining the illiberal exercise of absolute power. While this development heralds the end of progressive neoliberalism , political illiberalization ultimately still protects the encasement of global capitalism , the core aim of the neoliberal project.

The rise of neo-illiberalism might be compared to a virus, whereby western liberal democracies increasingly come to resemble illiberal democracies and (competitive) authoritarian regimes elsewhere. Where illiberalizing regimes in Hungary and Poland are infecting the neoliberal European Union (EU) as a whole, not least because of center-right political cover offered by the European Peoples Party (EPP), neo-illiberalism constitutes a fundamentally global phenomenon. For example, Brazil and India have recently embraced political illiberalization without rejecting neoliberal economics, whereas illiberal China and Russia have equally tightened their authoritarian rule. Amongst others, what unites these and other regimes is the mobilization of divisive nationalisms, seeing variegated 'strongmen' adapt state constitutions to their will, typically bulldozering pluralist political space whilst shielding the respective neoliberal interfaces between national economy and global capitalism.

Global Capitalism

To grasp the rise of neo-illiberalism we need to go back to the turn of the millennium, a time in which the various developments culminating in the neo-illiberal synthesis were put in motion. Next to the terrorist attacks on US soil which ignited the gradual mainstreaming of far-right narratives , the year 2001 is characterized by the entry of illiberal China into the neoliberal World Trade Organization (WTO). Meeting in serene Doha following the riots of Seattle, China's WTO entrance heralded a larger geographical shift captured by the famous BRIC acronym (Brazil, Russia, India, China) coined that year by Goldman Sachs economist Jim O'Neill. O'Neill foresaw stronger economic growth in the non-west, and called upon western leaders to incorporate leading non-western states into key governance platforms, which was realized later that decade by elevating the Group of Twenty (G20) as the world's leading forum on global governance.

Alongside the search for new markets and cheap labor, the 2000s were characterized by the ascent of the financial offshore world – a legal realm comprised of tax havens and secrecy jurisdictions where corporations and the rich stash their cash and property – which became global capitalism's central operating system by the turn of the millennium. Since then, offshore money from Russia and elsewhere flooded into cities like London, igniting a spending spree on real estate, football clubs, media conglomerates, and political influence. Amongst others things, the offshore world enabled spectacular corporate fraud, such as that which led to the collapse of US energy giant Enron, whose accounting gimmicks were copy-pasted by western banks, setting the stage for the financial crisis later that decade.

The final key development traced back to the turn of the millennium is the birth of digital platforms. Invented by Google as what Susanna Zuboff calls 'an automated architecture functioning as a one-way mirror', surveillance capitalism has since grown into a worldwide machine dedicated to behavioral observation, manipulation and modification, steadily enmeshing itself with the core logics of capital accumulation. Crucially, digitization accelerated the aforementioned trends: not only has digitization fueled global capital flight into offshore anonymity, it also augmented the mainstreaming of far-right narratives via YouTube and Facebook algorithms. Much like the invisible offshore world, the rise of surveillance capitalism largely went unnoticed, assisted by anti-terrorism legislation like the 2001 Patriot Act enabling far-reaching surveillance.

Growing up under the radar of the war on terror and financial turmoil, the first decade of the twenty-first century saw the birth of a fundamentally global, offshore, digitized and financialized hyper capitalism. Descriptions like shadow banks, phantom investments and dark money do not do justice to their role as fundamental building blocks of the new world. Amongst others factors, the offshore world was the ground zero of the financial crisis, where banks kept their toxic investments. This new world is the 'home' of trillion-dollar tech companies, who with other (shell) companies form an integrated web of corporate structures whose chief ultimate owners constitute a global billionaire class of approximately two thousand individuals and families. As such, this is also the world where neoliberal technocracy is increasingly fused with oligarchy. Due to the spectacular growth of income and wealth inequality worldwide, oligarchic enmeshment of the superrich and state power does not only define elites in Russia or the Gulf, but increasingly defines western states such as the US, where multibillionaire activists like the Koch brothers have effectively taken over the Republican Party.

Next to the economic recovery, the 2010s were defined by the increasing coalescence of financial and technology sectors. Within a development model labeled The Wall Street Consensus by political economist Daniela Gabor, an adaption of the neoliberal Washington Consensus within the framework of the G20, banks and financial institutions worldwide have come to embrace financial technology (fintech), driven by an insatiable hunger for personal data as raw materials for financialized surveillance capitalism. Crucially, where Silicon Valley long enjoyed a global tech monopoly, the 2010s saw the arrival of Chinese bigtech vying for global dominance. The western financial lobby has voiced its fears of Chinese platforms like Alibaba and Tencent, which they describe as all American bigtechs 'rolled into one' operating under tight control of the Chinese Communist Party (CCP). These fears are not unfounded: where Facebook encountered many difficulties in building a global cryptocurrency, the Chinese central bank has developed its own alternative, and the CCP has recently ordered China's banks and tech platforms to adopt it. In the words of Mark Zuckerberg: the American state has to play a more active role 'otherwise our financial leadership is not guaranteed'.

Whilst the rest of the world has steadily bought into Chinese technology, the other BRICs have embraced (parts of) China's digital strategy. For example, where a small minority of India's 1.4 billion population had a bank account in 2014, this number has since risen beyond a billion. That said, these bank accounts are coupled to biometric personal data, and critics identify this policy as part of Narenda Modi's political agenda to transform India into a Hindu nationalist surveillance state. Taken together, around the time the coronavirus made the first news headlines, the New York Times identified three competing visions on the future of surveillance capitalism: where the Chinese are 'moving fast and breaking things' without any regard for privacy and citizen rights, and the EU tries to make a moral point around privacy and consent, with the US caught in the middle.

Nationalist Leninism

Although 'moving fast and breaking things' is a good description for Xi Jinping's China, it should be remembered that this philosophy has long guided Silicon Valley, where asking for forgiveness trumps begging for permission. The disruption of established industries, practices and processes defines platforms like Uber, operating without any regard for the law or basic decency. With the rise of western neo-illiberalism, moreover, this philosophy has also entered into government. Brexit, for example, is best understood as a process of continuous disruption of established political practices and procedures, from shunning press conferences to unlawfully closing down parliament. As The Economist noted: 'The Tories' disruptive strategies would not be out of place in Silicon Valley'.

Where rampant digitization has disrupted a range of established industries since the turn of the millennium, and set its sights on incumbent finance in the wake of the financial crisis, the 2010s are marked by tech's infiltration of established politics. Where Facebook and Google place their own employees in US political campaigns ever since the rise of Barack Obama, an entire ecosystem of techno-metapolitical players has since grown up around these platforms: next to dedicated bots and troll farms there now exists a media network dedicated to mainstream far-right narratives, of which Breitbart News – financed by US billionaire Robert Mercer, captained by the identitarian demagogue Steve Bannon – is the most prominent. The adoption of far-right narratives by established media, whether global corporate players like NewsCorp or national public broadcasters, brought right-wing culture wars into the established arena of mass-mediated politics.

Other crucial players in this ecosystem are data analytics firms, like Cambridge Analytica (CA), again featuring Mercer and Bannon, as well as Palantir Technologies owned by US tech billionaire Peter Thiel. Where CA founder Alexander Nix was schooled at the elitist Eton College alongside David Cameron and Boris Johnson, Thiel not only enjoys the ear of Trump as advisor, but also those of Mark Zuckerberg as Facebook board member, where he kept the company from fact checking political advertisements. Where US journalist Jane Mayer speaks of 'the Fox News White House' to highlight the close relationship between Trump and the world's second most powerful media magnate, in the digital age the world's first Twitter presidency might equally be labeled the Facebook White House to emphasize the ways in which Trump has become a digitally mass-mediated virus enabled by the world's most powerful media magnate. As argued by Trump's digital campaign manager: 'without Facebook we wouldn't have won'.

The global rise of neo-illiberalism is covered with the fingerprints of tech firms: where WhatsApp-mediated memes helped Jair Bolsonaro assume power in Brazil, the Philippines' Rodrigo Duterte was an early adopter of Facebook's political capabilities. Once in power, moreover, these 'strongmen' act like disruptive tech CEOs whilst demolishing liberal democracy, and embrace surveillance tools to anchor their rule: in India, for example, encrypted WhatsApp was recently found to be hacked, allowing Modi to track his political opponents. But although Israeli spyware and Russian hackers play an important role in the cross-border spread of neo-illiberal politics, to fully grasp the political possibilities of the digital age we need to redirect our gaze to Beijing , where digital technology is paramount in the exercise of social control.

In combining economic neoliberalization with illiberal political control since the late 1970s, the CCP has been one of the world's neo-illiberal vanguards. Experts describe the governing ideology of the CCP as a curious combination of nationalism and Leninism , following China's ideological rejection of both the French and Russian revolutions, which according to Wang Hui shaped up after the Cultural Revolution and was settled on Tiananmen Square. Crucially, the rejection of 'two major emancipation movements – socialism and liberalism' – is exactly what the western far right is after. In other words, what emerges under neo-illiberalism is a global ideological convergence. Just consider this: at the height of the so-called European 'refugee crisis' in 2015, which accelerated the mainstreaming of far-right narratives across the west, neo-illiberal China also saw the emergence of its own Alt-Right lingo for 'libtards' or 'regressive liberals', with derogatory terms like baizuo (白左) i.e. 'white left' popping up across the blogosphere.

Since 2016, this cocktail of nationalism and Leninism has put its mark on the west, with nationalist projects like America First! and Brexit being guided by self-proclaimed Leninists, like Bannon or Boris Johnson' advisor Dominic Cummings. Enabled by far-right culture wars informed by another communist – Italian Marxist Antonio Gramsci – these disruptive Leninists have set their eyes on breaking down liberal democracy and the rule of law. To do so, they pretend to represent 'the will of the people', and relentlessly discredit the core infrastructure of liberal democracy, framing its key institutions as 'enemies of the people', 'saboteurs', and 'traitors'. In the words of Bannon , the identitarian toyboy of the billionaire class: 'Lenin wanted to destroy the state, and that's my goal too. I want to bring everything crashing down, and destroy all of today's establishment'.

Alibamazonia

Where economist Branko Milanovic foresees a global clash between two ideal type political operating systems in the twenty-first century – liberal capitalism captained by the US, versus political capitalism championed by China – in reality the two have already substantially converged. Reduced to its core, where China and the non-western world opened up economically in the image of the US and the west in the closing decades of the twentieth century, today you can tentatively argue that the US and the wider west are politically closing up in the image of China. The new synthesis is neo-illiberalism, which speaks to what Thomas Piketty views as 'merchant nativism' i.e. the marriage between neoliberalism and identitarian nationalism. Besides emphasizing a process of reglobalization rather than deglobalization, the rise of neo-illiberalism also suggests that the center of capitalist gravity has shifted: where parts of the traditional periphery have steadily assumed characteristics of traditional core countries, the west has witnessed a reverse process of what the late Immanuel Wallerstein calls semi-peripheralization. In the words of Martin Wolf : 'as western economies have become more Latin American in their distribution of incomes, their politics have also become more Latin American'.

Where historian Neill Ferguson once spoke of 'Chimerica' to emphasize the co-dependent relationship between the world's two superpowers, today we can identify the contours of what you might call 'Alibamazonia': a twenty-first century imperial federation of techno-nationalist states, i.e. a global alliance between nationalist 'strongmen' and digital platforms. The relationship is symbiotic, as the rollout of digital surveillance requires the rollback of liberal democracy by design, which in turn strengthens illiberal political rule. In the words of Susanna Zuboff: 'surveillance capitalism takes an even more expansive turn toward domination than its neoliberal source code would predict Though still sounding like Hayek, and even Smith, its antidemocratic collectivist ambitions reveal it as an insatiable child devouring its aging fathers'. Indeed, digitization and surveillance not only disrupt Smithian competitive markets, but also Lockean notions of private property, and ultimately threaten to undo all liberal guarantees of individual freedom.

Besides heralding a territorial shift from west to east, amongst others symbolized by the United Nations' (UN) recent contract with China's WeChat (Tencent) to streamline its digital communication, neo-illiberalism also heralds a fundamental reconstitution between national and global scales, respectively understood as public and private spaces, whereby decades of neoliberalization transformed the former in the image of the latter, whilst the latter has witnessed an extraterritorial shift into digital and offshore domains, giving rise to private capitalist power of vast proportions, eating away at national states and international state systems. This is the most banal explanation for the western rise of neo-illiberalism: where decades of neoliberalism effectively put up the west for sale, neo-illiberalism heralds the moment when neoliberalism's ultimate winners seek to buy up and privatize government itself: 'neoliberalism's final frontier' .

Pandemic

Although coronavirus might be the final death knell to neoliberalism, it should be remembered that neoliberalism is a highly mutable ideology – well equipped to utilize its own failure for its advancement. Put differently, if neoliberalism is dying, we are looking at a slow-motion demise: where some identified its imminent death after the dotcom crash at the turn of the millennium, neoliberalism certainly lost its self-explanatory aura after the financial crisis of 2008. Accordingly, although still carried forward by a centrist consensus, western neoliberalism became more authoritarian. And where 2016 saw the centrist consensus collapse, seeing neoliberalism's core economic project carried on by a decisive illiberal politics, the question is whether today's coronavirus will bring an end to the economic project. For example, the key pillars of that project, such as global capital mobility and central bank independence, are still standing. Furthermore, although non-neoliberal policies might well be enacted to stem the virus, like introducing capital controls, these might be temporary measures to save the project in the long run.

That said, if coronavirus proves to be the final death knell to neoliberalism, which even the Financial Times alludes to, it still might prove a blessing for core features of neo-illiberalism. For example, where the virus is regarded as an indictment of neoliberal globalization, it nonetheless fuels the rollback of liberal democracy and rollout of digital surveillance. Indeed, for the world's faux Leninists and tech billionaires the virus is the ultimate disruptive event to be exploited. Where the US Republicans have used the pandemic to legislate neoliberal tax breaks and deregulation, as part of a rescue package that trumps the 2008 financial bailout, we should not underestimate the extent to which Trump might exploit the pandemic for his own benefit, not least to escape the prospect of electoral loss and prosecution. Many 'strongmen' are embracing the virus to anchor their rule, not least Victor Orbán cynically exploiting the virus to accelerate Hungary's transformation from liberal democracy towards illiberal dictatorship, with the EU once again looking the other way, thereby confirming its own neo-illiberal corrosion.

Where many countries have yet to setup mass testing capabilities to track the virus and create viable paths out of societal lockdowns, a whole range of states have watered down privacy legislation to digitally track the virus, including left coalition governments like Spain. In this sense, the virus has led to a reboot of neoliberalism's famous TINA mantra – there is no alternative – because who cares about far-reaching surveillance when lives are at stake? As argued by Jamie Bartlett, 'the looming dystopia to fear is a shell democracy run by smart machines and a new elite of 'progressive' but authoritarian technocrats'.

Mimicking core features of China's fin-tech-state integration, Apple and Google have joined forces to allow governments to track the virus, whereas the US government has promised to rollout a digital dollar and wallet as part of its coronavirus rescue package. Indeed, the virus is a financial bonanza for tech companies, not least Thiel's Palantir having signed a contract with the British National Health Service (NHS) to optimize data management. In one of his first acts to tackle the virus, Dominic Cummings invited all bigtechs to Downing Street. As noted in Wired magazine: 'for Cummings it's big tech versus bad virus' . Palantir is currently in talks with governments across Europe.

Across the globe, the virus is spurring the development of digital apps, using locational data and facial recognition technologies to track population health and whereabouts. In India, Modi's henchmen are forcing citizens to take hourly selfies to track the virus through their whereabouts, and non-compliance will result in enforced mass quarantine, where catching the virus seems all but certain. In so doing, coronavirus threatens to deepen the ugly face of neo-illiberalism, defined by mass incarceration programs, from Uighurs in China's Xijiang to refugees indefinitely locked up along the Mediterranean and the US-Mexican border. And whilst the pandemic has yet to reach the world's favelas and slums, threatening the lives of the most vulnerable, lax responses to the virus in the developed world characterized by defunded health care systems are making neoliberalism's implicit social Darwinist inclinations shockingly explicit.

As the rise of neo-illiberalism signals profound geopolitical and economic shifts, the pandemic might well be utilized to rewire the world's legacy operating systems. Are we moving towards a financial reset, which was due in 2008 but was postponed via monetary gymnastics? Will China liquidate its massive holding of US treasuries? Will the world's superpowers ramp up the threat of war or will they compromise, or are we already looking at the contours of a new settlement? Furthermore, with the world economy falling off a cliff, and the worst still to come, many small-and-medium-sized enterprises are facing bankruptcy, whilst Amazon and a handful other bigtechs are massively expanding their businesses. What will the post-corona world look like? Will capitalism survive?

While we anticipate what might be coming, one of the biggest societal disruptions is the loss of conventional social exchange, of physical closeness and contact, as we are all locked up in our homes, forcing into digital interfaces, continuously leaking data into the expanding machine of surveillance capitalism. Although there momentarily is no alternative, we'd better make sure we seize the moment: the disruptive virus offers an incredible prospect for societal reprogramming, for better and for worse. Lest we forget that this crisis is not merely biological – it is deeply political.


PlutoniumKun , May 10, 2020 at 8:29 am

Meaty stuff to digest on a Sunday. But very interesting. As to the 'name', I would suggest crypto-neoliberalism.

One key take for me from the events of the last few months is that its increasingly clear that when centrist/neoliberals are forced to make a choice between the far nationalistic right and the populist left or Greens, they will pick the former every time. It's that simple.

I think its an interesting idea that political movements are being shaped by the techno-nationalism. Its certainly true that Tencent and Alibaba and Amazon and FB/Google have a lot in common, and will see their own futures as mutually enmeshed with nationalist right wing political movements. In China its very hard to see where Tencent ends and the CPP begins – if Biden wins I think we'll see a similar enmeshing accelerate in the US (Trump being too slow to realise that he needed those companies as his friends). In a smaller scale, the same thing is happening in countries like South Korea. Europe is at a crossroads, simply because it doesn't have those big data companies, so will face the prospect of keeping them at arms length, or becoming enmeshed in their tentacles, and so becoming a battleground for a sort of Huawai/Amazon battle.

I wonder if we are seeing a new schism developing between the large nations becoming variants of techno-nationalisms, with mid sized countries from South Korea to New Zealand to Norway to Canada and Chile, all trying to stay out of the fray, and perhaps co-operating in a sort of Hanseatic league of smaller States trying to maintain some degree of progressiveness.

JEHR , May 10, 2020 at 9:56 am

PK: your last sentence is very interesting. I see those countries you mentioned as not yet being "cryto-neoliberalist." I would like to think that they would co-operate in order "to maintain some degree of progressiveness." However, our (Canada's) proximity to the US makes it highly unlikely to last. Everything is so uncertain what with viruses running amok and climate change marching onward. Who knows what is next?

Susan the other , May 10, 2020 at 2:22 pm

There is an optimum size. It's not big and it's not small. It's somewhere in between. Gotta have something to do with the maximum maintainable human synergy – aka politics. Evolution seeks a central place to mutate, so for the sake of control, the wizards of our new crypto-neoliberalism might want to do a massive project to issue citizenship rights to the entire world. Digitally of course. For one thing, without individual human rights there can be no local or regional sovereignty. And there will never be a global sovereignty until human rights are guaranteed – traditionally by democracy but we have seen that it has it's limits. But because there is a watershed whereby politics (sovereignty) always follows money it would be smart to look to the actual source of "money" which is people. Whichever way they are grouped. A smart crypto neoliberal, smarter than Zuckerberg, would first shuffle the world's nations, then shuffle all their citizens, and then, blindfolded, reach into the mix and pull out a name. Repeat until all the names are revealed – and each one is randomly put in a group to be called their "peer group" or stg. like that. And all groups are organizations of global peers with equal rights. And while that is being chopped up, a global system of civil/environmental justice can be established gee this is sounding like a big project maybe we should just stick with nations and give the smaller ones handicaps. This is making me tired.

JBird4049 , May 10, 2020 at 10:35 pm

Open uncontrollable boarders are a neoliberal goal partly for labor arbitrage, but also to reduce the power, by reducing its existence, of a nation-state to interfere with the creation and domination of powerful international organizations like the IMF, or those agreements like NAFTA. A new kind of economic colonization as ultimately it is being done by non-nation-states. An economic Westphalia done in reverse.

Bsoder , May 10, 2020 at 2:03 pm

How about klepto-neoliberalism. In fact I think neoliberalism has accomplished about everything it can, so it's straight back to medieval times, with climate chaos leaving us as a failed world, thus we get the dark ages. Unless of course people/citizens decided to take action. As far as the post, ah, you just can't write like that. If he was a postdoc in my lab that never would have seen the light of day. I have no idea who the intended audience is, perhaps economists? The only thing missing was string theory. Historically, I do not believe that the history of neoliberalism rolled that way. It didn't get better bigger & stronger after 2008 not based on any risk analysis I've read – everything become deeply destabilizing. Look kids in this country before the pandemic didn't have enough food now many don't have any short of begging and handouts. The guy confuses nationalism vs. Nationalist because he's working his argument backward. Obtuse and sensational at the same time. While I'm at it, the only problem with democracy is there's not enough of it. Fascism? Where? China? The EU? Nah.

Susan the other , May 10, 2020 at 2:31 pm

Yes to all of the above.

Jeremy Grimm , May 10, 2020 at 4:15 pm

Besides possessing even amplifying all the off-putting qualities of the term 'Neoliberalism' -- its smeared meanings and usages, its inherent oxymoronity, its ill-coinage -- the term 'Neo-Illiberalism' is quite unnecessary given that Neoliberalism is anything but dead. I believe the aftermath of the pandemic shows most uncomfortable promise of a great new age of Neoliberalism. As currently configured the 'pandemic' policies in the US will result in obliterating small and medium business, in widespread mortgage foreclosures, in personal bankruptcies, in evictions and homelessness, and in a permanent loss of jobs with resulting high levels of unemployment. The ruins will be grabbed up and consolidated by the large Cartels, banks, and financial corporations.

The rest of this post interweaves dozens of themes and sub-themes without a coherence I can perceive. The "key development" "the birth of digital platforms" sounds cool -- but what is a digital platform when you strip away the 'cool'? It is marketing and media outlet. Are the "behavioral observation, manipulation and modification" really so novel or so much more effective? Is it more effective than the techniques of the Church practiced through early education and socially enforced worship? Does it really lead to more sales, or the formation of opinion any more effectively than radio or public speeches? Are the impacts of the 'digital platform' really as great and effective as Goggle and Facebook claim in their advertising sales literature?

Mass surveillance was well underway long before the pandemic. I don't believe the pandemic offers any better excuse for extending mass surveillance than the excuses already used. The Internet and our phone systems offer ample hidden means to extend mass surveillance that need no excuses since no one notices them. The post riffs on about "rampant digitization" and "data analytics firms" as if they were critical tools of Neoliberalism. We live under the watchful eyes of government panopticons, created to maintain control over the Populace. But these panopticons are neither necessary for spreading Neoliberalism nor inherently Neoliberal in their uses. The panopticons are enabled by digitization but they are hardly necessary to control a population. The Gestapo was adequately served by neighbors, even family members informing on each other.

Neoliberalism is alive and well and flourishing. Neoliberalism is an ideology created for the Big Money by a large well-funded thought collective. It is designed to include multiple layers and contradictions. The "key development" was not the development of digital platforms -- the "key development" was the sale of Government to Big Money. This purchase enabled the re-monopolization and consolidation of US Business, the Globalization of production, the complete enthrallment of Labor, purchase of Education, Science, and the Media -- including the Internet highways.

rkka , May 10, 2020 at 9:32 pm

" One key take for me from the events of the last few months is that its increasingly clear that when centrist/neoliberals are forced to make a choice between the far nationalistic right and the populist left or Greens, they will pick the former every time"

That has been true since 23 March 1933, when the German center decided it would rather back the most vile, violent, radical Right rather than compromise with a moderate democratic Left. That's the day that every single political party in Germany at the national level, except the Social Democrats and the (banned & illegal, and therefore absent from the vote) Communists decided it would be a good idea to give The Mustache the power to legislate by decree.

The Centrists backed Nixon, Reagan, & Shrub, the Trumps of their respective times, all manifestly unfit to govern.

And that's how we got where we are.

tracy , May 10, 2020 at 8:47 am

As far as the name goes, I've got to pipe up from the peanut gallery and say, 'neoliberalism' has never been a good handle. After these many years, the average person is not familiar with it. It implies 'some kind of liberal' and it implies 'no-harm-no-foul'. At this point progressives know it means Bad Stuff but nobody else does. We have gone from bad to worse by labeling 'centrism' as a bogeyman too, while most people find it a harmless descriptor of reasonable people whose views are neither leftist nor rightist. So it is no good as a better descriptor than 'neoliberal'.

The enemy, across the whole spectrum, is corruption. Call the DNC brand of it something which the average person/voter can grasp.

Daniel Raphael , May 10, 2020 at 9:39 am

'Illiberalism' is nothing new, but it is a useful term employed as it is here, in describing the drive toward globalized fascism. Fascism has been described as "the iron hoop that keeps the capitalist barrel from falling apart," and the steady steps of regimes to circumscribe resistance today, paves the road towards crushing opposition tomorrow.

Bsoder , May 10, 2020 at 2:11 pm

That may be one definition, but clearly it doesn't work that way as in operate and to implement. Hitler and Mussolini didn't have skin heads doing the heave lifting they had all unions buying into the master plan. And there was a master plan. Japan relied on a national code of conduct based on the Bushidō Way and a real hatred of the Chinese.

Clive , May 10, 2020 at 9:44 am

Yup, you can't really argue with the substance of this. But the usual Open Democracy blindspot is visible for all onlookers to see, even if the author is apparently oblivious to it (although given the fancy footwork they need to employ to avoid it, you have to wonder if they aren't all-too-well aware of it, but don't want to risk disclosure and the resultant amplification).

Which is: somehow or other (and I really aren't sure how the non-authoritarian left ended up being enmeshed and embroiled with the authoritarian left on this) the left as a whole has become synonymous with being some sort of Lockdown Taliban. Only the purest, hardline-ist, longest, unwavering-ist, toughest most lockdown-ey lockdown ev-ah is to be considered.

And it gets worse, folks. Having participated in the politicising of COVID-19 across national boundaries, demonising dissenting approaches such as Sweden's and turning the rag bag of current-knowledge and scientific theories into weaponisable collateral to be factionalised and then acquired by and deployed by the right and the left in an ideological turf war, the left has collectively painted itself into an ideological corner from which it has no path to walk back from.

Proffering a policy response that is little more than lockdowns as far as the eye can see is hardly likely to have voters flocking to political parties which have hitched themselves to this wagon.

Or, they can try to wriggle their way out of this "There Is No Alternative" humanity-under-house-arrest position without obviously surrendering to the opposing stand-off with humanity-as-a-lab-experiment contrarians.

More likely, though, is the left will get bogged down, as it is continuing to do, in a war of attrition. Yes, the Lockdown Fetish left can wave shrouds at the "gramps will just have to jolly well take his chances if we are to be free" right. Neither is any better than the other. Neither is going to make a breakthrough in popular opinion.

Honestly, I've been involved in the left side of politics for ages. Ending up, apparently in perpetuity, as having set itself up for this sort of can't-win self-imposed rigid positioning is as depressing as it is familiar.

Carolinian , May 10, 2020 at 10:45 am

Sounds like you are saying that the left has become intellectually stale and consumed with petty quarrels. Hard to disagree and I also think the obsession with, say, insisting that Sweden is wrong and that the lockdown consensus is right is an example of this. We are in a whole new situation with the novel coronavirus and therefore experimentation is necessary without reproach.

Left in Wisconsin , May 10, 2020 at 12:39 pm

Yup, it's just like the border conversation – no solution on offer, just critique with no dissent allowed. I keep thinking the cognitive dissonance will kick in at some point. But for now at least the "solution" is just to keep narrowing the scope of acceptable discourse.

What I find truly hilarious (and sad) is the faith in voting/democracy with the consternation about voters continuing to vote "incorrectly."

m sam , May 10, 2020 at 1:31 pm

Sorry to be the lone dissent on this, but the lockdown being turned into a "political weapon:" that is s curious way of looking at the situation. If it is a weapon, who is it being used against? (And by the left? Where is this left that is using the lockdown to attack its enemies?) I guess I don't understand that part of it and perhaps I am completely ignorant of the situation. But it seems to me the lockdown is more the result of public health decisions, not some attempt to weaponize the situation and get even with anyone's enemies.

I do think the pandemic response has been politicized though, but it seems to me politicization is being generated by those who encouraged fascist militias to carry assault rifles to lockdown protests at state houses, like in Wisconsin and Michigan. The politicization seems far stronger to me from people like Chris Christie, who want to force open the economy and claim everyone should just accept mass deaths (which will definitely include those we can consider our loved ones).

And maybe the pandemic response has also been politicized a little by some economists, who seem to think that because they know how to read a spreadsheet they can do this public health thing themselves far better than any old clutch of medical doctors.

Clive , May 10, 2020 at 2:44 pm

The left are using the COVID-19 to bash the right ("you want to end lockdowns and kill people!") and the right are using COVID-19 to bash the left ("you want to continue the lockdowns and kill people's livelihoods and freedoms so life isn't worth living!").

The public -- who are the voters, after all -- are merely caught in the crossfire.

In the absence of political credibility and media credibility, public opinion will simply bypass both estates and make their own minds up. This is a societal lose-lose-lose. Neither the left nor the right look like they are capable of leading opinion or providing good governance. The media goes through the motions of ridiculing either the left or the right but ends up merely looking ridiculous itself.

This is the stuff of failed states.

The ultimate loser in this scenario is always the left. While the right may be deranged, the left is not only deranged, it's deranged in a internal dissent-riven, factionalist and screeching banshee sort of a way. The right, which is merely deranged in an internally-consistent and unified way looks the least-worst by comparison.

m sam , May 10, 2020 at 3:15 pm

This sounds more like bothsiderism. Where is the left "using COVID-19 to bash the right?" Do you mean some Twitter thing? Because if it is, this is definitely a case of "the right are doing something bad so therefore the left must be doing something too," i.e. bothsiderism, which I would consider a mirage.

Like I mentioned above, the right is showcasing fascist militias in state houses, and their national politicians are calling for everyone to accept mass deaths so the economy can get back to growth. And what is the left doing, by your description it sounds like they are just getting behind the non-partisan public health response: the lockdown and social distancing. I mean, is there really more to it than that? I am trying to consider your argument carefully, but I'm not seeing the logic of it.

And besides, what do you mean, "the public" is caught in the crossfire? I would consider myself a leftist, am I not a member of "the public?" And as a member of the public I find the right is a palpable threat in this situation. A threat to me, my family, and my community. And as a member of the public I too find the lockdown hard, oppressive, and worrying, but not such a deadly threat. The lockdown is pretty much the only tool we have (and is not some scheme concocted by the left), and still simply do not see how this is some weapon being used to attack the right on any level that actually matters.

So the difference between the left/right "political responses" here: I don't think those things are equivalent. And whether "the left is the ultimate loser", you haven't made clear what they should be doing that they aren't already (should they have armed militias intimidating elected politicians and calling for mass death too?). You seemed to mention they should be "more open to options," but you didn't actually make a good case that they aren't (again, is this some twitter thing? Because that is just the kind of mirage this looks like). I have simply not hear any leftists do anything by accept policies put forward by medical specialists.

Clive , May 10, 2020 at 3:30 pm

Yes it is a Twitter thing. Or a comments section on websites thing . That's where politics happens these days.

Have a read of those or pick some random websites of your own choosing. Then come back and try to tell me the left isn't using COVID-19 to ding the right and vice versa.

And yes, it is bothsidesism. Because both sides are being as bad as the other.

Just because you don't like it (and I don't like it either) doesn't unfortunately mean it's not true.

m sam , May 10, 2020 at 5:44 pm

No, it is an illusion of centrism (and face it: the Twitters is very much a factory of illusions): following the advice of public health specialists simply isn't partisan "weaponization". In fact, I would say the politicking involved here, which includes insisting that listening to medical experts in equivalent to armed fascists marching through state houses, is particularly egregious. As if centrists agree with those fascists and "mass deaths" are called for at least that's the only conclusion I can come to after such "bothersider" mystification. And that is exactly what this is, mystification of what is really happening. And when that is the case, one can only ask who really wins here? I think you're right, it isn't "the left," and I would also say it isn't the public alt large either.

Waking Up , May 10, 2020 at 5:03 pm

As mentioned in the following article at Naked Capitalism:

https://www.nakedcapitalism.com/2020/05/the-false-dawn-of-ending-coronavirus-lockdowns.html

The results of a survey of 23,000 people in 50 states and the District: 93% of Americans do not think the economy should reopen immediately.

Should we assume 93% of Americans are now considered "Left"? Regardless of how much some people want to yell at each other on Twitter or the internet in general, this really is about life and death. For some people, simply leaving their homes can be a death sentence. Maybe they don't feel suicidal, yet.

JBird4049 , May 10, 2020 at 10:47 pm

Ideology does not conform with sanity or common sense, but some people would have you to think different; facts also should agree with the approved ideology or else they are wrong. The authoritarians, left and right, have doing this for a few years now.

I bet some well paid consultants are figuring out how to label the 93% as liberal moochers or something.

Ultrapope , May 10, 2020 at 2:50 pm

And by the left? Where is this left that is using the lockdown to attack its enemies?

Yes, can someone please tell me what the hell constitutes the left? It is incredibly frusturating to read broad critiques of "the left" in a world when everyone from Nancy Pelosi to George Soros to Bernie Sanders to Tony Blair to Xi Jinping fall under the heading of "the left"

JB4049 , May 10, 2020 at 11:23 pm

That is deliberate. The American left is mainly the DSA, the Greens with some other bits. Bernie Sanders could be considered part of its rightwing. As the left was slowly destroyed starting with the American Communist Party, then rolling rightward, what was acceptably leftist or even liberal was gradually constricted. Now Senator Sanders is labeled a socialist, which is a lie, but he labeled as such to smear his proposals as communism.

Nixon, Ford, Carter, Reagan, and G. H W. Bush would all be, or at perceived to be, to moderate or even leftist . (Pardon me, I might be dying of laughter.)

In American politics, until a few years ago, there was no left since its remnants was crushed by President Clinton.

The Democratic Party is now at best center-right and getting more so. It is a conservative party much like the old Republic Party of the 1960s without a spine, more pro-war, more authoritarian and comfortable using and being part of the police state and much more corrupt.

The Republican Party is something new for the United States. It has a spine, it's fanatically pro- wealth, and insane. Otherwise, it is much like the Democratic Party.

The differences in social issues are like the shell of a hermit crab. As soon as the money is threatened they are discarded with the right soothing lies to quiet the true believers.

A similar, but I guess less violent, process happened in Europe.

Bsoder , May 10, 2020 at 2:22 pm

Clive, I beg to differ. Your own guy, at question time asked Borris "How on earth did we get here?" Well, how did we? The post explains nothing. Your comments are all outcomes / conclusions but not the mechanics of how it happened. I say with all due respect. Having two incompetents as leaders is a start but not by far the whole answer.

Clive , May 10, 2020 at 2:57 pm

Yes, if you can successfully pull off the line of attack you're suggesting the left tries to pull off against the right, then you're definitely on to something.

But if this approach doesn't work (and it isn't -- read it and weep ; I certainly do) how long do you want the left to keep going with it? Yes, sometimes persistence pays off and repetition eventually yields results. However, sometimes it doesn't and it is just flogging a dead horse.

How much longer should I give it? And if public perception is that your line of criticism is only another variation on coulda-woulda-shoulda and England Derangement Syndrome, when does what sounds like broken record'ing get to be simply annoying people rather than converting them?

Put as simply as I can, is it worth my asking if the left seriously wants to govern or does it just want to whinge?

pjay , May 10, 2020 at 9:58 am

An impressive description of world-historical developments. But there are some important, I would say crucial, elements missing in this account. Here are a few of them:

1. What alternative would the author advocate? Is it a return to the "extreme center"? Though the "center-left" is identified as "co-producers" of this world with the "center-right," it is the latter, along with the various international representatives of "Illiberalism" (China, Russia, Bolsonaro, etc.) that get almost all of the criticism. I gather that the author is not advocating socialism. So what is the preferred model? Or, worded differently, where is the *resistance* to this next stage of neoliberalism to come from? The Obama or Clinton wings of the Democratic party? The "adults" on the Council on Foreign Relations? A more authentic "mixed" economy or Social Democracy? I can't tell – which keeps me from knowing how to interpret this.

2. Along those lines, completely missing from the framing of this article is the degree to which the "illiberal" states of China, Russia, Iran, and others are attempting to *resist* being swallowed up by US-led neoliberal globalization, and that an important part of what is going on reflects this struggle between the old unipolar hegemon and the rest of the world. This article collapses important distinctions between the US/West and the non-West in their historical relation to neoliberal globalization. For most NC readers this is probably obvious in the case of Russia, at least. Whatever we think of Putin's "authoritarianism," it does *not* stand in the same relationship to global capitalism as that of Trump.

3. Similarly, while there is a lot here about the dangers of the Surveillance State (and rightly so), I don't see much about how this might relate to global geopolitical conflict and the military-industrial-intelligence complex. For example, I don't see anything about the US military bases that surround China, Russia, Iran, etc., the steady expansion of NATO after the fall of the Soviet Union, the role of US intelligence in the return of fascism to Brazil, the destruction of lesser states that had the audacity to resist being absorbed by Western Neoliberal advance (Iraq, Libya, Syria, etc.). Yeah, Steve Bannon is a right-wing s**t. But he didn't do any of this -- he is just the political beneficiary.

There are several other missing elements in this story, but I'd settle for a discussion of these.

Dwight , May 10, 2020 at 10:05 am

Thank you for an interesting read. Shoshana Zuboff's name is written "Suzanna" two times.

a different chris , May 10, 2020 at 10:11 am

The King is dead. Long live the King!

Ep3 , May 10, 2020 at 10:29 am

You seem to leave out how the virus will change "personal rights". Rights for businesses to disobey govt orders. In Michigan, it is rising to a collision between the right to disobey the law in the name of freedom versus govt acting to protect its citizens. So that what we will have at the end is businesses being able to operate outside the law while individuals will have their rights stripped.
One example, which has been fought repeatedly in the past, is the right for businesses to serve who they want. Michigan businesses are saying they don't have to follow rules put in place due to COVID. Then, citizens are saying they don't have to follow those rules if they don't want to. So businesses don't have to serve minorities if they don't want to. Doctors don't have to care for/accept patients that may not be able to afford a premium price & premium services. Where will it stop?

JEHR , May 10, 2020 at 11:14 am

During a pandemic the rules for staying alive and staying healthy are not put into law or made legal–that is the difference.

Bsoder , May 10, 2020 at 2:27 pm

They have been made legal alright. By decree and proclamation. End? People are angry and it goes way beyond Covid-19. It's never going to end.

stefan , May 10, 2020 at 10:35 am

The virus is a bright light is casting in bold relief the deficiencies of society: the replacement of minimum wage workers with prisoners, the loss of healthcare for the unemployed, the forfeiture of education to inadequate broadband, the replacement of humanism with AI but above all, the absence of true statesmen.

Rod , May 10, 2020 at 2:22 pm

but above all, the absence of true statesmen.

imo, there is no lack of solutions available, only your statement.

Bsoder , May 10, 2020 at 2:30 pm

Not without the will and consent of the governed. But I mean that in a positive way. Protect the people.

shinola , May 10, 2020 at 12:34 pm

The Koch bro's & their ilk fancy themselves as Libertarian which is, essentially, plutocratic social Darwinism. Ya know, that "Because markets / Go die" thing.

Now the the tech. billionaires present themselves as benign saviors of humanity. They propose that a Public Private Partnership for a total surveillance state is the way to go. (See 'The Intercept' article "New Screen Deal" in yesterday's Links – a must read). PPP's are an essential "feature" of fascism. It appears to me that this is the direction the US is headed.

(Neo-illiberalism is kinda awkward sounding)

Olivier , May 10, 2020 at 1:13 pm

I think much of this discussion will be upended by climate change and the ongoing collapse of our high-tech, high-manufacturing, high-consumption societies. The surveillance dystopia in particular, although looking fearsome at the moment, is especially fragile: in order for mass digital surveillance like that to be possible it is not enough for governments and a handful of corps to have big computers, rather the surveillance technology must be ubiquitous and woven into the fabric of everyone's life. That means, inter alia, cranking out hundreds of millions of smartphones, home appliances and sundry digital gadgets every year, distributing them, keeping them powered and networked etc etc. Will we retain that capacity? Highly doubtful IMO, although I won't attempt to predict a timeline.

Jonathan Holland Becnel , May 10, 2020 at 2:15 pm

Yay Private Companies ruling the world!!! Woohoooo

not.

Susan the other , May 10, 2020 at 2:45 pm

Sorry to rant, but this post lit my short fuse when it started talking, out of the blue, about national crypto currencies. That's a total oxymoron. All mixed up with offshoring and secret capital stashed away on Pirate Island – they tossed in almost a nonsequitir: national crypto currency. No. It is not crypto. It is digital. Digital currency and Crypto currency are light years apart. They have nothing in common. Except that certain people are interested in stripping democracy and nations of their sovereignty to control their money. With an article like this the death of sovereignty is sneaking in the back door. And money – its actual value – cannot be separated from sovereignty. Unless there is a greater sovereignty to include it. And that requires a lot of work because if it is not accomplished "neoliberalism" will eat up the planet, all its resources, starve anybody who gets in their way, and jet off to Mars.

And the red herring about financialized surveillance is crypto-speak. Taking away our privacy and human rights. Right. Well, the underlying reality which we might not notice, is our national democratic sovereignty. I am not happy with the casual insouciance of this post.

John Hemington , May 10, 2020 at 3:04 pm

I have to say that I was rather disappointed (though not totally surprised given the source) that the role of the Democratic Party establishment in supporting the move to neo-illiberalism via its dedication to its Wall Street and Big tech clients and total antipathy to any minor move to the left within the Party. This has served as an enabler to the Republican right in their move into Neo-fascism and away from any semblance of participative democracy in this country.

john halasz , May 10, 2020 at 4:35 pm

This screed is just a mess. Neo-liberalism has always been a thoroughly authoritarian doctrine; it's initial laboratory was Pinochet's Chile. And '"liberal democracy" has always been a contradiction in terms,- (what's the name of Japan's perennial ruling party?) Electoral systems, if that"s the minimal criterion of "democracy," have been increasingly hollowed out of what little popular efficacy they once had after 40 years of neo-liberal ascendancy. CF. Colin Crouch's "post-democracy" or Sheldon Wolin's "inverted totalitarianism". So the screed just combines nostalgia for nothing, for what never was, with sub-Foucaultian paranoia, in the name of the vanity of being an academic intellectual. There's no mention of the global debt load, 320% of global gdp, which had reached its limits even before Covid-19, and which will collapse in the aftermath of the Covid-19 induced depression. That would be the real start of any serious analysis, as the coming terrain of future contention, rather than imagining that the masters of the universe could continue their predatory reign in the absence of any sustainable basis for it.

VietnamVet , May 10, 2020 at 7:33 pm

This post suffers from both their and our cognitive dissonance and corporate propaganda. But this graph posted at Automatic Earth is clear:
https://pbs.twimg.com/media/EXnFaoeXkAIN2oC?format=jpg&name=medium

The failed nations of USA, UK, Canada and Sweden haven't controlled the Wuhan coronavirus. They are identified in the center in red. These neo-liberal governments won't spend money to hire contact tracers, provide universal testing and quarantine the infected in safe secure facilities. Instead they've come up with herd immunity, freedom and other nonsense to gloss over the fact that the excess deaths are of absolutely no concern to the ruling aristocracy.

The cure is to restore democracy. Halt the pandemic. Rebuild sustainable societies, infrastructure and nations. This will be difficult unless the truth is recognized that the reigning elite's ideology of profit over anything else is destructive and quite deadly.

[May 11, 2020] Welcome to the Military-Industrial Pandemic

May 11, 2020 | www.theamericanconservative.com

Before coronavirus came to dominate the headlines, one of the most important stories of the year was the signing of an agreement between the U.S. and the Taliban. The deal signed in Doha on February 29 is a first step toward ending the U.S.'s longest war. After nearly two decades, thousands of lost lives on all sides, and an estimated $1.5 trillion, the Trump administration is finally acting on knowledge the U.S. government has long possessed: the war in Afghanistan is unwinnable.

The parallels between the war in Afghanistan and the Vietnam War are striking. In the Afghanistan Papers that were acquired by the Washington Post , the senselessness of the war is laid bare by U.S. government officials. The papers are reminiscent of the Vietnam-era Pentagon Papers and show that for years, the U.S. government has known that the war in Afghanistan is a costly and deadly exercise in futility. Afghanistan's terrain, tribal politics, and culture have long thwarted invaders. This is something that the British and the Soviets, to the delight of U.S. officials in 1979, learned the hard way.

Yet despite clear lessons from the past and what should have been some institutional memory, U.S. policymakers pursued financially and strategically ruinous wars in Afghanistan and Iraq. Estimated expenditures on these two wars and the larger open ended "war on terror" now exceed $6.5 trillion. Rather than having made the U.S. more secure, these wars, and the unchecked defense spending that they demand, make the U.S. more vulnerable to a host of internal and external threats.

America's interventionist policies abroad and the cancerous growth of defense budgets, the most recent of which is nearly $800 billion, compromise Washington's ability to grapple with threats like crumbling infrastructure, an educational system that fails to deliver, and true national preparedness for a crisis like the coronavirus. It is useful to think about what even a small portion of the $6.5 trillion spent on failed wars could have done had it been spent on infrastructure, world-class public education, accessible healthcare, and emergency preparedness. If it had been spent intelligently and strategically, it could have been transformative.

Instead, the U.S. public, as has so often been the case, continues to allow the military-industrial complex to exercise undue influence. The companies that make up the vast military-industrial complex in the U.S. spend millions lobbying Congress. These lobbying efforts probably have the highest return of any investment on the planet. In exchange for comparatively paltry campaign donations, members of Congress are persuaded to pass legislation that yields billions in revenue for these companies.

Those who stand up to the calls for increased defense spending are said to be "soft on defense" or even called "unpatriotic" by rival politicians and the platoon of retired colonels and generals who act as paid cheerleaders for defense contractors. In his 1961 Farewell Address, President Eisenhower presciently warned Americans about the power of the military-industrial complex. In the often-quoted speech, Eisenhower argued that "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex." Eisenhower went on to say that a failure to guard against this influence could lead to a "disastrous rise of misplaced power" that could "endanger our liberties or democratic processes."

Americans have ignored Eisenhower's warning, and we are living with the consequences. The insidious influence of the military-industrial complex infects both Congress and much of the U.S. news media. Never was this more apparent than after September 11, when those who questioned the march to war in Afghanistan and Iraq were demeaned or silenced. Real debate about how to best respond to the threat posed by al-Qaeda and, more generally, militant Salafism was quashed. Instead, the U.S. pursued the most expensive and, as time would prove, counterproductive policies imaginable.

Nearly 20 years on, Afghanistan is slowly reverting to Taliban control. The invasion of Iraq spawned the Islamic State and turned the country into an Iranian satellite. Neither of these wars achieved their aims, but they did make hundreds of billions of dollars for defense contractors. Low-cost and effective ways to combat terrorism are rarely considered. Such methods do exist and often consist of little more than empowering local communities via very specific tailored development projects. But such methods do not require hundreds of millions of dollars' worth of drones and Predator-borne missiles. Thus, they receive little attention and even less funding.

Now, as the U.S. winds down its wars in Afghanistan and Iraq, the "war on terror" is passé. The new threats are the old threats: Russia and China. The pivot away from the war on terror to renewed preparations for combatting China and Russia will be even more profitable for the defense industry because this means increased funding for big-ticket legacy weapons systems. The defense budget just passed by Congress is one of the largest in the country's history and even funds the creation of a sixth military branch, the Space Force. The demands for ever more defense spending ignore the fact that the combined defense budgets of China and Russia equal a little more than a quarter of what the U.S. spends on defense. Nor is there much discussion of the fact that a war between great powers is as unlikely as it is unthinkable due to the threat of mutually assured nuclear annihilation.

In the same speech in which he warned Americans about the rise of the influence and power of the military-industrial complex, Eisenhower argued that the only real check on this would be "an alert and knowledgeable citizenry." One can only hope now that the U.S., and indeed the world, face the threat of a global pandemic, that Americans will begin to question soaring defense budgets and endless wars that contribute little to real security. Real security, as this pandemic will demonstrate, is dependent on internal resiliency. This kind of resiliency is built on sound infrastructure, accessible healthcare, a well-educated and healthy populace, localized supply chains, and responsive and responsible government. The coronavirus pandemic may finally force a rethink of how the U.S. government spends its citizens' money and how willing it is to continue funding and fighting counterproductive wars.

Michael Horton is a foreign policy analyst who has written for numerous publications, including The National Interest , West Point CTC Sentinel, The Economist , and the Christian Science Monitor .

[May 11, 2020] The global economy is in deep trouble was evident in 2019 and it is now enduring a sliding down into the abyss. The frantic 2008 policy of propping up Asset (Debt) prices with easy liquidity through Bank Money now meets the reality that Main Street is being poleaxed even more than hitherto.

Notable quotes:
"... Hospital chains in USA are in the hands of private equity as are Care Homes and whole swathes of infrastructure. Where PE does not hold the equity, management has simply leveraged to the hilt as at Boeing. Using Debt to fund Share Buybacks is the biggest waste of capital and puts business in run-off like a Mutual Fund. In the time Covid-19 has been in the Media most Western governments could have set up a Manufacturing Facility to produce PPE to any specified design. It is not like starting a space program. ..."
"... The truth is that Politics is full of lawyers - nice schools, nice universities, nice offices with the highest-tech product being a PC and a Webcam. In the days when military service was combat related rather than pen pushing and degree chasing, and people actually knew how trucking functioned and machines ran in factories - it was evident how the command system worked from desk to shop-floor. ..."
"... Today it is all Windbaggery. Failure is too well rewarded and Success easily wiped from the Doers by the Talkers. ..."
"... They wondered if Wuhan was China's "Chernobyl Moment"...- in fact it is the Chernobyl for The Western Societal Model. After all, Wall Street should be able to fix this situation - Masters of The Universe - they are where the Physics grads go to program trading systems - that is where the talented are sucked into the Brave New World. Why hasn't Wall Street solved it. What has Jamie Dimon done - he is always ready with comments ..."
May 11, 2020 | www.moonofalabama.org

Paul Greenwood , May 10 2020 7:57 utc | 49

I tend to ignore academic articles contrasting 21st Century pandemics with those in predominantly agrarian economies centuries ago. They are interesting in their own right but not prescriptive in any way unless you are obsessed with Labour Theory of Value and Ricardian Rent Theory.

That the global economy is in deep trouble was evident in 2019 and it is now enduring a step-change down into the abyss. The frantic 2008 policy of propping up Asset (Debt) prices with easy liquidity through Bank Money now meets the reality that Main Street is being poleaxed even more than hitherto.

Hospital chains in USA are in the hands of private equity as are Care Homes and whole swathes of infrastructure. Where PE does not hold the equity, management has simply leveraged to the hilt as at Boeing. Using Debt to fund Share Buybacks is the biggest waste of capital and puts business in run-off like a Mutual Fund. In the time Covid-19 has been in the Media most Western governments could have set up a Manufacturing Facility to produce PPE to any specified design. It is not like starting a space program.

The truth is that Politics is full of lawyers - nice schools, nice universities, nice offices with the highest-tech product being a PC and a Webcam. In the days when military service was combat related rather than pen pushing and degree chasing, and people actually knew how trucking functioned and machines ran in factories - it was evident how the command system worked from desk to shop-floor.

Today it is all Windbaggery. Failure is too well rewarded and Success easily wiped from the Doers by the Talkers.

They wondered if Wuhan was China's "Chernobyl Moment"...- in fact it is the Chernobyl for The Western Societal Model. After all, Wall Street should be able to fix this situation - Masters of The Universe - they are where the Physics grads go to program trading systems - that is where the talented are sucked into the Brave New World. Why hasn't Wall Street solved it. What has Jamie Dimon done - he is always ready with comments

Time to Re-Engineer these Societies towards Substance and away from Speculation

[May 10, 2020] Lockdowns May Aggravate America's Next Health Crisis An Explosion Of Deaths Of Despair, Study Finds

Notable quotes:
"... Polls of life satisfaction taken since the outbreak began have reflected a rapid erosion as 33 million Americans have joined the unemployment rolls over the last months. NY Gov Andrew Cuomo said during a recent daily briefing that NY is seeing a spike in drug and alcohol abuse as people sit around all day with nothing to do and nowhere to go. ..."
"... But of course the tremendous levels of financial uncertainty coupled with the unique characteristics of this crisis make it pretty much impossible to model - any research is really an educated guess, at best. ..."
"... "Unemployment is going to have a very important impact on deaths of despair." ..."
"... His proposed strategies including investing more resources in helping unemployed people find meaningful work, and/or training the armies of contact tracers that de Blasio has now promised to hire to spot people at risk of self-harm. ..."
May 10, 2020 | www.zerohedge.com

Doctors , scientists policymakers and even 'non-experts' posting on social media have argued that shuttering the health-care system to all non-emergency care risks sparking other public health crises from a spike in heart attacks and advanced cancer diagnoses, to so-called "deaths of despair."

In some areas, a spike in suicides has already been recorded since the start of the outbreak. And now, a newly published paper released Friday has attempted to quantify deaths that might occur because of the mental-health ramifications of widespread economic chaos caused by the crisis. The research - which hasn't yet been peer-reviewed - found the isolation, grief and economic hardship related to COVID-19 are conspiring to supercharge America's already-burgeoning mental-health crisis, likely setting the stage for tens of thousands of suicides down the line.

Specifically, the researchers tabulated that as many as 75k additional "deaths of despair" could be caused by the outbreak and the economy-crushing measures implemented to stop the spreads. "Deaths of despair" typically refer to suicides and substance-abuse-related deaths, according to Bloomberg .

The research was carried out by the Well Being Trust and researchers affiliated with the American Academy of Family Physicians. One of the report's authors said he hopes the research is eventually proven to be incorrect.

"I hope in 10 years people look back and say, 'Wow, they way overestimated it,'" said John Westfall, director of the Robert Graham Center for Policy Studies in Family Medicine and Primary Care, who co-wrote the report.

But the sizable spike in suicides, overdoses etc since the last major crisis (the financial crisis) is reason to be concerned.

Even as the American economy rebounded after the last recession, suicides and overdoses cut into Americans' life expectancy. Mental health experts worry that the economic uncertainty and social isolation of the pandemic will make things worse at a time when the health care system is already overwhelmed. The suicide rate in the US has already been rising for two decades, and in 2018 hit its highest level since 1941, Bloomberg reported, citing a piece published by JAMA Psychiatry (a prestigious medical journal) back in April.

"There's a paradox," said Jeffrey Reynolds, president of a Long Island-based nonprofit social services agency, the Family and Children's Association. " Social isolation protects us from a contagious, life-threatening virus, but at the same time it puts people at risk for things that are the biggest killers in the United States: suicide, overdose and diseases related to alcohol abuse."

Polls of life satisfaction taken since the outbreak began have reflected a rapid erosion as 33 million Americans have joined the unemployment rolls over the last months. NY Gov Andrew Cuomo said during a recent daily briefing that NY is seeing a spike in drug and alcohol abuse as people sit around all day with nothing to do and nowhere to go.

"One of the main things people should take away from this paper is that employment matters," said Benjamin Miller, chief strategy officer at the Well Being Trust and a clinical psychologist who worked on the paper. "It matters for our economic livelihood, and for our mental and emotional health."

But of course the tremendous levels of financial uncertainty coupled with the unique characteristics of this crisis make it pretty much impossible to model - any research is really an educated guess, at best.

Still, the researchers believe it's a useful warning, and something important for policy makers to keep in mind.

"It's useful to have a wake-up call," said Ken Duckworth, chief medical officer at the National Alliance on Mental Illness. "Unemployment is going to have a very important impact on deaths of despair."

Benjamin Miller, chief strategy officer at the Well Being Trust and a clinical psychologist who worked on the paper, proposed several solutions that could be enacted to, uh, depress the number of suicides.

His proposed strategies including investing more resources in helping unemployed people find meaningful work, and/or training the armies of contact tracers that de Blasio has now promised to hire to spot people at risk of self-harm.

[May 10, 2020] April Jobs Report 42 Million Unemployed 25.5% Unemployment Rate

May 10, 2020 | www.zerohedge.com

Here Is The Real April Jobs Report: 42 Million Unemployed, by Tyler Durden Sun, 05/10/2020 - 15:30 Friday's job report - according to which a record 20.5 million jobs were lost in April, some 10x more than the depths of the Great Depression, resulting in a 14.7% unemployment rate - was ugly enough as is, the NYT summarizing the catastrophic nature of the economic collapse with the following creative front page.

The truth, unfortunately is even uglier.

While it is true that what the BLS reported that the April unemployment rate (UR) was less than expected (14.7% versus consensus of 16.0%) and the drop in payroll employment of 20.5 million was also less than the 22.0 million expected, Standard Chartered bank has calculated that adjustments to the headline unemployment rate push the effective number of unemployed to 42 million and the effective UR rate to 25.5%, higher even than the U-6 underemployment rate of 22.8%. Worse, if one treats underemployed in line with the U-6 methodology, the true April unemployment number would rise to an mindblowing 27.5%.

How does one get these numbers? As the bank's chief FX strategist Steve Englander explains, start with the 23.1 million unemployed as published by BLS. To this add 8.1mn people who have dropped out of the labor force since February (previously the labor force had been growing steadily, so these are likely unemployed).

Add back 7.5MM workers classified as 'employed but not at work for other reasons' – BLS states that these workers are likely misclassified as employed, when they are in fact unemployed. Involuntary part-time work for economic reasons has gone up by 6.6MM and we treat these as half-unemployed (i.e., a contribution of 3.3MM).

This totals almost 42 Million effectively unemployed. Keep the civilian labor force denominator at February's 164.5 million, which results in a 25.5% estimate for effective unemployment, and if Englander treated involuntary part-time workers as completely unemployed, the resulting unemployment rate would be at 27.5%.

Commenting on the April BLS report, Englander writes that "bad data for the mid-March to April period is largely anticipated by investors; these data were neither good nor bad enough to force investors to adjust expectations." He also expects the May labor data to show deterioration at a slower pace, but think that investors are looking at the balance between initial and continuing claims to assess the pace at which reopening would lead to better labor-market outcomes.

And while a slowdown in the collapse is to be expected - after all, there are only so many workers that can be fired - don't expect it any time soon. As we first noted on Friday, White House economic adviser Kevin Hassett - who said two weeks ago that Q2 GDP would be the biggest negative number since the great depression - has set the groundwork for an even scariee number next month as the statistics catch up to the reality, warning that unemployment could hit 20% in May, up from 14.7% in April, or rather down from the real 27.5% unemployment rate.

" I think just looking at the flow of initial claims, it looks like we're probably going to get close to 20 percent in the next report ," Hassett told CNN 's "State of the Union" on Sunday, refusing to admit that the actual number when one eliminates the BLS fudges is already far higher.

He added that the rate will depend on whether the virus "has really abated" and if economies are "really going again."

"I would guess middle of summer is when we're going to start to go into the transition phase," said Hassett, adding that he hopes the third and fourth quarters will bring "very strong" growth.

"Just looking at the flow of initial claims that it looks like we're probably going to get close to 20% in the next report," senior White House economic adviser Kevin Hassett says about US unemployment. #CNNSOTU pic.twitter.com/bTN85AJaMD

-- State of the Union (@CNNSotu) May 10, 2020

Looking ahead at the May data, Englander is similarly gloomy and warns that initial claims have totaled 7 million since the April survey week and there is no sign that continuing claims are turning down due to rehiring or reopening, adding that "at this point it does not look like May employment data will show improvement or even stability. "

The incoming data look consistent with the baseline UR breaching 20% in May , especially if the responses on "employed but not at work for other reasons" change.

In summary, the Trump admin is hoping that within a few months the bottom will be in for the economy, it is also hoping that the official government reports eventually catch down to reality, and that at some point the two series - the actual economy and how the government actually represents it - will converge. The question is when, and just how massive the discrepancy between truth and the "official data" will grow until that happens.

[May 10, 2020] 'Murica From Overstretch To Collapse by Daniel Lazare

May 09, 2020 | www.zerohedge.com
Authored by Daniel Lazare via Off-Guardian.org,

In less than three decades, a mere blink of the eye in historical terms, the United States has gone from the world's sole superpower to a massive foundering wreck that is helpless before the coronavirus and intent on blaming the rest of the world for its own shortcomings. As the journalist Fintan O'Toole noted recently in the Irish Times:

"Over more than two centuries, the United States has stirred a very wide range of feelings in the rest of the world: love and hatred, fear and hope, envy and contempt, awe and anger. But there is one emotion that has never been directed towards the U.S. until now: pity."

Quite right. But how and why did this pitiable condition come about? Is it all Donald Trump's fault as so many now assume? Or did the process begin earlier?

The answer for any serious student of imperial politics is the latter. Indeed, a fascinating email suggests that the tipping point occurred in early to mid-2014, long before Trump set foot in the Oval Office.

Sent from U.S. General Wesley Clark to Philip Breedlove, Clark's successor as NATO commander in Europe, the email is dated Apr. 12, 2014, and concerns events in the Ukraine that had recently begun spinning out of control. A few weeks earlier, the Obama administration had been on top of the world thanks to a nationalist insurrection in Kiev that had chased out a mildly pro-Russian president named Viktor Yanukovych. Champagne glasses were no doubt clinking in Washington now that the Ukraine was solidly in the western camp. But then everything went awry. First, Vladimir Putin seized control of the Crimean Peninsula, site of an all-important Russian naval base at Sevastopol. Then a pro-Russian insurgency took off in Donetsk and Luhansk, two Russian-speaking provinces in the Ukraine's far east. Suddenly, the country was coming apart at the seams, and the U.S. didn't know what to do.

It was at that moment that Clark dashed off his note. Already, he informed Breedlove, "Putin has read U.S. inaction in Georgia and Syria as U.S. 'weakness.'" But now, thanks to the alarming turn of events in the Ukraine, others were doing the same. As he put it:

"China is watching closely. China will have four aircraft carriers and airspace dominance in the Western Pacific, within 5 years, if current trends continue. And if we let Ukraine slide away, it definitely raises the risks of conflict in the Pacific. For, China will ask would the U.S. then assert itself for Japan, Korea, Taiwan the Philippines the South China Sea?

...[I]f Russia takes Ukraine, Belarus will join the Eurasian Union, and, presto, the Soviet Union (in another name) will be back...

...Neither the Baltics nor the Balkans will easily resist the political disruptions empowered by a resurgent Russia and what good is a NATO 'security guarantee' against internal subversion?

...And then the U.S. will find a much stronger Russia, a crumbling NATO and [a] major challenge in the Western Pacific. Far easier to [hold] the line now in Ukraine than elsewhere later" [emphasis in the original].

The email speaks volumes about the mentality of those in charge. Conceivably, the Obama administration still had time to turn things around – if, that is, it had shown a bit of flexibility, a willingness to compromise, and a willingness as well to stand up to the ultra-nationalists who had led the anti-Yanukovych upsurge and opposed anything smacking of an even-handed settlement.

But instead it did the opposite. Back in the 1960s, cold warriors had argued that if Vietnam "fell" to the Communists, then Thailand, Burma, and even India would follow suit. But the proposition that Clark now advanced was even more extreme, a super-Domino Theory holding that a minor ethnic uprising in a part of the world that few people in Washington could find on the map was intolerable because it could cause the entire international structure to unravel. NATO, U.S. control of the western Pacific, victory over the Soviets – all would be lost because a few thousand people insisted on speaking their native Russian.

Why such rigidity? The real problem was not so much a confrontation mindset as a phenomenon that the historian Paul Kennedy had identified in the late 1980s: "imperial overstretch." Like other empires before it, the U.S. had allowed itself to become so over-extended after twenty-five years of "unipolarity" that strategists had their hands full keeping an increasingly rickety structure together. Nerves were on edge, which is why an ethnic uprising that might have been accommodated at an earlier stage of U.S. imperial development was no longer tolerable. Because the rebels had run afoul of U.S. imperial priorities, they constituted a fundamental threat and therefore had to be bulldozed out of the way.

Except for one thing: the structure was so weak that each new bulldoze operation only made matters worse. Insurgents continued to hold their ground in Donetsk and Luhansk thanks to Russian backing while the government grew more and more corrupt and unstable back in Kiev. In the Middle East, the situation was so confused that U.S. allies like Saudi Arabia and Qatar were channeling money and arms to ISIS as it rampaged through eastern Syria and northern Iraq and advanced on Baghdad. Thanks to the turmoil that U.S. policies were unleashing, millions of desperate refugees would soon make their way to Europe where they would spark a powerful nativist reaction that continues to this day. U.S. hegemony was turning into a nightmare.

It was no different in an America shaken by Wahhabist terrorism and dismayed by wars in the Middle East that went nowhere yet never seemed to end. Donald Trump rode a wave of discontent into the White House by promising to "drain the swamp" and bring the troops home. Conceivably, he could have done just that once he was in office – if, that is, he had been serious about downsizing U.S. imperialism and was capable of standing up to the CIA. But the "intelligence community" struck back by launching a classic destabilization campaign based on the theme of Russian collusion while Trump's foreign-policy ideas turned out be even more of a mess than Obama's.

So the collapse intensified, which is why America is now such a helpless giant. A crazy man is at the helm, yet the best Democrats can do is put up a candidate suffering from the early stages of senile dementia, who may be a rapist to boot. No one knows how things will play out from this point on.

But two things are clear. One is that the process d id not start under Trump, and the other is that it will undoubtedly continue regardless of who wins in November. Once collapse sets in, it's impossible to stop.

[May 10, 2020] The burger-flipping part of US servant economy isn't coming back, and it might be decades before America can rebuild a significant manufacturing economy

May 10, 2020 | www.moonofalabama.org

William Gruff , May 10 2020 12:50 utc | 66

"This [real workers going back to work for their bosses' profits] must happen now, or we are all doomed."

I really laughed at that.

What is doomed is the American empire. It will take a few years for that doom to play out, but history books will likely put the date for the demise of the empire back in March.

The burger-flipping servant economy isn't coming back, and it will be decades before America can rebuild a significant manufacturing economy. Get used to this "Greater Depression" because it will be with us a while, particularly after the next couple waves of the covid hit.

Hint: If you don't have a big 75" wall screen TV yet and want one, you might want to make that investment before the "decoupling" goes any further. They will cost a year or two salary afterwards.

[May 10, 2020] One Bank Explains Why QE No Longer Stimulates The Economy And Only Leads To Higher Stock Prices

May 10, 2020 | www.zerohedge.com

Even some of the most ardent supporters of the fraud that is Keynesian economics now admit the entire modern economic system is on the verge of collapse for one main reason: the marginal utility of debt is collapsing, with ever more debt required to generate an increase in underlying GDP.

And tied to that, is another reason why any day now the current system may be the last: the marginal utility of every new QE is now declining to the point where soon virtually none of the money created by the Fed out of thin air will enter the economy and instead will be stuck in capital markets, resulting in hyperinflation for asset prices even as the broader economy collapses. Or, as BMO's Daniel Krieter writes, "QE has fed through to the real economy in a slower manner than previous QE campaigns" and for each dollar the Fed's balance sheet has grown, M1 money supply has increased about $0.32, compared to $0.96 and $0.74 in QE1 and QE2. "The expansionary policy thus far has mostly resulted in increased asset prices", BMO writes concluding what had been obvious to us and our readers since 2009. Only now we are ten years closer to what is the inevitable endgame, one where the Fed has no impact on M1, which will also be known as the "game over" phase.

But let's back up.

Traditionally, as BMO explains, we analyze the business cycle from a classical economic perspective where monetary authorities are more passive and "the invisible hand" guides economies (this used to be the case before the Fed went all Politburo on the USSA and decided to nationalize capital markets, crushing any "signal" the bond market may have; the final step will be the launch of Yield Curve Control which will be game over for the market). In this context, we look at interest rates, which can theoretically be defined as the rate that makes the consumer indifferent between consumption today and consumption tomorrow. R* is the (unknowable) natural rate of interest that supports full employment and stable interest rates. In theory, if r<r*, then consumption today is preferable and the economy is expanding. If r>r*, consumption saving is preferable and the economy is contracting.

In an expansionary phase, prices and consumption are increasing. Because prices and investment opportunities are high, demand for money among consumers/businesses is high, and interest rates (r) increase alongside borrowing . When r rises to the rate of r*, consumption slows, earnings fall, and a recession ensues. R* falls as uncertainty and risk aversion grow. This is a "business cycle" recession (and as long as the Fed is around, we will never have one of those again as the Fed has now also killed the business cycle... just as the USSR tried to do).

However, a recession can also be caused by some external shock to the economy that produced further declines in r*. This is because r* is reactive to uncertainty with a strong negative correlation. The greater the uncertainty, the lower r* falls.

In recession, r falls as consumption remains low as long as it is greater than r*. Defaults accelerate the drop in r. With the passage of time, r* rises slowly as the uncertainty/risk aversion surrounding the shock and/or end of business cycle fades. However the longer firms go without earnings due to low consumption, the more defaults are realized and the more r drops. At some point, the combination of falling r and rising r* results in r <= r*. Once this happens, consumption/ investment picks up and the economy enters recovery.

In addition to accelerating declines in r, defaults experienced during recession also lower the cost of labor and capital goods as the resources of failed companies are returned to the economy. In addition, barriers to entry in certain industries fall as "old guard" firms go out of business. Thus, as the economy enters recovery, this combination of cheaper labor/capital goods and lower barriers to entry leads to strong business investment and increases growth potential during the ensuing expansion.

This is how the world works in theory. Unfortunately, since 1913, theory has not worked due to the intervention of the Fed. So now let's look at how all this works in reality, and introduce an active central bank with a wider range of monetary policy tools at its disposal.

As the economy cools, the central bank lowers r in an attempt to spur consumption by forcing r<r*. Consumption increases in response, and recession/defaults are avoided. But business resources aren't returned to the economy. Recovery will be less robust due to fewer relative attractive investment opportunities. As Krieter argues, this was the experience of 2001.

Now in 2008, a shock in the form of subprime mortgages hits the economy and uncertainty skyrockets. R* moves into negative territory as shown in a recent San Francisco Fed study. The Fed moves rates lower, but is constrained by the zero bound. In order to further "lower r", the Fed embarks on asset purchases during QE and is successful in spurring consumption, as evidenced by the strong correlation between increases in excess reserves and increases in M1. M1 is the most basic measure of money supply and includes essentially only cash and checking/demand bank accounts.
The theory is that for a good or service to be consumed, it must be paid for out of M1. Therefore, the increase in M1
following QE is a measure of the degree to which QE results in actual consumption.

Note "lower r" in quotation marks in the previous bullet because r is at the zero bound and cannot (at least in the United States) be lowered further. Therefore QE increases money supply which is meant to spur consumption, which is the same desired effect of lower interest rates. In a sense, money supply increases are synthetic interest rate decreases (and synthetic capital market increases) .

The combination of QE-driven consumption (r falling) and fading uncertainty after a trillion dollar fiscal stimulus package (r* rising) ultimately pulls the economy out of recession. However, the pace of response in 08/09 was slower. QE was not announced until late November 2008, after large defaults were already experienced. Fiscal stimulus in the form of the ARRA package didn't arrive until February 2009 with an additional lag in implementation that featured incremental defaults. In the end, almost a trillion dollars' worth of debt was affected by default in 2008/09, but QE certainly prevented actual defaults from being likely exponentially greater. BMO notes however that defaults avoided were once again economic resources that were not returned to the economy and barriers to entry that are not lowered. This argues that attractive investment opportunities following the financial crisis were not as abundant as the depth of recession would suggest.

As a result, the recovery was slow, ultimately prompting the Fed to embark on additional rounds of quantitative easing in an attempt to spur increased consumption.

Which brings us to the seeds of the Fed's own demise: the problem is that QE appears to be experiencing diminishing returns, as evidenced by a falling correlation between excess reserves and M1 in successive episodes of QE following the financial crisis. As QE leads to a direct increase in bank reserves, only a fraction is translated into money supply growth, and thus potentially consumption and investment. QE1 was highly effective and an important factor behind pulling the economy out of recession. QE2 had a marginally lower, but still high, follow through of .735 indicating that on average, $0.74 of each dollar of QE translated to increased money supply. We observe elevated inflation and personal consumption rates during the period of QE2 as evidence of its effectiveness. However, during Q3, the correlation fell to just $0.28 and resulted in very little inflation of GDP growth. Through this lens, the impact of QE on the real economy has diminished over time.

How does BMO explain the diminishing impact of QE?

Following five years of no QE in the United States, it appears the utility of current QE has increased modestly in comparison to QE3. However, the follow through to consumption still remains well below levels experienced between Q1 and Q2. It is likely then that current QE is unlikely spurring much consumption as r isn't influenced lower (via money supply increase) as much as in the past and likely remains well above r*.

Worse, as we discussed last week , one can argue that r* is likely lower now than potentially any point in history, and according to Deutsche Bank it is at an all time low of -1%.

Not only is uncertainty extremely high, but the impact of COVID-19 arguably directly lowers r*. Recall r can be defined as the rate of interest that makes consumption today indifferent to consumption in the future. In all economic models, r is assumed to be positive. But when people are afraid to their leave their house for fear of infection, future consumption actually is more attractive than current consumption. So r* is arguably negative for fundamental reasons for the first time. Greatly heightened uncertainty only pushes it even further negative.

When money supply goes up, but consumption fails to be generated (because r remains well above r*), then savings rates mathematically increase. Therefore, the prices of financial assets increase generally.

During times of risk aversion, bond prices increase first, but supply of safe assets is limited, especially as the Fed buys a substantial portion of the Treasury market. Investors are therefore pushed into riskier assets. But as long as r remains below r*, the more savings go up, the greater the mechanical move in financial asset prices relative to real economic activity.

This, according to BMO, is what's driving the paradoxical relationship between bond and equity prices in recent weeks, and explains why stocks are performing so well despite the outlook for the greater economy. Money supply that doesn't translate into consumption must result in higher financial asset prices until defaults result in wealth destruction. What does this mean for the recovery? The central bank is displaying reduced capacity to further generate real economic activity as a result of accommodative policy over the past twenty years. This means that recovery is unlikely until r* increases significantly , which only happens alongside fading virus uncertainty. This will take a long time.

During that time, one of two things will happen. Either the government will continue to assist companies in avoiding
bankruptcy, or it will not. If it does, confidence (and r*) will likely return relatively more quickly at a huge cost to the government. However, there will not be a large return of economic resources at the end of this recession and the ensuing recovery will be disappointing given the degree of economic pain currently being felt.

If it does not, defaults could potentially reach historic proportions, and the recession will be long and painful. However, using the "ripping the bandaid" analogy, this scenario would result in likely the largest return of economic resources in the history of the country and lead to a very powerful economic expansion in the wake of the current recession.

Ultimately, the truth likely lies in the middle. The government will continue to provide relief, though not likely in scale large enough to save all businesses. Defaults and downgrades will be staggering, but this will increase the capacity of growth in the ensuing economic recovery.

What does this mean for risk assets? It means that risk assets are being technically supported by stimulus measures so far, particularly QE that is no longer as effective as it was. However, a large wave of defaults is unavoidable without an unlikely near-term (and complete) solution to COVID-19. Heavy defaults, the kinds described in " Biblical" Wave Of Bankruptcies Is About To Flood The US , will likely bring about another wave of risk asset price weakness as wealth is destroyed and technical upward pressure on financial asset prices and a higher percentage of savings demand is met with safe haven assets (Figure 3).

This also explains why the Fed was compelled to enter the bond market, as absent a direct intervention in the secondary market, bond prices would crater and trigger a self-fulfilling doom-loop, where lower bond prices lead to higher defaults, lead to even lower prices and so on. For now, the Fed has managed to delay this process but there is only so much Powell can do to offset the collapse in fundamentals which will lead to continued ratings erosion, and the eventual defaults of countless companies, many of which the Fed will be directly invested in. At that point, the Fed's action in the "market" will become the topic of non-stop Congressional hearings, and will culminate with doubts emerging about the viability of the dollar as a reserve currency.

Until this trigger level is reached, however, QE will continues to pose a technical tailwind, influencing financial asset prices higher. This can be sustained until default rates increase, which is likely not until June or later as government stimulus money starts to run dry, and which point assets will likely take another nosedive lower, just as reports of a second coronavirus pandemic result in (most Democratic) states shuttering again ahead of the presidential election.

What happens then? Risk assets will continue to slide into the election and into 2021, at which point as Nordea showed last week, we will hit a point where the lagged effect of the flood central bank liquidity will finally hit into the S&P500, and result in one final explosion in risk assets, sending stocks over 40% higher...

... although not of a benign nature but more of what one would expect to see in the Caracas or Weimar stock market.

[May 10, 2020] If all coronavirus-related job losses had shown up as unemployed, the unemployment rate would now be around 19.0%, not 14.7%.

May 10, 2020 | caucus99percent.com

Before the April jobs report release, Heidi Shierholz of the Economic Policy Institute (EPI) warned on Twitter that Friday would be "the most cataclysmic #JobsDay of all of our lives" and shared a chart showing how recent unemployment claims contrast with the past 80 years, before detailing current conditions in a 22-tweet thread.


BRACE YOURSELF for the most cataclysmic #JobsDay of all of our lives. This chart has monthly job changes over the past 80 years. We lost more than 20 million jobs in April. There has never been anything like this. 1/ pic.twitter.com/eODWpeAb4X

-- Heidi Shierholz (@hshierholz) May 8, 2020

While the 14.7% figure for April is significantly higher than February (3.5%) and March (4.4%), it fails to capture the full scope of how U.S. workers have been impacted by temporary business closures and hours reductions that have resulted from the ongoing global health crisis. The report says 5.1 million Americans had hours cut in April.

Shierholz, senior economist and director of policy at EPI, explained that "only about two-thirds of coronavirus-related job losses are showing up as unemployed -- the rest are showing up as having dropped out of the labor force. If all coronavirus-related job losses had shown up as unemployed, the unemployment rate would now be around 19.0%, not 14.7%."

"Further, about 7.5 million workers are likely being misclassified as 'employed, not at work' instead of 'temporarily unemployed,'" she continued. "If they were classified correctly AND all coronavirus-related job losses had shown up as unemployed, the unemployment rate would be around 23.6%."

She also highlighted EPI's estimate from April 30 that because of recent job losses, about 12.7 million Americans have lost their employer-based health insurance -- which EPI researchers called a " terrifying " indictment of the country's private, for-profit healthcare system, particularly in the midst of a pandemic.

[May 10, 2020] Former JPMorgan Economist We Are Heading Towards A Weimar Republic Inflation Setup

May 10, 2020 | www.zerohedge.com

Former JPMorgan Economist: We Are Heading Towards A Weimar Republic Inflation Setup by Tyler Durden Sat, 05/09/2020 - 21:30 Submitted by a former JPMorgan economist who wishes to remain anonymous

The everything bubble

Readers will have anticipated the bursting of the bubble that has been re-inflating ever since 2009. Ultra-loose monetary policy, coupled with deflationary pressures from increased aggregate supply and investors chasing yield at ever higher risk, meant that almost all asset classes had reached all time highs just before entering the current bear market.

That there is a bubble, a massive one, is unquestionable. Readers will further have anticipated that it didn't have to be a global pandemic to burst this bubble. This bubble was practically looking for a prick - any prick - to burst it. Whether it was a credit event, liquidity shortages that led to bankruptcies, a terrorist attack, a natural disaster or a bat: markets had reached a level of fragility where they could not cope with the materialising of such a tail risk event.

Too much had fueled this fragility: out-of-touch credit ratings, leveraged balance sheets, stock buybacks, expansionary monetary policy and as a result: out-of-control credit and debt.

📊 WATCH: Two Decades Of Growing Global Debt 📊

In 2020, a sharp upward trajectory in debt levels looks all but certain. More in the latest IIF Global Debt Monitor: https://t.co/Exj7rDDPpx pic.twitter.com/q0R1vi05DY

-- IIF (@IIF) April 14, 2020

Market outlook

Expect companies in energy to go bust first. Then retail and hospitality. At some stage their bankruptcies will push creditors into a corner where such lenders will either have to be bailed out or they will drop like flies (Lehman style). Already banks have slowed their credit lines to corporates, like in 2008/2009, anticipating that some of their debtors will fail to repay.

Sure, with more QE flooding the markets a complete wipe-out may be averted, as there is no political appetite for mass insolvencies (especially in an election year in the US).

The bubble has reached a level where systemically relevant banks will be facing their Lehman moment sooner rather than later. Lawmakers will not allow such systemically relevant lenders to go under, as this would practically imply all lights to go out. So the real question at hand is: at what cost?

Crossing the Rubicon

On April 27, 2020 CNBC ran a story on "Why the coronavirus crisis may prompt central bankers to scrap inflation targeting".

If central banks indeed abandon or modify inflation targeting we will certainly be crossing the Rubicon. Admittedly, there is no other way in answering the above questions.

Policymakers continue to be behind the curve and obviously failed to learn from 2008/2009. Their last resort is printing money and creating more debt. If central banks have no or a soft-washed inflation mandate we are heading towards a Weimar Republic style inflation setup.

With global output staying the same or declining, aggregate demand declining significantly and the quantity of money in circulation multiplying (by means of handouts or universal basic incomes), asset prices across asset classes being propped up by central banks, it becomes just a matter of time until inflation goes from 'subdued' to 'out of hand'.

Asset allocation in this new set up

With central banks either purchasing corporate bonds or accepting them as collateral, it may be soon until their mandate is being changed to facilitate the buying of equities, too. As other commentators already noted: we may have abandoned free markets and now head to a centrally planned set up.

The recent pick-up from the March 2020 lows in stock markets will be short lived. Nothing has fundamentally improved, other than emergency liquidity provisions by central banks. Expect a new selloff by year end - re-testing the lows of March - because perfidiously the Fed does not yet own enough corporate debt/equity to control asset prices!

Central banks will be printing fiat money on a unprecedented scale. With potentially negative interest rates even in the US, a slowing of global trade and thus reduced supply, the risk of a surprise inflation increases markedly. If and when this feeds through, asset allocation becomes key.

Look for uncorrelated asset classes or inflation resistant assets. There is a chance central banks will own a good part of cross-sector corporate debt/equity when the dust settles and inflation starts to go through the roof.

For questions or comments, please get in touch.

[May 10, 2020] Neoliberalims with probably survive COVI-19 with minor modifications

Highly recommended!
May 10, 2020 | www.moonofalabama.org

likbez , May 10 2020 3:51 utc | 50

@bevin | May 9 2020 21:17 utc | 28

>The capitalists have painted themselves into a corner. There is no way out from this crisis which does not
> involve the end of fifty years of neo-liberalism (and two centuries of the liberal Political Economy).

I thought the same in 2008. Did not happen.

> Neo-liberalism, allied to warmongering in the MIC and dominating the political process through its ownership
> of both its own party and the Opposition's, has so dominated US life that the kind of reforms that Keynes saw
> as necessary to preserve the system from itself are unthinkable.

That's true but neoliberalism evolved in different direction: Trumpism ("national neoliberalism") is essentially neoliberalism without neoliberal globalization. Domestically it looks more and more like a unique "Americanized" flavor of neofascism. The latter historically proved to be a resilient social system (Spain)

> The current policy of giving money in unlimited quantities to corporations, virtually without condition,
> and invoicing the working class by pledging future tax revenues to repay the cost of financing, is unsustainable.

OK. But what is the countervailing force ? There is none. By definition creating a viable political opposition in a national security state is impossible. Note that the USSR crumbled only when KGB changed sides. And that Nazi Germany did not crumbed until Soviets took Berlin, and, despite all the misery of the last year of war, there were fierce fight for Berlin (and heavy losses for Soviets)

> Neo-liberalism, the ideology of capitalist rule, has had its chance. The crisis that we are in
> is showing how useless it is, how dangerous a society devoted to the profit of a few, rather than the welfare
> of the many is. With every new twist and turn it demonstrates its inability to govern.

Neoliberalism will most probably survive COVID-19 epidemic like it survived the crisis of 2008. You can argue whether quarantine was necessary or not and about the level of incompetence of Trump administration, but you can't deny that the measures taken by the USA government somewhat softened the blow and the social system remains intact.

Again, there is no viable countervailing force to MIC and financial oligarchy, and the two party system is very resilient and essentially guarantee that the internal political situation will stay this way. Looks like only external shocks or disintegration of the country under the pressure from far right nationalists can crumble this system.

> What this adds up to- mass unemployment and increasing immiseration with no organised voice to represent tens
> of millions of desperate workers and their families is the likelihood of a series of explosions, riots,
> strikes, boycotts and direct actions.

In the USA the family of three can survive when each of the adults earn just $10 per hour (which means income around $40K a year). Real misery is reserved mostly to single mothers and unemployed. You can't compare the situation in the USA to the situation in "neoliberalized" xUSSR countries where it is really about physical survival and large percentage of population live of ~$2 a day. Do we see riots in those countries ?

> There is nobody to press reforms on the ruling class

Now you are on something.

[May 10, 2020] San Diego Unemployment Rate Nearly 27%, Breaking County Record Set During Great Depression

May 10, 2020 | www.zerohedge.com

With the worst jobs report in history under our belt, which saw a record 20.5 million jobs lost in April, and the stated unemployment rate at 14.7%, some cities have been hit worse than others by the economic fallout from the pandemic.

To wit, after steadily increasing 2-3% every week for the past two months, the unemployment rate in San Diego county is at an all-time high of just under 27% - exceeding the previous record from 1933 set during the Great Depression, according to a report by the San Diego Association of Governments (SANDAG).

[May 09, 2020] The Evening Blues - 5-8-20 caucus99percent

May 09, 2020 | caucus99percent.com
'Most Cataclysmic' Jobs Report of Our Lifetime Shows US Unemployment Soaring to Level Not Seen Since Great Depression

Just a day after announcing that about 33.5 million Americans have filed jobless claims since mid-March as the coronavirus pandemic has caused lockdowns worldwide, the U.S. Department of Labor on Friday revealed the nation's official unemployment rate hit 14.7% last month -- its highest level since the Great Depression.

Before the April jobs report release, Heidi Shierholz of the Economic Policy Institute (EPI) warned on Twitter that Friday would be "the most cataclysmic #JobsDay of all of our lives" and shared a chart showing how recent unemployment claims contrast with the past 80 years, before detailing current conditions in a 22-tweet thread.


BRACE YOURSELF for the most cataclysmic #JobsDay of all of our lives. This chart has monthly job changes over the past 80 years. We lost more than 20 million jobs in April. There has never been anything like this. 1/ pic.twitter.com/eODWpeAb4X

-- Heidi Shierholz (@hshierholz) May 8, 2020

While the 14.7% figure for April is significantly higher than February (3.5%) and March (4.4%), it fails to capture the full scope of how U.S. workers have been impacted by temporary business closures and hours reductions that have resulted from the ongoing global health crisis. The report says 5.1 million Americans had hours cut in April.

Shierholz, senior economist and director of policy at EPI, explained that "only about two-thirds of coronavirus-related job losses are showing up as unemployed -- the rest are showing up as having dropped out of the labor force. If all coronavirus-related job losses had shown up as unemployed, the unemployment rate would now be around 19.0%, not 14.7%."

"Further, about 7.5 million workers are likely being misclassified as 'employed, not at work' instead of 'temporarily unemployed,'" she continued. "If they were classified correctly AND all coronavirus-related job losses had shown up as unemployed, the unemployment rate would be around 23.6%."

She also highlighted EPI's estimate from April 30 that because of recent job losses, about 12.7 million Americans have lost their employer-based health insurance -- which EPI researchers called a " terrifying " indictment of the country's private, for-profit healthcare system, particularly in the midst of a pandemic.

[May 07, 2020] People will not start consuming until they feel safe

May 07, 2020 | www.moonofalabama.org

Petri Krohn , May 6 2020 20:01 utc | 7

It makes no difference if it is Corona, Cholera, or Jack the Ripper that is roaming the streets. People will not start consuming until they feel safe.

[May 07, 2020] Michael Hudson's book killing the host is great in explaing that current economic situation in the USA

The key idea is the financial industry is by-and-large a parasitic industry.
May 07, 2020 | www.unz.com

Anon [417] Disclaimer , says: Show Comment May 6, 2020 at 11:15 am GMT

@Hibernian That is angument for bailing out just " the payment system/ real economy and per mark Blyth or John Kay( other people's money book) is like approximately 5% of the economy ,the test is just incredible leverage and fool Hardy financialization.

Watch one of John Kay's talks on YouTube or mark Blyth talk about 2008.

Glass- steagall was not the sole cause of 2008, but it does need to be reinstated. Also when the banks were recapitalized on the backs of savers, by cutting interest rates , to almost nothing, the rational response was to take your money out, they make loans of ten dollars on deposits of one dollar and barely even pay you for the privilege.

A jubilee is needed , during certain reigns in Egypt and china , Jubilee's / debt forgiveness would happen as frequently as every 18 months.

Kings basically used to make the agreement , I'll give you a monopoly on banking but in exchange don't think if the world's goes to hell , don't think you are getting 100 cents on the dollar. Not running my kingdom for you to be made whole. It's worse nowadays because they print the money put of thin air and expect to be repaid in full, austerity is a vicious cycle, every dollar that goes to debt is one less to spend on consumption , so demand has to go down, and it creates a vicious cycle.
Another thing china gets right is they owe money to themselves, not oligarchs like us, if they want to they just agree not to pay themselves back.

Michael Hudson's book killing the host is also great.

https://newworldeconomics.com/category/how-banks-work/

Anon [417] Disclaimer , says: Show Comment May 6, 2020 at 11:53 am GMT
That is an argument for bailing out just " the payment system/ real economy and per mark Blyth or John Kay( other people's money book) that is like approximately 5% of the economy ,the rest is just incredible leverage and fool hardy financialization. America has ones and zeros , and china has gold reserves , a better nuclear arsenal, competent leadership, more human capital, infrastructure, means of production, antibiotics, rare Earth's, is the greatest creditor nation I believe as opposed to the greatest debtor nation and approximately 82% of American weapon systems require at least one input from China.( Please don't argue America has competent leadership , because competent leadership would have never allowed it to get 10% this bad, the main argument against tariffs, is that they kick off a retaliatory cycle, except the U.S. didn't retaliate until extremely recently.

Those factories were built initially by Rockefellers , Sam Walton, Kissinger and other American oligarchs to get away from American labor, you reap what you sow, but globalists could care less.

You don't have to like China but please realize the extra Herculean task of trying to lift 1.4 billion people out of poverty, and realize it will necessitate some tough decisions, unlike America where the bottom 90-95% haven't gotten raises adjusted for inflation since 1983( the great decoupling)
And Americans love to cry about the Chinese not having political freedom, well when most dissent is disingenious like tienneman square which was the CIA ( google tienneman myth, the journalists admit it) and Hong Kong was the CIA and Soros ( you really think those people organically waved American flags, stupid?)
who is a front man for the CIA if you didn't know, the uyghurs are Muslims that the US has been cultivating since the 80s under Reagan and the national endowment for democracy( per William engdahl) who have been knighted to sabotage one belt one road because the US is mad at it's Navy getting end run arounded similar to how the British got mad at the Germans pre world war 1 for building a railroad to Baghdad, so they could get oil without dealing with the British Navy ( guess mackinder and Brzezinski aren't as smart as they think)
On top of that political freedom is somewhat of a dead weight loss, look at the division it's caused in the US, I'd rather have clean water.( 3800+ US areas have water at least 2x worse than Flint/ Google it)
We build more prisons, china just kills all the prisoners and people who love the killing of unborn children bemoan the killing of actual child molestors.

Also please be aware the one child policy was imposed on china by the Rockefellers just like they sterilized a third of Puerto Rican women by 1965 , by tying their tubes without consent and telling them it was reversible.

How many people even know how Britain got Hong kong,? They fought two wars over the right of court Jews( Sassoon) in Britain to flood china with opium, and when China lost not only did they have to give up Hong Kong, they had to allow opium to flood their country and had to pay for every dollar spent by both sides.( I'm pretty sure if I was Chinese, k would hate the west on that fact alone)

Watch one of John Kay's talks on YouTube or mark Blyth talk about 2008.

Glass- steagall was not the sole cause of 2008, but it does need to be reinstated. Also when the banks were recapitalized on the backs of savers, by cutting interest rates , to almost nothing, the rational response was to take your money out, but they make loans of ten dollars on deposits of one dollar and barely even pay you for the privilege.

A jubilee is needed , during certain reigns in Egypt and china , Jubilee's / debt forgiveness would happen as frequently as every 18 months on average.

Kings basically used to make the agreement , I'll give you a monopoly on banking but in exchange don't think if the world's goes to hell , don't think you are getting 100 cents on the dollar. Not ruining my kingdom for you to be made whole. It's worse nowadays because they print the money put of thin air and expect to be repaid in full, austerity is a vicious cycle, every dollar that goes to debt is one less to spend on consumption , so demand has to go down, and it creates a vicious cycle.
Another thing china gets right is they owe money to themselves, not oligarchs like us, if they want to they just agree not to pay themselves back.

Michael Hudson's book killing the host is also great.

https://newworldeconomics.com/category/how-banks-work/

Godfree Roberts , says: Show Comment May 6, 2020 at 11:54 am GMT

In France, a team of researchers has found the disease was already spreading there in late December, one month before the first official cases were confirmed. The revelation followed a study of 14 stored respiratory samples of patients who were admitted to intensive care units with influenza-like symptoms in December and January.

The researchers identified a 42-year-old patient, whose last overseas trip had been to Algeria in August, who developed symptoms after one of his children had a flu-like illness. The patient, who had pre-existing asthma and Type 2 diabetes, was admitted to the ICU for antibiotic therapy and discharged after two days.

https://www.scmp.com/news/china/science/article/3083081/britains-coronavirus-cases-came-mainly-europe-not-china

Wuhan detected it in late December, too. But was that the earliest French case, or will further testing–perhaps some postmortems–reveal earlier cases?

[May 07, 2020] America's Design Causes It To Fail The COVID-19 Challenge by Eric Zuesse

This is a weak article. Indignation as for excesses of neoliberal social system that exists in the USA is a good thing only if there is a plan to change the system. Eric Zuesse has none. Also for top 10% the US healthcare is very efficient; it is probably the best on the planet.
OK neoliberalism is bad. But what is the alternative? Return to the New Deal capitalism is impossible as management now is allied with the capital owners and that destroyed fragile coalition of trade unions and apart of professional management that existed during the new deal as a countervailing force for political power of the capital. Such coalition could exist if financial oligarchy is suppressed and if taxes of millionaires income (especially income from stocks) were around 80%. As soon as JFK lowered the taxed that was a writing on the wall: the New Deal is doomed. Financial oligarchy was suppressed and it did not like it. So in 20180 they staged coup d'état and the New Deal was over.
The question is: what political coalition can take on financial oligarchy. There is no such coalition yet.
Notable quotes:
"... Americans generally are desperate to go to work even if they might be spreading the coronavirus-19. They need the pay and the insurance coverage in order to be able to buy medical care. If they don't pay for it they won't get it. So: whomever does show up for work might reasonably be especially inclined to fear likely to catch the disease from a co-worker there. This is one of the many reasons why socializing the healthcare function is vastly more efficient than leaving it to market forces . ..."
"... Furthermore, prisons are among the institutions that especially increase the spread of an epidemic such as Covid-19. And the United States has a higher percentage of its residents in prison than does any other country in the world . In fact, almost all of the Americans who are in prison are poor (since 100% of the poor cannot afford a lawyer), and the poorer a person is, the likelier that the individual is to get coronavirus-19. ..."
"... America has 655 per 100,000, or 4.5 prisoners for every 1.0 prisoner in the entire world), America has vastly more production of coronavirus-19 that's generated by its being a police-state than any other country does -- and this isn't even taking into consideration the rotten, overburdened, health-care system, and the billionaire-propagandized public contempt for the poor, that characterize America's culture, and that make those prisons, perhaps, the worst amongst industrialized nations. ..."
"... Furthermore, in America, "Approximately 95 percent of criminal cases are plea-bargained, in part because public defenders are too overwhelmed to take them to trial. 'That means the state never even has to prove you did anything. They hold all the cards.'" So, the Constitutional protections, such as trial-by-jury and all of the other on-paper protections, don't even apply, in reality, to at least 95% of criminal defendants. And, in many U.S. states, convicts -- and even ex -convicts -- aren't allowed to vote. America's billionaires also use many other ways to keep down the percentage of the poor who vote. ..."
"... In addition, prior to the coronavirus challenge, both America and UK have been reducing, instead of increasing, their social protections; and, therefore, they were the only industrialized nations where life-expectancies were declining even before the coronavirus-19 hit. The recognition and concern about this decline started in UK, but has now started to be published even in the U.S. ..."
"... In other words: coronavirus hit UK at a time when the Government was already moving away from socializing and into privatizing health care; and, as a consequence, the death-rates had already started increasing in 2015. Coronavirus kills mainly people who already have bad health; and, so, their population were maximally vulnerable to it at the time when this epidemic struck. ..."
"... Even prior to 2015, the U.S. was wasting around half of its entire public-and-private spending for health care -- it was the most inefficient healthcare system on the planet -- and therefore had significantly lower life-expectancies than all other industrialized countries did. But, now, those remarkably low life-spans are actually getting even lower. ..."
"... This is the reason why America is designed so as to fail the coronavirus-19 challenge. The power of big-money (concentrated wealth) is destroying this country. It controls both Parties and their respective media, so the public don't know (and certainly cannot understand) the types of realities that are being reported (and linked-to) here. ..."
"... The fact [the existence of ] corporate prisons exist is pretty much an open declaration that we're a kleptocracy, run by the uniparty. ..."
"... We give an EQUAL vote to children, imbeciles, hostiles, and those who don't even speak the language ..."
"... Democracy is not about efficiency but to keep a check on those in power. It preventing the concentration of powers. It all about checks and balances to preserve the citizens freedoms. ..."
May 06, 2020 | www.zerohedge.com
Authored by Eric Zuesse via The Strategic Culture Foundation,

America isn't the only country which is so corrupt as to stand at or near the top of the global coronavirus-infection rankings , but, as the June 2020 issue of The Atlantic headlines, "We Are Living in a Failed State: The coronavirus didn't break America. It revealed what was already broken." Why did this happen?

Virtually all other industrialized countries have social-welfare systems in place, such as health-insurance covering 100% of the population; and, consequently, the residents there don't lose their health insurance if they lose their job -- they therefore aren't desperate to show up for work even when they are sick or can spread an epidemic.

Americans generally are desperate to go to work even if they might be spreading the coronavirus-19. They need the pay and the insurance coverage in order to be able to buy medical care. If they don't pay for it they won't get it. So: whomever does show up for work might reasonably be especially inclined to fear likely to catch the disease from a co-worker there. This is one of the many reasons why socializing the healthcare function is vastly more efficient than leaving it to market forces .

On April 23rd, Reuters reported that, "U.S. workers who refuse to return to their jobs because they are worried about catching the coronavirus should not count on getting unemployment benefits, state officials and labor law experts say."

In such states, the unemployment-benefits system is being used as a cudgel so as to force employees back to work, and therefore to increase the percentage of the population who will become infected by the coronavirus-19.

Furthermore, prisons are among the institutions that especially increase the spread of an epidemic such as Covid-19. And the United States has a higher percentage of its residents in prison than does any other country in the world . In fact, almost all of the Americans who are in prison are poor (since 100% of the poor cannot afford a lawyer), and the poorer a person is, the likelier that the individual is to get coronavirus-19.

This is yet another reason why prisons are a prime place for the spread of the disease. And on April 26th, the New York Times headlined "As Coronavirus Strikes Prisons, Hundreds of Thousands Are Released: The virus has spread rapidly in overcrowded prisons across the world, leading governments to release inmates en masse." Since America has more of its population in prison than any other country does (lots more: whereas "The world prison population rate, based on United Nations estimates of national population levels, is 145 per 100,000" , America has 655 per 100,000, or 4.5 prisoners for every 1.0 prisoner in the entire world), America has vastly more production of coronavirus-19 that's generated by its being a police-state than any other country does -- and this isn't even taking into consideration the rotten, overburdened, health-care system, and the billionaire-propagandized public contempt for the poor, that characterize America's culture, and that make those prisons, perhaps, the worst amongst industrialized nations.

Furthermore, in America, "Approximately 95 percent of criminal cases are plea-bargained, in part because public defenders are too overwhelmed to take them to trial. 'That means the state never even has to prove you did anything. They hold all the cards.'" So, the Constitutional protections, such as trial-by-jury and all of the other on-paper protections, don't even apply, in reality, to at least 95% of criminal defendants. And, in many U.S. states, convicts -- and even ex -convicts -- aren't allowed to vote. America's billionaires also use many other ways to keep down the percentage of the poor who vote.

Taken all together (and to list the other details would fill a book), America's systematized intense discrimination against the poor constitutes virtually an invitation to this country's having exceptional vulnerability to any epidemic. The fact that America now has 33.3% of the world's coronavirus-19 cases , though only 4.2% of the world's population, is actually systemic, and not merely particular to this moment in this country, and in the entire world. Donald Trump, and the current U.S. Congress, are part of a system of oppression, not really exceptions to it (such as the billionaires' media pretend -- with Democratic billionaires blaming "the Republicans," and Republican billionaires blaming "the Democrats"). The way this Government performs is actually somewhat normal for this country since at least 1980 .

In addition, prior to the coronavirus challenge, both America and UK have been reducing, instead of increasing, their social protections; and, therefore, they were the only industrialized nations where life-expectancies were declining even before the coronavirus-19 hit. The recognition and concern about this decline started in UK, but has now started to be published even in the U.S.

British healthcare scholar Danny Dorling headlined at his "Political Insight" blog on 16 July 2016, "Austerity, Rapidly Worsening Public Health across the UK" and reported that "the UK's Office for National Statistics (ONS) released its latest annual mortality figures – on schedule. An unprecedented rise in mortality was reported which was revealed to have risen across all the countries of the UK." Then, on 8 July 2018, London's Daily Express bannered "Britain is the ONLY European country with a declining life expectancy – inquiry launched" . Then, on 8 March 2019, the blog of the British Medical Journal headlined "The deepening health crisis in the UK requires society wide, political intervention" and reported that UK's life-expectancy had been plunging since 2014. The BMJ then issued an article on 27 March 2020, "Things Fall Apart: the British Health Crisis 2010–2020" .

In other words: coronavirus hit UK at a time when the Government was already moving away from socializing and into privatizing health care; and, as a consequence, the death-rates had already started increasing in 2015. Coronavirus kills mainly people who already have bad health; and, so, their population were maximally vulnerable to it at the time when this epidemic struck.

Meanwhile, the same shortening of life-spans was also occurring in the U.S. On 29 November 2018, London's Daily Mail bannered "American life expectancy DROPS as suicides and drug overdoses soar and progress against heart disease grinds to a halt, CDC data reveal" . A year later, the JAMA Network headlined on 26 November 2019, "Life Expectancy and Mortality Rates in the United States, 1959-2017" and reported that "Between 1959 and 2016, US life expectancy increased from 69.9 years to 78.9 years but declined for 3 consecutive years after 2014." So: both UK and U.S. life-spans peaked in 2014. Unlike virtually all other nations, these two were declining in health.

Even prior to 2015, the U.S. was wasting around half of its entire public-and-private spending for health care -- it was the most inefficient healthcare system on the planet -- and therefore had significantly lower life-expectancies than all other industrialized countries did. But, now, those remarkably low life-spans are actually getting even lower.

Political-science studies that are based upon decades of reliably reported data have established that ever since around 1980, the United States has been a dictatorship: what the public wants (and even needs ) is basically ignored, but what the super-rich (the country's actual dictators) simply want becomes reflected in governmental policies. That's the very definition of a "dictatorship." The U.S. national Government is responsive to the wants of its billionaires, not to the needs of the public (such as protecting their health, education, and welfare, even when the billionaires don't want it to).The findings in one of these studies are summarized well in a six-minute video, here .

Although the billionaires who fund America's liberal Party, the Democratic Party, oppose the billionaires who fund the Republican Party (the conservative Party -- the one that's overtly in favor of the existing wealth-inequality), this is purely for PR purposes. Whenever the issue becomes their own wealth versus improving the wealth and economic opportunity for the poor, they all go for expanding their own empire (sometimes by funding a tax-exempt 'charity' that will increase, even more, their personal control over the total empire -- by using that tax-exemption to leverage the operation, which will be controlled by themselves instead of by the public tax-funded government). Such 'charities' are mainly tax-dodges.

However, in all countries, the people who are the most vulnerable to epidemics are the poor. This also means that the infection-rates and spreading of the disease are the highest amongst the poorest. And, in this epidemic, the interests of the super-rich are opposite to the interests of everybody else . And, since the U.S. Government has, for decades now, been serving predominantly the super-rich, instead of the public , the people who are the most at risk are also the most ignored.

This is even proud policy ('fiscal responsibility', etc.) in the Republican Party. Bailing-out investors is 'necessary', but bailing out employees and consumers is 'fiscally irresponsible'. For example, on April 27th, the Democrat David Sirota headlined "Red States Owe Workers More Than $500 Billion -- The GOP Is Trying to Steal The Money: Trump is boosting a McConnell plan to help states renege on promised retirement and health benefits to millions of workers and retirees." And he is correct.

However, his Party is going to be compromising with that (instead of adamantly refuse to accept it and then go on the political hustings shaming the Republican President and Congress-members so as to break them on their blatantly scandalous whoring to the entire billionaire-class, who want their investments to be bailed out before the public is -- which might turn out to be never). It's a "good cop, bad cop," routine, to protect the super-rich. It accepts holding the public hostage to what the big political donors want, instead of focuses against that as being the central political issue of the moment, and of at least post-1980 America.

This is 'democracy'-as-political-scam. For example: some of the Democratic billionaires, who fund anti-Trump ads, pretend to be Republicans , in order to be able to peel off some of Trump's Republican voters, and so are blaming Trump alone for America's catastrophically bad performance in the coronavirus-crisis .

They're just trying to deceive their suckers into voting for Joe Biden, or else not voting at all; and, so, their ad doesn't even so much as just mention Biden. It's a Biden ad that makes no mention of Biden. It hides its true motive. That's typical.

This is the reason why America is designed so as to fail the coronavirus-19 challenge. The power of big-money (concentrated wealth) is destroying this country. It controls both Parties and their respective media, so the public don't know (and certainly cannot understand) the types of realities that are being reported (and linked-to) here.

It's also the reason why Joe Biden's "plan" for dealing with the coronavirus epidemic is just as bad a joke on the voters as Trump's is. This is a failing country, which is failing in a bipartisan (both Republican and Democratic Party) way.

A "good cop, bad cop" government is, in reality, all bad cop.

(I therefore proposed an Amendment to the U.S. Constitution in order to rectify some of the reasons behind this structural failure of the U.S. Government. Perhaps the only alternative to that would be violent revolution, but it would probably make things even worse, not better.)


desertboy , 23 minutes ago

The fact [the existence of ] corporate prisons exist is pretty much an open declaration that we're a kleptocracy, run by the uniparty.

Reign in Fact, 28 minutes ago

" The power of big-money (concentrated wealth) is destroying this country... This is 'democracy'-as-political-scam... "

No the scam is democracy itself. We give an EQUAL vote to children, imbeciles, hostiles, and those who don't even speak the language, while allowing wholesale vote-buying bribery of public unions.

No such system has ever thrived anywhere in the animal kingdom - equality without merit, or rule by will of the laziest, weakest and dumbest - no matter how small the "society", team, family, gang, union, band, corporation, religion or nation.

It can't and won't end well.

youshallnotkill , 15 minutes ago

Democracy is not about efficiency but to keep a check on those in power. It preventing the concentration of powers. It all about checks and balances to preserve the citizens freedoms.

The fact that you don't understand these where basics of why we have a republic is testament to our failed school system.

Deep In Vocal Euphoria , 30 minutes ago

Demoracy...usa was a constitutional republic..........

AVmaster , 30 minutes ago

This hasn't been the american "design" since 23DEC1913......

Dragonlord , 1 minute ago

America's design to disable the freedom of state secession has ruined it. As a result, we are facing the possibility of another civil war.

[May 06, 2020] The Coronavirus Revealed America's Failures by George Packer

May 06, 2020 | archive.fo

W hen the virus came here, it found a country with serious underlying conditions, and it exploited them ruthlessly. Chronic ills -- a corrupt political class, a sclerotic bureaucracy, a heartless economy, a divided and distracted public -- had gone untreated for years. We had learned to live, uncomfortably, with the symptoms. It took the scale and intimacy of a pandemic to expose their severity -- to shock Americans with the recognition that we are in the high-risk category. The crisis demanded a response that was swift, rational, and collective. The United States reacted instead like Pakistan or Belarus -- like a country with shoddy infrastructure and a dysfunctional government whose leaders were too corrupt or stupid to head off mass suffering. The administration squandered two irretrievable months to prepare. From the president came willful blindness, scapegoating, boasts, and lies . From his mouthpieces, conspiracy theories and miracle cures. A few senators and corporate executives acted quickly -- not to prevent the coming disaster, but to profit from it. When a government doctor tried to warn the public of the danger, the White House took the mic and politicized the message. Every morning in the endless month of March, Americans woke up to find themselves citizens of a failed state. With no national plan -- no coherent instructions at all -- families, schools, and offices were left to decide on their own whether to shut down and take shelter . When test kits, masks, gowns, and ventilators were found to be in desperately short supply, governors pleaded for them from the White House, which stalled, then called on private enterprise, which couldn't deliver. States and cities were forced into bidding wars that left them prey to price gouging and corporate profiteering. Civilians took out their sewing machines to try to keep ill-equipped hospital workers healthy and their patients alive. Russia, Taiwan, and the United Nations sent humanitarian aid to the world's richest power -- a beggar nation in utter chaos.
Donald Trump saw the crisis almost entirely in personal and political terms. Fearing for his reelection, he declared the coronavirus pandemic a war, and himself a wartime president. But the leader he brings to mind is Marshal Philippe Pétain, the French general who, in 1940, signed an armistice with Germany after its rout of French defenses, then formed the pro-Nazi Vichy regime. Like Pétain, Trump collaborated with the invader and abandoned his country to a prolonged disaster. And, like France in 1940, America in 2020 has stunned itself with a collapse that's larger and deeper than one miserable leader. Some future autopsy of the pandemic might be called Strange Defeat , after the historian and Resistance fighter Marc Bloch's contemporaneous study of the fall of France . Despite countless examples around the U.S. of individual courage and sacrifice, the failure is national. And it should force a question that most Americans have never had to ask: Do we trust our leaders and one another enough to summon a collective response to a mortal threat? Are we still capable of self-government? This is the third major crisis of the short 21st century. The first, on September 11, 2001, came when Americans were still living mentally in the previous century, and the memory of depression, world war, and cold war remained strong. On that day, people in the rural heartland did not see New York as an alien stew of immigrants and liberals that deserved its fate, but as a great American city that had taken a hit for the whole country. Firefighters from Indiana drove 800 miles to help the rescue effort at Ground Zero. Our civic reflex was to mourn and mobilize together. Partisan politics and terrible policies, especially the Iraq War, erased the sense of national unity and fed a bitterness toward the political class that never really faded. The second crisis, in 2008, intensified it. At the top, the financial crash could almost be considered a success. Congress passed a bipartisan bailout bill that saved the financial system. Outgoing Bush-administration officials cooperated with incoming Obama administration officials. The experts at the Federal Reserve and the Treasury Department used monetary and fiscal policy to prevent a second Great Depression. Leading bankers were shamed but not prosecuted; most of them kept their fortunes and some their jobs. Before long they were back in business. A Wall Street trader told me that the financial crisis had been a "speed bump." All of the lasting pain was felt in the middle and at the bottom, by Americans who had taken on debt and lost their jobs, homes, and retirement savings. Many of them never recovered, and young people who came of age in the Great Recession are doomed to be poorer than their parents. Inequality -- the fundamental, relentless force in American life since the late 1970s -- grew worse. This second crisis drove a profound wedge between Americans: between the upper and lower classes, Republicans and Democrats, metropolitan and rural people, the native-born and immigrants, ordinary Americans and their leaders. Social bonds had been under growing strain for several decades, and now they began to tear. The reforms of the Obama years, important as they were -- in health care, financial regulation, green energy -- had only palliative effects. The long recovery over the past decade enriched corporations and investors, lulled professionals, and left the working class further behind. The lasting effect of the slump was to increase polarization and to discredit authority, especially government's. Both parties were slow to grasp how much credibility they'd lost. The coming politics was populist. Its harbinger wasn't Barack Obama but Sarah Palin, the absurdly unready vice-presidential candidate who scorned expertise and reveled in celebrity. She was Donald Trump's John the Baptist. [ David Frum: Americans are paying the price for Trump's failures ] Trump came to power as the repudiation of the Republican establishment. But the conservative political class and the new leader soon reached an understanding. Whatever their differences on issues like trade and immigration, they shared a basic goal: to strip-mine public assets for the benefit of private interests. Republican politicians and donors who wanted government to do as little as possible for the common good could live happily with a regime that barely knew how to govern at all, and they made themselves Trump's footmen. Like a wanton boy throwing matches in a parched field, Trump began to immolate what was left of national civic life. He never even pretended to be president of the whole country, but pitted us against one another along lines of race, sex, religion, citizenship, education, region, and -- every day of his presidency -- political party. His main tool of governance was to lie. A third of the country locked itself in a hall of mirrors that it believed to be reality; a third drove itself mad with the effort to hold on to the idea of knowable truth; and a third gave up even trying. Trump acquired a federal government crippled by years of right-wing ideological assault, politicization by both parties, and steady defunding. He set about finishing off the job and destroying the professional civil service. He drove out some of the most talented and experienced career officials, left essential positions unfilled, and installed loyalists as commissars over the cowed survivors, with one purpose: to serve his own interests. His major legislative accomplishment, one of the largest tax cuts in history, sent hundreds of billions of dollars to corporations and the rich. The beneficiaries flocked to patronize his resorts and line his reelection pockets. If lying was his means for using power, corruption was his end. [ Read: It pays to be rich during a pandemic ] This was the American landscape that lay open to the virus: in prosperous cities, a class of globally connected desk workers dependent on a class of precarious and invisible service workers; in the countryside, decaying communities in revolt against the modern world; on social media, mutual hatred and endless vituperation among different camps; in the economy, even with full employment, a large and growing gap between triumphant capital and beleaguered labor; in Washington, an empty government led by a con man and his intellectually bankrupt party; around the country, a mood of cynical exhaustion, with no vision of a shared identity or future. If the pandemic really is a kind of war, it's the first to be fought on this soil in a century and a half. Invasion and occupation expose a society's fault lines, exaggerating what goes unnoticed or accepted in peacetime, clarifying essential truths, raising the smell of buried rot. The virus should have united Americans against a common threat. With different leadership, it might have. Instead, even as it spread from blue to red areas, attitudes broke down along familiar partisan lines. The virus also should have been a great leveler. You don't have to be in the military or in debt to be a target -- you just have to be human. But from the start, its effects have been skewed by the inequality that we've tolerated for so long. When tests for the virus were almost impossible to find, the wealthy and connected -- the model and reality-TV host Heidi Klum, the entire roster of the Brooklyn Nets, the president's conservative allies -- were somehow able to get tested, despite many showing no symptoms . The smattering of individual results did nothing to protect public health. Meanwhile, ordinary people with fevers and chills had to wait in long and possibly infectious lines, only to be turned away because they weren't actually suffocating. An internet joke proposed that the only way to find out whether you had the virus was to sneeze in a rich person's face. When Trump was asked about this blatant unfairness, he expressed disapproval but added, " Perhaps that's been the story of life ." Most Americans hardly register this kind of special privilege in normal times. But in the first weeks of the pandemic it sparked outrage, as if, during a general mobilization, the rich had been allowed to buy their way out of military service and hoard gas masks. As the contagion has spread, its victims have been likely to be poor, black, and brown people . The gross inequality of our health-care system is evident in the sight of refrigerated trucks lined up outside public hospitals. [ Ibram X. Kendi: Stop blaming black people for dying of the coronavirus ] We now have two categories of work: essential and nonessential. Who have the essential workers turned out to be? Mostly people in low-paying jobs that require their physical presence and put their health directly at risk: warehouse workers, shelf-stockers, Instacart shoppers, delivery drivers, municipal employees, hospital staffers, home health aides, long-haul truckers. Doctors and nurses are the pandemic's combat heroes, but the supermarket cashier with her bottle of sanitizer and the UPS driver with his latex gloves are the supply and logistics troops who keep the frontline forces intact. In a smartphone economy that hides whole classes of human beings, we're learning where our food and goods come from, who keeps us alive . An order of organic baby arugula on AmazonFresh is cheap and arrives overnight in part because the people who grow it, sort it, pack it, and deliver it have to keep working while sick. For most service workers, sick leave turns out to be an impossible luxury. It's worth asking if we would accept a higher price and slower delivery so that they could stay home. The pandemic has also clarified the meaning of nonessential workers. One example is Kelly Loeffler, the Republican junior senator from Georgia, whose sole qualification for the empty seat that she was given in January is her immense wealth. Less than three weeks into the job, after a dire private briefing about the virus, she got even richer from the selling-off of stocks , then she accused Democrats of exaggerating the danger and gave her constituents false assurances that may well have gotten them killed. Loeffler's impulses in public service are those of a dangerous parasite. A body politic that would place someone like this in high office is well advanced in decay. The purest embodiment of political nihilism is not Trump himself but his son-in-law and senior adviser, Jared Kushner. In his short lifetime, Kushner has been fraudulently promoted as both a meritocrat and a populist. He was born into a moneyed real-estate family the month Ronald Reagan entered the Oval Office, in 1981 -- a princeling of the second Gilded Age. Despite Jared's mediocre academic record, he was admitted to Harvard after his father, Charles, pledged a $2.5 million donation to the university. Father helped son with $10 million in loans for a start in the family business, then Jared continued his elite education at the law and business schools of NYU, where his father had contributed $3 million. Jared repaid his father's support with fierce loyalty when Charles was sentenced to two years in federal prison in 2005 for trying to resolve a family legal quarrel by entrapping his sister's husband with a prostitute and videotaping the encounter. [ Adam Serwer: Trump is inciting a coronavirus culture war to save himself ] Jared Kushner failed as a skyscraper owner and a newspaper publisher, but he always found someone to rescue him, and his self-confidence only grew. In American Oligarchs , Andrea Bernstein describes how he adopted the outlook of a risk-taking entrepreneur, a "disruptor" of the new economy. Under the influence of his mentor Rupert Murdoch, he found ways to fuse his financial, political, and journalistic pursuits. He made conflicts of interest his business model. So when his father-in-law became president, Kushner quickly gained power in an administration that raised amateurism, nepotism, and corruption to governing principles. As long as he busied himself with Middle East peace, his feckless meddling didn't matter to most Americans. But since he became an influential adviser to Trump on the coronavirus pandemic, the result has been mass death. In his first week on the job, in mid-March, Kushner co-authored the worst Oval Office speech in memory, interrupted the vital work of other officials, may have compromised security protocols, flirted with conflicts of interest and violations of federal law, and made fatuous promises that quickly turned to dust. " The federal government is not designed to solve all our problems ," he said, explaining how he would tap his corporate connections to create drive-through testing sites. They never materialized. He was convinced by corporate leaders that Trump should not use presidential authority to compel industries to manufacture ventilators -- then Kushner's own attempt to negotiate a deal with General Motors fell through. With no loss of faith in himself, he blamed shortages of necessary equipment and gear on incompetent state governors. To watch this pale, slim-suited dilettante breeze into the middle of a deadly crisis , dispensing business-school jargon to cloud the massive failure of his father-in-law's administration, is to see the collapse of a whole approach to governing. It turns out that scientific experts and other civil servants are not traitorous members of a "deep state" -- they're essential workers , and marginalizing them in favor of ideologues and sycophants is a threat to the nation's health. It turns out that "nimble" companies can't prepare for a catastrophe or distribute lifesaving goods -- only a competent federal government can do that . It turns out that everything has a cost, and years of attacking government, squeezing it dry and draining its morale, inflict a heavy cost that the public has to pay in lives. All the programs defunded, stockpiles depleted, and plans scrapped meant that we had become a second-rate nation. Then came the virus and this strange defeat. [ Read: Trump's coronavirus message is revisionist history ] The fight to overcome the pandemic must also be a fight to recover the health of our country, and build it anew, or the hardship and grief we're now enduring will never be redeemed. Under our current leadership, nothing will change. If 9/11 and 2008 wore out trust in the old political establishment, 2020 should kill off the idea that anti-politics is our salvation. But putting an end to this regime, so necessary and deserved, is only the beginning. We're faced with a choice that the crisis makes inescapably clear. We can stay hunkered down in self-isolation, fearing and shunning one another, letting our common bond wear away to nothing. Or we can use this pause in our normal lives to pay attention to the hospital workers holding up cellphones so their patients can say goodbye to loved ones; the planeload of medical workers flying from Atlanta to help in New York ; the aerospace workers in Massachusetts demanding that their factory be converted to ventilator production; the Floridians standing in long lines because they couldn't get through by phone to the skeletal unemployment office; the residents of Milwaukee braving endless waits, hail, and contagion to vote in an election forced on them by partisan justices . We can learn from these dreadful days that stupidity and injustice are lethal; that, in a democracy, being a citizen is essential work; that the alternative to solidarity is death. After we've come out of hiding and taken off our masks, we should not forget what it was like to be alone.
This article appears in the June 2020 print edition with the headline "Underlying Conditions." We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.
George Packer is a staff writer at The Atlantic . He is the author of Our Man: Richard Holbrooke and the End of the American Century and The Unwinding: An Inner History of the New America .

[May 06, 2020] In December the Fed's repo market had been sounding the alarms that a serious bubble recession was coming. Nothing apparently was fixed from the last wall street megadooshbaggery meltdown

May 06, 2020 | turcopolier.typepad.com

ST Harris , 04 May 2020 at 12:55 PM

Even in blissful 'pre rona' December the Fed's repo market had been sounding the alarms that a serious bubble recession was coming. Nothing apparently was fixed from the last wall street megadooshbaggery meltdown. See:

https://www.housingwire.com/articles/wells-fargo-joins-chase-in-halting-helocs/

This means that even those who built up real estate equity will have a difficult time short term liquifying that equity, which means that Chase, Wells Fargo, et al have a lot of pessimism about the US real estate market, the thing they have made so much money on last few years, and which they were supposed to have fixed.

well pilgrims ;) not only is the economy enduring sudden searing pandemic pain, it is also feeling the beginning of a big bubble popping recession, which everybody in the financial world was already freaking about well before the rona arrived. Perhaps endless Fed QE can prop up equities markets through November, perhaps, but then it's all bets off into 2021 as numerous wall street debts scams will have to be deleveraged.

[May 04, 2020] Fauci and the damage to the USA economy

May 04, 2020 | www.zerohedge.com

It's likely Fauci's incorrect simply because just as central planners routinely failed when it came to planning economic outcomes in the 20th century, so does that same central planning fail now. Fauci once again may be brilliant, but he's no match for a U.S. economy comprised of hundreds of millions of individuals making infinite informed decisions every second of every day.

The same applies to Bill Gates. Some believe that his undeniable genius as a businessman positions him to knowledgeably opine on how we the U.S. and the world can come back from the virus. Gates has observed that businesses would be troubled with or without the lockdowns, unemployment would be higher with or without them, so the plan should be to continue them until we're better situated in terms of a vaccine.

Is Gates right? It's once again difficult to know. For one, his analysis ignores the "unseen"; as in what would individuals and businesses have done had the response of politicians to the virus been something like "You're all adults. Be careful."

If so, it's not unreasonable to suggest that Fauci, Gates and other intelligent individuals would have strongly called for Americans to shelter-in-place, and tens of millions would have done just that. At the same time, Elon Musk and investors like Michael Burry might have responded in more intrepid fashion; calling for individuals and businesses to work around a virus of unknown lethality.

[May 04, 2020] Neoliberalism and neoconservatism are the two sides of the one political coin that Americans are allowed to choose

Highly recommended!
Notable quotes:
"... the nations CEO's become sort of one big club, and the top of the club is the head parasites pulling the strings on the stock market (outfits like Goldman Sachs). ..."
"... NO ONE wants to cross the head parasites, the corrupt political class turns to them as their economic brain trust, and the propaganda class (MSM) spin narratives that comport to the corrupt political class' interests and the corrupt status quo. ..."
May 04, 2020 | www.unz.com

Chris Moore says: Website Show Comment April 30, 2020 at 7:38 pm GMT 400 Words

As our guest puts it, the recently passed Trump "Bank and Landlord Relief" bill, mistakenly named the Coronavirus bill, starts by providing banks with an even larger giveaway of wealth than they received from Obama in 2008. Helping the banks, financial and real estate sectors in a so-called free market system is conflated with helping the industrial economy and general living standards for most Americans. The essence of a parasite is not only to drain the host's nourishment, but to dull the host's brain so that it does not recognize that the parasite is there.

One of the ways it does this is to entice most of the biggest companies onto the stock markets, which in turn subordinates them to the financial sector -- more specifically, the investment bankers. And then the nations CEO's become sort of one big club, and the top of the club is the head parasites pulling the strings on the stock market (outfits like Goldman Sachs).

NO ONE wants to cross the head parasites, the corrupt political class turns to them as their economic brain trust, and the propaganda class (MSM) spin narratives that comport to the corrupt political class' interests and the corrupt status quo.

This is why [neo]liberalism and neoconservatism are the two sides of the one political coin that Americans are allowed to choose. Lean left? You'll get a liberal who mostly uses identity politics to divide and rule. Lean right? You'll get a neocon who mostly uses foreign affairs to divide and rule. But increasingly, the two cross-over, hence you'll see liberals harping 24/7 about Russiagate and neocons harping 24/7 about Iran, Islam and now China.

None of this is to say that Russia, China and Iran aren't competitors, because they are. But the liberal and neocon fanatics turn them into existential, kill or be killed competitors...

... ... ...

[May 04, 2020] Ordinary Americans Are Going To Get Super-Pissed by James Howard Kunstler

Looks like wishful thinking. Neoliberalism despite its trend for redistribution wealth up probably will survive this crisis. One strong argument here is that the return to the New Deal capitalism is not impossible as a weak alliance of management and trade union that existed after WWII was dissolved long ago.
So there is not countervailing force for the dominance of financial capital. It captured that state and MIC is just an extension of Wall Street -- it racketeers. The same is true about intelligence agencies, which also are pretty closely connected with Wall Street, especially CIA.
May 04, 2020 | www.zerohedge.com
Authored by James Howard Kunstler via Kunstler.com,

... ... ...

And so here we are at a fraught moment in the convergent crises of corona virus and the foundering economic system that it infected, with all its frightful pre-existing conditions. Of course, it isn't capitalism , so-called, that is failing, but the perversions of capitalism, starting with the appendage of the troublesome term: ism . It isn't a religion, or even a pseudo-religion like Zoroastrianism or communism. It's simply the management system for surplus wealth. In a hyper-complex society, the management of wealth naturally grows hyper-complex, too, with lavish opportunities and temptations for chicanery, cheating, fraud, and swindling (the perversions of capital). It's in the interest of the managers to cloak all that hyper-complex perversity in opaque language, to make it seem okay.

How many ordinary Americans have a clue what all the Municipal Liquidity Facilities, Primary Dealer Credit Facilities, Primary and Secondary Market Corporate Credit Facilities, Money Market Mutual Fund Liquidity Facilities, Main Street New Loan Facilities and Expanded Loan Facilities, Commercial Paper Funding Facilities currency swap lines, the TALFs TARPs, PPPs, SPVs represent ­- besides the movement, by keystrokes, of "money" from one netherworld to another (both conveniently located on Wall Street), usually to the loss of non-elite citizens generally and to their offspring's offspring's offspring?

Real capital is grounded in the production of real things of real value, of course, and when it's detached from all that, it's no longer real capital. Money represents capital, and when the capital isn't real, the money represents nothing!

... ... ...

All this because we just can't face the task of reorganizing our national home economics to suit new circumstances. So, nature will do it for us. Nature will furnish us with a marvelously efficient black hole where we can conveniently stash our fake money so that we'll never have to see it again.

Nature will bust up our giant institutions, our giant corporations, our giant networks of financial obligations. And after a period of confusion and social disorder, some clever humans will aggregate into smaller networks and re-organize their activities on a smaller scale that actually supports truthful relationships between the production of things deemed to hold value and money that represents those things.

The beauty of springtime is sublime and, as Edmund Burke noted, that very beauty provokes our thoughts of pain and terror.


xxx 46 minutes ago

I'm not seeing it. The Federal Gub'mint will hand out free Netflix vouchers, along with SNAP cards, and more than half of Americans will wallow in that like pigs in ****. Unfortunately, there are just too many that want everything handed to them, and are "OK" with living in a tiny shithole apartment and eating take-out the rest of their lives. Still waiting for the "Revolution" that will never happen. They can just print money to infinity, apparently. And it never inflates, or deflates.

xxx 39 minutes ago

The fed doesn't print money it creates currency ie bondage and they've created trillions as of late and they're going to create many more trillions. Deflation followed by hyperinflation, famine and a civil war that will make the last civil war look like child's play in comparison.

xxx 31 minutes ago

Yes, but one would think that would have happened by this time already. After the last printing frenzy, I was reading for years how "The End is near", "Hyperinflation", "Deflation"...hell, Stockman wrote an article a week for like 8 years about that. And it STILL hasn't happened. Why??? It's like fundamentals don't matter...economics doesn't matter...so when DOES it matter? How many more trillions from now does it start to matter?

xxx 12 minutes ago

I agree it's been quite a while since the fed killed the economy and debased the dollar and I'm surprised the thieving bastards have kept this **** show going so long. But they can't do it forever and the day of reckoning is coming.

xxx 17 minutes ago

They can only do it as long as the $ has reserve currency status. Once it loses that, all hell breaks loose.

xxx 6 minutes ago

Reserve currency status will be lost and Amerikans will know true poverty. Not the poverty we have today with obese useless people on welfare but real grinding poverty with famine. And all fiat currencies will go to zero in this depression.

[May 03, 2020] Geopolitics Post-COVID-19

May 03, 2020 | www.zerohedge.com

Before the coronavirus caused governments to impose lockdowns, whole economies, markets and even currencies were already on course to be destroyed by a vicious downturn in bank lending at a time of contracting trade and record debt. The additional strains from the virus have intensified the crisis further and quickened the pace of all aspects of monetary destruction.

The coronavirus has permitted America and other Western nations to adopt a war footing by restricting personal freedom in the interest of the state. As tensions against China rise and the global economic crisis escalates, these freedoms will be not be returned, being deemed to be against national interest.

This is an election year for America and the political system is already ramping up blame for the virus and her economic misfortunes against China. We are entering dangerous territory when politics mobilises hate against a supposed enemy by using propaganda tactics which are designed to stir up xenophobic anger.

How China responds will be crucial. Its leadership can defuse the situation with a few simple changes to its foreign policy, isolating America from her allies in the process. But does a highly bureaucratic communist leadership have the imagination to do so? Introduction

One thing is for sure: the world will be different when it emerges from the coronavirus crisis. Doubtless, on pain of likely death those over seventy years of age must remain prisoners in their own homes while the younger generations are tasked with the return to normality. All this is meant to be under government guidance of course. Over the coming months governments intend to save swathes of business sectors, such as banking, energy production, utilities and the rest, first by lending the money to pay the bills, and then by rescuing the failures, taking them into public ownership in many cases.

That is what the post-coronavirus environment can be expected to look like, if, as governments hope, the recovery is V-shaped. If not, then greater interventions will be visited on the population to protect it from itself.

While not necessarily intentioned, there has been and will continue to be a dramatic transfer of freedom from individuals to the state, which the state is always reluctant to let go when the crisis passes. The evocation of a war against the virus is to facilitate the transfer of peoples' freedom to the state, because that is what is required to fight a war. But when it's over, the bureaucrats' instincts are never to return freedoms.

In the vast majority of cases, win or lose, following a war it is usual for a nation to retain the measures adopted, dropping none of them. It might be called a transitional economy, kept in place with all the war-time restrictions until an exit path, inevitably to greater socialism, can be devised. And for America there is a war still to be fought against China for global domination, justifying yet more control.

Nanny meets fascist socialism

Welcome to the new post-coronavirus intensified socialism. As individuals we have given the state enormous power over our lives, which will almost certainly be consolidated. The direction of travel is clear. Not only can big brother censor us, but it can now track our movements more effectively than the old KGB. If you leave your home, leave your smartphone behind. Wear a wide-brimmed hat and change your gait, avoiding the cameras. Your money in the bank, or more correctly in your about-to-be-nationalised bank's money credited to your account, can only be disposed of for state-regulated products by means of traceable transactions instead of old-fashioned cash.

Instead of the soviet, we have the nanny state. Nanny knows best. This is the real world of the 2020s. It is unnatural and will therefore eventually fail. In previous articles I have written about one aspect of its failure, and that is the impending collapse of unbacked state currencies. I have pointed out that central banks, and especially the Fed responsible for the world's reserve currency, are embarking on an exercise in inflation designed, above all, to uphold the state by maintaining the values of its debt and therefore all other financial assets. If they fail, and they will because the task is too great, the currencies will fail as well, and remarkably quickly. Until then, free markets are a primal threat to the system and must not prevail.

Doubtless, deep state operatives everywhere believe that the threats from their own people can be contained. Taking that for granted, they are now moving on to contain threats from other states that don't conform to the West's democratic model. There is now much more propaganda coming out of America and the UK about the evil Chinese than the evil Chinese are disseminating about America and Britain.

The story being managed is of a devious state, somehow stealing our souls by selling us their technology. Mobile 5G puts China into our homes and controls our internet of everything. It will allow the Chinese to control us . What is not explained is why it is in China's interest to abuse its customers in this way. What is not explained is why we, as individuals, will be better off not having Chinese goods and technology. And when Britain's GCHQ intelligence and security division took Hua Wei's equipment apart, they couldn't find any evidence of Chinese state spyware anyway.

The irony in all this is that our democratic model, the nanny state, is cover for the same internal policies as those deployed by the Chinese, admittedly less vicious; but that is changing. Rather than communist-socialist, both Chinese communism and Western democracies are, properly defined, fascist-socialist. With communism, the state owns your cow and tells you what to do with it. With fascism, you own the cow and the state tells you what to do with it. In these simplistic, but not inaccurate terms, our governments increasingly follow the fascist creed adopted by the Chinese Communist Party after Mao's death. Give it time and the intense Chinese-style suppression of free speech could become the defining feature of nanny's management style as well.

Here we must note a fundamental truth. Socialists of either extreme do not see free markets as a rival, because they believe they are useful for progressing socialism towards desired ends. The true rival to your socialism is someone else's socialism. Newly energised Western state socialism is to be pitted against Chinese state socialism. The World is about to get more dangerous.

US is upping the propaganda stakes

Last week, US Secretary of State Mike Pompeo said China caused an enormous amount of pain and will pay a price for what they did with the coronavirus pandemic. On Tuesday, President Trump threatened to seek reparations from China for infecting Americans. This follows a 57-page memorandum, entitled Main Messages dated April 17, briefing Republican senators, which was headed by the following bullet points:

Clearly, the propaganda war being waged by America against China is undergoing a new lease of life. And it's not just America: anti-Chinese belligerence is being ramped up through other national intelligence agencies. Even senior MPs in the UK's Conservative Party and "useful idiots" in the media are now spouting renewed anti-Chinese propaganda.

On one level, American propaganda can be taken as a defense of President Trump, on the simplistic basis of finding someone else to blame for his administration's increasingly desperate economic plight. But the danger is that the White House train has left the station in the direction of policy escalation with no means of stopping. In this election year someone must be blamed. To improve his ratings and following an established political tradition of diverting attention from the domestic scene, Trump must blame foreigners and China is the easiest target. We are rapidly moving in the direction of unintended consequences.

Meanwhile, we have to hope that President Xi does not take the American bait and escalate tensions from his side. Xi's equanimity has set the pattern so far. He has made mistakes, and will almost certainly continue to do so, but his Sun Tzu strategy is making it difficult for the Americans: "If [the enemy] is in superior strength, evade him".

Of one thing we can be reasonably certain, and that is in a new attack the Trump administration will escalate trade protectionism against China. It is a policy which will backfire on America. Assuming no change in the American people's savings habits, the budget deficit leads almost directly to a trade deficit, the twin deficit syndrome. The trade deficit is not caused by unfair foreign competition, but as a simple matter of national accounting it is linked to inflationary funding of government spending. The temporary offset with respect to the inflationary effect on prices is the expansion of foreign production which ends up as imports at less inflated prices. Meanwhile, the US's budget deficit is now set to grow substantially from its trillion-dollar baseline and in the light of recent economic developments it could easily more than double.

If the trade deficit is to be contained, then measures must be introduced to prevent import substitution. This is in accordance with enhanced nationalism, typified by Trump's Make America Great Again slogan. Therefore, the likelihood of America extending trade protectionism beyond China as the economic crisis progresses is greater than it may currently appear.

Without lower prices for imported goods and consumption generally restricted to domestic production, inevitably prices for everything will rise at a faster pace. Therefore, at a time when food prices will almost certainly be rising sharply and causing political difficulties for Trump, price inflation for all aspects of consumer spending will be getting beyond the managed control of government statisticians.

Domestically, the combination of an escalating budget deficit and rising consumer prices will lead to higher interest rates and therefore increased US Treasury borrowing costs. The Fed will then be unable to control financial asset prices, the dollar will slide, and it could turn out to be electoral suicide. Trump may not realise it but in this election year he is conflating two opposing objectives: a geopolitical one against China to improve his political ratings and an economic one which can be expected to destroy them.

In the past, politicians in this position have responded by clamping down even further on free markets and personal freedom, evoking Hayek's prophecy of the call for stronger leadership in his The Road to Serfdom . And with respect to foreign policy, imperialistic motivation intensifies, which we are already seeing.

Meanwhile, we must hope President Xi stays calm in the face of American self-harm.

[May 03, 2020] Covid-19 Was Just The Pin That Shattered The Fantasy Fueled By Soaring Debts, Rampant Asset Inflation Windfalls To The Wealthy by David Stockman

May 03, 2020 | www.davidstockmanscontracorner.com

... ... ...

Dear Reader,

The coronavirus is now exposing a far more deadly disease: Namely, the poisonous brew of easy money, cheap debt, sweeping financialization and unbridled speculation that has been injected into the American economy by the Fed and Washington politicians.

It has turned Wall Street into a dangerous gambling casino while leaving Main Street buried under mountainous debts, faltering investment in growth and productivity and the hand-to-mouth economics of spending more than you earn.

It has also left the American economy exceedingly vulnerable to external shocks like the thundering blow of Lockdown Nation.

That's because 80% of households have no appreciable rainy-day funds and businesses have hollowed out their balance sheets and artificially extended their supply chains to the four corners of the earth in order to goose short-run profits and share prices.

However, this unprecedented fragility has become starkly evident after public health authorities essentially shut down normal commerce and economic function. Workers have been separated from their workplaces, consumers from the malls, diners from the restaurants, travelers from the airlines, hotels and resorts -- with many more like and similar disruptions to the supply-side of the economy.

In turn, these disruptions are causing production and incomes to fall abruptly. Shrunken household incomes and business cash flows are literally pulling the legs out from under the edifice of debt and speculation that has been piled atop the American economy.

So both a renewed financial and economic crisis and an abrupt change of course lie dead ahead. The 30-year party of False Prosperity is over.

Accordingly, even if the Covid-19 hysteria eventually abates and Lockdown Nation is lifted, the 2020s will be a decade when the chickens come home to roost.

It will be a time when the cans of delay and denial may no longer be kicked down the road to tomorrow. Today's economic and political fantasies will be crushed by America's accumulated due bills.

Bubbles will be burst. Speculators will get carried out on their shields. Easy money wealth will evaporate.

[May 03, 2020] In a Pandemic emergency fund distribution, the financial parasites and well connected institutions will get the lion share of funds

May 03, 2020 | www.bloomberg.com

"In a Pandemic, the Mob Is the Ultimate Enforcer" [John Authers, Bloomberg ].

The business perspective: "what really matters to the world's financial movers and shakers is the great mob of voters out there in the real world, and how they might respond to whatever measures they take to deal with the pandemic and the economic crisis that has come in its wake. That, in turn, might owe a lot to the Don

The optics are not good when headlines reveal that scarcely impoverished institutions such as Harvard University and the Los Angeles Lakers have received public handouts while small businesses have been unable to get their hands on any money before it runs out.

After the mistakes made in the wake of the last financial crisis, Powell rightly grasps that it is very important to get it right this time -- or face what might be a dangerous populist backlash. Or, in our Sopranos analogy, the Mob."

Yesterday when I linked to the event at Lansing, Michigan, I commented that those there had no idea what they were doing as they were protesting the wrong thing at the wrong place. Instead, they ought to be occupying the US Treasury building in DC and the NY Fed Bank in NYC to stop the fraudulent dissemination of $$Trillions to Wall Street criminals masked as bankers, hedge fund mangers and the like as those locations are where the MAJOR crimes are occurring as I type this comment. Their behavior casts them as ignorant and perhaps worse as they're being led into an assault on their own interests while doing nothing to genuinely defend their wellbeing and that of their kin and progeny. Such stupidity's been ongoing since 1980-81 when it arose during Reagan's campaign and continued afterward. That it's being directed/channeled is clear, just as who was financing the Tea Party rubes was clear--It's the same criminals doing the looting in DC and NYC.

Given the state of politics within the Outlaw US Empire, such behavior is unfortunately normal to a certain degree. If it was a gang of Occupy Wall Street Protesters, the reaction by the forces of coercion would've been vastly different and very violent. Such is the state of Machiavellianism within as it's worked for many decades dividing and ruling. With such impediments, attaining the mass solidarity required to affect the Sea-change required is made extremely difficult, which is why you observe that nothing's been done for the masses while many things have been done to further their exploitation.

Posted by: karlof1 | May 1 2020 20:55 utc | 88

[May 03, 2020] Analysis and viewpoint scenarios: COVID-19 prepare for the next 2 years

May 03, 2020 | www.moonofalabama.org

Likklemore , May 1 2020 22:30 utc | 94

Analysis and viewpoint scenarios: COVID-19 prepare for the next 2 years

Part 1:"The Future of the COVID-19 Pandemic: Lessons from Pandemic Influenza" by CIDRAP, University Minnesota.

LINK

cited by Sputniknews.


[May 03, 2020] Derivatives as per BIS: $640 Trillion, Global debt: $265 Trillion.

May 03, 2020 | www.moonofalabama.org

Likklemore , May 2 2020 4:37 utc | 117

@ karlof1 post 108

Excellent presentation on the critical issues.

The Feds, in panic mode to stave off the Depression, are unaware they have launched the Great Reset that will include Healthcare as a priority and not an afterthought as the corona crisis revealed.

Debt jubilee is on the menu as QE to Infinity for bailing the banks and billionaires takes us to a very bad ending. Implosion of derivatives will be the tsunami. Derivatives as per BIS: $640 Trillion, Global debt: $265 Trillion.

The second financial collapse began September 2019. Most were forecasting 2nd Quarter 2020 contraction would mirror 1930s. Few expected 1st Quarter2020 to be there.

A review of the DJ charts displays similarities 2008 and 2020. Two rhymes. In fact DJ 2020 chart mirrors its 2008 chart without adjustments . And again, its the banks; not a care for mainstreet.

This is truly shocking. Just imagine.
See here: 5 Banks control the U.S. economy

Imho, we will need a new currency to replace the Weimar/Zimbabwe USD. Will it be Digital? Unlikely to be digital on a global scale.

As the man said, over the next 5 years the choice will be "Surviving not Winning"

[May 03, 2020] The economic depression comes into focus

May 03, 2020 | caucus99percent.com

Roughly 41% of working-age adults say their families have experienced a job loss, a decrease in work hours or other employment-related declines in income in recent weeks, according to a new analysis by the Urban Institute.

Underscoring the jump in financial distress around the country: More than 4 in 10 of Americans whose work was affected by the pandemic said they weren't able to pay the rent, mortgage or utility bills; skipped medical care; or were at risk of going hungry.

31% of survey respondents reported their families cut spending on food.
28% were forced to use savings or take on credit card debt to pay their bills.
69% of those whose family incomes were below the poverty level were unable to pay for their housing, were food insecure or were unable to seek needed medical care.

[May 02, 2020] In pandemic blame distribution Fauci and the CDC top should get mayor shares

May 02, 2020 | www.moonofalabama.org

Antonym , May 1 2020 14:03 utc | 15

In pandemic blame distribution Fauci and the CDC top should get mayor shares.

In financial crash blame distribution the New York FED with its top 5 controller / bail-out receiver banks have big parts. It still holds the world's other Central Banks hostage through its reserves and trade in U$ dollars only meme.

In the intelligence area it is not very different: also that branch of the US Deep State failed.

A multipolar world is getting closer..

GeorgeV , May 1 2020 14:04 utc | 16

The jaw-dropping stupidity of the Trump administration regarding the COVID-19 pandemic is truly mind numbing. There is an old dictum that states that there is no such thing as 'military intelligence.' To that I add there is no such thing as 'intelligence' in Washington DC either, or the Trump White House for that matter. If you try to look for it, you will only find hacks, flacks, quacks and certifiable jerks. You would do better to waste your time and money looking for the Loch Ness Monster, Big Foot, or the Tooth Fairy. The prospect that Trump could get anther four years as president is depressing indeed. All that would be left is divine intervention, and I don't think that is any more likely than finding the aforementioned mythical creatures.

[May 01, 2020] Ten questions the U.S. needs to offer clear answers to the world regarding the #COVID19.

People's Daily, China
Notable quotes:
"... Among the reported influenza deaths in the US, how many cases were infected with COVID-19? Did the US government cover up the spread of coronavirus with the flu? When will the US government make public the samples of the US influenza virus and its genetic sequence, or allow experts from the WHO or the United Nations to sample and analyze? ..."
May 01, 2020 | www.facebook.com
Yesterday at 9:30 AM · Ten questions the U.S. needs to offer clear answers to the world regarding the # COVID19 .

1. Regarding the restarted avian influenza virus modification experiment last year, why does the US release no more updates?

The Science reported in February 2019 that US authorities had quietly approved the avian influenza virus modification experiment. The research, aiming to transform the H5N1 virus to be more capable of infecting mammals, was controversial and considered extremely dangerous. Some experts believe that the modification may increase the risk of human-to-human transmission of the virus. The question is why the US government decided to unfreeze the experiment 4 years after it was halted, and why there are no more updates regarding the experiment.

2. The United States Army Medical Research Institute of Infectious Diseases (USAMRIID) was previously closed. What is the truth behind ?

The Global Biodefence reported in April that the USAMRIID, US Army's primary institution and facility for biological research headquartered in Fort Detrick, Maryland, has resumed full operation. The institution was once ordered to halt the study of biological select agents and toxins (BSATs) last July. In March, there was a petition on the White House website demanding the clarification of the shutdown of USAMRIID. Given that these issues have become a primary public concern, what is the US government's response?

3. The US Department of Health and Human Services ran a scenario last year that was similar to the COVID-19 outbreak. Is this just a coincidence?

In March, the New York Times quoted a draft report obtained from the US government saying that from January to August 2019, the US Department of Health and Human Services ran a scenario called "Crimson Contagion" that simulated the fictional outbreak involving a group of tourists visiting China. They then became infected and flew to various countries, including the US. Last October, a high-level pandemic exercise named Event 201 was hosted by a couple of US organizations. The drill simulated a scenario that a fictional virus called CAPS, which causes more severe symptoms than SARS and transmits via the respiratory route like the common flu, had caused a pandemic. Like COVID-19, there is no vaccine