It indicates that the Biden administration’s economic policies and its claims that the US economy is on the way to recovery could well be going the same way as Afghanistan.
A study in contrasts: Wall Street and the underlying economy
The contrast between the rise of the stock market and the underlying state of the US economy was highlighted on Monday when Wall Street’s main index, the S&P 500, reached a level double its low of March 2020 as the initial effects of the COVID-19 pandemic led to chaos in US financial markets.
The new high was recorded despite the debacle in Afghanistan, sharply falling consumer confidence, slowing growth in China and the widening impact of the Delta variant both in the US and internationally.
The markets fell on Tuesday with the S&P 500 having its worst day for a month, falling by 0.7 percent and the Dow dropping by 500 points at one stage, on the back of data which showed a 1.1 percent fall in retail sales in July compared to June.
But with money continuing to pour into the financial system from the Fed the general sentiment appears to be that the Wall Street surge will continue. “I don’t think it portends a precipitous drop around the corner. I think it’s very temporary,” one financial manager told the Wall Street Journal .
Fears of worsening conditions in the underlying economy were revealed in the results of the widely watched Michigan consumer confidence survey published at the end of last week.
It showed that the Consumer Sentiment index fell by 13.5 percent from July to August to a level just below the April 2020 low. The University of Michigan (UofM) survey reported that the only faster rates of decline in the Sentiment Index were in April 2020, when it recorded a drop of 19.4 percent and in October 2008, during the global financial crisis, when it dropped 18.1 percent.
“The losses in early August were widespread across income, age, and education subgroups and observed across all regions,” according to the survey. Richard Curtin, the UofM economist in charge of the survey called the results “stunning.”
It indicates that the Biden administration’s economic policies and its claims that the US economy is on the way to recovery could well be going the same way as Afghanistan.
A survey of small businesses conducted by the Wall Street Journal showed a fall in sentiment similar to that recorded by the UofM.
It found that small business confidence in August had dropped to its lowest level since the early spring, largely as a result of the rise in COVID-19 infections due to the more infectious Delta variant.
Some 39 percent of small business owners expected economic conditions in the US to improve in the next 12 months, down from 50 percent in July and 67 percent in March. Reporting on the survey, the Journal cited the owner of one small business, an event production company, which reported a flurry of cancellations.
“We were slowly ramping up in anticipation of a robust third and fourth quarter,” he said. “You can drop the ‘ro’ part. It seems like it is just bust.”
The resurgence of the pandemic via the Delta variant is also putting a damper on international economic growth, particularly in China.
According to data released by China’s National Bureau of Statistics on Monday, the economy slowed in July by more than expected. This was the result of Delta infections as well as flooding due to extreme weather events in parts of the country.
Retail sales in July rose by 8.5 percent in July compared with the same month a year ago and industrial production increased by 6.4 percent. But both these figures were below the level anticipated by economists of 10.9 percent and 7.9 percent respectively.
China has imposed strict travel restrictions in response to an outbreak of the coronavirus that began in the middle of last month in Nanjing. But even before the latest outbreak there were signs that the initial bounce back of the Chinese economy was slowing.
Reporting on the latest data, Fu Linghui, a spokesman for the statistics bureau said; “Growth in some consumer sectors and services slowed.” He warned that growth in the second half of the year was likely to be lower than the first six months.
International banks and forecasting agencies are revising down their estimates for Chinese growth. Goldman Sachs, Morgan Stanley and Nomura as well as other investment banks have all reduced their forecasts. The ANZ bank added its voice on Monday when it downgraded its forecast for full year growth from 8.8 percent to 8.3 percent. It pointed to a “broad-based slowdown in domestic activities in July, which suggests that the economy is rapidly losing steam.”
Julian Evans-Pritchard, senior economist at Capital Economics, told the Financial Times (FT) that in addition to the fall in the growth of retail sales, investment spending and industrial activity that were less sensitive to COVID-19 restrictions were also weaker.
“The drop back in consumption should reverse once the virus situation is brought under control and restrictions are lifted,” he said. “But we think the slowdown elsewhere will deepen over the rest of the year.”
And if there is a slowdown in the rest of the world, it will heavily impact on China as can be seen in the latest figures on exports which showed growth of 19 percent in July as compared with 32 percent in June.
The increasingly complex situation in the global economy is adding to the problems confronting the major central banks as they consider whether they should start to ease or “taper” their support for financial markets.
There appears to be something of a shift among members of the Fed’s governing body towards tapering. In an interview with the FT last week, San Francisco Fed president Mary Daly, regarded as being on the dovish side, said it was “appropriate” to start dialling back accommodation, starting with asset purchases.
“Talking about potentially tapering those later this year or early next year is where I’m at,” she said.
Esther George, the president of the Kansas City Fed, has also indicated that it is time to “transition from extraordinary monetary policy accommodation to more neutral settings.”
The key issue here is inflation and whether this will lead to a push by workers for higher wages. George alluded to this issue, referring to “firm inflation expectations” and a “recovering labour market” as being consistent with Fed objectives that could provide the basis for “bringing asset purchases to an end.”
The question was dealt with more bluntly in remarks by David Kelly, chief global strategist at JPMorgan Asset Management, reported in the FT.
The official Fed position is that the present spike in US inflation is “transitory.” “But there is nothing transitory about wage inflation,” Kelly said, warning that present Fed policies “will trigger higher wages and pressure corporate margins.”
On the other side, there is a fear that such is the dependence of Wall Street on the flow of cheap money from the Fed and the mountain of debt and fictitious capital it sustains that any move to curb it in order to counter inflation and a wages push by workers will set off financial turbulence.
The financial markets will be closely following the remarks by Fed chair Jerome Powell at the annual conclave of central bankers and financial analysts at Jackson Hole, Wyoming at the end of this month which may give some indication of the direction in which the US central bank is heading.
At present the differences, at least as they appear in public, are relatively muted. But that could rapidly change as indicated by developments in Britain.
In the middle of July, the House of Lords economic affairs committee, which includes former Bank of England governor Mervyn King, issued a scathing report on the Bank of England’s (BoE) quantitative easing (QE) asset purchasing program.
Lord Michael Forsyth, the chair of the committee, said the BoE “has become addicted” to QE using it as the “answer to all the country’s economic problems.”
The report said there were wide perceptions the bank was “using QE mainly to finance the government’s spending priorities” and if these continued to grow “it would lose credibility destroying its ability to control inflation and maintain financial stability.”
BoE governor Andrew Bailey responded testily to the use of the word “addicted” saying it had a “very damaging meaning for many people who are suffering.”
Last week the BoE made a tentative move towards tightening monetary policy when it announced a plan to start reducing its holding of £900 billion worth of government bonds, equivalent to about 40 percent of GDP.
Announcing the policy at a press conference, Bailey said when interest rates reached 0.5 percent the central bank would stop reinvesting the proceeds of bonds it owns and when they reached 1 percent it would consider selling some of them. The process of unwinding QE would proceed on “autopilot” along a “gradual and predictable path.”
But as the FT reported this “breeziness” seemed odd given the “market upheavals” when the Fed sought to reduce its balance sheet in 2013 and 2018. In 2013 the initial move to end QE resulted in a spike in interest rates.
In 2018, when Fed chair Powell indicated further rate rises in 2019 following four rises over the previous 12 months and that the reduction in asset holdings was on “autopilot,” Wall Street responded with a significant fall, recording its worst December since the Depression.
Chris Hedges | America: A Final Farewell
https://www.youtube.com/watch?v=oRAkX7NWkos
Don’t be fooled by Joe Biden
Chris Hedges | NAFTA, Clinton, and Obama BETRAYED Americans... and Joe Biden was right there with the worst of them!
Nolte: Dangerous Joe Biden Delivers Border, Economic, Coronavirus, Crime, and Overseas Chaos
While we’re watching all the terrible chaos break out in Afghanistan, His Fraudulency Joe Biden and the Democrats are also serving up plenty of chaos right here at home.
That’s not to say we shouldn’t keep an eye on Afghanistan, not with thousands of American civilians trapped behind enemy lines after a jihadist takeover. But let’s do two things at once and remember all the chaos Joe Biden and the Democrat party are wreaking on the home front.
You know, when Donald Trump was president, all that chaos was mostly manufactured by the fake news media; that chaos was fabricated by a Deep State determined to use lies (like the Russia Collusion Hoax and the Ukraine phone call) to foment a coup. Granted, some chaos was created by Trump himself and his mercurial personality.
Still, the chaos we’re now seeing is all a result of Joe Biden and a feckless, hapless, and totally incompetent Democrat party — and it’s real, very real.
Afghanistan Chaos
The withdrawal in Afghanistan did not have to be this way. Biden did not have to break Trump’s deal with the Taliban for a May 1 withdrawal. Biden did not have to remove our troops before every American was safely evacuated. He did not have to leave behind billions of operational U.S. weapons for the Taliban to pick up. He did not have to choose Summer to withdraw when the Taliban are fully operational, instead of Winter when the Taliban are scattered around waiting out the cold weather at their respective homes.
As a result, we now have thousands of American civilians trapped in a terrorist hell being told by their own government that they are on their own.
TOPSHOT – Afghan people climb atop a plane as they wait at the Kabul airport in Kabul on August 16, 2021, after a stunningly swift end to Afghanistan’s 20-year war, as thousands of people mobbed the city’s airport trying to flee the group’s feared hardline brand of Islamist rule. (Photo by Wakil Kohsar / AFP) (Photo by WAKIL KOHSAR/AFP via Getty Images)
Economic Chaos
Biden inherited a recovering economy and decided to strangle it with a lunatic amount of government spending that created record inflation. As a result, all the wage gains during the Trump years have been wiped out by an explosion in the cost of life’s most basic necessities: food, housing, and energy.
Gasoline alone is up a dollar a gallon, which is a brutal tax on the working poor.
Nevertheless, Biden keeps spending, kills oil pipelines, and refuses to allow oil exploration.
And now all signs point to a coming recession.
Border Chaos
Biden has opened up our southern border to anyone who wants to come in, regardless of whether or not they are vaccinated or infected. As a result, we currently have the worst southern border crisis in decades after Trump had pretty much solved the problem and stabilized it.
Honduran migrants hoping to reach the U.S. border walk alongside a highway in Chiquimula, Guatemala, Saturday, Jan. 16, 2021. Guatemalan authorities estimated that as many as 9,000 Honduran migrants have crossed into Guatemala as part of an effort to form a new caravan to reach the U.S. border. (AP Photo/Sandra Sebastian)
Coronavirus Crisis
According to the CDC’s own math, the Trump vaccine is working about as well as anyone could have dreamed, and yet Biden has lost total control of the messaging. As a result, masks, panic, and the economic devastation that comes with the panic have returned.
The fear-porn peddlers have turned a nothing breakthrough issue for the vaccinated into a false crisis that says the vaccine doesn’t really work.
What an unforced error.
Crime Crisis
Violent crime is up, and in many cases, way up, in almost every major Democrat-controlled city. But, again, this is another thing that did not have to happen. But after Democrats embraced the domestic terrorists in Antifa and Black Lives Matter, emptied prisons, basically legalized rioting, and ended bail, all the gains against violent crime over the last two decades have been erased.
Overseas Chaos
It’s not just Afghanistan. After years of Middle East stability under Trump (including peace treaties), rockets are again being fired into Israel, Islamic terrorists are emboldened by Biden’s capitulation in Afghanistan, as are the Chinese and Iranians.
The world is much less safe than it was seven months ago, and America is not only less safe, it is less free.
Follow John Nolte on Twitter @NolteNC. Follow his Facebook Page here.
Billions in US federal rent assistance money withheld from millions facing eviction
Out of the $46.5 billion in funding provided for rental assistance under two bailouts enacted in December 2020 and March 2021, the vast majority has not been distributed, with only an estimated $3 billion of the funds being distributed as of August 3 according to CNBC, while millions are at risk of eviction or foreclosure.
According to the Eviction Lab, in the six states and 31 cities tracked by it, 480, 456 evictions have taken place during the pandemic. In just those areas alone, 6,108 evictions were filed in the last week. This is in spite of the announcement on August 3 by the Centers for Disease Control and Prevention (CDC) of the extension of the eviction moratorium to October 3 for counties “experiencing substantial and high levels of community transmission levels.”
The moratorium extension itself was only issued after Democrats allowed it to expire on July 31 and then after they washed their hands of it. The latest temporary version is a significant revision of the previous moratorium which, at least in letter, covered all renters. While CNN, citing a “source familiar with the effort” estimates it covers 90 percent of renters, which by no means should be taken at face value, that would still mean hundreds of thousands are now not covered who previously were, and can be thrown out of their homes amid a surge in the pandemic.
The extension itself has an uncertain legal future as attested to by the federal judge who allowed the Biden administration’s revised moratorium to remain in place, no doubt a veiled reference to a challenge by the extreme-right Supreme Court.
Approximately 1.6 million households reported being “very likely” to face eviction in the next two months according to the US Census Bureau’s July 21-August 2 Household Pulse Survey, while another 1.9 million where “somewhat likely.” Some 5.8 million were not at all confident in their ability to pay next month’s rent. Additionally, 238,000 homeowners were “very likely” to have to leave their house due to foreclosure, while another 826,000 were “somewhat likely” to have to leave.
For those seeking assistance, only 287,000 cited applying and receiving household rental assistance through state or local government, while 1.49 million were waiting for a response and 890,773 were denied assistance.
Only 15 states and the District of Columbia had spent 10 percent or more of the funds initially approved by Congress as of the end of June, according to the US Treasury, despite $25 billion of the funds for the Emergency Rental Assistance Program (ERAP) having been approved on December 27 of last year and $21.55 billion in March 11 of this year, under the Consolidated Appropriations Act and the “ American Rescue Plan Act ” bailouts, respectively.
According to a HuffPost analysis of Treasury Department data, “in roughly 40 states, counties and cities, not a single cent from ERAP made it out the door during that time.” This included some smaller counties, but also whole states such as New York, which received $801 million in funds, and Puerto Rico at $325 million, where nothing from ERAP was distributed.
Chicago hadn’t distributed any of its $80 million in ERAP funds either at the end of June, with the spokesperson for the Chicago Department of Housing saying that the department had been waiting on the City Council, which is ruled by Democrats, failing to allocate the funds since May when the applications opened.
Politicians for both parties have criticized local governments for the glacial pace that rental assistance was distributed.
Senate Minority Leader and coup plotter Mitch McConnell stated last week, “The problem has been with state governments who have been pathetically slow to get the money out.”
Senate Majority Leader Chuck Schumer criticized his own state of New York, stating he would send a letter to the state government to “immediately start disbursing those funds.”
Representative Bobby Rush, Democrat of Illinois, referring to the city of Chicago’s delay of $80 million in ERAP funds, stated that “Bureaucratic bungling is unacceptable,” and, “I am astounded and heartbroken that my constituents, who are suffering from horrendous economic woes in the midst of an ongoing pandemic, have not received the full financial relief that I voted for.”
New York City’s Mayor Bill de Blasio’s spokesperson Bill Neidhardt stated, referring to the unemployment benefits, “The main reason is that the application was fucking impossible.”
Neidhardt, saying perhaps more than he intended, stated, “I think it’s strategic incompetence. That’s why they delayed it, and that’s why they rolled out a mind-bogglingly unusable interface. Both those things show they didn’t want people to get the money.”
Sarah Saadian, vice president of public policy at the National Low Income Housing Coalition stated that while some places were distributing funds, many states and local governments were “putting in place their own documentation requirements or very lengthy application processes, which are getting in their own way of distributing aid.”
State governments undoubtedly played a role in holding up these funds through sheer incompetence and indifference. The central reason, though, has the same roots as the holding up of unemployment money, and that is the drive to shove workers back into low-paying jobs through economic blackmail so they can get back to producing profits for the financial oligarchy. As the WSWS wrote on April 29 of last year:
The unemployment benefits program included in the CARES Act has been, to a large extent, an elaborate exercise in deliberate mass deception. When Congress and the White House presented the additional 13 weeks of state-based unemployment insurance beyond the typical 26 weeks, plus an additional $600 weekly federal supplement through July 31, 2020, as a social safety net during the COVID-19 crisis, they knew very well that millions of unemployed workers would be unable to take advantage of it.
The Democrats and Republicans knew that many workers would not be able to get through to the antiquated systems in the state capitals across the country, which would be completely overwhelmed and unprepared for the number of people seeking to apply for benefits. They were counting on these systems being so backed up with delays and confusion that workers would give up and end up receiving little or nothing of the government money.
Just as before, both Republicans and Democrats are well aware that the distribution of such money would encounter significant caveats, yet they did nothing to address these.
“In most cases they couldn’t scale up an already-existing program, or if they could scale up an existing program, that program was tiny compared to the funding available now,” Ann Oliva, a housing policy expert at the Center on Budget and Policy Priorities told HuffPost. “That explains some of the lag.”
The glacial rate of the distribution of ERAP funds is in direct contrast to the lightning fast speed at which the continuous bailout by the Fed to Wall Street and large corporations is carried out. The justifications, evasions and blame game going on in D.C. and across the states are thoroughly unconvincing given that the Fed gives out over $120 billion per month, almost triple the total amount allocated to ERAP , to buy up corporate bonds and other financial assets, which are quickly used by Wall Street to fuel an orgy of speculation whose result can be seen in soaring stocks and soaring wealth of the billionaires. This contrast becomes even more evident when it’s considered that only a fraction of ERAP funds have been distributed, while the $120 billion is quickly put to use in speculative activities by Wall Street.
One could also point to the bailout of the airline industry, which, while being nominally allocated less money, in reality received far more than the $3 billion currently distributed. American Airlines received $5.81 billion through the CARES Act, while Delta received $5.4 billion, with both of their CEOs receiving millions while laying off tens of thousands of workers.
The failure to provide for housing, and the ongoing eviction and foreclosure crisis, is a testament to the bankruptcy of the capitalist system and to the necessity for its overthrow and replacement by socialism, reorganizing society to meet human need rather than private profit.
Biden washes his hands of responsibility for mass evictions
After allowing the federal moratorium on evictions to expire over the weekend, exposing millions of hard-pressed renters to the danger of forcible removal from their homes, loss of their belongings and homelessness, the Biden White House issued a statement Monday afternoon effectively disavowing any responsibility for the vast social misery its actions are helping to cause.
The statement issued on “eviction prevention efforts” acknowledges the horrific impact of mass eviction, particularly “given the rising urgency of containing the spread of the Delta variant,” which will run like wildfire through homeless shelters, tent camps and overcrowded apartments where multiple families will live doubled-up and tripled-up.
But while promising that “President Biden is taking further action to prevent Americans from experiencing the heartbreak of eviction,” the actions amount to a laundry list of appeals for other people to do something about the crisis. The statement reads like a satire on indifference thinly disguised by political doubletalk.
Biden directs his own White House to discuss with other federal agencies “whether there are any other authorities to take additional actions to stop evictions,” given that the right-wing majority on the US Supreme Court struck down the anti-eviction order which was issued by the Centers for Disease Control and Prevention last September, on public health grounds, and extended several times for three-month periods.
He calls on state and local courts to pause eviction proceedings until tenants and landlords can access Emergency Rental Assistance, the federal program established to provide assistance to workers thrown out of their jobs because of the pandemic and unable to pay their rent. Some $47 billion has been appropriated for this program, but only $3 billion has been paid out, largely because of foot-dragging by state and local governments and landlords.
Biden calls on state and local governments to stop the foot-dragging, without offering any reason why that should be expected to happen, since it is driven by political resistance among capitalist politicians to do anything to assist tenants against landlords, who comprise a substantial social interest in both parties.
The president calls on landlords to “hold off on evictions for the next 30 days” and even appeals to “utilities providers to work with State and local governments … to avoid cutting off services for those behind in payments due to the pandemic and at risk of eviction.”
Biden, a devout churchgoer, does not include an appeal for Satan to cut off his claws and his tail and for the lion to lie down with the lamb, but he might as well do that as plead with landlords and utility companies to give their working class customers a break.
This rigmarole was accompanied by a round of finger-pointing among the Democrats in Washington, with the White House and congressional leaders criticizing each other, and various factions of the House Democrats suggesting that their inner-party opponents are to blame for the failure to pass legislation by the July 31 deadline set by the Supreme Court ruling.
It is certainly true, as Representative Alexandria Ocasio-Cortez, Representative Cori Bush and others charge, that a sizeable faction of “moderate,” i.e., right-wing House Democrats refused to support a bill presented Friday morning by the House leadership to extend the eviction moratorium through October 18. Some of them threatened to board planes to go back to their districts during the August congressional recess rather than allow the measure to come to a vote.
But Ocasio-Cortez, Bush and others in the “left” of the Democratic caucus have devoted their political careers to upholding the viability of this right-wing party of imperialism and Wall Street as a vehicle for social reform. They can hardly express shock that their colleagues care more for landlords than they do for tenants about to be made homeless.
House Speaker Nancy Pelosi and others in the Democratic congressional leadership faulted the White House for waiting until last Thursday to announce there would be no extension of the moratorium without congressional action. But the July 31 deadline was well known throughout Washington, as well as the inevitability of a Senate filibuster to block any action, given the refusal of the Democrats to change the filibuster rule.
The truth is that the eviction moratorium was allowed to expire because there is no significant support within the US ruling elite for social reform measures, let alone actions that would impinge on the profit interests of landlords, who include not just so-called “mom-and-pop” owners of a few properties, but giant financial concerns that control real estate empires.
Now the consequences will be felt, unevenly at first, because there is a patchwork of state and local restrictions on evictions, many also enacted during the pandemic. Renters in New York, New Jersey, Maryland, California, Oregon and Washington have some limited protections for a limited period of time, at most a few months.
In many areas, however, the wave of evictions will begin immediately, perhaps as soon as this week. There were 600 families said to be threatened with eviction in Detroit, according to one local survey.
In St. Louis, the sheriff’s office said it was preparing to execute 126 eviction orders that had reached the final stage, and would be adding staff to the teams of officers assigned to this brutal task. Sheriff Vernon Betts said his office would begin to enforce 30 evictions per day starting August 9, and he said after working to “clean up” the backlog, he expected hundreds of new eviction filings by landlords who had been biding their time. He told a local news outlet, “Once the moratorium is over, I’m thinking it’s going to be, ‘Katy bar the door.’”
Renters have the worst prospects in the Southern states, according to a survey in the Wall Street Journal, with higher-than-average rent debt loads in Mississippi, South Carolina and Georgia, and laws so reactionary that Mississippi tenants can lose an eviction case and be on the street the same day, while Arkansas landlords can seek criminal charges against tenants who don’t pay rent.
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