WHAT? ARE WE TALKING ABOUT GAMER LYING LAWYER 'CREDIT CARD' JOE BIDEN OF MANY MANSIONS?!?
The commitment by the Biden administration to do “whatever is needed” to protect the money and wealth of financial investors, speculators and the wealthy has again laid bare the real nature of capitalist governments as the executive committee for managing the affairs of the ruling financial oligarchy.
The Fed and the US government then organized
a bailout of the banks running into hundreds of
billions of dollars, as the unemployment rate rose to
double digits, working class families lost their
homes, and workplace conditions worsened, not
least through the spread of two-tier wage systems
organised by the Obama administration with the
collaboration of the trade unions.
The bailout of Silicon Valley Bank and the historic crisis of capitalism
The collapse of Silicon Valley Bank (SVB)—the second largest bank failure in nominal terms in US history—and the ongoing turbulence in the banking system, raising the prospect of more failures, is another expression of the historic crisis of US and global capitalism.
This deepening rot and decay constitute the underlying driving force of two interconnected developments in US and world politics: the rapid escalation towards a third world war and the ongoing and intensifying assault on the working class in the US and internationally, as the ruling classes seek to make it pay for the existential crisis of their outmoded and reactionary private profit system.
The commitment by the Biden administration to do “whatever is needed” to protect the money and wealth of financial investors, speculators and the wealthy has again laid bare the real nature of capitalist governments as the executive committee for managing the affairs of the ruling financial oligarchy.
There is no money for the vital health, education and other social needs of the working class now being battered by the worst inflation in more than four decades, but billions, trillions, can be found overnight to defend the wealth of the financial oligarchy.
At the same time, no expense is being spared in the development of the means necessary for the prosecution of war—the US-NATO war in Ukraine, the goal of which is the breakup and dismemberment of Russia and the war drive against China, which the US regards as its chief global rival.
There is a deep-seated and organic connection between the SVB debacle and the possibility of an implosion of the financial system and the war drive.
The continuous eruption of financial crises, despite all the claims of the regulators and financial authorities that lessons have been learned and safety measures put in place, is an expression of the historic decline of the economic power of US imperialism, which it seeks to resolve through military means.
The demise of SVB and the shock waves it is sending through the financial system, the full consequences of which have yet to be seen, is another expression of the essential dynamic, one could say law of motion, of US capitalism now in operation.
Tracing out the developments of the past 50 years, this dynamic comes clearly into view: Measures taken by the ruling class and its state to try to stave off or alleviate a crisis at one point only create the conditions for its eruption, in even more violent form, at another.
In August 1971, in response to the decline of the position of American capitalism vis-à-vis its rivals, US president Nixon withdrew the gold backing from the US dollar, ending the postwar monetary system.
One of the consequences of this decision, taken to shore up the position of the US, was to fuel the growth of financial speculation that increasingly characterised the modus operandi of US capitalism throughout the 1980s, as whole swaths of industry that had formed the foundation of the postwar boom were laid to waste.
In October 1987, the developing crisis these measures produced erupted in the form of a Wall Street crash, still the largest single one-day fall in history, at more than 22 percent.
The guarantee by the US Federal Reserve Chairman Alan Greenspan in response to this crisis—what became known as the Greenspan put—that the Fed would prop up the financial markets fueled an expanding orgy of speculation over the next two decades, leading to the eruption of the US and global financial crisis of 2008.
The Fed and the US government then organized a bailout of the banks running into hundreds of billions of dollars, as the unemployment rate rose to double digits, working class families lost their homes, and workplace conditions worsened, not least through the spread of two-tier wage systems organised by the Obama administration with the collaboration of the trade unions.
In the wake of the crisis, the Fed began its program of quantitative easing, the pumping of trillions of dollars into the financial system via the purchase of Treasury bonds and mortgage-backed securities. Instead of ending the rampant speculation that precipitated the 2008 crash, the central bank, the chief financial arm of the capitalist state, further fueled it.
This meant that when the COVID-19 pandemic struck in early 2020, the Trump administration, supported by the Democrats, refused to institute the necessary public health measures, fearing they would collapse the speculative bubble.
Instead, the Fed pumped in still more money after the financial freeze of March 2020, when, for a number of days, there was no market for US government debt, supposedly the safest financial asset in the world, thus fueling even more speculation and financial parasitism.
But this operation had consequences in the real economy. The refusal to eliminate COVID, the injection of $4 trillion into the financial system, rampant speculation and profit gouging by major commodity traders and giant food corporations, together with the military offensive against Russia in Ukraine, combined to set off the highest rate of inflation in four decades.
Fearing the consequences of a wages upsurge by the working class—the nemesis of the financial system—the Fed then changed course and started the steepest rate hikes since the early 1980s to try to crush it.
Now these measures have created the conditions for a new financial crisis, as can be seen in the collapse of SVB. Like so many other banks and financial corporations, SVB, which has been closely involved with the high-tech sector in California, gorged on the cheap money provided by the Fed in 2020 and 2021.
It had so much cash on hand that it had to place large portions of it in Treasury bonds and mortgage-backed securities, supposedly ultra-safe assets.
With the turn by the Fed to a higher interest rate regime, supposedly to fight inflation but in reality aimed at suppressing the working class, if necessary through recession, the situation shifted sharply.
The market value of the bonds held by SVB fell as interest rates rose, such that it has been estimated its bonds lost $1 billion for every 25-basis point (0.25 percentage point) rise in the Federal funds rate, which has now been lifted by around 450 basis points.
This collapse in its asset base led to the $42 billion run on the bank, resulting in its collapse.
The circumstances of SVB are not replicated everywhere. But all areas of the financial system, the dominant force in the capitalist economy, have become so dependent on the inflow of cheap money that they are now being heavily impacted by interest rate hikes, the effects of which have only started to make themselves felt.
What are the consequences? They flow from the very nature of finance capital itself.
At first sight it appears to be able to conjure up ever greater amounts of money out of money itself.
But this appearance-form masks a deeper reality. Finance capital does not create additional or new value. In the final analysis, it is a claim on the surplus value extracted from the working class in the process of capitalist production.
Thus, while it continually seeks to escape to a realm where money begets more money, finance capital always strives to intensify the exploitation of the working class, above all in time of crisis, as the experience of 2008 so graphically demonstrated.
At the same time, driven by the deepening economic and social crisis at home, the government and the capitalist state must make the working class pay for war by massive cuts in social spending.
In every crisis, the two main classes of society align themselves and more and more directly on their fundamental material interests. The program of the ruling class will develop accordingly: rescue operations for the financial oligarchy combined with war and social counterrevolution.
The working class is likewise driven onto a collision course with the entire apparatus of the capitalist system. However, for that struggle to be successful, no matter how deep the crisis of the ruling class and its system, the working class must be politically armed with a clear program and perspective: the conquest of political power and the construction of a socialist economy.
The collapse of Silicon Valley Bank (SVB)—the second largest bank failure in nominal terms in US history—and the ongoing turbulence in the banking system, raising the prospect of more failures, is another expression of the historic crisis of US and global capitalism.
This deepening rot and decay constitute the underlying driving force of two interconnected developments in US and world politics: the rapid escalation towards a third world war and the ongoing and intensifying assault on the working class in the US and internationally, as the ruling classes seek to make it pay for the existential crisis of their outmoded and reactionary private profit system.
The commitment by the Biden administration to do “whatever is needed” to protect the money and wealth of financial investors, speculators and the wealthy has again laid bare the real nature of capitalist governments as the executive committee for managing the affairs of the ruling financial oligarchy.
There is no money for the vital health, education and other social needs of the working class now being battered by the worst inflation in more than four decades, but billions, trillions, can be found overnight to defend the wealth of the financial oligarchy.
At the same time, no expense is being spared in the development of the means necessary for the prosecution of war—the US-NATO war in Ukraine, the goal of which is the breakup and dismemberment of Russia and the war drive against China, which the US regards as its chief global rival.
There is a deep-seated and organic connection between the SVB debacle and the possibility of an implosion of the financial system and the war drive.
The continuous eruption of financial crises, despite all the claims of the regulators and financial authorities that lessons have been learned and safety measures put in place, is an expression of the historic decline of the economic power of US imperialism, which it seeks to resolve through military means.
The demise of SVB and the shock waves it is sending through the financial system, the full consequences of which have yet to be seen, is another expression of the essential dynamic, one could say law of motion, of US capitalism now in operation.
Tracing out the developments of the past 50 years, this dynamic comes clearly into view: Measures taken by the ruling class and its state to try to stave off or alleviate a crisis at one point only create the conditions for its eruption, in even more violent form, at another.
February marks 23rd straight month of real wages decline for US workers
Annualized inflation for February was 6 percent in the United States, according to figures released Tuesday by the Bureau of Labor Statistics. This was a slight decline from January’s level of 6.4 percent, but inflation is still at the highest levels since the early 1980s.
For workers, sustained, high rates of inflation have already produced a social disaster. This has been caused by a combination of trillions of dollars pumped into financial markets at the start of the pandemic and the economic dysfunction caused by the refusal of the US and other world governments to take public health measures to contain the spread of COVID. It has also been worsened by the massive outlays for the US-NATO proxy war against Russia and military buildup against Russia.
February was the 23rd consecutive month in which average wage growth was lower than inflation, a trend that began in April of 2021. Real average hourly earnings declined by 0.1 percent last month compared to January, and 1.3 percent over the previous 12 months.
The past two years have also seen a significant growth of strikes, as workers are being thrust into struggle by intolerable conditions. At the same time, these struggles are developing into ever more open conflicts with the pro-corporate trade union bureaucracy.
The weekend before the latest figures were released, the United Auto Workers rammed through a contract containing a measly 19 percent pay increase over six years at heavy equipment manufacture Caterpillar. With inflation at 6 percent, workers could experience a cut in real pay of up to 20 percent by 2029.
More significant struggles are on the horizon this year, with more than 1.6 million workers in the US whose contracts expire this year. This includes more than 350,000 workers at UPS, the largest unionized workforce in the country, as well as 150,000 autoworkers at the “Big Three” automakers—Ford, General Motors and Stellantis (formerly Fiat Chrysler).
The official narrative from the Federal Reserve, Washington and Wall Street decrying “inflation” in reality is a screen for efforts to rein in wage growth, as inadequate as it has been. Labor shortages over the past two years have produced an upward pressure on nominal hourly wages, which have increased between 5 and 6 percent a year. But the prices of housing, food, gas, heating and other basic necessities are rising faster than workers’ income.
For the past year, the Federal Reserve has continuously increased its benchmark interest rates from near zero to 4.58 percent. This policy, which is a sharp break with nearly 40 years of easy money policies which have fueled massive rises in the stock market, is aimed at curbing wage growth and strikes by ramping up unemployment, using it as a weapon to undermine workers’ resistance.
Current Fed Chairman Jerome Powell, with the full backing of the Biden administration, is implementing, albeit at a more gradual pace, a policy based on the “Volcker Shock” of the 1980s, named after former chairman Paul Volcker, an appointee of Democratic President Jimmy Carter. Then, as now, sharp rises in inflation fueled the largest strikes in the US in years, including a powerful strike by coal miners who successfully defied an anti-strike injunction by the Carter Administration.
Declaring “the standard of living of the average worker has to decline,” Volcker jacked up interest rates to 20 percent, sparking the worst economic downturn since the Great Depression. Over 6.8 million jobs were wiped out between 1978 and 1982, with the complicity of the AFL-CIO unions. Volcker also praised President Reagan for firing more than 11,000 striking air traffic controllers in 1981, saying the government union-busting was the most important single action “the administration took in helping the anti-inflation fight.”
Today, the Fed is seeking to limit wage growth to 3.5 percent; in December, by comparison, wage increases were 5.1 percent year-on-year. The Fed is aiming to increase unemployment to 4.4 percent this year, according to Fortune magazine. This amounts to the destruction of another 1.4 million jobs, further devastating the livelhoods of struggling workers and their families.
This is one of the main drivers behind the jobs bloodbath so far this year, including at Microsoft (10,000 jobs), Amazon (18,000) and Google (12,000). On Tuesday, Meta, the company which owns Facebook, announced it would cut another 10,000 jobs after carrying out 11,000 job cuts late last year. According to the website layoffs.fyi, based on publicly available data, over 138,000 job losses have been announced in the tech sector alone this year. While overall job losses are concentrated in tech, it is only a matter of time before they spread to large numbers of industrial workers and other sections of the working class.
The viability of the easy money policies which began in the aftermath of the Volcker Shock was heavily dependent on the artificial suppression of strikes and other class struggles, which fell to their lowest levels on record. A critical role in this was played by the trade union bureaucracy, which integrated itself fully with management and the capitalist state over this period.
Today, alongside rate hikes, the union bureaucracy is the other main pillar of the campaign to prevent wage increases and strikes. Powell’s 3.5 percent wages target has, in fact, been mostly met already among unionized workers, where sellout contracts such as the one at Caterpillar have produced wage increases even below that of non-union workers. In December, the last month for which figures are available, wages rose only 3.9 percent for unionized workers, compared to 5.3 percent for non-union workers. In manufacturing, this gap was even wider, with a 3.4 percent increase for unionized workers versus a 5.4 percent raise for non-union workers.
This is the real meaning of President Biden’s claim to be the most “pro-labor president” in American history: the use of the union bureaucracy to discipline the working class. Behind the bureaucrats lies more open measures of repression. When the railroad union officials were unable, in the face of rank-and-file opposition, to enforce a substandard contract for 120,000 railroaders through a vote of the rank and file, Biden responded by turning to Congress, which passed a bipartisan law to ban a strike and enforce the Biden-brokered contract workers had rejected.
The growth of the class struggle is developing into a more and more open conflict between workers and the entire state-corporate-union system of labor control. On the railroads, at Caterpillar and other key workplaces, workers are organizing rank-and-file committees, independent of the union officialdom, to fight for workers’ control.
This conflict will be made even more explosive by the extremely unstable economic situation. In summarizing the feeling of financial experts, the New York Times observed that the extreme fragility of the financial system exposed by the collapse of tech bank SVB, which the Federal Reserve in the past would have countered through massive infusions of cash through low interest rates and asset purchases, combined with persistently high inflation, “clouds the outlook for interest rates” for when the Federal Reserve meets later this month.
In reality, this “cloudy” forecast expresses the impossible contradiction embedded in the entire monetary policy being pursued. This, in turn, is not simply a wrong policy but the outcome of the growth of the contradictions in the capitalist system itself.
On the one hand, the Federal Reserve and other central banks are hiking interest rates to drive up unemployment to beat back the working class. But this also risks a financial collapse on an even bigger scale than in 2008 and in 2009, given that the financial system has become totally dependent on the free money policies which are now being ended. One of the most significant elements of the collapse of SVB was that it was triggered by its heavy investment in treasury bonds, previously seen as one of the most stable assets in the world.
The capitalist system is wracked by deep crisis. Its continued operation requires the ever deeper impoverishment of the working class. At the same time, US imperialism is resorting to war against Russia and China in the hopes that it will be able to redirect internal social tensions outward and blast its way out of its problems by subjugating new territories.
The alternative is the socialist restructuring of society by the working class, with the economy run in the interests of public need, and not private profit.
“Virtually none of that existed in 1900 during the last great wave of immigration, when we also took in a number of poor people. We didn’t have a well-developed welfare state,” Camarota continued:
We’re not going to stop [the welfare state] tomorrow. So in that context, bringing in less educated people who are poor is extremely problematic for public coffers, for taxpayers in a way that it wasn’t in 1900 because the roads weren’t even paved between the cities in 1900. It’s just a totally different world. And that’s the point of the RAISE Act is to sort of bring in line immigration policy with the reality say of a large government … and a welfare state. [Emphasis added]
The immigrants are not all coming to get welfare and they don’t immediately sign up, but over time, an enormous fraction sign their children up. It’s likely the case that of the U.S.-born children of illegal immigrants, more than half are signed up for Medicaid — which is our most expensive program. [Emphasis added]
As Breitbart News has reported, U.S. households headed by foreign-born residents use nearly twice the welfare of households headed by native-born Americans.
Idaho Republicans Plead with Biden to Flood U.S. Labor Market with More Foreign Workers, Approve Amnesty
Republicans in the Idaho legislature are looking to approve a resolution that would ask President Joe Biden, as well as Congress, to flood the United States labor market with more foreign workers as well as to grant an amnesty that would give green cards to millions of illegal aliens holding American jobs.
A resolution, authored by State Sen. Jim Guthrie (R) and cosponsored by State Sens. Treg Bernt (R), Linda Hartgen (R), and Chuck Winder (R), asks the federal government to stem the flow of illegal immigration by requiring E-Verify for employers, among other things, while also expanding the number of foreign workers business can import to take mostly working class, blue-collar jobs.
The goal, the resolution states, ought to be to fill U.S. jobs with a constant stream of foreign workers. Amnesty, which would reward illegal aliens with work permits and green cards, should be part of any such legislation, the Republicans write in the resolution:
… it is incumbent upon the Congress and President of the United States to strengthen our national security and the security of the several states, including Idaho, by adopting targeted, common sense, business-focused, market-driven immigration reform, which at its core must include the following: [Emphasis added]
…
An effective guestworker program that meets the labor needs and demands of year-round agriculture, construction, hospitality, food processing, manufacturing, technology and other market sectors, and in particular allows cyclical worker visas of adequate length to meet the labor demands of Idaho agriculture and business; [Emphasis added]
An effective process by which persons currently present in the United States without lawful status and who are gainfully employed and their immediate family can obtain work authorization or residency status, without a pathway to United States citizenship, provided said persons have no criminal history beyond their immigration-related violations, and provided further that an appropriate fine is assessed and paid in satisfaction of their immigration-related violations; [Emphasis added]
Republican State Reps. Judy Boyle, Chenele Dixon, Rod Furniss, Stephanie Mickelsen, Jack Nelsen, Jerald Raymond, Lori McCann, and Melissa Durrant are also cosponsoring the resolution.
The legislators claim that Idaho’s economy is “threatened and harmed by the unavailability of lawful labor needed to harvest, process, and transport our domestic food supply, to extract mineral, gas, oil, and timber resources, to build homes, businesses and highways, and to provide other basic life necessities,” even as nearly 26,000 Idahoans remain jobless.
Most illegal aliens holding farm jobs in the United States, the Idaho Republicans write, are “hard workers, pay taxes, and are critical to the economic production of domestic business,” suggesting that “it would be impractical to incarcerate or deport” such illegal aliens “without regard to circumstances.”
The resolution comes as Sen. Mike Crapo (R-ID) has tried, but failed, to pass a farmworker amnesty through Congress that would provide more than two million illegal aliens with amnesty.
By the end of last year, big donors to House Republicans and Democrats had rushed a lobbying campaign to get the farmworker amnesty passed in the lame-duck session. That effort likewise failed.
Already, the U.S. gives more than a million green cards to foreign nationals annually in addition to another million temporary work visas to foreign workers. These historically-high, decades-long legal immigration levels are added on top of hundreds of thousands of border crossers and illegal aliens who are being added to the workforce every year after securing work permits.
Millions of working and middle class Americans, Breitbart News has reported, have struggled to re-enter the workforce since the Chinese coronavirus pandemic as the Biden administration has grown the economy by routing about two million foreign workers into American jobs since 2019.
John Binder is a reporter for Breitbart News. Email him at jbinder@breitbart.com. Follow him on Twitter here.
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