Biden economic team: Straight from Wall Street
President-elect Joe Biden announced the second major group of cabinet and White House appointments Sunday and Monday, including most of his economic team, drawn almost entirely from the major financial institutions and hedge funds.
The most important nomination, of former Federal Reserve Board chair Janet Yellen to become secretary of the treasury, was leaked to the press last week. Yellen was deputy chair of the Fed from 2010 to 2014, then chair from 2014 to 2018, meaning that she played a major role in economic policy for the bulk of the Obama administration, a period that saw the greatest transfer of wealth from the poor and working class to the wealthy of any time in American history.
Throughout her tenure at the Fed, Yellen was identified with the policy of “quantitative easing,” in which the central bank made effectively unlimited sums of money available to the financial markets. This policy was pursued while the White House, Congress, and the media insisted that there was no money available to create jobs, sustain education and other social services, reduce poverty, or accomplish any other progressive social goal.
Her top deputy at the treasury, officially designated Monday, will be Adewale Adeyemo, a former Obama White House aide who became a senior adviser at BlackRock, the world’s largest hedge fund, after Trump took office. In 2019, Adeyemo left BlackRock to head the Obama Foundation in Chicago.
Adeyemo is one of two BlackRock officers named for high economic posts in the Biden administration, with the New York Times reporting that Brian Deeson, another former Obama aide turned investment banker, will become chairman of the National Economic Council, the top White House economic policymaking post.
For director of the Office of Management and Budget, Biden nominated Neera Tanden, currently chief executive of the Center for American Progress (CAP), a major Democratic Party think tank, whose selection is perhaps the most revealing decision of the Biden transition so far.
A book could be written about Tanden’s role in promoting right-wing social policies and the defense of American imperialism while using the language of liberalism and “progressive” politics.
Tanden was a vociferous supporter of Hillary Clinton for the Democratic nomination in 2016. Tanden became notorious for her attacks against Clinton’s chief challenger Bernie Sanders, which continued during the 2020 campaign, when Tanden aligned with Biden.
Despite the media characterization of CAP as a “left-wing” think tank, its major function has been to prepare and devise right-wing, pro-market policies for Democratic administrations, like the Affordable Care Act, which Tanden played a major role in crafting while she worked in the Obama White House.
CAP endorsed a proposal by Obama, during budget negotiations with congressional Republicans, to calculate increases in Social Security payments through what was called “chained-CPI,” a version of the Consumer Price Index constructed to produce lower increases in benefits—actually cuts in real terms, since the increases would lag behind the real rise in the cost of living for the elderly.
Bernie Sanders opposed chained CPI at the time, but Tanden has continued to support it, while admitting that it is regressive, as a necessary element in a budget “compromise” with Republicans. This, of course, is exactly the posture advocated by Joe Biden throughout the presidential campaign, when he claimed he would be able to find “common ground” with Senate Republican leader Mitch McConnell and other congressional reactionaries.
Tanden was a co-author of an influential article published in 2012 by the New England Journal of Medicine, under the title, “A Systemic Approach to Containing Health Care Spending,” which defended Obamacare as the basis for substantially reducing the cost of health care for both corporations and the government. The lead author of this treatise was Dr. Ezekiel Emanuel, brother of the former mayor of Chicago and Obama aide, and a leading public advocate of reducing health care spending aimed at prolonging the lives of the elderly.
While her remit in the Obama White House was domestic policy, Tanden has played a significant role at the CAP in supporting the type of aggressive foreign intervention espoused by Hillary Clinton as secretary of state and then as a presidential candidate.
According to journalist Glenn Greenwald, Tanden argued during the US-NATO attack on Libya in 2011 “that Libyans should be forced to turn over large portions of their oil revenues to repay the U.S. for the costs incurred in bombing Libya, on the grounds that Americans will support future wars only if they see that the countries attacked by the U.S. pay for the invasions.” This anticipated the position taken by Donald Trump in relation to Syria and Iraq.
In 2014, the CAP published a report backing the decision of the Obama administration to intervene militarily in Iraq and Syria on the pretext of fighting the Islamic State (ISIS), an offshoot of the fundamentalist forces backed by the US and Saudi Arabia against the Assad regime in Syria. Last year, the New York Times reported that the CAP had received $2.5 million from the United Arab Emirates to fund national security and international policy studies.
Tanden also has been publicly linked to the slander campaign against imprisoned WikiLeaks publisher Julian Assange, calling him “the agent of a pro fascist state, Russia” after WikiLeaks published materials damaging to Hillary Clinton during the 2016 election campaign, and branding him “a central reason of why Trump got elected.” Tanden’s own anti-Sanders screeds were among the emails made public by WikiLeaks.
The three members of the Council of Economic Advisers will be Cecilia Rouse of Princeton University as chair, joined by Jared Bernstein, a longtime Biden adviser and labor economist, and Heather Boushey, who currently heads the Washington Institute for Equitable Growth, a liberal advocacy group.
The six economic nominees announced Monday include four women, two African Americans (Rouse and Adeyemo) and an Indian-American (Tanden). While this is celebrated endlessly by the Biden camp and the media as a cabinet that “looks like America,” the reality is that many of those selected are multi-millionaires. All are vehement defenders of the capitalist system and the “right” of the giant corporations, banks, hedge funds and a few hundred billionaires to control the economic resources of America.
Similarly, when Biden named his seven-person communications team on Sunday, the main focus of media coverage was that all seven were women, three of them black and one Latino. Nearly all are veterans of the Obama administration, meaning they already have extensive practice in lying to the American people and to the world about drone missile assassinations, illegal wars in Libya, Syria and Yemen, global spying by the US intelligence apparatus, and other crimes and misdeeds of Washington.
The main significance of the communications appointments is the integration of individuals from the more liberal wing of the party, including Karine Jean-Pierre, formerly of Move-on, Symone Sanders, who worked for Bernie Sanders in 2016, and Pilar Tobar of America’s Voice, a liberal immigration reform group. They have all moved seamlessly from the supposed “anti-corporate” wing of the Democratic Party to serve in an administration that is utterly dedicated to serving the interests of big business.
What the rich are thankful for
For most Americans, this will be the worst Thanksgiving they can remember. A quarter-million people in America are dead from the pandemic. Tens of millions have lost their jobs, and countless others are hungry or on the verge of being evicted from their homes. For months, workers throughout the country have played a daily game of Russian roulette every time they punched into a shift at a factory, warehouse or store.
But the view from Manhattan’s billionaires’ row is much more pleasant. On Tuesday, the Dow Jones Industrial Average hit a record of 30,000, up nearly 70 percent since March. This, in turn, has fueled the wealth of the ultra-rich. A recent report from the Institute for Policy Studies gives a sense of the enormous upward redistribution of wealth that has occurred since the outbreak of the pandemic:
Ten billionaires have a combined wealth of $433 billion and have seen their wealth increase $127 billion since the beginning of the pandemic in mid-March, a 42 percent increase. These ten are Jeff Bezos (Amazon), Alice, Rob and Jim Walton (Walmart), Apoorva Mehta (Instacart), John Tyson (Tyson Foods), Stephen Schwarzman (Blackstone), Henry Kravis and George Roberts (KKR), and Steve Feinberg (Cerberus).
John H. Tyson, the billionaire owner of Tyson Foods, has seen his personal wealth increase over $600 million since the beginning of the pandemic as an estimated 11,000 Tyson workers have been infected with COVID-19.
The wealth of Amazon’s Jeff Bezos has increased over $70 billion since mid-March while an estimated 20,000 Amazon workers have been infected with COVID-19.
To this list should be added Elon Musk, who recently eclipsed Bill Gates to become the second-richest man in the world. Musk has had his wealth surge by $112 billion—larger than the GDP of Kenya—in a single year as the stock price of Tesla and SpaceX soared.
On May 11, Musk announced the resumption of production at Tesla’s main facility in California, defying state law, with the complicity of the state’s Democratic Party government. In the period since Tesla reopened production, its stock price has more than tripled, making it the largest carmaker by market capitalization. Musk’s wealth is now five times what it was just two years ago.
The surge in the markets is driven by the vast and unprecedented intervention by the Federal Reserve, which has guaranteed that there will be no fall in stock prices regardless of the state of the real economy. Economists Raphaële Chappe and Mark Blyth note in the latest edition of Foreign Affairs that the growth in the rise in share values has almost exclusively benefited the super-rich.
“According to recent research by Goldman Sachs,” they write, “the bottom 90 percent of Americans hold a mere 12 percent of the value of stocks owned by U.S. households. The U.S. economy has failed to deliver inclusive growth for decades, as real wages for many workers have been stagnant since the mid-1970s.” They continue:
The Fed itself determined last year that the majority of American adults would not be able to cover a hypothetical unexpected expense of $400—a scenario that for millions of Americans became a reality when the pandemic forced the country to shut down.
In short, the United States seems to have stumbled into a monetary policy regime that has untethered the fate of economic elites, who derive most of their income from state-protected financial assets, from that of ordinary people, who rely on low and precarious wages. Such a regime offers permanent protections to those with high incomes from financial assets.
In reality, US capitalism has not “stumbled” into this policy. This state of affairs is the product of a decades-long campaign to slash the living standards of the working class while enriching the financial oligarchy.
Beginning with the Reagan/Thatcher/Volcker anti-inflation policies in the early 1980s, the world’s ruling classes launched a systematic campaign to drive down workers’ wages and living standards. “Anti-inflation” policies, which originally entailed the raising of interest rates to create a manufactured recession in the early ’80s, were soon supplanted by decades of extremely low interests rates for banks and the implicit guarantee that central banks would ensure there would be no serious fall in the value of financial assets.
The ruling class responded to the economic and financial crisis of 2008 by launching, under both Bush and Obama, a massive, multi-trillion-dollar bailout, implemented over the course of years, that led the stock market to surge amid mass unemployment.
In 2020, the ruling class used the crisis conditions created by the pandemic to launch a bailout twice the scale of 2008, implemented within a matter of just a few months, leading stock markets to surge to record highs almost immediately.
Beyond the trillions of dollars that went directly to Wall Street, even the funds supposedly meant to preserve workers’ jobs took the form of corporate handouts. As Chappe and Blyth noted, “An MIT team concluded that the PPP [Paycheck Protection Program] handed out $500 billion in loans yet saved only 2.3 million jobs over roughly six months… the annualized cost of the program comes out to roughly $500,000 per job.”
The bailout was followed by the reopening of workplaces in April and May. By the end of July, the emergency federal unemployment benefits available to some workers were allowed to expire, with legislators of both parties arguing that keeping the unemployed afloat was a “disincentive” to workers getting back on the job.
In the 2020 elections, millions of workers voted against the “herd immunity” policies of the Trump administration and the single-minded subordination of the well-being of the population to the stock market.
But immediately after the election, Biden declared that there will be “no national shutdown” while reaffirming the Federal Reserve’s unlimited commitment to propping up the stock market. “Our interest rates are as low as they have been in modern history. And I think that is a positive thing,” Biden declared. Biden’s selection of former Fed Chair Janet Yellen as his Treasury Secretary is a signal to Wall Street that the flood of free money will continue.
Neither Biden nor congressional Democrats have shown any interest in restoring emergency jobless aid, even as states close restaurants, bars and gyms to prevent hospitals from being overrun.
The year 2020 has exposed American society as an oligarchy, in which a tiny group of billionaires inflicts enormous social misery on the great majority of society for its own personal enrichment. If hundreds of thousands of people need to die to generate more wealth for the oligarchs, so be it.
The unprecedented enrichment of the financial oligarchy, in the midst of the greatest crisis since the 1930s, has exposed the arguments that have been made to justify decades of job-cutting and the destruction of social programs. If there is no money to pay jobless benefits, where on earth did society find $112 billion to give to Elon Musk?
These events have not passed unnoticed by millions of workers. Even before the pandemic, socialist sentiment was on the rise among broad sections of the population. Now it is becoming self-evident that the basic needs of society—including the preservation of human life itself—are incompatible with the domination of a few thousand billionaires over society.
The United States is facing an emergency. The pandemic is raging, and millions are hungry and jobless. Urgent measures are necessary. Containing the pandemic requires the immediate nationwide shutdown of nonessential production. This must be accompanied by full compensation for lost wages of workers and earnings of small businesspeople.
The money to save hundreds of thousands of lives exists in the overflowing bank accounts of the oligarchs. These funds must be immediately frozen, seized, and put to use to stop the pandemic and ensure that no one goes hungry or homeless as a result of lockdowns. The demand for these urgent measures is a critical component for the struggle for socialism and the reorganization of society to meet social need, not private profit.
Elon Musk Makes $100B in 2020, Becomes World’s Second-Richest Man
Tesla and SpaceX CEO Elon Musk has overtaken Microsoft co-founder Bill Gates to become the world’s second-richest person, behind Amazon CEO Jeff Bezos. Musk’s fortune increased an astounding $100 billion this year, from $28 billion to $128 billion.
The Verge reports that Tesla and SpaceX CEO Elon Musk has passed Microsoft co-founder Bill Gates to become the world’s second-richest person. The Bloomberg Billionaires Index now states that Amazon CEO Jeff Bezos is the richest man in the world followed by Musk and Gates.
Musk’s net worth now sits at around $128 billion after it increased by $100 billion this year. Bezos’ net worth is currently reported at around $182 billion leaving a sizable gap between the two. Musk ranked as the 35th richest person in the world on the Billionaire Index in January.
Musk’s rapid net worth increase is mainly driven by Tesla’s share price. The electric vehicle manufacturer currently has a market cap of almost $500 billion after starting 2020 at under $100 billion. Teslas has the highest market cap of any vehicle manufacturer in the world, according to The Guardian, despite producing a fraction of the cars of more established automakers.
This year Tesla plans to produce 500,000 vehicles compared to around 10 million cars from a company such as Toyota. Three-quarters of Musk’s net worth reportedly consists of Tesla shares, Bloomberg states.
Breitbart News recently reported that a Tesla vehicle was involved in a crash that fired flaming hot batteries through the windows of residential homes in Oregon. Read more at Breitbart News here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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