America Faces No Greater Threat Than Joe Biden and the Democrat Party. Their Assault to Our Borders Is As Great As Their Assault to Free Speech and Free Elections
Sunday, December 4, 2022
CON MAN, DOCUMENTED LIAR AND GAMER LAWYER JOE BIDEN - FOLKS, THERE'S NEVER GOING TO BE STUDENT DEBT RELIEF BUT I'M NOT GOING TO TELL YOU THE TRUTH UNTIL AFTER YOU VOTE DEMOCRAT FOR MORE STUDENT DEBT RELIEF
HOW MUCH ARE BIDEN'S CRONY BANKSTERS RAKING IN FROM STUDENT DEBT?
VIDEO
Biden blasted for greatest 'vote-buying' ploy of all-time
In an attempt to provide political cover for the Biden administration’s student loan relief debacle, the Democratic Socialists of America’s semi-official magazine Jacobin is presenting bankruptcy as a solution to student debt.
On November 18, it published an article by Julia Rock titled, “Joe Biden Is Finally Moving Toward Allowing Bankruptcy to Eliminate Student Debt.”
With Biden’s very modest plan to allow student borrowers to write off $10,000-$20,000 in government-held loans blocked by Republican-backed court suits, the administration is attempting to sugar-coat its refusal to make a serious effort to provide relief for millions of students burdened by crushing debt by ending its opposition to the discharge of a portion of student debt through the bankruptcy process.
Students are evidently expected to be grateful for the chance, compliments of the Democratic Party, to go into bankruptcy to avoid penury and homelessness.
The vast majority of students will not see it that way. Instead, they will rightly see this inducement to declare bankruptcy as an insult and a provocation. They are well aware that when it comes to bailing out billionaire tax-evaders and speculators, both big business parties spare no expense. Example: the bipartisan CARES Act, passed with record speed when the pandemic torpedoed the stock market in the spring of 2020. That act of charity for the rich funneled trillions of dollars to the banks, corporations and investment houses.
President Joe Biden with Education Secretary Miguel Cardona [AP Photo/Susan Walsh]
This week has seen another example of bipartisan action in Congress effected with blinding speed—despite the near-civil war atmosphere in Washington—to block rail workers from exercising their right to strike and impose a slave’s charter contract backed by the rail companies, overriding the votes of tens of thousands of rail workers who voted against it.
There, the heroes of the DSA and the so-called “progressive” wing of the Democratic Party—including Bernie Sanders and Alexandria Ocasio-Cortez—played the critical role in ensuring passage of the dictatorial anti-strike measure.
Similarly, these pseudo-left representatives of the privileged middle class are rushing to declare the administration’s modest easing of Department of Justice (DoJ) rules in relation to student bankruptcy to be a “victory.”
The article by Julia Rock favorably cites Elizabeth Warren, who claims, “The Biden administration has taken an important step forward to reform a deeply broken bankruptcy system that has made it nearly impossible for Americans to deal with student debt, even when they’re in severe financial stress.”
The administration, in addition to extending the student loan pause initiated under Trump until June 2023, directed the DoJ to soften its policy of opposing student debt discharge in bankruptcy court. The department issued a release stating: “Although the bankruptcy judge makes the final decision whether to grant a discharge, the new process announced today provides Justice Department attorneys with clear standards for recommending discharge to the judge without unnecessarily burdensome and time-consuming investigations.”
As a senator, Biden voted for the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which tightened the bankruptcy code so that student loans were stripped of bankruptcy protections. The law prevented students from having their loans discharged absent proof of “undue hardship,” which has proven an insurmountable legal burden for the vast majority of students.
Since taking office, the Biden administration has used the Department of Justice to oppose students seeking bankruptcy to discharge their loans, with the DoJ appealing rulings in their favor.
This isn’t the first time Jacobin has presented bankruptcy as a solution to student debt. In the April 8, 2021 Jacobin article, “The End of Joe Biden’s Student Debt Prison May Be in Sight,” author Walker Bragman wrote that the Supreme Court was considering hearing a case that “could defang a draconian bankruptcy law championed by Joe Biden and his financial industry donors sixteen years ago.” Bragman claimed that this “could offer people a meaningful pathway out of massive student debt.”
A “meaningful pathway?” A more apt description of bankruptcy is a measure of last resort incurring its own nightmarish costs to debtors.
Bankruptcy proceedings can be “expensive” according to Bankrate, citing a $240 filing fee, $700 to $2,000 in lawyer fees and additional court fees. It is a long legal process usually taking four to six months. It causes long-term damage to one’s credit score for a period of seven to 10 years (for Chapter 7 and Chapter 13 bankruptcy, respectively) which often leads to higher insurance rates.
Both types of bankruptcy usually involve losing all credit cards, as well as making it difficult or impossible to get an auto loan or house loan. It can even make getting an apartment lease more difficult, as most landlords require a credit history to rent an apartment.
Nor does bankruptcy necessarily eliminate all of one’s debt. Chapter 13 bankruptcy requires a repayment plan over three to five years, while Chapter 7 requires the liquidation of all non-exempt assets to pay back creditors.
According to a survey by the Professional Background Screening Association, 38 percent of employers perform credit checks on some job candidates, while 14 percent do credit checks for all candidates, meaning those who opt for bankruptcy may find it more difficult to find jobs in the future, particularly in private industry. The job search website Monster writes in the article “Past Bankruptcy Can Haunt Your Job Hunt” that “If you’ve declared bankruptcy in the past, be prepared to defend that decision to a potential employer.”
The claim that bankruptcy is a “meaningful” alternative for students already drowning in debt recalls Marie Antoinette’s notorious “Let them eat cake.”
The DSA and the rest of the pseudo-left fraternity have nothing to do with socialism. Notwithstanding their populist rhetoric, they are pro-capitalist, pro-imperialist, pro-war and anti-working class. They promote the politics of racial and gender identity in order to obscure the fundamental class divisions in society, foment divisions within the working class, and secure positions and income for themselves.
That is why the DSA is an arm of the Democratic Party—a party of Wall Street, the Pentagon and the CIA—and a defender and component part of the pro-corporate trade union bureaucracy. These anti-Marxist forces play a critical role in enforcing the political domination of the bourgeoisie over the working class.
Just as the majority of DSA-affiliated Democrats in the House voted to ban a strike and impose a contract on the rail workers, they have lined up to vote for every allocation of funds to prosecute the US/NATO proxy war against Russia in Ukraine, totaling more than $100 billion so far this year. Biden’s woefully inadequate student loan forgiveness program would cost a fraction of this, coming in at $13.3 billion a year. But even this is too much for the ruling class, which will not permit even the most modest measure of social reform.
What is required to address the student debt crisis is a genuine socialist policy, including the abolition of all student debt, the provision of free, quality higher education for all who want it, and the expropriation of the banks and loan service companies to provide the necessary funds and reorganize the economy according to social need, not private profit.
The social basis for implementing this policy is the working class, whose potential industrial and political power is immense. Students must turn to the working class and fight for a socialist program and leadership, to establish the political independence of the working class from both parties of big business, the trade union apparatus and their hangers on in the DSA and the pseudo-left as a whole.
In lieu of action to lessen crushing debt load
Brooks: Government Intervening in Rail Talks Creates Same ‘System Is Rigged’ Hazard of Bank Bailouts
On Friday’s “PBS NewsHour,” New York Times columnist David Brooks stated that the federal government intervening to prevent a rail strike will give companies an advantage in negotiations and creates a moral hazard like the bank bailouts in 2008 and will cause people to think “the system is rigged.”
Brooks said, “I’m a little — not that I’m singing solidarity for every — every morning, but, basically, the government took away the workers’ right to strike or their ability to strike. And that imbalances the negotiation going — if the railroad companies think, oh, well, the government will step in and take away the ability to strike, then that alters how they’re going to negotiate. And so it alters the balance. So, I worry a little about the — sort of the moral hazard of government stepping in. And, it, somehow, it reminds me, in sort of an inverse case, I thought the bailout of the banks in 2008 was the right thing to do. Nonetheless, it is clear that the moral hazard, the way the government behaved had long-term moral and cultural effects on this country, because people thought, the system is rigged. And if workers decide, if we lose the ability to strike, then the system’s a little rigged against us, and that could lead to some level of cynicism and distrust.”
On Tuesday, the US Department of Education announced an extension of the pause on student loan repayments, interest and collections, which was initiated by the Trump administration in March of 2020 in response to the COVID-19 pandemic.
The move was in response to court rulings backing suits by Republican-led state governments and right-wing, corporate-funded lobby groups opposing President Biden’s executive order discharging a relatively small portion, less than a quarter, of the $1.75 trillion in student debt owed by 43 million federal student loan borrowers.
Biden’s plan, announced in August in response to pressure from congressional Democrats fearing a Republican sweep in the November midterm elections, would cancel up to $10,000 in student debt for individuals earning less than $250,000 a year, and by $20,000 for recipients of Pell grants, which go to low-income students.
The Department of Education has sent letters to the 16 million student debtors whose applications for relief have already been approved, telling them that no debt can be discharged. The letter states that “unfortunately, a number of lawsuits have been filed challenging the program, which [have] blocked our ability to discharge your debt at present.” It pathetically adds, “Your application is complete and approved, and we will discharge your approved debt if and when we prevail in court.”
The letter is a slap in the face to millions of students and youth who fell for Biden’s election promise to cancel $10,000 to $20,000 in student debt.
President Joe Biden with Education Secretary Miguel Cardona [AP Photo/Susan Walsh]
The government’s announcement on the temporary debt repayment holiday stipulates a maximum six month extension past the previous cut-off of January 1, 2023. It states: “Payments will resume 60 days after the Department is permitted to implement the program or the litigation is resolved, which will give the Supreme Court an opportunity to resolve the case during its current Term. If the program has not been implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that.”
The extension was announced following a ruling by the Eighth Circuit Court of Appeals, based in St. Louis, Missouri, indefinitely blocking the student loan forgiveness plan. A three-judge panel of the Republican-dominated appeals court granted the request for an injunction made by six Republican-led state governments.
That ruling came on the heels of a ruling by a federal district court judge in Texas striking down the entire plan in response to a suit filed by a right-wing group set up by the billionaire founder and former CEO of Home Depot, Bernie Marcus, and backed by the billionaire Mercer family.
The Biden administration sent a letter to the US Supreme Court last week asking it to allow the program to proceed while the lawsuits play out, a request that has little chance of being granted.
In contrast to Biden’s half-hearted student debt forgiveness moves, the White House last week asked for a further $37.7 billion in arms funding for Ukraine in the US/NATO proxy war against Russia. It is a virtual certainty that most if not all of the request will be granted in a bipartisan vote in Congress.
This will bring the total allocation for the war to more than $100 billion just this year. It is estimated that the student loan forgiveness plan would cost $13.3 billion annually, a sum that has been denounced as extravagant and “inflationary” not only by Republicans, but also by the pro-Democratic, Jeff Bezos-owned Washington Post and a section of Democratic office-holders and lawmakers.
Education Department Undersecretary James Kvaal warned in a November 17 court filing that blocking the partial debt relief plan would lead to a “historically large increase in the amount of federal student loan delinquency and defaults.”
He was alluding to concerns that a wave of defaults and delinquencies could threaten the stability of a variety of financial assets. Student Loan Asset-Backed Securities (SLABS) are used in much the same way that sub-prime mortgages were used to anchor the massive edifice of speculative assets that came crashing down in September of 2008, triggering the “Great Recession” and wiping out the savings and jobs of tens of millions of Americans. The Federal Reserve and the Obama administration intervened with trillions in handouts to the banks, under the rubric of “quantitative easing,” rescuing the corporate oligarchy while piling up unprecedented levels of debt.
Now, the policy of low interest rates and virtually free credit for the banks and Wall Street investors has been abandoned under the impact of skyrocketing inflation, exacerbated by the war against Russia. Under conditions of a rising tide of working class struggle in the US and internationally, as workers mobilize to make up for lost wages and decades of union-imposed concessions, the US ruling class has adopted recessionary policies, hoping higher interests rates will produce an economic slowdown and a sharp increase in unemployment, undercutting working class militancy.
But this heightens the prospect of another financial collapse, with Ponzi schemes such as the market in SLABS coming undone, after the manner of the crypto currency platform FTX.
Investopedia remarks that “because of the inherent similarities between the student loan market and the sub-prime mortgage market, there is rampant fear that the student loan industry will be the next market implosion to trigger a financial crisis.”
The other component of the Biden administration response has been to direct the Department of Justice to support student loan debt discharge following a filing for personal bankruptcy, something the federal government has up to now opposed. Essentially, the administration is attempting to palm off bankruptcy as a solution for students struggling with student loans.
This is especially cynical considering Biden’s role as a senator in passing the Bankruptcy Abuse Prevention and Consumer Protection Act, which tightened the bankruptcy code so that private student loans were stripped of bankruptcy protections.
Biden blasted for greatest 'vote-buying' ploy of all-time
On Monday, an appeals court ruled that a temporary stay blocking Joe Biden’s student loan forgiveness plan, which would cancel up to $20,000 in student debt per borrower, will be turned into an injunction, shelving the plan indefinitely. The ruling was made by the Eighth Circuit Court of Appeals in response to a lawsuit by six Republican-led state governments—Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina, which claimed that forgiving the debt would impact them economically.
President Joe Biden with Education Secretary Miguel Cardona [AP Photo/Susan Walsh]
The Republican plaintiffs deliberately filed their suit in the territory covered by the Eighth Circuit so that any appeal of the lower court ruling by either side would go before one of the most right-wing appeals courts in the country. All but one of the 11 active judges on the Eighth Circuit were appointed by Republicans, including four appointed by Donald Trump. The three-judge panel that issued Monday’s ruling was composed of two Trump appointees and one George W. Bush appointee.
Biden announced the student debt forgiveness program in August, issuing an executive order based on a 2003 federal law that allows the secretary of education to modify financial assistance programs for students “in connection with a war or other military operation or national emergency.” That law was first cited by the Trump administration to suspend student loan debt payments during the COVID-19 pandemic. The debt suspension is due to end at the beginning of 2023.
Monday’s appeals court ruling followed the striking down of Biden’s student loan plan by a Trump-appointed Texas federal judge last Thursday. Judge Mark Pittman, ruling on a separate suit from the one filed by the Republican-led states, claimed Biden’s executive action creating the program unlawfully encroached on Congress’s power. This is a completely hypocritical statement coming from the same far-right that argues for the authoritarian “unitary executive theory,” which radically attacks the constitutional principle of separation of powers and claims the president has unilateral power to wage war and imprison and even kill alleged terrorists and “illegal enemy combatants,” including US citizens.
Pittman’s ruling halted the acceptance of new applications and processing of pending ones. Some 16 million applications were already approved at the time of the ruling, with 26 million people having already applied.
Monday’s appeals court ruling focused on the impact the Biden plan would have on the Missouri Higher Education Loan Authority (MOHELA), a private company headquartered in St. Louis, Missouri created by the state in 1981 along the lines of Freddie Mac. It is one of the largest holders and servicers of student loans in the country, providing student loans to 2.7 million recipients.
The ruling said: “It is alleged MOHELA obtains revenue from the accounts it services, and the total revenue MOHELA recovers will decrease if a substantial portion of its accounts are no longer active under the Secretary's plan. This unanticipated financial downturn will prevent or delay Missouri from funding higher education at its public colleges and universities.”
It continues: “Due to MOHELA’s financial obligations to the State treasury, the challenged student loan debt cancellation presents a threatened financial harm to the State of Missouri.”
Nothing is said about the “financial harm” that the $1.7 trillion in student debt imposes on 43 million borrowers (of which Biden’s plan addresses less than a quarter).
This very argument was previously dismissed by a district judge, who stated, “Missouri has not met its burden to show that it can rely on harms allegedly suffered by MOHELA. MOHELA, not the State, is legally liable for judgments against it.”
MOHELA itself stated it wasn’t involved in the case, saying on November 2, “MOHELA's executives were not involved with the decision of the Missouri Attorney General's Office to file for the preliminary injunction in federal court on September 29, 2022.”
What the argument essentially boils down to is the protection of the sacred right of loan service companies to maximize profits made off the backs of student debtors. It doesn’t have anything to do with protecting the public, whom the states claim to represent.
The ruling shows that even the most modest social reform is not possible under the capitalist two-party system, which, on the contrary, is moving toward cuts in core programs such as Social Security and Medicare.
Biden did not bring his student loan plan before Congress because he knew it would fail, due not only to blanket opposition from the Republicans, but also because a section of the Democratic Party opposed it. During the midterm election campaign, Colorado Senator Michael Bennet declared his opposition, as did Congressman Tim Ryan of Ohio, who failed in his race for the Senate against Trump-backed J. D. Vance.
While the political establishment will not permit even a modest reduction in student debt, Biden is asking for another $37.7 billion to fund the imperialist proxy war against Russia in Ukraine. The US had already committed $66 billion in military aid to Ukraine just this year.
The ruling class has endless money for the war, which is threatening to go nuclear, but supposedly no money to moderate the crushing debt burden on student youth. According to the Congressional Budget Office, Biden’s plan would cost $400 billion over 30 years, which works out to $13.3 billion annually, a third of the additional money that Biden is asking for the war, and a sixth of that which has already been committed this year.
Chuck Schumer Suggests DACA Amnesty Needed to Spike U.S. Population as Nation Hits Record 331.9M Residents
Then, to add insult to injury, like clockwork, right after the midterm election scam-o-rama, Senator Chuck Schumer had an epiphany, because suddenly we're "short of workers," and the only way to fill out those ballots for Democrats...er..."have a great future" is to grant amnesty (read: voting rights supporting leftists) to "however many" illegal invaders there are in the country.
Big oil, food giants, restaurant chains reap windfall profits as US real wages plunge
With one week remaining before the US midterm elections, President Joe Biden has taken to denouncing the oil monopolies for “war profiteering” and price-gouging. On Monday, he took time out from traveling around the country to boost the faltering campaigns of Democratic House and Senate members and candidates for state offices to attack the record profits reported last week by oil and gas companies as “outrageous” and threaten the imposition of an excess profit tax.
“It’s time for these companies to stop war profiteering, meet their responsibilities to this country, give the American people a break and still do very well,” he told reporters at the White House.
It is all too obvious that Biden’s bluster against corporate profit-gouging is prompted by polls showing that soaring prices for basic necessities is the biggest concern driving voters in elections that may very well shift control of one or both chambers of Congress, as well as much of the country’s electoral machinery, to Trump’s fascistic Republicans.
Nobody knows better than Biden that there is no possibility of getting an excess profits tax through Congress, even should it remain under Democratic control.
Share of corporate-sector income received by workers over recent business cycles, 1979-2022. [Photo: Economic Policy Institute]
The oil magnates responded contemptuously to Biden’s threat. Mike Sommers, president of the American Petroleum Institute, stated, “Rather than taking credit for price declines and shifting blame for price increases, the Biden administration should get serious about addressing the supply-and-demand imbalance that has caused higher gas prices and created long-term energy challenges.”
In other words, it should lift the minimal restraints on the fossil fuel industry and give it an even freer rein to pollute and profit from the impact of the US-NATO war against Russia.
Last Friday, Exxon Mobil and Chevron, the largest US oil companies, reported record or near-record profits for the July-September quarter of 2022. Exxon’s profit of nearly $20 billion was a record for any quarter and 10 percent higher than the previous record, set the quarter before. Chevron’s profit of $11.2 billion was slightly less than the previous quarter’s record amount.
On Thursday, the two biggest European producers, Shell and TotalEnergies, reported that their profits had more than doubled from the third quarter of 2021.
The five biggest oil companies took in more than $50 billion in profits in the second quarter of this year, and the International Energy Agency reported that the net income of the world’s oil and gas producers will double this year from last to a record $4 trillion. “Today’s high fossil fuel prices have generated an unprecedented windfall for producers,” the agency stated.
Rather than using some of their windfall profits to reduce prices or increase production, the oil giants have raised dividends and carried out massive stock buybacks to enrich their big investors. On Friday, Exxon Mobil raised its stock dividend, citing its commitment to “return excess cash” to shareholders.
Biden has released some 165 million barrels of oil from the Strategic Petroleum Reserve and prices at the pump have receded in recent weeks from their previous highs, but they remain more than 13 percent higher than at the end of 2021.
The energy industry is not alone in taking advantage of the inflationary spiral, rooted in decades of central bank handouts to Wall Street and exacerbated by supply chain disruptions triggered by US-NATO proxy war against Russia in Ukraine, to reap windfall profits.
A person shops at a grocery store in Glenview, Ill., Monday, July 4, 2022. [AP Photo/Nam Y. Huh]
The New York Times on Monday reported that major food companies and restaurant chains have driven up their profits by charging the public far more than what was needed to cover their increased costs.
The article noted that over the past year, the price of food eaten at home has increased 13 percent, according to the Bureau of Labor Statistics (BLS). Basic staples have risen far more than the 8.2 percent year-over-year increase in the Consumer Price Index.
Cereals and bakery goods are up 16.2 percent. Dairy products have shot up by 15.9 percent.
A dozen eggs that could have been purchased for $1.83 in 2021 now cost $2.17.
Meanwhile, the profits of major food companies have risen even faster than the prices they charge. Last month, PepsiCo, whose prices for drinks and chips were up 17 percent from year-earlier levels, reported that its third-quarter profit grew by more than 20 percent. Coca-Cola reported a profit increase of 14 percent from the previous year.
Many restaurant chains are likewise reaping super-profits on the basis of inflated prices. The Times article focused on Chipotle Mexican Grill, which reported that its prices by the end of 2022 would be nearly 15 percent higher than a year earlier. It reported a nearly 28 percent increase in its profits in the latest quarter as compared to the same quarter last year.
The newspaper quoted Kyle Herrig, president of advocacy group Accountable.Us as saying, “The [earnings] calls tell us corporations have used inflation, the pandemic and supply chain challenges as an excuse to exaggerate their own costs and then nickel and dime consumers.”
Housing costs are likewise soaring, further eroding workers’ purchasing power. According to the latest report on inflation, issued last month by the BLS, the cost of renting a primary residence rose this year by 7.2 percent through September, more than double the usual annual increase of around 3 percent.
The average 30-year fixed-rate mortgage has topped 7 percent, due mainly to the rapid increase in interest rates imposed by the Federal Reserve to slow down economic growth and drive up unemployment—a central component of the ruling class war against workers’ wage struggles. This is the highest mortgage rate since the Great Recession of 2008.
With the national median asking price for a home at $435,050—itself prohibitive for most workers—mortgage payments today are nearly $1,000 a month higher than in August of 2021.
Biden’s feigned outrage over corporate price- and profit-gouging cannot conceal the fact that his administration is working relentlessly with the trade union apparatuses to impose the full inflationary impact of the war in Ukraine, for which the White House and Congress have already allotted over $50 billion, on the working class. With the support of both big business parties, Biden has joined with the rail and West Coast dock workers’ union leaderships to block 22,000 longshoremen and 120,000 railroaders, who have voted overwhelmingly to strike and rejected pro-company contracts, to exercise their right to strike.
The result has been a devastating decline in the real earnings of US workers.
Dallas Federal Reserve chart shows most US workers have negative wage growth. [Photo: Dallas Federal Reserve Bank]
Last month, the BLS reported that real hourly and weekly earnings for all employees decreased 0.1 percent from August to September, seasonally adjusted. Year over year, real hourly earnings fell 3 percent, while real weekly earnings declined even more, 3.9 percent, due to a decrease in the average workweek.
According to a study released in October by the Federal Reserve Bank of Dallas, the decline in real wages for US workers is even more severe. The authors of the study wrote:
We find that a majority of employed workers’ real (inflation-adjusted) wages have failed to keep up with inflation in the past year. For these workers, the median decline in real wages is a little more than 8.5 percent. Taken together, these outcomes appear to be the most severe faced by employed workers over the past 25 years…
While the past 25 years have witnessed episodes that show either a greater incidence or larger magnitude of real wage declines, the current time period is unparalleled in terms of the challenge employed workers face.
Globalization of the United States economy has had a crippling impact on American towns as free trade makes it easier for companies to move production and jobs overseas, a report from the U.S. International Trade Commission details.
The report, which assembled union representatives, economists, and others to discuss the impact of decades-long U.S. free trade policy, was requested by U.S. Trade Representative Katherine Tai and conducted in March and April of this year.
Among other findings, the report found that U.S. free trade policy has allowed companies to more readily move American jobs overseas and keep wages low for jobs that remain in the U.S.
“Participants identified trade policy as the cause of job losses. One union representative noted that trade policies often have loopholes or are manipulated by China and other countries so that the policies are not operating as intended,” the report states:
Another union representative stated that current trade agreements allow for more capital mobility than the agreements prior to the 1980s, enabling auto, electronics, and steel manufacturers to move overseas for any number of reasons. Various union representatives explained that companies are able to use the threat of moving jobs overseas for various reasons — such as better tax implications and lower wages — to limit the power of labor unions and keep domestic wages down. [Emphasis added]
When U.S. free trade policy enables companies to offshore production, the report states, American employees are not the only ones directly impacted by such moves. Towns and communities as a whole, along with Americans in supporting industries, feel the devastating impact as well.
The abandoned “Scranton Lace Company” factory is seen in Scranton, Pennsylvania, on August 11, 2020, the landmark factory where former Secretary of State and Democratic Presidential candidate Hillary Rodham Clinton’s grandfather used to work was closed in 2002. (ERIC BARADAT/AFP via Getty Images)
“Participants noted that, when jobs are lost, local businesses — such as gas stations and restaurants — that rely on affected workers as customers and clients, as well as other businesses in the industry’s supply chain, suffer as a result,” the report states. “A retired steelworker also noted that company bankruptcies can have effects beyond job loss, such as lost pensions.”
Societal impacts as a result of companies
offshoring U.S. production, the report finds,
include rising mental health issues, suicide,
lower life expectancy, divorce, domestic
violence, higher crime rates, and worse off
public schools.
In particular, when a plant closed in Beaver County, Pennsylvania, the report states, because of U.S. free trade policy, neighboring mom-and-pop shops, local businesses, and grocery stores suffered tremendously to stay afloat. Many ended up closing as well.
“Another union representative noted that, when General Motors Company shut down production in Lansing, Michigan, jobs throughout the local community suffered as a result,” the report states:
Two other union representatives spoke about the impact of plant closures and production cutbacks on employees. An academic and a business owner reported that plant closures can lead to the loss of opportunity for upward career mobility and a shift to services jobs that tend to have lower wages and fewer benefits. Other union representatives, including one who is retired, said that the closure of the General Motors plant in Lordstown, Ohio, in 2019, and the threat of offshoring has been used to suppress worker wages and benefits. Another union representative spoke about Cooper Tire in Finley, Ohio, which reportedly faced competition from dumped imports from China in 2007. Employees at this facility were reportedly scheduled for shifts that were two days on and two days off and could not file for unemployment. [Emphasis added]
In Rep. Tim Ryan’s northeast Ohio district, nearly
deaths in the area have skyrocketed by 400 percent
in some communities.
“A retired union representative said that families and neighborhoods in the Mahoning Valley and Youngstown, Ohio, are still being affected by manufacturing job losses that occurred over 40 years ago, as well as more recent plant closures,” the report states. “She described a cycle of decline, decay, and blight, as the population has dropped to one-third of its previous size and homes lay vacant as children and grandchildren move away.”
The economic and social decay of Ryan’s district is partially why Ohio’s Senator-elect J.D. Vance explained to Breitbart News last month that tariffs on foreign imports must be the center of the nation’s industrial policy to “rebuild the industrial heartland of America.”
The company that produces Louisville Slugger wooden bats has closed its factory and museum on April 20, 2020 in Louisville, Kentucky. The 165-year-old company that produces 2 million wooden bats a year, including some 50,000 destined for Major League Baseball, closed its factory and popular museum in March, furloughing 90 percent of its employees amid the ongoing coronavirus pandemic. (Andy Lyons/Getty Images)
Offshoring, spurred by U.S. free trade policy, is not letting up.
This month, for example, executives with technology parts manufacturer Jabil Inc. announced that they would be laying off about 1,400 of their American employees in California and closing six plants across the state.
Similarly, a 125-year-old plant Avon plant in Suffern, New York is shuttering and laying off nearly 140 of its American employees. Avon executives said those U.S. jobs will be sent to Brazil and Poland where the price of labor is substantially lower.
Also this month, medical device company Vapotherm announced that it is closing its Exeter, New Hampshire manufacturing plant, laying off nearly 50 of its American employees, and sending production to low-wage Tijuana, Mexico.
Executives with Norcold, the refrigerator manufacturer, are laying off nearly 360 of their American employees at two Shelby County, Ohio plants and sending all production to foreign countries.
John Binder is a reporter for Breitbart News. Email him at jbinder@breitbart.com. Follow him on Twitter here.
2022 global art market benefits from an “explosion of wealth” at the top
In the past two years, a global pandemic has officially cost more than six million lives (with estimates indicating that some 20 million people have actually perished due to COVID-19). The US-NATO proxy war against Russia in Ukraine has killed at least 200,000 military personnel and 14,000 civilians, while displacing eight million more. Surging inflation threatens vast numbers with fuel and food insecurity, and starvation in certain parts of the world, in the coming winter months.
Yet the world’s art market has never been in healthier shape, according to A Survey of Global Collecting in 2022, a recently issued Art Basel & UBS Report.
After a brief interruption in 2020, the art market “bounced back strongly in 2021, with aggregate sales of art and antiques by dealers and auction houses reaching an estimated $65.1 billion. Representing a 29% increase on the previous year, this figure outstrips the market’s 2019 value by $0.7 billion.”
Global Billionaire Wealth and Population (A Survey of Global Collecting in 2022)
The “robust” character of the art market mirrors the stratospheric rise in the wealth of the world’s richest people over the same period. According to Credit Suisse, “The ranks of the global ‘ultra-high net worth’ (UHNW) individuals, those who have $30 million or more in assets not including their primary residence, swelled by 46,000 last year to a record 218,200 as the world’s richest people benefited from ‘almost an explosion of wealth’ during the recovery from the pandemic.”
The combined wealth of the UHNW individuals now equals $35.5 trillion worldwide. Together with the wealth of the Very HNWIs (holding from $10 million to $30 million in liquid assets) and “mere” high-net-worth individuals (with $1 million to $10 million each), this represents an enormous sum of money in search of a lucrative return. After stocks and real estate, fine art is one such investment.
The survey by Art Basel & UBS Report describes a market that is global in scope, subject to geopolitical tensions and open to the use of digital formats both for trading and as an art form in itself, such as videos with NFTs (non-fungible tokens), to the extent that it opens new avenues of profitability. This market is highly speculative, with collectors selling almost as much artwork as they buy, and above all concerned with the financial over the aesthetic or cultural value of a work, so much so that 95 percent of the HNW collectors surveyed had purchased works of art sight unseen, with just over half (51 percent) regularly doing so.
While there was some lingering concern about COVID, most collectors still favor in-person interaction at art fairs and galleries with their dealers. Collectors planned to resume travel to the major art fair destinations, such as Art Basel and Miami Basel, which represent high-priced opportunities to view and purchase contemporary art. The cancellation or postponement of such international art fairs due to the pandemic represented a serious loss of revenue for not only galleries, more than a quarter of which generate 20 percent or more of their yearly revenue at such fairs, but for attendant services as well, such as air travel, accommodations, dining, etc.
Before the pandemic, “HNW collectors attended an average of 41 art-related events in 2019, including six gallery exhibitions and five art fairs. This fell to 36 in this sample in 2020.” However, with the “end of the pandemic,” the survey reports, “Art fairs have bounced back, with 74% of the HNW collectors surveyed having purchased at an art fair in the first half of 2022 (versus 54% in 2021), including both in-person and OVR [online viewing rooms] purchases. 65% reported that they had bought a work through an in-person event (up from 37% in 2021).”
The rich collectors are feeling flush. According to the report, their median “expenditure on art in the first half of 2022, at USD 180,000, already nearly doubled their spending in the entire pre-pandemic year of 2019 (USD 100,000) and is notably higher than in the entire year of 2021 (when they spent USD 164,000). And they’re not putting their wallets away. They plan to more than double their 2021 spending by year’s end.”
Sotheby's headquarters in New York [Photo by ajay suresh / CC BY 2.0]
There is an almost desperate quality to this spending, as though HNWIs cannot store their money fast enough in assets that may better withstand an anticipated crisis in the economy. In fact, collectors were slightly more optimistic about the outlook for the art market in the next six months than they were about the state of the stock market over the same period (78 percent vs 75 percent, respectively). “They’re also buying more expensive art than last year. The share of collectors purchasing works priced at more than USD 1 million nearly doubled from 2021, from 12% to 23%. This is similar to the price levels at which they bought in 2019.”
The report pays considerable attention to geo-strategic shifts in power as reflected by trade between the major art centers. Those have traditionally been New York and London, though in recent years the combined mainland China and Hong Kong market has overtaken the UK for second place. This correlates closely with the location of the world’s wealthiest, who are still concentrated in the United States (145,000 HNWIs), as compared to roughly 50,000 in China and 10,000 or fewer in European capitals such as Paris and Berlin. It is noted that the activity of Russian oligarchs in the market has been checked somewhat by the war in Ukraine and the attendant sanctions.
The report documents how the globalization of the past 30 years has seen the development of art markets in places where they barely existed before, such as India, Mexico, Turkey and Brazil. However, the market remains highly unequal. “Its key players continue to be European and American: Sotheby’s, Christies, and Philips in the auction market; Art Basel and Frieze in the art fair sector; and David Zwirner, Gagosian, and Hauser & Wirth among others in the gallery market. If anything, globalization has strengthened their position and they face minimal competition from their counterparts in emerging regions.”
Social inequality also manifests itself strongly among artists, with one percent of them ranked as “super star” figures, with name-recognition and prestige from museum shows, whose work commands millions of dollars. The bulk of artists, 84 percent of whom are so-called “emerging” or unrepresented by galleries, do not participate in this market at all. It is also the case that even at the high end, artists themselves see only a portion of the money paid for their work, with 30 percent typically going to the gallery and the most lucrative sector being in resales. In this regard, the art market in the US is more attractive than that in Europe because it has no legislation concerning resale rights that would guarantee artists a share in future profits off their work, equivalent to royalties in music.
Despite the report’s overall emphasis that 2022 was the best of all possible worlds for the wealthy and the art market, a certain anxiety creeps into the report.
“Even at the very top of the wealth spectrum, where many HNW individuals have been insulated from some of these economic stresses, wealth has stalled its bull run. Forbes’ annual compilation of the world’s wealthiest billionaires showed a large increase in billionaire wealth throughout the pandemic, with certain industries such as tech, e-commerce, and health all flourishing.” However, the report continues, “figures published in March 2022 showed a contraction in both the number of billionaires (down by 3% on 2021) and their collective wealth (also decreasing 3%), with major losses in Russia following the invasion of Ukraine (34 fewer billionaires) and China (losing 87, with government regulation and greater scrutiny of tech companies as a main contributing factor).”
Data in a separate report from Wealth-X issued in November shows a continuation of the downward trend, with the number of UHNWIs said to have fallen by 6 percent in 2022, with double-digit losses in the US, Japan and France.
All is not lost! “But even with these losses, billionaire wealth has more than doubled in ten years, and at the very top of the billionaire list, wealth still grew in 2022, with the top ten billionaires increasing their combined wealth by 13% from March 2021 to March 2022.”
The report concludes by emphasizing, with unintended irony, how much these wealthy art collectors are committed to the betterment of life on the planet–not by making their $35.5 trillion available to meet the pressing needs of humanity, but by taking steps to reduce the carbon footprint produced by their travel and to use recyclable packaging for their art shipments, even if it means paying a little more.
Such an irrational system is not only inimical to the creation of meaningful art and culture accessible to broad masses of the population; it is as unsustainable as the financial house of cards on which it is based.
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