BILLIONAIRES, BANKSTERS AND THE RICH PARTNER WITH TRUMP TO FIGHT … economic
equality.
"JPMorgan
Chase CEO Jamie Dimon, who was known as Barack Obama’s
favorite banker and who has been a major donor to
the
Democratic Party, centered his annual letter to shareholders on a
denunciation of socialism."
*
BANKSTER SOCIALISM
Dimon’s bank received tens
of billions of dollars in government bailouts and many billions more
from the Obama administration’s ultra-low interest rate
and “quantitative easing” money-printing policies. He told his
shareholders that “socialism inevitably produces stagnation,
corruption” and “authoritarian government,” and would be “a
disaster for our country.”… UNLESS IT IS SOCIALISM FOR BANKSTERS AND WALL
STREET!
*
"This paved
the way for the elevation of Trump, the personification of the criminality and
backwardness of the ruling oligarchy."
*
"The
very fact that the US government officially acknowledges a growth of
popular support for socialism, particularly among the nation’s youth,
testifies to vast changes taking place in the political consciousness of
the
working
class and the terror this is striking within the ruling elite. America is,
after all, a country where anti-communism was for the greater part of
a century a state-sponsored secular religion. No ruling class has so
ruthlessly
sought to exclude socialist politics from political discourse as the
American ruling class."
*
Socialism haunts the American ruling class In the
two months since Donald Trump vowed in his State of the Union Address that
“America will never be a socialist country,” the right-wing demagogue president
and the Republican Party have embraced anti-socialism as the defining theme of
their campaign in the 2020 elections.
WALL STREET CRIMINALS and the ultimate death of America’s
middle-class
Jim Carrey: America ‘Doomed’ If
We Don’t Regulate Capitalism
"The American phenomenon of record stock values
fueling an ever greater concentration of wealth at the very top of
society, while the economy is starved of productive investment,
the social infrastructure crumbles, and working class
living standards are driven down by entrenched
unemployment, wage-cutting and government austerity policies, is part of
a broader global process."
*
"Hillary
will do anything to distract you from her reckless record and the damage to the
Democratic Party and the America she and The Obama's have created."
*
“Behind the ostensible government sits enthroned
an invisible government owing no allegiance and acknowledging no responsibility
to the people. To destroy this invisible government, to befoul the unholy
alliance between corrupt business and corrupt politics is the first task of the
statesmanship of today.” THEODORE
ROOSEVELT
*
"Hillary will do anything to distract you from her reckless record and the damage to the Democratic Party and the America she and The Obama's have created."
"But
what the Clintons do is criminal because they do it wholly at the expense of
the American people. And they feel thoroughly entitled to do it: gain power,
use it to enrich themselves and their friends. They are amoral, immoral, and
venal. Hillary has no core beliefs beyond power and money. That should be clear
to every person on the planet by now." ---- Patricia McCarthy
- AMERICANTHINKER.com
HERE'S THE REAL SOCIALISM TRUMP HAS WARNED THE NATION ABOUT!
"In other words, Trump’s drive to boost the financial markets with an unrestrained flow of cash in the interests of the financial oligarchy and to install political appointees, runs the risk of completely discrediting one of the key institutions of the global capitalist system"
"One of the premier institutions of big business, JP Morgan Chase, issued an internal report on the eve of the 10th anniversary of the 2008 crash, which warned that another “great liquidity crisis” was possible, and that a government bailout on the scale of that effected by Bush and Obama will produce social unrest, “in light of the potential impact of central bank actions in driving inequality between asset owners and labor."
"One of the premier institutions of big business, JP Morgan Chase, issued an internal report on the eve of the 10th anniversary of the 2008 crash, which warned that another “great liquidity crisis” was possible, and that a government bailout on the scale of that effected by Bush and Obama will produce social unrest, “in light of the potential impact of central bank actions in driving inequality between asset owners and labor."
Trump calls for more cheap money for financial markets
The Trump administration is stepping up its push to have the US Federal Reserve ease monetary policy and provide a further boost to financial markets amid controversy over proposals to fill two vacancies on the Fed’s governing board.
On Friday Trump followed an earlier call by White House economic adviser Larry Kudlow for a 0.5 percentage point cut in interest rates, telling reporters the Fed should resume financial asset purchases, the policy of “quantitative easing.”
Following the release of new data showing that jobs grew by 196,000 last month, Trump said the economy could have grown faster without the Fed’s interest rates rises last year as it attempted to “normalise” monetary policy.
“I personally think the Fed should drop rates; I think they really slowed us down,” he said. “There’s no inflation. In terms of quantitative tightening it should actually now be quantitative easing. You would see a rocket ship.”
Trump’s comments come in the wake of the Fed’s pullback from its planned interest rate increases this year and its decision to end the winddown of its financial asset holdings, accumulated in the wake of the financial crisis, by September.
This followed the market turbulence last December and denunciations of the Fed by Trump who said it had gone “crazy” and “loco,” amid reports he was considering whether he was able to sack Jerome Powell as Fed chairman.
In the immediate aftermath of the financial turmoil, Powell indicated in January that the Fed had received the market message. At its March meeting, the FOMC (Federal Open Market Committee) indicated there would be no further interest rises this year.
Equally significant was its decision to maintain its holdings of bonds and other financial assets at around $3.5 trillion—compared to around $800 billion before the global financial crisis—effectively signalling the end of any attempt to return to pre-crisis monetary policy.
Clearly encouraged by the Fed’s latest moves, Trump has decided to press ahead. He has signalled that he is considering the appointment of two political supporters to fill vacancies on the Fed’s board of governors.
Last month, the president announced he was looking to former campaign adviser Stephen Moore for one of the positions. During the period of quantitative easing under Obama, Moore attacked the Fed for its asset purchases. Now under the Trump administration he has switched course.
Last December, in the midst of the market downturn following the last Fed interest rate rise, Moore denounced Powell as “totally incompetent.” “The Fed is a disaster,” he said in an interview with the Wall Street Journal. “We should have a discussion in this country about whether we really need a Fed.”
In a further radio interview at the time, Moore attacked the notion of central bank independence saying that if the Fed chair was not responsive to the president then who was he responsive to?
“The law says he [the president] can replace the Federal Reserve chairman for cause. I would say, well, the cause is that he’s wrecking the economy.”
Trump has followed up his touting of Moore with a move to appoint Herman Cain to the other position. Cain, a former Republican presidential contender and a pizza restaurant chain executive, is a vocal supporter of Trump. He chairs a political action committee that aims to combat “disrespectful, dishonest and destructive news” about the president.
Cain, however, may be in doubt because of sexual harassment accusations against him that caused him to drop his presidential campaign in 2011.
Both men received endorsements from Kudlow who said they were “very capable people” who would “balance perhaps some of the other views on the Federal Reserve Board.”
Kudlow said the administration was vetting Cain before sending formal documents to the Senate for confirmation. Speaking to “Fox News Sunday,” White House Acting Chief of Staff Mick Mulvaney said he thought Cain would be “a great member of the Fed.”
Last Thursday Trump said that he intended to nominate both Cain and Moore, saying of Cain “That’s the man.”
Given that nominations have to go to the Senate for confirmation, the administration may decide not to go ahead. But Trump’s moves have provoked alarm in financial circles. Economists at the Barclays bank said: “The experience of each candidate does not seem to be the main reason the Trump administration is considering their nominations.”
In an editorial published on Saturday, the Financial Times insisted that Trump had to be stopped from “packing the US Federal Reserve.”
It said neither Moore nor Cain “is remotely qualified to sit in the monetary cockpit of the world’s reserve currency.” Both had auditioned for the position by supporting Trump’s call for monetary loosening and would be a thorn in the side of Powell.
“Knowing that, Mr Trump’s selections surely qualify as sabotage. It is one thing for the US president to pack Washington’s regulatory boards with cronies. Every president does it, though Mr Trump far more blatantly than most. It is quite another to vandalise the integrity of the world’s dominant central bank.”
With the world economy moving towards greater financial turbulence amid what the International Monetary Fund has called a “synchronised slowdown,” the editorial pointed to wider concerns.
“Even more is at stake than sound management of the world’s premier reserve currency. Populists everywhere are demonising expertise and eating away at the foundations of liberal democracy,” the editorial said. While it took decades to build an institution’s independence, it noted, “it takes far less to destroy it.”
In other words, Trump’s drive to boost the financial markets with an unrestrained flow of cash in the interests of the financial oligarchy and to install political appointees, runs the risk of completely discrediting one of the key institutions of the global capitalist system.
Amid auto layoffs and warnings of manufacturing “bloodbath”
IMF chief points to global growth deceleration
The managing director of the International Monetary Fund, Christine Largarde, warned on Tuesday that the prospects for the global economy were “precarious.”
In a speech delivered ahead of the IMF’s annual spring meeting next week, where it will issue its world economic outlook, Lagarde indicated that the forecast for global growth, already downgraded in January, would be further lowered because the world economy had “lost further momentum” and slid into a “synchronised deceleration.”
“Only two years ago, 75 percent of the global economy experienced an upswing,” she said. “For this year, we expected 70 percent of the global economy to experience a slowdown in growth.”
She added that while the IMF did not expect a recession in the “near term,” the global economy was “unsettled” and in a “delicate moment,” and that any upturn in growth would be “precarious.”
Her remarks underscored the extent to which the global economy and financial markets have become ever more dependent on the inflow of ultra-cheap money from the world’s central banks, which have started to reverse their return to a more “normal” policy.
The US Federal Reserve has made clear it does not expect to raise interest rates this year, after indicating at least two rises for 2019 as recently as last December, and the European Central Bank announced some limited monetary stimulus at its most recent meeting.
Lagarde warned that “should there be a sharper-than-expected tightening of financial conditions, it could create serious challenges for many governments and companies in terms of refinancing and debt service, which could amplify exchange-rate movements and financial market corrections.”
The low interest rate regime of the past decade, which the central banks have been incapable of ending, had created problems in meeting any significant downturn or recession.
“The reality is that many economies are not resilient enough. High public debt and low interest rates have left limited room to act when the next downturn comes, which inevitably it will,” Lagarde said.
The latest report from the World Trade Organisation also points to a significant slowdown in global growth, reflected in its predictions for trade.
Releasing the forecast on Tuesday, the director-general of the WTO, Roberto Azevêdo, said that in 2017 trade growth stood at 4.6 percent. “At that point we were somewhat optimistic there was renewed dynamism and momentum in global trade. Since then, leading indicators have shown momentum weakening—particularly towards the end of last year.”
Trade had “underperformed” last year, with growth of 3 per cent, and “we expected even more modest growth in 2019, at just 2.6 percent.”
Azevêdo said there were a number of elements involved, but “rising trade tensions” were the major factor. “Trade simply cannot play its full role in driving GDP growth when levels of uncertainty are so high. Greater uncertainty means lower investment and consumption. Investment, in particular, has a pronounced impact on trade.”
The slowing of the world economy is most pronounced in Europe, where manufacturing indexes, regarded as a reliable indicator of the state of the economy as a whole, dropped sharply in March. A widely followed purchasing managers’ index for the euro zone fell to 47.5 for March, down from 49.3 in February, with a level below 50 indicating a contraction. It was the biggest drop in nearly six years.
The most significant downturn is in Germany, the biggest economy in the euro zone, where the purchasing managers’ index for March dropped to its lowest point in seven years.
The Wall Street Journal reported that Germany’s Mechanical Engineering Industry Association halved its forecast for growth this year to 1 percent, pointing to the trade conflict between the US and China as the reason. The Journal cited the head of an Italian auto supplier, who warned of a “bloodbath for manufacturers in Europe this year.”
The bloodbath has in fact already begun. Mass layoffs are underway at European and US auto plants, indicating that the ruling classes intend to impose the full burden of the downturn in the global economy on the backs of the working class.
The official position in the US is that growth is on track to record levels of between two and three percent. But movements in financial markets are pointing to a significant downturn, if not recession. One of the most significant is the “inversion” of the yield curve, where the interest rate on long-term Treasury bonds falls below the rates on short-term debt. This is regarded as an indicator of recession, as investors seek a safe haven, putting their money in long-term bonds, driving up the price and lowering the yield.
Another indication is the call last week by White House National Economic Council Director Larry Kudlow for the Fed to cut its interest rate by 0.5 percentage points.
The Fed responded to the financial market turbulence last December by shelving its planned interest rate rises for this year and winding up its planned reduction of the financial assets it purchased during quantitative easing, leaving the Fed holding $3.5 trillion worth of bonds compared to about $800 billion before the 2008 financial crisis.
But the Trump administration views these actions as insufficient. In calling for the rate cut, Kudlow said it had to be undertaken as a “precaution.”
“I don’t want any threats to the recovery,” he said. “I’m aware of the inversion of the yield curve and I’m aware of the rest of the world’s weak economy.”
It speaks volumes about the underlying situation in the US and global economy that the present Fed rate of between 2.25 percent and 2.5 percent—one of the lowest levels in history—is regarded as a threat to growth. This is indicative of the extent to which the entire economy has become dependent on the inflow of cheap money.
This money has not been used to finance an expansion in production. Rather, it has been deployed in the very kinds of financial speculation and parasitism that led to the financial crisis more than a decade ago, creating the conditions for another meltdown.
Evidence of such speculation was revealed in an interview with the Financial Times this week with Jonathon Levine, co-managing partner of Bain Capital, a global private equity group involved in takeovers. Bain said that “increasingly aggressive” projected benefits from mergers and acquisitions were masking the real scale of borrowing and heightening the risk of a crash in this sector.
Bain indicated that “people were using complex jargon to exaggerate cost savings” for companies involved in mergers, “leading to soaring debt levels based on over-inflated projections.”
As the layoffs already taking place make clear, the outcome of this parasitic, and in some cases criminal, activity will be intensified attacks on the jobs and social conditions of the working class.
Editorial Reviews
Obama Is Making You
Poorer—But Who’s Getting Rich?
Goldman Sachs, GE,
Pfizer, the United Auto Workers—the same “special interests” Barack Obama was
supposed to chase from the temple—are profiting handsomely from Obama’s Big
Government policies that crush taxpayers, small businesses, and consumers.
In Obamanomics, investigative reporter Timothy P. Carney digs up
the dirt the mainstream media ignores and the White House wishes you wouldn’t
see. Rather than Hope and Change, Obama is delivering corporate socialism to
America, all while claiming he’s battling corporate America. It’s corporate
welfare and regulatory robbery—it’s Obamanomics.
*
Obama Is Making You
Poorer—But Who’s Getting Rich?
Goldman Sachs, GE,
Pfizer, the United Auto Workers—the same “special interests” Barack Obama was
supposed to chase from the temple—are profiting handsomely from Obama’s Big
Government policies that crush taxpayers, small businesses, and consumers.
New York Senator Kirsten Gillibrand: Another pro-
bankster, right-wing Democrat enters the 2020 race
*
*
Her
embrace of Hillary Clinton, the candidate of Wall Street and the CIA, and
Obama, who presided over the largest transfer of wealth in history from the
bottom to the top, demonstrate clearly her adherence to the right-wing policies
of the Democrats that are responsible for the accelerated deepening of economic
and social inequality, paving the way for the Trump presidency.
*
She has also received substantial contributions from major Wall Street firms, including Goldman Sachs and JPMorgan Chase & Company.
*
During her 2012
reelection campaign, she was the third highest recipient of
donations from the securities and investment sector, reportedly
taking in more than $1.84 million.
CRIMINAL
GLOBALIST BANKSTERS AND THE POLITICIANS THEY BOUGHT:
The
Story of Goldman Sachs and Clinton, Obama and Trump corruption.
Goldman Sachs, GE, Pfizer, the United Auto Workers—the same “special interests”
Barack Obama was supposed to chase from the temple—are profiting handsomely
from Obama’s Big Government policies that crush taxpayers, small businesses,
and consumers. In Obamanomics, investigative reporter Timothy P.
Carney digs up the dirt the mainstream media ignores, and the White House
wishes you wouldn’t see. Rather than Hope and Change, Obama is delivering
corporate socialism to America, all while claiming he’s battling corporate
America. It’s corporate welfare and regulatory robbery—it’s OBAMANOMICS TO
SERVE THE RICH AND GLOBALIST BILLIONAIRES.
TRUMPERNOMICS:
THE SUPER RICH
APPLAUD TWITTER’S TRUMP’S TAX CUTS FOR THE SUPER RICH!
"The tax overhaul would mean an unprecedented windfall for the
super-rich, on top
of the fact that virtually all income gains during the period of
the supposed
recovery from the financial crash of 2008 have gone to the top 1
percent income
bracket."
After Lehman's
Collapse: A Decade of Delay
Now that the 2018
midterms are over, folks can address the elephant in the room. If one tuned
into Fox Business midday on January 7, one heard legendary corporate raider
Carl Icahn dilate on the dimensions of the pachyderm, which he pegged at $250
trillion. That’s the size of worldwide debt. But can that be right -- it’s
more than eleven times the official U.S. federal government’s debt? And in case
you didn’t notice, it is a quarter of one quadrillion bucks. Pretty soon we’ll
be talking real money.
Icahn’s $250T quotation
for worldwide debt came out last year. On September 13, Bloomberg ran “$250 Trillion in Debt: the World’s Post-Lehman
Legacy”
by Brian Chappatta, who draws off data from the Institute of International Finance’s July 9 “Global Debt
Monitor,” (to read IIF reports, one must sign up). Chappatta wonders how the
world’s central bankers can “even pretend to know how to reverse what they’ve
done over the past decade”:
[Central banks] kept
interest rates at or below zero for an extended period […] and used bond-buying
programs to further suppress sovereign yields, punishing savers and promoting
consumption and risk-taking. Global debt has ballooned over the past two
decades: from $84 trillion at the turn of the century, to $173 trillion at the
time of the 2008 financial crisis, to $250 trillion a decade after Lehman Brothers
Holdings Inc.’s collapse.
Chappatta breaks global
debt down into four categories: financial corporations, nonfinancial
corporations, households, and governments. In every category, global nominal
debt rose from 2008 to 2018, with the debt of governments hitting $67T. In the
important debt-as-a-percentage-of-gross-domestic-product measurement, three of
the categories rose while only financial corporations fell, “leaving their
debt-to-GDP ratio as low as it has been in recent memory.” Global banks seem to
be “healthier and more resilient to another shock.” After reporting on
worldwide debt, Chappatta then looks at U.S. debt.
What’s interesting about
debt in America is that as a percentage of GDP, households and financial
corporations have sharply reduced their debt. It is only government in America
that has seen a sharp debt-to-GDP uptick, and it was quoted at more than 100
percent of GDP. That’s rather higher than for all government debt worldwide.
Since the U.S. isn’t the
only nation that has been busy buying bonds and creating money, one might
wonder just how much money there is in the world. In June of 2017,HowMuch put out
“Putting the World’s Money into
Perspective,” which is a nice little graphic that puts the category “All
Money” at $83.6T.
In November of
2017, MarketWatch ran
“Here’s all the money in the world, in
one chart”
by Sue Chang, who in her short intro to the chart has some interesting things
to say about global money, including cryptocurrencies. She writes of “narrow
money” and “broad money” and pegs the latter at
$90.4T, (or what Sen. Everett Dirksen would call “real money”.) If you want to
examine Chang’s chart more closely, I’ve “excised” it here for your
convenience; don’t miss the notes on the right margin. (Because its depth is
13,895 pixels, you might want to just save the chart to your computer rather
than print it off.)
So, in addition to an
historic run-up in debt, there’s been a monster amount of new money created.
Chappatta calls it the “grandest central-bank experiment in history.” His use
of “experiment” is apropos, as one wonders whether the world’s central bankers
and their economists really know what they’ve been doing.
One ray of hope might
just be President Trump’s choice of Jerome Powell as Chairman of the Federal
Reserve, (Trump has such good instincts about people). One can get a sense of
the man from his January talk with David Rubenstein at the Economic Club of
Washington, D.C. (video and transcript). It’s refreshing that
Mr. Powell disdains the “Fed speak” used by his predecessors.
Chappatta’s article is
quite worth reading, and it’s not very long. The charts are user-friendly,
although animated ones are a bit “creative.” The last section, “China Charges
Forward,” is especially worthwhile.
This is the post-Lehman
legacy. To pull the global economy back from the brink, governments borrowed
heavily from the future. That either portends pain ahead, through austerity
measures or tax increases, or it signals that central-bank meddling will become
a permanent fixture of 21st century financial markets.
Given those
alternatives, let’s try a little austerity. But austerity would entail spending
cuts, and Congress has a poor history in that regard. In fact, since fiscal
2007, the year before the financial crisis, total federal spending has gone
from $2.72T a year to more than $4T. While austere citizens deleverage and get
their fiscal affairs in order, Congress shamefully borrows and spends like
never before.
Congress’ solutions are
to bail out, prop up, and do whatever it takes to avoid reforming what it has
created. So they farm out their responsibilities to the Federal Reserve.
Indeed, in the July 17, 2012 meeting of the Senate Banking Committee (go to the 53:50 point of this C-SPAN video), Chuck Schumer told
Federal Reserve Chairman Ben Bernanke the following:
So given the political
realities, Mr. Chairman, particularly in this election year, I'm afraid the Fed
is the only game in town. And I would urge you to take whatever actions you
think would be most helpful in supporting a stronger economic recovery… So get
to work, Mr. Chairman. (Chuckles.)
So the Fed is “the only
game in town” because there are only monetary solutions for the economy, right?
There aren’t any fiscal solutions, as they would involve Congress, and Congress
is busy running for re-election, right? Sounds like you’re abdicating your
responsibilities, Chuck.
The last decade has been
an exercise in delay. Congress has avoided doing the difficult and unpopular
things that would help avoid future financial collapses. If Congress were
serious about balancing the budget, then social programs would be on the chopping
block, because that’s where the real
money goes.
"The Federal Reserve is a key mechanism for perpetuating this
whole filthy system, in which "Wall Street rules."
Wall Street rules
The Federal Reserve sent a clear message to Wall
Street on Friday: It will not allow the longest bull
market in American history to end. The message
was received loud and clear, and the Dow rose by
more than 700 points.
Hundreds of thousands of federal workers remain furloughed or
forced to work without pay as the partial government shutdown enters its third
week, but the US central bank is making clear that all of the resources of the
state are at the disposal of the financial oligarchy.
Responding to Thursday’s market selloff following a dismal
report from Apple and signs of a manufacturing slowdown in both China and the
US, the Fed declared it was “listening” to the markets and would scrap its
plans to raise interest rates.
Speaking at a conference in Atlanta, where he was flanked by his
predecessors Ben Bernanke and Janet Yellen, both of whom had worked to reflate
the stock market bubble after the 2008 financial crash, Chairman Jerome Powell
signaled that the Fed would back off from its two projected rate increases for
2019.
“We’re listening sensitively to the messages markets are
sending,” he said, adding that the central bank would be “patient” in imposing
further rate increases. To underline the point, he declared, “If we ever came
to the conclusion that any aspect of our plans” was causing a problem, “we
wouldn’t hesitate to change it.”
This extraordinary pledge to Wall Street followed the 660 point
plunge in the Dow Jones Industrial Average on Thursday, capping off the worst
two-day start for a new trading year since the collapse of the dot.com bubble.
William McChesney Martin, the Fed chairman from 1951 to 1970,
famously said that his job was “to take away the punch bowl just as the party
gets going.” Now the task of the Fed chairman is to ply the wealthy revelers
with tequila shots as soon as they start to sober up.
Powell’s remarks were particularly striking given that they
followed the release Friday of the most upbeat jobs report in over a year, with
figures, including the highest year-on-year wage growth since the 2008 crisis,
universally lauded as “stellar.”
While US financial markets have endured the
worst December since the Great Depression,
amid mounting fears of a looming recession
and a new financial crisis, analysts have been
quick to point out that there are no “hard”
signs of a recession in the United States.
Both the Dow and the S&P 500 indexes have fallen more than
15 percent from their recent highs, while the tech-heavy NASDAQ has entered
bear market territory, usually defined as a drop of 20 percent from recent
highs.
The markets, Powell admitted, are “well ahead of the data.” But
it is the markets, not the “data,” that Powell is listening to.
Since World War II, bear markets have occurred, on average,
every five-and-a-half years. But if the present trend continues, the Dow will
reach 10 years without a bear market in March, despite the recent losses.
Now the Fed has stepped in effectively to pledge that it
will
allocate whatever resources are needed to ensure that no
substantial market correction takes place. But this
means
only that when the correction does come, as it
inevitably
must, it will be all the more severe and the Fed will have
all the less power to stop it.
From the standpoint of the history of the institution, the Fed’s
current more or less explicit role as backstop for the stock market is a
relatively new development. Founded in 1913, the Federal Reserve legally has
had the “dual mandate” of ensuring both maximum employment and price stability
since the late 1970s. Fed officials have traditionally denied being influenced
in policy decisions by a desire to drive up the stock market.
Federal Reserve Chairman Paul Volcker, appointed by Democratic
President Jimmy Carter in 1979, deliberately engineered an economic recession
by driving the benchmark federal funds interest rate above 20 percent. His
highly conscious aim, in the name of combating inflation, was to quash a wages
movement of US workers by triggering plant closures and driving up
unemployment.
The actions of the Fed under Volcker set the stage for a vast
upward redistribution of wealth, facilitated on one hand by the trade unions’
suppression of the class struggle and on the other by a relentless and dizzying
rise on the stock market.
Volcker’s recession, together with the Reagan administration’s
crushing of the 1981 PATCO air traffic controllers’ strike, ushered in decades
of mass layoffs, deindustrialization and wage and benefit concessions, leading
labor’s share of total national income to fall year after year.
These were also decades of financial deregulation, leading to
the savings and loan crisis of the late 1980s, the dot.com bubble of 1999-2000,
and, worst of all, the 2008 financial crisis.
In each of these crises, the Federal Reserve carried out what
became known as the “Greenspan put,” (later the “Bernanke put”)—an implicit
guarantee to backstop the financial markets, prompting investors to take ever
greater risks.
In 2008, this resulted in the most sweeping and systemic
financial crisis since the Great Depression, prompting Fed Chairman Bernanke,
New York Fed President Tim Geithner and Treasury Secretary Henry Paulson (the
former CEO of Goldman Sachs) to orchestrate the largest bank bailout in human
history.
Since that time, the Federal Reserve has carried out its most
accommodative monetary policy ever, keeping interest rates at or near zero
percent for six years. It supplemented this boondoggle for the financial elite
with its multi-trillion-dollar “quantitative easing” money-printing program.
The effect can be seen in the ever more staggering wealth of the
financial oligarchy, which has consistently enjoyed investment returns of
between 10 and 20 percent every year since the financial crisis, even as the
incomes of workers have stagnated or fallen.
American capitalist society is hooked on the toxic growth of
social inequality created by the stock market bubble. This, in turn, fosters
the political framework not just for the decadent lifestyles of the financial
oligarchs, each of whom owns, on average, a half-dozen mansions around the
world, a private jet and a super-yacht, but also for the broader periphery of
the affluent upper-middle class, which provides the oligarchs with political legitimacy
and support. These elite social layers determine American political life, from
which the broad mass of working people is effectively excluded.
The Federal Reserve is a key mechanism for
perpetuating this whole filthy system, in
which “Wall Street rules.” But its services in behalf
of
the rich and the super-rich only compound the fundamental
and
insoluble contradictions of capitalism, plunging the system
into
ever deeper debt and ensuring that the next crisis will be
that
much more violent and explosive.
In this intensifying crisis, the working class must assert its
independent interests with the same determination and ruthlessness as evinced
by the ruling class. It must answer the bourgeoisie’s social counterrevolution
with the program of socialist revolution.
the depression is already here for most of us below the
super-rich!
Trump and
the GOP created a fake economic boom on our collective credit card:
The equivalent of maxing out your credit cards and saying look how
good I'm doing right now.
*
Trump criticized Dimon in 2013 for supposedly contributing to the
country’s economic downturn. “I’m not Jamie Dimon, who pays $13 billion
to settle a case and then pays $11 billion to settle a case and who I
think is the worst banker in the United States,” he told reporters.
*
"One
of the premier institutions of big business, JP Morgan Chase, issued
an internal report on the eve of the 10th anniversary of the 2008
crash, which warned that another “great liquidity crisis”
was possible, and that a government bailout on the scale of that
effected by Bush and Obama will produce social unrest, “in light of
the potential impact of central bank actions in driving
inequality between asset owners and labor."
*
"Overall, the reaction
to the decision points to the underlying fragility of financial markets,
which have become a house of cards as a result of the massive inflows of
money from the Fed and other central banks, and are now extremely
susceptible to even a small tightening in financial conditions."
*
"It is significant that what the Financial Times described
as a “tsunami of money”—estimated to reach $1 trillion for the year—has failed
to prevent what could be the worst year for stock markets since the global
financial crisis."
*
"A
decade ago, as the financial crisis raged, America’s banks were in ruins. Lehman
Brothers, the storied 158-year-old investment house, collapsed
into bankruptcy in mid-September 2008. Six months earlier, Bear Stearns,
its competitor, had required a government-engineered rescue to avert the
same outcome. By October, two of the nation’s largest commercial banks,
Citigroup and Bank of America, needed their own government-tailored
bailouts to escape failure. Smaller but still-sizable banks, such as
Washington Mutual and IndyMac, died."
*
The GOP said the "Tax Cuts and Jobs Act" would reduce
deficits and supercharge the economy (and stocks and wages). The White
House says things are working as planned, but one year
on--the numbers mostly suggest otherwise.
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