What Millennials don't get about America's economic pie
Fed a steady diet of economic lies by anti-capitalists in our society, the Millennial generation has been tricked into believing that the wealthy get rich only by stealing an oversized slice of America's economic pie. By taking more than their fair share, the narrative goes, greedy corporate CEOs leave little but crumbs for everyone else. Such fallacious thinking is referred to as the zero sum theory of economics, the idea that there's only one finite-sized pie to go around, and that one person taking a large slice means someone else will go hungry.
In truth, America does not have a finite economic pie. Rather, it has a virtually unlimited supply of ever evolving economic pies of varying sizes waiting to be made by enterprising people of every race and every income group.
The biggest such pies are made by high-profile capitalists like Warren Buffett, a Democrat, and Charles Koch, a Republican, both of whom generously share their self-created economic pies not only with a myriad of charitable organizations, but also with hundreds of thousands of well paid employees who eagerly work for their thriving corporate empires.
Millions of other economic pies are made by less famous job-creators, those whose small businesses provide more than 80% of America's private sector employment. Still more economic pies are made by the 160 million people who constitute the backbone of our economy, men and women who earn a slice of their country's widespread prosperity simply by getting up and going to work so they can provide for themselves and their families by working hard and learning to live within their means.
Unfortunately, there will always be some who habitually make bad decisions, financial or otherwise. Frustrated that self-created problems have kept them from participating in the American dream, they bitterly complain that someone else made off with their share of the pie. With nothing but crumbs on their plates, these economically ignorant people are prime targets of the party whose election success depends upon inciting class hatred, the means of gaining political power outlined in an 1848 manuscript titled The Communist Manifesto.
A new poll commissioned by the Victims of Communism Memorial Foundation found that 70% of Millennials are likely to vote for a socialist in 2020. Since socialism-loving Millennials are so obsessed with wealth disparity, here are a few questions for them:
● If wealth disparity is a bad thing, can aggrieved Millennials explain why so many filthy rich Democrats — Nancy Pelosi, John Kerry, Oprah, Al Gore, the Clintons, the Obamas, etc. — selfishly cling to the lion's share of their enviable fortunes, rather than giving away, say, 80% of what they have to the poor?
● Can Millennials explain how corporate CEOs are any more to blame for wealth disparity than the filthy rich Democrats named above?
● Can they explain how society is hurt when wealthy job-creators like Warren Buffett and Charles Koch use their accumulated capital to create even more good-paying jobs?
If Millennials troubled by wealth inequality reflect on those questions, they will (1) stop blaming others and get to work on a plan for earning a share of their country's bountiful prosperity and (2) realize that the party telling them that socialism will make their lives better is playing them for fools.
Millennials might want to read this Jewish World Review article about the unmitigated havoc socialism has inflicted on country after country after country. The next election will determine whether our two-party constitutional republic survives or falls from within to single-party socialist rule.
An electrical engineering graduate of Georgia Tech and now retired, John Eidson is a freelance writer in Atlanta.
"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."
Despite a booming economy, many U.S. households are still just holding on
https://mexicanoccupation.blogspot.com/2019/05/the-recovery-that-never-happened-except.html
"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."
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 Clinton is simply the epitome of the rabid self – a whirlpool of selfishness, greed, and malignance.
more than Hillary and Billary!
FOLLOWING
THE CRIMES OF BILL AND HILLARY CLINTON BECOMES AMERICA’S ROAD TO
REVOLUTION
http://mexicanoccupation.blogspot.com/2016/10/bill-and-hillary-clintons-global.html
‘The Case Against Socialism’:
‘History is Replete With
Examples of Socialism Gone
Awry’
Alex
Wong/Getty Images
Sen. Rand Paul
(R-KY) is out with a new book, The Case Against Socialism, and explained his case and vision in a lengthy exclusive interview on
Sirius XM’s Breitbart News Sunday this weekend.
perpetuating
this whole filthy system, in
which
"Wall Street rules."
Wall Street rules
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.
Decade after financial crisis JPMorgan
predicts next one’s coming soon
"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."
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."
Ten years
since the collapse of Lehman Brothers
Sen. Josh Hawley (R-MO) ripped what he called
the country’s “new aristocratic elite” for engineering the United States
economy against the American middle class.
Recent research revealed that while coastal, elite metropolis cities have flourished in the last decade, small town and rural American communities have suffered depopulation, mass job loss, and continued economic strain since the Great Recession.
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 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.
"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 full significance of the bailouts of the financial
system
and the subsequent provision of trillions of dollars
is clear. It
has brought about the institutionalisation of a
process,
developing over the preceding decades, where the financial
system, with the stock market at its centre, functions
as a
mechanism for the transfer of wealth to the heights of
society.
"It was caused by reckless lending practices,
Wall Street greed, outright fraud, lax
government oversight in the George W. Bush
years, and deregulation of the financial sector
in the Bill Clinton years. The deepest source,
going back decades, was rising inequality. In
good times and bad, no matter which party
held power, the squeezed middle class sank
ever further into debt...
Despite a booming economy, many U.S. households are still just holding on
https://mexicanoccupation.blogspot.com/2019/05/the-recovery-that-never-happened-except.html
"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."
“Our entire
crony capitalist system, Democrat and Republican alike, has become a
kleptocracy approaching par with third-world hell-holes. This is the
way a great country is raided by its elite.” ---- Karen McQuillan THEAMERICAN
THINKER.com
“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
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."
CLINTON MAFIA
AND THEIR BANKSTERS AT GOLDMAN SACHS
WHO IS
TIGHTER WITH THE PLUNDERING BANKSTERS? CLINTON, OBAMA or TRUMP?
The Clinton White House famously abolished the
Glass–Steagall legislation, which separated commercial and
investment banking. The move was a boon for
Wall Street firms and led to major bank mergers that some
analysts say helped contribute to the 2008 financial crisis.
Bill and
Hillary Clinton raked in massive speaking fees from Goldman Sachs, with
CNN documenting a total of at least
$7.7 million in paid speeches to big financial firms,
including Goldman Sachs and UBS. Hillary Clinton made $675,000 from
speeches to Goldman Sachs specifically, and her
husband secured more than $1,550,000 from Goldman speeches. In 2005 alone, Bill Clinton collected over $500,000 from three Goldman Sachs events.
husband secured more than $1,550,000 from Goldman speeches. In 2005 alone, Bill Clinton collected over $500,000 from three Goldman Sachs events.
Hillary Clinton is simply the epitome of the rabid self – a whirlpool of selfishness, greed, and malignance.
It may well be
true that Donald Trump has made his greatest contribution to the nation before
even taking office: the political destruction of Hillary Clinton and her
infinitely corrupt machine. J.R. Dunn
"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."
Only Barack Obama has serviced banksters
more than Hillary and Billary!
“Clinton also
failed to mention how he and Hillary cashed in after his
presidential tenure to make themselves multimillionaires,
in part by taking tens of millions in speaking fees from Wall Street
bankers.”
FOLLOWING
THE CRIMES OF BILL AND HILLARY CLINTON BECOMES AMERICA’S ROAD TO
REVOLUTION
http://mexicanoccupation.blogspot.com/2016/10/bill-and-hillary-clintons-global.html
Transcripts
released by WikiLeaks of Clinton speeches to Wall Street
bankers, for which she received six-figure paychecks, show her praising
the recommendations of the 2010 Simpson- Bowles
deficit-reduction commission, which called for sweeping cuts to
Social Security, Medicare and Medicaid; the elimination of 200,000
federal jobs; a tax on employees’
Media silent on dismissal of DNC suit against
Julian Assange
A federal court ruling last Tuesday
dismissing a Democratic National Committee (DNC) civil suit against Julian
Assange “with prejudice” was a devastating indictment of the US ruling elite’s
campaign to destroy the WikiLeaks founder. It exposed as a fraud the entire
“Russiagate” conspiracy theory peddled by the Democratic Party, the corporate
media and the intelligence agencies for the past three years.
The decision, by Judge John Koeltl of
the US District Court for the Southern District of New York, rejected the smears
that Assange “colluded” with Russia. It upheld his status as a journalist and
publisher and dismissed claims that WikiLeaks’ 2016 publication of leaked
emails from the DNC was “illegal.”
Despite the significance of the ruling,
and its clear newsworthiness, it has been subjected to an almost complete
blackout by the entire media in the US and internationally.
The universal silence on the court
decision—extending from the New York Times (which buried a
six-paragraph report on the ruling on page 25) and the Washington Post,
to “alternative” outlets such as the Intercept, the television
evening news programs and the publications of the pseudo-left—can be described
only as a coordinated political conspiracy.
Its aim is to suppress any discussion of
the court’s exposure of the slanders used to malign and isolate Assange, and to
justify the unprecedented international pursuit of him over WikiLeaks’ exposure
of US war crimes, surveillance operations and diplomatic conspiracies.
The New York Times,
the Washington Post and other corporate outlets have
relentlessly smeared Assange as a “Russian agent” and depicted him as the
linchpin of a conspiracy hatched in Moscow to deprive Democratic Party
candidate Hillary Clinton of the presidency in the 2016 US elections.
Now that their claims have been
subjected to judicial review and exposed as a tissue of lies and fabrications,
they have adopted a policy of radio silence. There is no question that if the
court ruling had been in favour of the DNC, it would have been greeted with
banner headlines and wall-to-wall coverage.
The response exposes these publications
as state propagandists and active participants in the campaign by the
Democratic Party, the Trump administration and the entire ruling elite to
condemn Assange for the rest of his life to an American prison for the “crime”
of publishing the truth.
The editors and senior writers at these
outlets, such as New York Timeseditorial page editor James
Bennet, are in constant contact with the CIA and other intelligence agencies.
Behind the scenes, they work out an editorial line that will advance the
interests of the Wall Street banks and the military-intelligence apparatus. At
the same time, they decide what news and information they will hide from the
American and world population.
The efforts by the mainstream news
outlets to bury the ruling presents a clear example of the type of media
manipulation that has led millions of people to seek alternative sources of
news on the internet, of which WikiLeaks is itself an example.
Judge Koeltl’s decision made plain the
anti-democratic and dictatorial logic of the DNC case against Assange. He
warned: “If WikiLeaks could be held liable for publishing documents concerning
the DNC’s political, financial and voter-engagement strategies simply because
the DNC labels them ‘secret’ and trade secrets, then so could any newspaper or
other media outlet.” This, he stated, would “override the First Amendment”
protection to freedom of the press mandated by the US Constitution.
Koeltl’s finding was an absolute
vindication of Assange and WikiLeaks’ 2016 publications exposing the attempts
by the DNC to rig the Democratic Party primaries against self-declared “democratic
socialist” Bernie Sanders in favour of Hillary Clinton.
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.”
Exclusive
– Rand Paul Makes
‘The Case Against Socialism’:
‘History is Replete With
Examples of Socialism Gone
Awry’
15 Oct 2019Washington, D.C.6
14:35
Sen. Rand Paul
(R-KY) is out with a new book, The Case Against Socialism, and explained his case and vision in a lengthy exclusive interview on
Sirius XM’s Breitbart News Sunday this weekend.
In
the interview, Paul said that from Adolf Hitler’s Nazi regime in Germany to
Josef Stalin’s Soviet Union to Mao Zedong’s China to Fidel Castro’s Cuba to Pol
Pot’s Cambodia to Hugo Chávez and Nicolás Maduro’s Venezuela, socialism has
worse than failed in every single country it has been attempted. And while he
says that modern American socialists like Rep. Alexandria Ocasio-Cortez (D-NY)
and Sen. Bernie Sanders (I-VT) claim “they don’t want that kind of socialism”
that results in “authoritarianism, genocide, and famine,” there is no case
where socialism has ever worked and it always ends up there.
“I
think that’s one of the questions that comes up very quickly is some people are
incredulous you even have to make the case because history is replete with
examples of socialism gone awry, socialism devolving into authoritarianism,
genocide, and famine,” Paul said in a half-hour special that aired Sunday
evening on Breitbart News
Sunday on SiriusXM 125 the Patriot Channel.
“The
20th century really is the history of the failure of socialism, from Hitler’s
Nazi or nationalist socialism to Stalin’s Bolshevik socialism to Mao’s
socialism to Pol Pot. Really, time and time again, millions of people have died
at the hands of despotic rulers,” Paul said. “Some would say today’s socialists
like AOC and Bernie don’t want that kind of socialism, but actually there was a
time when Bernie was very sympathetic to Castro as well as Chávez. This
seems to be the pattern for today’s socialists is that they’re very, very open
to socialism until they find out that it’s replaced by authoritarianism and
until they find out it’s been replaced by poverty.”
Paul
points to Venezuela as a key recent historical example of socialism “gone
awry.”
“This
is true in Venezuela in particular,” Paul said. “All the American left was in
love, even people who didn’t claim to be socialists, were in love Chávez and
claimed he was reducing poverty, but in the end in Venezuela it’s become so
desperate that the average person has lost 20 pounds not because they intended
to but for lack of food. Venezuela was once one of the richest
countries—probably the richest country—in South America. They still have more
oil reserves than Saudi Arabia, but there’s still shortages of food. The common
people can’t eat. You see people like their leader, Maduro—their socialist
leader—becoming more and more overweight; he’s probably added something like 50
pounds while the average person is losing 20 pounds. So I think you see example
after example of socialism not working and devolving into state violence, but I
think even more important though is we now—you think most people would know
that, but what we have now is polls showing people today, especially youth,
think socialism might be a good idea. You have some polls showing over 50
percent of young people thinking we ought to try socialism. So my wife and I
got together and wrote this book thinking gosh, we have to remind them of the
history of socialism, but we also have to remind them that socialism
historically has also devolved into violence.”
Socialism,
Paul argues, has taken over the Democrat Party, fueled by an angry presidential
primary battle that has resulted in a “bidding war” of sorts between that
party’s leaders attempting to outdo each other.
“I
think it’s become a kind of a bidding war among the presidential candidates on
the Democrat side,” Paul said. “One person will offer free college, and the
other person will say, ‘No, free college and free benefits for paid leave,’ and
then another one will say, ‘What about Medicare for All?’ So it just goes on
and on and on, in sort of a bidding war on the left for who can offer more free
stuff. But there needs to be an examination of who really pays for so-called
‘free stuff.’ This is one of the big lies we point out in The Case Against Socialism, is
that Bernie and AOC say, ‘Oh the top one percent will pay for all this.’ But
when you add it up, there’s just not enough money. What they have proposed on
the top one percent would maybe bring in $50 billion, but their spending desires
are closer to $60, $70, or even $80 trillion. So there’s definitely a mismatch
and a math problem for these people.”
In
addition to the mathematical and historical issues with socialism, Paul argues,
current socialists using Scandinavian countries like Denmark and Sweden to
argue socialism works are false analogies.
“But
even worse, they point to the so-called socialism of Scandinavia and say, ‘Oh
yeah, we used to like Chávez, we used to like Castro, we used to like the
Sandinistas, but now what we really like is Scandinavian socialism,’” Paul
said. “So we examine that, my wife and I did a great deal of research and we
examined Scandinavian socialism and what we came up with is interestingly they
are not socialist. They have private property; most of the businesses are owned
privately. They have a private stock exchange. In fact, the prime minister of
Denmark when Bernie kept saying, ‘Denmark is this great socialist nation,’ the
prime minister actually came out and said, ‘Bernie, you need to pipe down; we’re
not a socialist country.’ In fact, he almost got alarm in his voice because he
was worried people might not come there to do business anymore because they
might think they were a socialist nation. Most of the indexes of freedom,
trade, and capitalism actually rank the Scandinavian countries quite high. So
really what Bernie is selling is a bill of goods here. They will then argue
that the Scandinavian countries have a lot of free stuff—they do have a lot of
free stuff, welfare, and state goodies that come with big government, but the
interesting thing with Scandinavia is it’s much different than Bernie and AOC
say. What happens in Scandinavia is the working class pay a huge amount of
taxes. The working class pay a 25 percent sales tax on everything, including
food, and the working class and middle class also pay income tax, whereas many
in our country on the lower end are excluded from the income tax, whereas what
you find over there is even at $60,000 you have a 60 percent income tax. So,
really, I think it’s important that we explode the myths of American socialists
that Scandinavia is socialist but also explode the myth that you can have all
this free stuff and the only people that pay are the top one percent in
America. There’s just not enough money, and it’s just not true.”
Paul
is troubled by a rising interest in socialism among America’s youth, as
evidenced by some increased support for the radical and failed ideology in
recent polling, and is concerned that American young people are not learning
this history in school. While he thinks some of it is just a natural tradition
of Americans being more leftist when they are young and becoming more
conservative as they get older, he is concerned that some of what is happening
is due to a lack of education on the historical failures of socialism and
misconception about what socialism really entails—government control of the
means of production.
“I
think there’s always been a trend for young people to be more liberal—or more
open to socialism—you know the old saying was, ‘If you don’t believe in liberal
policies before age 30 you don’t have a heart, but if you don’t believe in
conservative polices after age 30 you don’t have a brain,’” Paul said. “There
is some truth to it. When you’re younger, you live on your parents’ dole. In
many ways, you are a dependent who has not necessarily seen the working world
or seen what it’s like and seen that paying taxes is necessary. So I do think
people become more conservative over time. It’s also true that the polls that
show younger people and millennials leaning toward socialism, when they ask
these young people ‘What is socialism?’ only 16 or 17 percent of them can
actually answer what socialism is and socialism is traditionally defined as the
state owning the means of production and you don’t have private property—there
is collective ownership of things. For most young people, if they’re just
reading one sentence on Twitter, I guess they’re not reading much history. Some
of it is a misconception, but some of it also is a function of our schools in
that I think there’s a sort of unified groupthink in schools that teaches kids
that things are sort of unfair out there and that it’s a rotten world and the
government is going to make things more equal and more fair. So I think some of
them want to see government-enforced equality, but we make the case in The Case Against Socialism that
if you want equality of outcomes you would have to have equality police.”
Paul
further explains the left’s hypocrisy when it comes to a “fairness police” that
he says would be necessary under a socialist system to ensure “equal outcome”
by noting that it cuts against core American beliefs of “equal protection under
the law.”
“You
would have to have a fairness police that is going to show up with truncheons
to make people fair again because any time you sort of advocate for equal
outcome you basically push to make everyone equal all the time, the world is
not that way,” Paul said. “You have unequal talents, some people work harder
than others, some people are luckier, some people are taller, some people are
smarter, some people are faster—there’s all kinds of reasons why there are not
equal outcomes. But the irony is if you want to have equal outcomes the law and
the government actually has to treat people unequally. You think the left would
think this through, and they would realize that the whole idea of equal
protection under the law—that everybody should be treated the same—is a
principle that the left prided themselves in and almost everyone prides themselves
in now and yet if you have equal outcomes you won’t have equal protection under
the law. You actually will have to law that will treat people in an unequal
way.”
Part
of why Paul said there is a rush to socialism in America’s youth is a legitimate
concern with political corruption in America, something grassroots movements on
both the left and the right have felt for many years. There is, he said, a
political, cultural, and financial elite that seems to ordinary Americans to be
above the rest of society when it comes to the law and because of that
corruption people challenge the system—on both sides of the political aisle. He
is concerned, however, that the left’s pandering with socialism would only make
the system worse because it would empower more cronyism and more corruption if
ever implemented, whereas conservatives’ vision of less government cuts into
the ability of bad actors to act badly.
“I
think you’ve hit the nail on the head. Both left and right, the Tea Party and
Occupy Wall Street movement, they’re all sort of unhappy about—myself
included—about crony capitalism, about people who manipulate government and
manipulate the law to have an unfair advantage,” Paul said. “It’s not just that
they’re selling something that people want and have become successful like Sam
Walton, it’s things like some of the big pharmaceutical companies and things
that come to Washington and manipulate government to enrich themselves and then
abuse the rules to enrich themselves more and more. So yes I think both sides—both
right and left—see this. I remember when the bankers were bailed out in 2009,
these very wealthy bankers and very wealthy banks that had made rotten
decisions. In the end, the poor homeowner was kicked out of his house or her
house but the banks were bailed out. So the Occupy Wall Street movement was
offended by that and so was the Tea Party. The real difference is the answer.
It’s one thing to be angry about crony capitalism. For those on the left, it’s
because crony capitalism is a failure they think we should try socialism. For
those of us on the right, or the Tea Party movement, we look at crony
capitalism and say that’s too much government—that’s people abusing
government.”
Paul
added that the right’s vision is more effective in solving the problems of
corruption because it takes the power away from that handful of people who
would wield it dishonorably. And that is exactly the problem with socialism, he
said, as evidenced by all its historical failures: Bad actors rise up and
inevitably wield said power unfairly in what ends up benefitting the few at the
top and screwing over the many throughout society.
“We
decided that what we wanted was less government, more of a government
restrained and restricted and limited by the Constitution and less crony
capitalism in a sense that what we wanted to inject was more of a free market
and more voluntary transactions,” Paul said. “So it is sort of ironic that both
right and left are both motivated by the same problem we see, and they come up
with very different solutions and I think that’s why the book we have The Case Against Socialism is
so important is because it’s about choices. It’s about voters in our country
who get to think about what kind of economic system we want. And I guess our
point in the book is we don’t think it’s an accident that throughout history
every time socialism has been tried it has wound up in genocide and famine. The
stories from Mao’s China, the stories from Pol Pot in Cambodia, the stories
currently from Venezuela, I mean they are horrifying stories. People are eating
their pets in Venezuela. People need to know this. The other side will complain
and say that’s not real socialism, that’s a bunch of kleptocrats. And yet
that’s the people who are elected, that’s their party label—they are from the
socialist party—and again the apologists for socialism say ‘oh that’s not what
we really want. These people now are just thugs.’ But why is it time and time
again socialism devolves into thuggery? So, I think this is an important and timely
book and I hope it will get the readership necessary to shape and influence
some of the next generation.”
Paul
added that he’s looked at experts and historical analysis to question whether
socialism inevitably ends up in authoritarian regimes intent on genocide and
famine, or if that just keeps happening accidentally. He argues that the
experts like Austrian economist Friedrich Hayek have examined this very
question and found that under socialism, ruthlessness prevails in leadership
and violence becomes necessary for implementation.
“People
keep getting back to this idea of whether it’s an inevitability to have this
kind of authoritarianism and violence or whether it’s an accident,” Paul said.
“Hayek and others looked at this, and they said it shouldn’t be looked at as a
one-off or accidental in history that socialism devolves into violence because
if you ultimately want to collectivize the farms as Mao did or Stalin did, if
you want to take property from people, there is a point at which they will
resist. Really, the leader that exhibits that most ruthless character is the
one who’s able to take the land because it ultimately does require, as Lenin
and others said, you’ve got to break a few eggs to make an omelette. The thing
is is ultimately this is what happens. You end up choosing a few leaders; they
get selected by the rest of the socialists because they are the most ruthless
and willing to actually use the violence necessary to take the property. But
really, our kids need to learn this history and read about it. Pol Pot was not
that long ago in Cambodia with the killing fields and just hundreds and
hundreds if not thousands of bodies piled in mass graves. In a very short
period of time they expelled virtually everybody from the cities and ultimately
millions of people were killed. This is the kind of thing that people say, ‘Oh
that’s not what I want.’”
But,
Paul argues, if Americans vote for socialist leadership, what ultimately
happens next is evident throughout history.
“But
if you’re for socialism, if you’re for the collectivization of ownership, if
you believe that the collective is more important than the individual,
ultimately this is what happens,” Paul said. “If you don’t think the individual
is important and you disdain individual rights, then it’s sort of like it’s
okay to have drone-like slaves because then what you’re about is the hive and
you’re not really concerned about the individual. Our country was founded on
something completely different, individual liberty. Our bill of rights is directed
toward individuals not toward classifications and these are important
traditions but I think it’s not being taught in school. Today’s sort of Twitter
society is short attention span and not reading. I think it’s important to have
the ammunition out there and we’re hoping that The Case Against Socialism will be that
ammunition to help people make an informed decision and hopefully prevent
America, as President Trump said, from ever becoming a socialist nation.”
Before
Paul’s interview with Breitbart News, he had appeared on The View opposite, among
others, Ana Navarro—the frequent critic of President Donald Trump—who shut Paul
down when he was explaining what socialism was and why it was bad and why it
failed in Venezuela. Paul, when asked about Navarro’s silencing of him, told
Breitbart News that exposing socialism does not fit Navarro’s “narrative” of
hateful opposition to President Trump—something shared by the other hosts
of The View—so
she would rather just not discuss these inconvenient truths at all.
“It
doesn’t really fit their narrative,” Paul said. “People like Ana Navarro hate
President Trump and they blame everything and they blame the poor dialogue and
crassness in Washington and crass dialogue between right and left—they blame it
all on the president, and yet really people like Ana Navarro and others
on The View who
shout and scream over everybody, really they’re adding to that poor dialogue.
They’re setting a poor example for everyone with the sort of yelling and
screaming, but the particular point we were trying to explain to her was the
leaders in Venezuela are socialist. The leaders of their party identify as the
socialist party. She was like, ‘No they’re thugs, they’re thugs. They’re not
socialists.’ And I tried to calmly make the point to her that, well, they are
socialists and they are thugs—and that’s precisely our point. When the
government is controlled centrally by a few people, by one political party—the
socialists—and you get central planning where you don’t have the freedom to
decide what and how much to produce and consumers don’t get to choose, when a
few people control things, you have much more of a susceptibility to
kleptocracy, to thieves, to stealing and lying and enriching yourselves.”
Paul
added that leftist anti-Trump personalities like Navarro “demean themselves” by
opposing allowing “intelligent debate” on these issues.
“That’s
what keeps happening [socialism failing] over and over again, and that’s what
she doesn’t understand and so many on the left refuse to understand is that
there is a tendency or maybe even something that is inherent to socialism that
leads to thuggery,” Paul said. “People like her don’t want to see the lessons
of Mao, the lessons of Stalin, the lessons of Hitler—they weren’t accidents of
history, they were the natural conclusion of socialism. Maduro and Chávez are
the natural conclusion to socialism. Then she was like, ‘Oh, President Trump is
misusing this and saying that if the Democrats win you’ll get socialism.’ Then
I said, and I don’t think she liked it, I said, ‘You know, if you vote for a
socialist you might get socialism.’ And it’s like really? That sounds obvious
to me. Bernie says he is a socialist—I think we’d get socialism [if he wins].
AOC says she’s a socialist. I would think we might socialism if these people
ever get in charge of the government. So it’s sort of a bizarre situation, but
they sort of demean themselves by being intolerant of allowing intelligent
debate.”
While
much of the interview focused on the issues of socialism and Sanders in
particular, Paul added that the new Democrat frontrunner Sen. Elizabeth Warren
(D-MA) is really no different than Sanders when it comes to socialist
ideology—just that she’s better at hiding it from the public than Sanders which
is why she’s ascendant in the polls.
“I
think there’s really not a dime’s worth of difference between Bernie Sanders
and Elizabeth Warren,” Paul said. “They stand for the same policies and
ultimately hers is a socialist platform also. You’re right, though, she’s like
most liberals of the last several decades where they were always smart to try
to hide their socialism from the public. And I think in the end, most of the
major policies that have come out—Elizabeth Warren has rushed to support. So I
don’t know that you can claim, maintain, or support that there’s much of a
difference in policies between Bernie Sanders’ socialism and Elizabeth Warren.”
What’s
particularly troubling, though, Paul said, is the evidence that socialism has
won the day inside the Democrat Party as a whole. Ocasio-Cortez is now calling
the shots and really running the House of Representatives now, not Speaker
Nancy Pelosi, as evidenced by the Democrats’ lunging towards impeachment of
President Trump. How the media and political class have gone after President
Trump, versus the kid glove treatment of former Vice President Joe Biden and
his son Hunter Biden, is exactly the kind of unfair double standard that Paul
argues leads people to question the fairness of the political and economic
system in America.
“I
think they’re off the reservation now as far as impeachment goes,” Paul said.
“[Pelosi] announced she was for it before she saw any transcripts of the phone
call. And, the way I see it is I don’t think there’s anybody from either party
who hasn’t threatened Ukraine’s aid and told them they have to investigate
corruption. [Former Vice President Joe] Biden was there threatening it years
ago, if they didn’t quit investigating his son’s company—the company that was
paying him $50,000 a month—I think most Americans, when they hear that, just on
the face of it, that some 30-year-old kid is on the board of an international
company getting $50,000 a month, and his dad is traveling to Ukraine all the
time, and his dad sort of tells them, ‘Guess what, you get no more money unless
you fire this prosecutor.’ The prosecutor has actually now testified that he
was investigating the company that was paying Hunter Biden. It just doesn’t
pass the smell test. People are going to wonder and say, ‘Well, Pelosi is going
to impeach the president over accusations he did something like this even
though it doesn’t sound like he was willing to trade or do anything.’ But even
if the accusations were accurate, they sound very similar to what Biden’s been
accused of but yet nobody blinked an eye or accused Biden of doing something
untoward that he should be impeached for. But I think the American people
ultimately do want fairness, and they’re going to balk at treating Trump
differently than Biden is treated. So if the American people perceive the
actions of both to be similar, but that the Democrats are only willing to go
after a Republican, I think it ends up becoming a partisan thing that I think
people in the end are going to think was motivated by politics not by principle
or justice.”
Paul
added that this double standard is exactly why Americans on both sides of the
aisle are “disturbed” by America’s political, financial, and cultural elites.
He also explained that the ultimate irony of all this kleptocracy by the Bidens
is that it has cleared the way for the rise of Warren, a socialist herself, and
the question is whether she will be able to sufficiently hide her socialism.
“People
get disturbed by it on both sides,” Paul said. “Really, they get disturbed by
what’s going on. But, I think really that ultimately it’s going to be very,
very hard and the irony is that while they thought this was going to bring
Trump down, the irony is this is bringing Biden down. His numbers were already
falling because he doesn’t seem to be on the ball as much as he used to, he
doesn’t seem to have maybe what it takes to intellectually get through the
questions of the day during the debates, and so I think that was already
bringing him down but the association with the scandal and his son and all the
money that went to his son, I think that’s what’s bringing him down. I agree
with you that Elizabeth Warren is surging to the top, and the question will be:
Will she run away from all the stuff she supports with Bernie, ultimately, or
will the tag of socialism and the stain of socialism stick to her as well? We
plan on being out there and talking about socialism over the next year and
making the actual positions of Elizabeth Warren and Bernie Sanders are well
known and that the disaster of socialism is something our kids will hopefully
know enough about to resist it.”
LISTEN TO
RAND PAUL ON BREITBART NEWS SUNDAY:
"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
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.
Decade after financial crisis JPMorgan
predicts next one’s coming soon
Published time: 13 Sep,
2018 14:00
© Ole Spata / Global Look
Press
·
With the 10th anniversary approaching of the catalyst
for the last major global stock market crash – the Lehman Brothers’ collapse –
strategists from JPMorgan are predicting the next financial crisis to
strike in 2020.
Wall Street’s largest investment bank analyzed the
causes of the crash and measures taken by governments and central banks across
the world to stop the crisis in 2008, and found that the economy remains
propped up by those extraordinary steps.
According to the bank’s analysis, the next crisis will
probably be less painful, however, diminished financial market liquidity since
the 2008 implosion is a “wildcard” that’s tough to game out.
“The main attribute of the next crisis will be severe
liquidity disruptions resulting from these market developments since the last
crisis,” the reports says.
Changes to central bank policy are seen by JPMorgan
analysts as a risk to stocks, which by one measure have been in the longest
bull market in history since the bottom of the crisis.
JPMorgan’s Marko Kolanovic has previously concluded
that the big shift away from actively managed investing has escalated the
danger of market disruptions.
“The shift from active to passive asset management,
and specifically the decline of active value investors, reduces the ability of
the market to prevent and recover from large drawdowns,” said JPMorgan’s Joyce Chang and Jan Loeys.
The bank estimates that actively managed accounts make
up only about one-third of equity assets under management, with active
single-name trading responsible for just 10 percent or so of trading volume.
JPMorgan referred to its hypothetical scenario as
the “great liquidity crisis,” claiming that the timing of
when it could occur “will largely be determined by the pace of central
bank normalization, business cycle dynamics, and various idiosyncratic events
such as escalation of trade war waged by the current US administration.”
*
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."
Ten years
since the collapse of Lehman Brothers
Ten years ago on this day, the global
capitalist system entered its most far-reaching and devastating crisis since
the Great Depression of the 1930s. A decade later none of the contradictions
which produced the financial crisis has been alleviated, much less overcome. Moreover,
the very policies carried out to prevent a total meltdown of the financial
system, involving the outlay of trillions of dollars by the US Federal Reserve
and other major central banks, have only created the conditions for an even
bigger disaster.
The immediate trigger for the onset of
the crisis was the decision by US financial authorities not to bail out the
158-year-old investment bank Lehman Brothers and prevent its bankruptcy. There
is considerable evidence to suggest that this was a deliberate decision by the
Federal Reserve to create the necessary conditions for what they knew would
have to be a massive bailout, not just of a series of banks but the entire
financial system.
The previous March, the Fed had
organised a $30 billion rescue of Bear Stearns when it was taken over by JP
Morgan. But as the Fed’s own minutes from that time make clear the Bear Stearns
crisis was just the tip of a huge financial iceberg. The Fed noted that “given
the fragile conditions of the financial markets at the time” and the “expected
contagion” that would result from its demise it was necessary to organise a
bailout. As Fed chairman Ben Bernanke later testified, a sudden failure would
have led to a “chaotic unwinding” of positions in financial markets. The bailout
of Bear Stearns was not a solution but a holding operation to try to buy time
and prepare for what was coming.
While the demise of Lehman was the
initial trigger, the most significant event was the impending bankruptcy,
revealed just two days later, of the American insurance firm AIG, which was at
the centre of a system of complex financial products running into trillions of
dollars.
Due to the interconnections of the
global financial system, the crisis rapidly extended to financial markets
around the world, above all across the Atlantic to Europe where the banks had
been major investors in the arcane financial instruments that had been
developed around the US sub-prime home mortgage market, the collapse of which
provided the immediate trigger for the crisis.
The value of every crisis, it has been
rightly said, is that it reveals and starkly lays bare the underlying
socio-economic and political relations that are concealed in “normal” times.
The collapse of 2008 is no exception.
In the twenty years and more preceding
the crisis, particularly in the aftermath of the liquidation of the Soviet
Union in 1991, the bourgeoisie and its ideologists had proclaimed not only the
superiority of the capitalist “free market” but that it was the only possible
socio-economic form of organisation. Basing themselves on the false
identification of the Stalinist regime with socialism, they maintained that its
liquidation signified that Marxism was forever dead and buried. In particular,
Marx’s analysis of the fundamental and irresolvable contradictions of the
capitalist mode of production had proved to be false. According to the central
foundation for what passed for theoretical analysis, the so-called “efficient
markets hypothesis,” a financial meltdown was impossible because with the
development of advanced technologies all information had been priced into
decision making and so a financial collapse was impossible.
Rarely have the nostrums of the
bourgeoisie and its ideologists been so graphically exposed.
Two days after the crisis erupted,
President George W. Bush declared “this sucker’s going down.” Later, the high
priest of capitalism and its “free market,” the now bewildered former head of
the US Federal Reserve Alan Greenspan, testified to the US Congress that he had
been completely confounded because markets had failed to behave according to
his “model” and its assumptions.
The crisis also exposed in full glare
another of
the central myths of the capitalist
order—that
the state is somehow a neutral or independent
organisation committed to regulating
social
and economic affairs in the interests of
society
as a whole.
It confirmed another central tenet of
Marxism, expounded more than 170 years ago, that “the executive of the modern
state is but a committee for managing the common affairs of the bourgeoisie.”
This was exemplified in the naked class
response to the financial meltdown. The plans, already developed by the Fed and
other authorities to cover the losses of the financial elite, whose speculative
and in many cases outright criminal activities had sparked the crisis, were put
into operation.
In the lead-up to the presidential
election of November 4, Wall Street swung its support behind Obama—with the
media promoting him as the candidate of “hope” and “change you can believe
in”—over McCain. The Democrats had committed themselves to the bailout,
securing the passage of the $700 billion TARP asset-purchasing program through
Congress. This massive increase in the national debt of the United States was
authorised with virtually no debate.
Of course, a new political fiction was
immediately advanced. It was necessary to bail out Wall Street first, the
public was told, in order to assist Main Street. However, this lie was rapidly
exposed. The crisis was the starting point for a massive assault on the working
class. While bankers and financial speculators continued to receive their
bonuses, millions of American families lost their homes. Tens of millions were
made unemployed.
In the following year, the rescue
operation organised by the Obama administration of Chrysler and General Motors,
with the active and full collaboration of the United Auto Workers union,
resulted in the development of new forms of exploitation, above all through the
two-tier wages system, paving the way for even more brutal systems such as
those pioneered by Amazon.
This was the other side of a Wall Street
bailout—a massive restructuring of class relations in line with the edict of
Obama’s one-time chief of staff Rahm Emanuel to “never let a serious crisis go
to waste” because it provides “an opportunity to do things you think you could
not do before.”
The same class response was in evidence
elsewhere. After the initial effects of the crisis had been overcome, the
European bourgeoisie initiated an austerity drive forcing up youth unemployment
to record levels. In Britain workers have endured a sustained decline in real
wages not seen in more than a century.
The most egregious expression of this
class logic has been seen in Greece with the imposition of poverty levels last
seen in the Great Depression of the 1930s. The numerous bailout operations were
never aimed at “rescuing” the Greek economy and its population but directed to
extracting the resources to repay the major banks and financial institutions.
The crisis revealed the real nature of
bourgeois democracy. The euro zone and the European Union were exposed as
nothing more than a mechanism for the dictatorship of European finance capital.
As one of the chief enforcers of its diktats, the former German finance
minister Wolfgang Schäuble, declared, in the face of popular opposition,
“elections cannot be allowed to change economic policy.”
As the working class in every country
confronts stagnant and declining wages, falling living standards, the scrapping
of secure employment and attacks on social services, leading to mounting health
and other problems, innumerable reports and data chart the development of a
global system in which wealth is siphoned up the income scale.
According to the latest Wealth-X World
Ultra Wealth Report some 255,810 “ultra-high net worth” individuals, with a
minimum of $30 million in wealth, now collectively own $31.5 trillion, more
than the bottom 80 percent of the world’s population—comprising 5.6 billion
people. Overall the wealth of this cohort increased by 16.3 percent in 2016–17,
rising by 13.1 percent in North America, 13.5 percent in Europe and 26.7
percent in Asia.
The full significance of the bailouts of
the financial system and the subsequent provision of trillions of dollars is
clear. It has brought about the institutionalisation of a process, developing
over the preceding decades, where the financial system, with the stock market
at its centre, functions as a mechanism for the transfer of wealth to the
heights of society.
Who
Can We Blame For The Great Recession?
|
This year marks the tenth anniversary of
the “Great Recession” and the media are trying to determine if we have learned
anything from it. The Queen visited the London School of Economics after the
“Great Recession” to ask her chief economists why they hadn’t seen this
disaster coming. They told her they would get back to her with an answer. Later,
they wrote her a letter saying that the best economic theory asserts that
recessions are random events and they had successfully predicted that no one
can predict recessions.
Still, George Packer, a staff writer at
the New Yorker magazine since 2003, thinks he knows more than the LSE
academics. He wrote the following in the August 27 print issue:
"It was
caused by reckless lending practices, Wall Street greed, outright fraud, lax
government oversight in the George W. Bush years, and deregulation of the
financial sector in the Bill Clinton years. The deepest source, going back
decades, was rising inequality. In good times and bad, no matter which party
held power, the squeezed middle class sank ever further into debt...
"In
February, 2009, with the economy losing seven hundred thousand jobs a month,
Congress passed a stimulus bill—a nearly trillion-dollar package of tax cuts,
aid to states, and infrastructure spending, considered essential by economists
of every persuasion—with the support of just three Republican senators and not
a single Republican member of the House."
Typically, journalists will defer to an
expert on matters in which they aren’t trained, which is most subjects. But
Packer didn’t bother to ask an economist as the Queen did. Had he done so, he
would have received the same answer from mainstream economists – recessions are
random events and can’t be predicted. If economists knew the causes of
recessions they could predict them when they see the causes present.
So where did Packer get his “causes” for
the latest recession? In the classic movie Casablanca, the corrupt and lazy
policeman Renault is “shocked” to find gambling going on at Rick’s place and
orders the others to round up the “usual suspects.” That’s what Packer does.
People have blamed greedy businessmen and bankers for crises for centuries.
Since the rise of socialism they added capitalism and the politicians who
support it. The only new suspect in the socialist line up is inequality, even
though inequality has varied little since 1900 and is near its record low since
then.
Had Packer consulted the University of
Chicago Booth School of Business, he wouldn’t have received much help. Keep in
mind that mainstream economists think recessions are random events. After the
storm subsides, they can identify likely contributors for the latest disaster,
but those differ with each recession. Recently Chicago Booth queried experts
for the top contributing factors of the latest recession. The top answer was flawed regulations, followed by underestimating risk and
mortgage fraud.
The “flawed regulations” excuse assumes
that bitter bureaucrats who write the regulations are wiser than the actual
bankers and ignores the fact that banking is one of the most regulated
industries. One analyst described the recent recession as the perfect storm of
regulations so massive no one group could understand them all and many of them
working against other regulations.
Blaming “underestimated risk” is good
Monday morning quarterbacking. Everyone has 20/20 hindsight, or 50/50 as
quarterback Cam Newton said. The same economists don’t explain why banks that
took similar risks didn’t fail or why what seems risky now didn’t seem so risky
in 2007. As for fraud, the amount was negligible and is always there; why did
it contribute to a recession this time? Sadly, the correct answer to what
caused the Great Recession– “Loose monetary policy” – came in next to last
among Chicago Booth’s experts.
Perspective is vital. A magnifying glass
can make a lady bug look terrifying. Let’s pull back and put the latest
recession in a broader context. There have been 47 recessions/depressions since
the birth of the nation. Before the Great Depression economists called crises
“depressions” and since then they are “recessions.” They’re the same thing;
economists thought “recession” was less scary.
Recessions before the Great Depression
were mild compared to it. It took the Federal Reserve and the US government
working together trying to “rescue” us to plunge the country into history’s
worst economic disaster. Journalists like Packer have convinced people that the
Great Recession of 2008 was second only to the Great Depression, but if we
combine the recessions of 1981 and 1982, separated only by a technicality and
six months, that recession would have been worse. The Fed did not reduce
interest rates after that recession because it was still battling the inflation
it has caused in the 1970s, yet the economy bounced back and recovery lasted
almost a decade.
I want to drive home the fact that the
three worst recessions in our history assaulted us after the creation of the
Federal Reserve in 1913.
The best explanation of the causes of
recessions, because it enjoys the greatest empirical support, is the Austrian
business-cycle theory, or ABCT. Ludwig von Mises and Friedrich Hayek are most
famous for refining and expounding it, but the English economists of the
Manchester school were the first to write about it. They discovered that
expansions of the money supply through low interest rates motivated businesses
to borrow and invest at a rapid rate. That launches an unsustainable boom
because businesses are trying to deploy more capital goods than exist. Banks
raise rates to rein in galloping inflation and the boom turns to dust.
Banks don’t control interest rates today
as they did in the past. That’s the Federal Reserve’s job. The Fed generally
reduces interest rates or expands the money supply through “quantitative
easing,” or buying bonds from banks, in order to force an economy in the ditch
to climb out. The recovery from the Great Recession remained on its
feet for so long because the Fed’s policy of paying interest on reserves at
banks soaked up much of the new money it created out of thin air. Also,
much of the money went overseas to buy imports or as investments.
The lesson – don’t ask medical advice
from your plumber or economics from a journalist. And if you ask an economist,
make sure he follows the Austrian school.
NO PRESIDENT IN HISTORY SUCKED IN MORE
BRIBES FROM CRIMINAL BANKSTERS THAN BARACK OBAMA!
“Records show that four out of Obama's
top
five contributors are employees of
financial
industry giants - Goldman Sachs
($571,330),
UBS AG ($364,806), JPMorgan Chase
($362,207) and Citigroup ($358,054).”
OBAMA and HIS BANKS: THEIR PROFITS, CRIMES
and LOOTING SOAR
This was not because of difficulties in
securing indictments or convictions. On the contrary, Attorney General Eric
Holder told a Senate committee in March of 2013 that the Obama administration
chose not to prosecute the big banks or their CEOs because to do so might “have
a negative impact on the national economy.”
Watch–Josh
Hawley Rips ‘Aristocratic Elite’ for Engineering U.S. Economy Against American
Middle Class
JOHN BINDER
16 May 2019184
6:00
Sen. Josh Hawley (R-MO) ripped what he called
the country’s “new aristocratic elite” for engineering the United States
economy against the American middle class.
For his first major speech on the
Senate floor, Hawley slammed the “big banks, big tech, big multi-national
corporations, along with their allies in the academy and the media,” whom he
said have created an economic structure in which they, the well-connected,
benefit while the American working and middle class increasingly struggle to
get ahead.
Hawley said:
The chattering class often tells us
that all of this—the jobs, the despair, the loss of standing—is the result of
forces beyond anyone’s control. As if that’s an
excuse to do nothing. But in fact, it’s not true. [Emphasis added]
Today’s society benefits those who
shaped it, and it has been shaped not by working men and women, but by the new
aristocratic elite. Big banks, big tech, big
multi-national corporations, along with their allies in the academy and the
media—these are the aristocrats of our age. They live in the United States,
but they consider themselves citizens of the world. [Emphasis added]
They operate businesses or run
universities here, but their primary loyalty is to their own agenda for
a more unified, progressive—and profitable—global order. These modern
aristocrats often claim to be a meritocracy. And many of them truly believe
they are. What they don’t see, or won’t acknowledge, is that the society they
have built works mainly for themselves. They’ve effectively run this
country for decades. And their legacy is national division and national decline.
[Emphasis added]
Defending the needs of the American
middle class against a growingly powerful “aristocratic elite” is the “crisis
of our time,” Hawley asserted.
“After years of sacrifice, the great
American middle is being pushed aside by a new, arrogant aristocracy,” Hawley
said. “The new aristocrats seek to remake society in their own image: to
engineer an economy that works for the elite but few else, to fashion a culture
that is dominated by their own preferences.”
“This town has embraced a politics
of elite values and elite ambition rather than building opportunities to thrive
in the great and broad American middle. This has left middle America—the great
American middle class—under siege: battling the loss of respect and work, the
decline of home and family, an epidemic of loneliness and despair,” Hawley
continued. “This is the crisis of our time.”
Specifically, Hawley blasted
multinational corporations for outsourcing American middle class jobs overseas
— wreaking economic, cultural, and social havoc on rural and small town American
communities in the process — and both political establishments for treating
American citizens as mere consumers.
“In places like the one where I grew
up, in middle Missouri, good-paying jobs that you can raise a family on are
going away,” Hawley said. “The jobs go overseas or south of the border or to
cities on the coasts. And once-vibrant towns decline, taking with them the
network of schools and neighborhoods and churches that make up middle class
life.”
Hawley continued:
Rural America has been particularly
hard hit. Rural Americans’ life expectancy has not just leveled off,
its actually dropped, and for women without a high school degree, that drop has
been staggering. In some rural places, residents struggle with outright
deprivation. [Emphasis added]
My home state contains some of the
poorest counties in America, all in rural places that once boasted thriving
small towns. As those communities struggle,
want sets in. But the crisis reaches well beyond economics. [Emphasis added]
The message that Washington has sent
our whole society is loud and clear: our elites are the people who matter—and those who aspire to join them. Everyone else is
unimportant or backwards. And millions of Americans are left with
the sense that the people who run this country view them with nothing but
contempt and value them as nothing but consumers. [Emphasis added]
Indeed, working and middle class
Americans have been hit the hardest from decades-long political consensus
between the Republican establishment and Democrats.
Recent research revealed that while coastal, elite metropolis cities have flourished in the last decade, small town and rural American communities have suffered depopulation, mass job loss, and continued economic strain since the Great Recession.
For instance, by 2016, elite
zip codes had a surplus of 3.6 million jobs, which is more than the combined
bottom 80 percent of American zip codes. While it only took about five years
for wealthy cities to replace the jobs lost by the recession, it took “at risk”
regions of the country a decade to recover, and “distressed” U.S. communities
are “unlikely ever to recover on current trendlines,” the report predicts.
Economic growth among the country’s
middle-class counties and middle-class zip codes has considerably trailed
national economic growth. For example, between 2012 and 2016, there were 4.4
percent more business establishments in the country as a whole. That growth was
less than two percent in the median zip code and there was close to no growth
in the median county.
While America’s working and middle
class have been subjected to compete for jobs against a constant flow of
cheaper foreign workers — where more than 1.2 million mostly low-skilled
immigrants are admitted to the country annually — the billionaire class has
experienced historic salary gains.
A study by the Economic Policy
Institute found that the country’s top 0.01 percent have enjoyed more than 15 times as much wage growth as the
bottom 90 percent of wage earners. Between 1979 and 2017, working and middle
class Americans’ wages grew by only 22 percent. On the other hand, the
plutocrat class saw their salaries grow by more than 155 percent over the same
period.
Likewise, free trade deals like
NAFTA — supported by Republicans and Democrats — as well as China’s entering
the World Trade Organization (WTO) has eliminated nearly five million American
manufacturing jobs across the country, devastating steel towns and U.S.
autoworkers. One former steel town in West Virginia lost 94 percent of its
steel jobs because of NAFTA, with nearly 10,000 workers in the town being
displaced from the steel industry.
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