THE ENTIRE REASON AMERICA HAS OPEN BORDERS IS TO KEEP WAGES DEPRESSED. IS IT WORKING?
The main impetus for the decision was the fear in ruling financial circles that inflation is going to drive a push by workers for higher wages to combat the decline over the past three decades and the rapid worsening of living standards over the past two years.
Why Jerome Powell Is Deliberately Misleading the Public
Allianz Chief Economic Adviser: If We Get 7 Rate Hikes, ‘We Will Go into Recession’
(CNSNews.com) - Mohamed El-Erian, chief economic adviser to Allianz, predicted Sunday that the United States will go into recession if the Federal Reserve Board Chairman raises interest rates seven times.
Federal Reserve Board Chairman Jerome Powell “doesn’t have an easy decision,” El-Erian said. “Inflation is high and will go higher because of what's happening in Ukraine, and basically, he's got to make a choice, hit the brakes, regain credibility, but risk a recession or tap the brakes, and we have an inflation problem going into next year. We are here, because the Fed is very late and has no good policy options available anymore.”
Goldman Sachs forecast that there is at least a 20 percent chance of recession in the U.S., host Margaret Brennan noted.
“Yes, and they are thinking that we're going to get seven hikes this year. I don't think we'll get seven hikes. I don't think this economy can support seven hikes, and if we do get seven hikes, we will go into recession. That's the cost of being late. I suspect that what we'll hear on Wednesday, Margaret, is a 25 basis point rate hike,” El-Erian said.
“We will hear that more on the way, and we will hear that they will all also contract what has become a nine trillion balance sheet. We are in this absurd situation that last week, when we got the 7.9 percent inflation rate, the Fed was still putting liquidity into this economy. That just gives you a feel for how misaligned policy has been,” he said.
When asked who was responsible for U.S. inflation, El-Erian said, “So it lies in the circumstances. It lies in the Fed being late, and mischaracterizing inflation. Til' the end of November they were calling it transitory, but also to be fair to the administration, there- there will be a Putin inflation component.
“I estimate that at 7.9 percent, we will probably get very close or above 10 percent before we come down, and that difference will be all because of the disruption that Putin's war imply for commodity prices, supply chains and shipments,” he said.
El-Erian said that if double digit inflation happens, “it will happen in the summer, and people will feel it. The worst thing for us would be not only do we feel the higher inflation, but we also feel income losses. That's why it's critical to avoid a recession. We-we can't avoid stagflation–lower growth, higher prices, but we certainly can avoid a recession and we can bounce back quickly,” El-Erian said.
El-Erian said there are political measures that can be taken to control inflation, but “they're stuck in Congress.
“You can do more to increase labor force participation so that wage pressure comes down. That's about childcare. That's about easing people's way back into the labor force. You can do more to enhance productivity, and you can do more to supply–to remove supply bottlenecks. The administration has policies. Lots of them are stuck in Congress right now,” he said.
VIDEO:
THE FRAUDULENT CLINTON FOUNDATION EXPOSED.
PAY-TO-PLAY FROM THE FIRST DAY!
Is it a signal that she's back in the game because she's selling her president-ability to the world's global billionaire crowd and laying the groundwork for more funds? There are all kinds of ways for foreign billionaires to get money to the U.S. without consequences, after all. What's more, it's pretty much the biggest base of support she has, which is at least one reason why she lost the 2016 election.
*
“The couple parlayed lives supposedly spent in “public service”
into admission into the upper stratosphere of American wealth, with incomes in the top 0.1 percent bracket. The source of this vast wealth was a political
machine that might well be dubbed “Clinton, Inc.” This consists essentially of
a seedy money-laundering operation to ensure big business support for the
Clintons’ political ambitions as well as their personal fortunes.
The basic components of the operation are lavishly paid speeches to Wall Street and Fortune 500 audiences, corporate campaign contributions, and donations to the ostensibly philanthropic Clinton Foundation.”
"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
(HOW MANY ARE BANSKTER BRIBES SUCKING GAMER LAWYERS? ALL BUT PELOSI! SHE'S JUST A BRIBES SUCKING INSIDE TRADER!)
GRIFTER AND PHONY CHARITY FOUNDATION FRAUDSTER HILLARY CLINTON’S LONG SERVICE TO AMERICA’S MOST EVIL BANKSTERS
https://mexicanoccupation.blogspot.com/2019/08/the-democrat-party-grifter-and-pay-to.html
The judge found these releases, together with the publication of Clinton’s secret speeches to Wall Street banks, in which she pledged to be their representative, were “matters of the highest public concern.” They “allowed the American electorate to look behind the curtain of one of the two major political parties in the United States during a presidential election.”
In other words, the US financial system, inflated to an unprecedented degree by the Fed, which has pumped trillions
US Fed targets wage demands as it lifts interest rate
As anticipated, the US Federal Reserve yesterday lifted its base interest rate by 0.25 percentage points and indicated it expects to raise it by a similar amount at each of the six remaining meetings this year.
It has also said it will start to reduce the Fed’s asset holdings of $9 trillion at a “coming” meeting, possibly as early as May, in another move to tighten monetary policy to counter rising inflation, now running at its highest level in four decades.
Prices rose at an annual rate of 7.9 percent in February with predictions the inflation rate could hit double digits because of higher oil prices and price hikes in other basic commodities due to the war crisis in eastern Europe.
The main impetus for the decision was the fear in ruling financial circles that inflation is going to drive a push by workers for higher wages to combat the decline over the past three decades and the rapid worsening of living standards over the past two years.
Fed chair Jerome Powell made clear a clampdown on higher wages was the central issue in his opening remarks to the press conference following the meeting of the Federal Open Market Committee (FOMC).
He said the economy was very strong against “the backdrop of an extremely tight labour market and high inflation.” He described the labour market as continuing to “strengthen” and “extremely tight.” The demand for labour was “very strong” and “wages are rising at their fastest pace in many years.”
He did not mention the fact that even though there have been some increases, the level of real wages is falling behind the present level of inflation, and the expected rises in coming months.
The same themes were repeated in the question-and-answer session following his opening remarks as Powell returned again and again to the wages issue.
In response to one journalist, who noted that many economists were saying inflation could not be brought down without higher unemployment, Powell said there was a “very, very tight labour market, tight to a level that’s unhealthy.”
In response to another question, he said that wages had moved at a “higher rate than in a very long time.” Returning to this theme at a later point, he said wages were moving up faster than is consistent with the Fed’s target rate of 2 percent inflation.
The Fed’s interest rate increases will make virtually no impact on price rises which are the result of supply chain bottlenecks and now the surge in commodity prices. Rather their aim, as Powell indicated, is to reduce demand in the broader economy and bring down the ratio of job vacancies to job seekers from its present level of 1.7.
In other words, even before workers try to claw back some of the trillions of dollars that have been siphoned off by the corporations over the past decades because of low wages, the Fed will seek to ensure this movement is crushed. This was the content of Powell’s repeated assertions that the aim of the Fed was to ensure that inflation did not become “entrenched.”
How far Powell is prepared to go was indicated in revealing remarks he made at a Senate hearing on March 3.
Republican senator Richard Shelby asked whether he would follow the example of Fed chair Paul Volcker in the 1980s, who drove up interest rates to record highs, inducing the deepest recession to that point since the 1930s, to drive down wages.
In response, Powell launched into a hymn of praise. After describing Volcker as a great public servant, he concluded: “I would hope history will record that the answer to your question is yes.”
There was another remarkable feature of Powell’s press conference.
With one exception there were no questions on what effect the turmoil in international financial markets would have on the US and Fed policy. Surging commodity prices and the danger of an imminent Russian default have led to parallels being drawn with the collapse of the hedge fund Long-Term Capital Management in 1998 when Russia last defaulted, and warnings that the global financial system faced a possible Lehman moment.
However, the sole questioner who referred to the financial dangers, asking whether there were any concerns about the effect of the sanctions on Russia, was simply brushed aside.
Powell started by declaring that central bankers were in favour of the sanctions but then said he was reluctant to comment any further because sanctions were the province of governments, and the role of central banks was to provide technical assistance.
After an initial dip, the response on Wall Street was favourable.
The Dow rose by more than 500 points, an increase of 1.5 percent. The S&P 500 was up by 2.2 percent, bringing its rise over the last two days to 4.4 percent, the largest such increase since April 2020. The tech-heavy NASDAQ index was up 3.8 percent, its largest increase since November 2020.
Described by the business channel CNBC as a “relief rally,” the rise in the market was largely because the Fed decision did not contain any surprises.
Yesterday’s rate increase and those to follow had long been expected and largely “priced in” to market calculations. Wall Street was no doubt heartened by the fact that FOMC member James Bullard was in a minority of one with his call for an immediate 0.5 percentage point hike.
Yields in the bond market went higher, with the rate on the benchmark 10-year Treasury note rising to 2.18 percent, its highest level since May 2019. This reflects a general expectation that the Fed will not pull back from its present course of higher interest rates because of the war crisis.
The Fed’s policy, however, may have an impact on financial markets.
Speaking to CNBC, David Kelly, chief global strategist as JP Morgan Asset Management, said: “I just want the Fed to maintain some flexibility. In the long run, we have to get rates back to positive levels. But there’s a lot of uncertainty out here, and remember we’ve got a lot of financial assets which are built on the edifice of super low rates, and you just can’t raise those rates up to normal levels overnight and expect nothing bad to happen.”
In other words, the US financial system, inflated to an unprecedented degree by the Fed, which has pumped trillions of dollars into it, could be blown over by the effect of interest rises in the US or by major turbulence in international markets.
The financial oligarchy has continued to prosper to the tune of hundreds of billions of dollars, benefiting from death and destruction, through the direct intervention of the machinery of the capitalist state, of which the Fed is a crucial arm. And as events of the past week have revealed there is no greater supporter of the institutionalize mechanisms for siphoning wealth into the coffers of the financial oligarchy than the Democratic Party.
US Federal Reserve backstops rising corporate debt mountain
As we noted, there was one notable feature of the passage of the $900 billion relief bill through the US Congress earlier this week that demonstrated the absolute loyalty of the Democrats to the Wall Street financial oligarchy.
After abandoning aid for cash-strapped cities and states to provide services and agreeing to a grossly inadequate one-time payment of $600 to most working people, they rose up in arms against at attempt to restrict operations by the Fed to bolster major companies.
Republican Senator Pat Toomey moved to prevent the Fed reviving an operation in which it receives money from the US Treasury, which it then leverages to make ultra-cheap loans to businesses and to buy corporate debt.
The Fed had raised objections when Treasury Secretary Steven Mnuchin called for the winding down of the program in November warning that it could impede its operations to sustain Wall Street and other financial markets.
The importance of that support, which was lifted to new heights following the market freeze in mid-March, has been underscored by data on the level of corporate borrowing this year compiled by the Bank of America and reported in the Financial Times earlier in the week.
US companies have borrowed a record $2.5 trillion in the bond market this year. This has meant that leverage—the ratio between debt and earnings—for investment grade companies has gone to new heights after reaching record levels in 2019.
The actions taken by the Fed in response to the March crisis have provided crucial support for these operations. The Fed took the unprecedented decision to buy investment-grade corporate bonds as well as buying exchange traded funds, including those that tracked riskier assets.
Unlike the purchases of Treasury bonds and mortgage-backed securities, which form the backbone of the Fed’s market intervention—currently running at $120 billion a month more than $1.4 trillion a year—the move into corporate bond purchases involved backing from the US Treasury, which the Toomey measure sought to restrict in the future.
The Fed’s corporate bond intervention after March had an immediate impact. As the Financial Times noted: “Without even purchasing a single bond, prices began to recover, bolstered by the Fed’s support. Investor confidence in corporate America returned and the floodgates opened to fresh corporate debt raising.”
Initially debt was raised to cover the loss of income due to the pandemic. But what the Financial Times called “the largest corporate borrowing spree on record” has developed as companies have used the ultra-low interest rates facilitated by the Fed to build up their cash holdings in order to take advantage of any favourable buying operations.
The significance of the Fed’s intervention into the corporate debt market, which the Democrats were so desperate to ensure continued unimpeded, was underscored by Jonny Fine, the USA head of debt syndicate at Goldman Sachs. He described it as “the most important piece of central bank policymaking I have seen in my career.”
Despite leverage ratios reaching record highs, indicating an escalation of risks, and the number of zombie companies—those where interest payments are higher than profits—climbing close to historic highs, the debt bubble has continued to inflate.
Rating agencies have downgraded ratings and a record number of firms have this year been rated at triple C, one of the lowest levels, and almost double the number last year.
They key factor at work in this extraordinary situation is the role of the Fed.
BLOG EDITOR: THE FED? OR THE BANKSTER-OWNED DEMOCXRAT PARTY???
As Alex Veroude, chief investment officer at Insight Investment, commented to the Financial Times: “The Fed has created an expectation of a bailout.”
He said it almost did not matter “what other indicators or debt or leverage show” and that ‘if you think about it, it is insane. It’s exactly what critics would say capitalism has created. But it’s the reality.”
Increased Fed intervention has also aided the private equity market where vast profits are accumulated through takeover deals and buyouts. The value of private equity deals this year has risen to the highest levels since 2007. Buyouts were worth $559 billion this year, an increase of 20 percent over last year, according to figures compiled by Refinitiv.
When the pandemic struck at the beginning of the year it appeared that the mergers and acquisitions market was going to take a major hit. But the intervention of the Fed provided a boost to this form of financial parasitism, as it did to many others.
Commenting on a rise of private equity deals, Bryce Klemper at the consultant firm McKinsey noted: “Ultimately the lifeblood of private equity is cheap debt. When you have the Fed saying debt will stay cheap for years… the numbers look buoyant.”
There are a number of conclusions to be drawn from these developments.
On the economic front, the growth of debt parasitism makes clear what lies behind the bipartisan refusal in the US to implement the necessary measures to deal with the pandemic because of the impact they would have on the stock market and the financial system more broadly.
Politically, the events of this year have delivered the death blow to whatever remained of the doctrine of the “free market” which has functioned as one of the essential ideological pillars of the capitalist order.
The financial oligarchy has continued to prosper to the tune of hundreds of billions of dollars, benefiting from death and destruction, through the direct intervention of the machinery of the capitalist state, of which the Fed is a crucial arm. And as events of the past week have revealed there is no greater supporter of the institutionalised mechanisms for siphoning wealth into the coffers of the financial oligarchy than the Democratic Party.
As the oligarchs make trillions, Congress offers a pittance for the jobless
The most important fact about the $900 billion coronavirus relief bill that was adopted by the US Congress Monday night is that it is grossly inadequate to meet the vast social needs exposed by the pandemic. Once again, the corporate-controlled two-party political system has revealed its indifference to mass suffering.
Millions of workers thrown out of their jobs by the coronavirus pandemic last spring were cut off federal supplemental unemployment benefits of $600 a week on July 31, under provisions of the CARES Act adopted near-unanimously by Democrats and Republicans in Congress. This cutoff was carried out to enforce the back-to-work drive by big business, which demanded that workers return to their jobs producing profits for the capitalists, regardless of the COVID-19 threat to their health and lives.
People line up during a food distribution event by Food Rescue US, Monday, Nov. 30, 2020, at Rosie’s at Copper Door B&B in the Overtown neighborhood of Miami [Credit: AP Photo/Wilfredo Lee]
While workers were forced back to factories and workplaces, there are 10 million fewer jobs today than at the start of the year. Now, after nearly five months of no benefits, which have wiped out their savings, driven them into poverty and put many in danger of homelessness, longterm unemployed workers will receive $300 a week, limited to 11 weeks, expiring by the middle of March. This pitiful sum will barely keep food on the table, let alone pay the bills that have accumulated since the summer.
Added to that is the $600-per-person one-time check to be sent out to most working people, as well as their children—half the $1,200 checks that were issued by the Treasury last spring and less than the average rent in most American cities. The sum total of these checks, $166 billion, is less than the $190 billion that Amazon CEO Jeff Bezos and Tesla CEO Elon Musk have gained between them since March.
Two billionaires have added more to their personal wealth than the US government sees fit to pay out to all working people in the country, combined, in the midst of the greatest economic crisis since the Great Depression. What a demonstration of the fact that America is a dictatorship of, by and for the billionaires! And to this class reality must be added the fact that Bezos and Musk have enriched themselves from a social catastrophe, a pandemic that has killed 320,000 Americans and 1.7 million people around the world.
The Democrats and Republicans agreed on a $900 billion limit to the “relief” bill. This figure is less than the $1 trillion accumulated by America’s billionaires since March. And it is less than the nearly $1 trillion the federal government is spending on the military and nuclear weaponry, including a record $741 billion budget for the Pentagon alone, passed through Congress by huge margins in both parties.
Compare the colossal sums available to the superrich and the military to the penny-pinching treatment of jobless workers. Two pandemic-related unemployment benefits programs, scheduled to expire next Monday, will now be extended for a mere 11 weeks. The moratorium on evictions, established as a public health measure by the Centers for Disease Control and Prevention, will be extended for a month. A pitiful $25 billion is assigned to the relief of renters and homeowners facing foreclosure—another drop in the bucket.
The Democrats and Republicans in Congress have aimed not to save the lives or livelihoods of American working people, but to safeguard the vast fortunes of the financial aristocracy. The coronavirus relief bill seeks to stave off, for a month or so, an economic collapse that would trigger a massive social upheaval and threaten the existence of the capitalist system as a whole.
It is notable that in her remarks Monday introducing the legislation, House Speaker Nancy Pelosi cited the deadline of December 26 for the expiration of pandemic-related unemployment assistance, calling that “vital.” Politicians of both capitalist parties were concerned that such a cutoff for 12 million people the day after Christmas would trigger widespread outrage in the working class.
The Republicans took their stand on blocking any financial aid for city and state governments that have been devastated by the economic slump accompanying the pandemic and have already eliminated 1.3 million jobs of public employees. Caught in the vise between legal requirements that they balance their budgets and plunging revenues, virtually every major city and most states project even more massive job cuts unless there is emergency federal aid. Democrats abandoned a proposed $1 trillion for the cities and states in favor of minimal aid for schools and public health services.
However sharp their tactical and short-term differences—large numbers of congressional Republicans still refuse to acknowledge the election victory of President-elect Joe Biden—both parties share a common class loyalty. They uphold the interests of the financial oligarchy, for which the coronavirus pandemic has been a money-making opportunity, not a historic calamity.
This was demonstrated in one critical incident in the weekend drive to put together a final version of the relief bill. When Republican Senator Pat Toomey proposed an amendment that would bar the Federal Reserve from reviving lending operations to companies and government agencies authorized under the CARES Act but phased out by the Trump administration, the Democrats rose up in rebellion.
They would not fight for the unemployed, the destitute or those facing eviction and foreclosure. They could care less about the 320,000 dead from COVID-19, or the 400,000 more facing death before widespread vaccinations take place. But when it came to a threat to slow the flow of credit and subsidies to big business, every Senate Democrat rushed to the barricades. Toomey’s proposal was sidetracked, and the Fed’s lending powers remained unimpaired.
Even in the “relief” bill itself, more money goes to business interests than to workers, including $284 billion in loans for the misnamed Paycheck Protection Program (a slush fund for corporations masquerading as small businesses), $20 billion in emergency grants to businesses, $15 billion for the airline industry and $15 billion for the movie theater chains. There is even a provision expanding the tax deduction for the “three-martini lunches” enjoyed by corporate executives.
The New York Times, the main media voice of the Democratic Party, praised the bipartisan congressional bill, headlining its editorial, “This Deal Is Good Enough.” The Democrats and their media mouthpieces portray the bill as a temporary stopgap until the Biden administration takes office January 20, 2021. But Biden has no plans to alleviate the social conditions of masses of workers facing hunger, poverty, homelessness, disease and death in a winter that is likely to be the worst in living memory. He has flatly rejected a lockdown of nonessential businesses and the closure of schools, the only measures that can prevent a tidal wave of death before vaccinations are widely available to the American population.
Working people should not place their hopes in any section of the corporate elite, including the Democratic Party and the Biden administration. The only force that will defend workers’ interests is the working class itself, organized as an independent political movement, fighting to enforce the closure of nonessential workplaces, with full income protection for affected workers and small businesses, until the pandemic is under control, and prepare a nationwide political general strike on the basis of a revolutionary socialist program.
Democrats unite with Trump to enact massive corporate bailout
Barry Grey
In a celebration of bipartisan unity, the Democratic-controlled House of Representatives on Friday approved by voice vote an unprecedented $2.2 trillion bill to bail out the nation’s corporations and banks, while providing limited and temporary aid to workers hit by the economic impact of the coronavirus pandemic.
The House vote followed Wednesday night's 96-0 approval of the measure by the Republican-controlled Senate. President Trump, who had lobbied furiously for the bill, signed it into law only a few hours after it passed the House just after 1:30 p.m.
The $2.2 trillion estimated cost of the bill, equal to more than half of the entire federal budget and far in excess of the $700 billion bank bailout bill passed in 2008, substantially underestimates the actual scale of the government handout to big business. The biggest single slice of the bill, $454 billion to finance guaranteed loans to big corporations, is designed to be leveraged by the Federal Reserve Board into some $4.5 trillion in loans and subsidies.
This amounts to a virtually unlimited backstop for the country's corporate and financial aristocracy, with no real strings attached. The provisions that provide stop-gap assistance to workers who are being laid off in the millions or being ordered to work without any protection against the deadly virus are designed to head off an eruption of class conflict in the short-term, so that the ruling class can buy time and prepare a counteroffensive to place the full cost of the corporate bailout on the backs of the working class. The bill's passage coincides with Trump's push to “open up” the country and force workers back into the plants and workplaces to resume pumping out profits for big business.
The Senate bill was supported by Vermont Senator Bernie Sanders, one of the two remaining candidates for the Democratic presidential nomination, who shelved his “socialist” pretensions to praise the measure as a boon to working people. There was no effort by the “progressive” allies of Sanders in the House, including Democratic Socialists of America members Alexandria Ocasio-Cortez and Rashida Tlaib, to actually oppose the bill.
Ocasio-Cortez railed against the bill during a four-hour floor debate Friday morning, but she failed to follow through with a threat to stall passage of the measure by demanding a roll-call vote. It was a right-wing Republican, Thomas Massie of Kentucky, a member of the ultra-conservative House Freedom Caucus, who sought to delay passage by opposing a voice vote and formally demanding a recorded vote.
With the House in recess, the White House, House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy had agreed that they would avoid requiring House members to appear in person to cast votes, under conditions of lockdowns and travel restrictions in large parts of the country and the rapid spread of COVID-19, and seek instead to get the bill approved by unanimous consent. That would have required only a few representatives to be in attendance.
Massie, however, refused to back down, forcing a quorum call to determine whether more than half of the chamber's 435 members were on hand—as they were. He was, however, unable to get a single House member to back his demand for a roll-call vote, allowing the House leadership to push the bill through on a voice vote. There were only a few scattered “nays” amidst the overwhelming chorus of “ayes.”
Following the vote, Pelosi and McCarthy appeared side by side to hail the passage of the bill, cynically casting it as a humanitarian lifeline to ordinary Americans. Pelosi quoted Pope Francis in praising the measure.
The bill includes two main provisions providing aid to workers. It allocates $300 billion for direct cash payments to more than 150 million households. Those eligible, who do not include undocumented workers, will receive $1,200 per adult or $2,400 per couple, plus an additional $500 for each child. This is a one-time subsidy.
In addition, the bill allocates $250 billion to extend unemployment benefits by 13 weeks and add $600 per week to the benefits provided by the states. This federal supplement is to end in early August for workers filing claims this week. The bill also makes freelance and gig workers eligible for the same unemployment benefits.
Some $500 billion is to be distributed to defray the costs of fighting the coronavirus epidemic and other social needs. That sum includes $207 billion for state, local and tribal governments, school districts and public transit agencies; $130 billion for hospitals and public health facilities and $45 billion for the Disaster Relief Fund of the Federal Emergency Management Agency. Only $16 billion is set aside for hospitals to procure personal protective equipment and ventilators.
The vast bulk of the bill is a massive handout to business, with most of the money by far going to big corporations. In addition to the $454 billion Treasury backstop for Fed loans and grants to corporations, the bill provides $46 billion in targeted loans from the Treasury Department, mainly to the commercial airline industry, with $17 billion carved out for Boeing.
It sets aside $350 billion in loans and aid to small businesses, which are defined as enterprises with up to 500 employees. This could include multi-billion-dollar hedge funds and other financial firms.
There is also $50 billion for an “employee retention tax credit” to companies that keep their employees on the payroll.
There are other windfalls to business buried in the more than 800 pages of the legislation. One that could directly benefit Trump or his associates is the full restoration to the real estate sector of a huge tax break for interest costs and operating losses that was limited by the 2017 tax overhaul.
Restrictions imposed on corporations receiving government aid are largely nullified by caveats. There is a provision barring businesses receiving loans from cutting their employment levels until September 30. However, this is hedged with the phrase “to the extent practicable.”
Corporate recipients are also barred from raising dividends or carrying out stock buybacks to further enrich executives and big investors. This provision, however, can be waived by Treasury Secretary Steven Mnuchin, a multi-millionaire and former CEO of OneWest Bank, where he was sued for illegal home foreclosures.
The bill sets the precedent for the unlimited plundering of social resources to prop up the corporate oligarchy, while providing entirely inadequate assistance to working people devastated by the health and economic impact of a pandemic that could have been either minimized or stopped in its tracks. Multiple advance warnings by health experts were ignored, no preparations for such a crisis were made, and the virus was not taken seriously by the government when it erupted in China.
The bipartisan bill does nothing to mobilize the immense power of technology and industry in a planned and coordinated manner to quickly produce and distribute the ventilators, masks and PPE material needed to save lives, and to construct the ICU units and hospitals and train the staff needed to prevent the health care system from being completely inundated.
It does not provide for the mass testing, contact tracing and extended social distancing needed to contain and defeat the disease. Nor does it order the shutdown of all workplaces and factories not providing essential services, with no loss in income for the workers, and safe conditions under medical supervision for those required to work.
These are demands that workers must raise, along with free and equal care for all those affected by the virus and a moratorium on rent, mortgage payments and personal loan payments for the duration of the crisis.
These critical needs at every point collide with the priorities of the profit system and private ownership of the means of production. The coronavirus pandemic has demonstrated all over the world the life-and-death need for the working class to put an end to capitalism and replace it with socialism.
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