Category Archives: Economics

Coronavirus reminds us we are organisms in an environment

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By Kurt Cobb

Source: Resilience

A close friend of mine, a professor of English literature, has been researching American philosopher John Dewey, whose book Quest for Certainty captivated me so much many years ago that I read it again right after I had finished it the first time. My friend has been reminding me why I found Dewey so profound while shedding new light on the philosopher’s thinking.

Dewey, it turns out, is one of the few thinkers in American life who absorbed the true import of the work of Charles Darwin. Dewey reminds us that, quite simply, Darwin posited that we humans are organisms in an environment just like every other organism. Dewey’s star faded after World War II.  American and world society have since lapsed into a narrative that puts humans above and outside nature, protected by technological advancements that supposedly shield us from nature’s demands and vicissitudes. The general narrative is that we are heading into a push-button, voice-activated technocratic paradise. (I think of the various Star Trek television series as popular cultural reflections of this view.)

But, the first pandemic in a century is forcefully and sadly reminding all of us that Darwin was right about our place in the natural world, more specifically, that we will never be outside of it.

That the world is “wildly unprepared” for this pandemic is in part a result of our belief the we are on a separate journey from the rest of the natural world, headed toward a perfected existence in which nature obeys all of our commands and bothers us not at all. Why prepare for something that is merely a product of nature? We have the technology to overcome it, don’t we? There must be a pill, right? Actually, wrong.

Those who understand human vulnerabilities have been sounding the alarm for years. But the idea that our entire way of life could be dramatically disrupted worldwide simultaneously simply was not on the radar of most governments—at least not enough to get them to stockpile even the most basic medical supplies; face masks come to mind.

There is much talk of creating a vaccine and doing it quickly. But such an endeavor can take more than a year and even more time to manufacture and distribute. There is less talk about the unhealthy lifestyles and chronic disease such as heart disease and diabetes that result from that lifestyle which might need to be addressed if we are going to cope better with the world of microorganisms we inhabit. There is even less talk that those at the bottom of the economic ladder are the most vulnerable and that the wealth gap and the gap in access to health care it implies are actually a huge public health problem for all of us.

The very way in which we live—constantly pressing on the edge of wilderness to develop it and exploit it—puts humans potentially in contact with millions of viruses from which will come the next pandemic. And, the next one will likely come much sooner than 100 years from now.

If we continue to think of health as the absence of illness, of illness as something that is prevented by a pill or a shot—and if not ultimately prevented, treated by a pill or a shot—we humans won’t make the necessary changes as a global society to better withstand more frequent pandemics.

Robust health, not techofixes, is the best way to confront the biological perils of the natural world in which we participate. Such a focus would, however, take a complete rethinking of who we humans are, namely, organisms in an environment. Will the coronavirus awaken any more of us to this fact?

A Shaky Foundation

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By Michael Krieger

Source: Liberty Blitzkrieg

And so castles made of sand fall in the sea, eventually.
– Jimi Hendrix

There’s a widespread belief out there that the U.S. and the global economy in general is on much sounder footing ever since the financial crisis of a decade ago. Unfortunately, this false assumption has resulted in widespread complacency and elevated levels of systemic risk as we enter the early part of the 2020s.

All it takes is a cursory amount of research to discover nothing was “reset” or fixed by the government and central bank response to that crisis. Rather, the entire response was just a gigantic coverup of the crimes and irresponsible behavior that occurred, coupled with a bailout designed to enrich and empower those who needed and deserved it least.

Everything was papered over in order to resuscitate a failed paradigm without reforming anything. Since it was all about pretending nothing was structurally wrong with the system, the response was to build more castles of sand on top of old ones that had unceremoniously crumbled. The whole event was a huge warning sign and opportunity to change course, but it was completely ignored. Enter novel coronavirus.

I’ve been concerned about the coronavirus outbreak from the start, and have been tweeting about it consistently for well over a month.

This observation proved prescient within just a few weeks, as the U.S. Centers for Disease Control (CDC) screwed up its early response to the pandemic in the most sloppy and unimaginable way possible. For whatever reason, the CDC instituted ridiculously stringent guidelines for testing potential infections by limiting testing to only those who recently traveled from China or had contact with someone known to be infected. The CDC continued to stick to these insane guidelines as the disease began to spread rapidly all over the world, particularly in South Korea and Italy.

The event that finally prompted the CDC to change its guidelines was the emergence of the first confirmed incidence of community spread coronavirus in the U.S., which occurred in northern California. The health professionals caring for that patient had requested testing days earlier, but the CDC rejected the initial request, putting medical staff and others at risk for no good reason. On top of all that, the limited testing kits the CDC had sent out didn’t work properly. The level of incompetence and failure we’ve seen from the CDC is almost hard to fathom, but given how hollowed out and corrupt our society has become, shouldn’t be surprising.

At this point, nobody knows what the eventual impact of the coronavirus on the planet will be. Anyone who says they know for sure is lying, but I think we should be taking it very seriously given the potential tail risks. A global pandemic is an uncertain and dangerous thing in the most robust and healthy of systems, but the consequences within a fragile house of cards system such as ours can be devastating.

A month ago, stock market valuations were near the highest ever and interest rates were near the lowest they’ve been in recorded human history. A gigantic “everything bubble” of historic proportions had been blown and investors were flying too close to the sun. It was a balloon looking for a pin, and it found one in the coronavirus. Nobody knew what the pin would be, which is exactly why the stock market collapsed so rapidly the moment investors began to appreciate the gravity of the situation. The fragility of the financial markets should be taken as a warning sign with regard to the rest of the system.

Financial assets have been intentionally blown to nonsensical levels in order to coverup the massive rot underneath. They’ve been masking the fact that much of the underlying economy consists of little more than financial engineering scams and war-making enterprises. The imperial oligarchy we live under is an utterly rotten, corrupt, and fragile superstructure that’s been carefully hidden for ten years under a facade of euphoric markets and a mass of debt-based consumption slaves.

The coronavirus itself should be seen in this context. The global system as it exists is simply not prepared for anything like this, but the reality is things like this do occur from time to time. Maybe we’ll get lucky and avoid the worst case scenario with this virus, but that’s not the point. There will always be other pins, and when your entire superstructure is fundamentally fragile and led by mediocre, corrupt sociopaths, it doesn’t take much to bring it down faster than you can imagine.

We stand at a moment where the fragility of our Potemkin Village paradigm will increasingly confront the harsh realities of meatspace. Coronavirus is a warning. It’s exposing a lot already, and will likely expose far more as it continues to spread. It’s exposing our ridiculous financial bubbles, it’s exposing the fact the U.S. can’t even manufacture its own surgical masks or medicines, and it’s exposing the clownish ineptitude of our leaders and institutions.

It’s important we take this warning to heart and do something useful with it. It’s crucial we understand that the current paradigm is long past its useful life and likely won’t be hanging around much longer. Don’t cry or experience nostalgia for what was, rather, get your stuff together so you can help build and usher in the new world to come.

Those too attached to the way things have been will have a particularly hard time adjusting to the turbulent times ahead, so you want to do whatever you can in order to avoid being in that group. Change doesn’t have to be bad, but resistance to change can be deadly. Don’t allow yourself to be a casualty.

The Economic Cataclysm Ahead

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By Charles Hugh Smith

Source: Of Two Minds

The economic storm hasn’t passed; the false calm is only the eye of the financial hurricane.

To understand the economic cataclysm ahead, do the math. Those expecting the Covid-19 pandemic to leave the U.S. economy untouched are implicitly making these preposterously unlikely claims:

1. China will resume full pre-pandemic production and shipping within the next two weeks.

2. Chinese consumers will resume borrowing and spending at pre-pandemic rates in a few weeks.

3. Every factory and every worker in China will resume full pre-pandemic production without any permanent closures or disruptions.

4. Corporate America’s just-in-time inventories will magically expand to cover weeks or months of supply chain disruption.

5. Not a single one of the thousands of people who flew direct from Wuhan to the U.S. in January is an asymptomatic carrier of the coronavirus who escaped detection at the airport.

6. Not a single one of the thousands of people who flew from China to the U.S. in February is an asymptomatic carrier of the coronavirus.

7. Not a single one of the thousands of people who are in self-quarantine broke the quarantine to go to Safeway for milk and eggs.

8. Not a single person who came down with Covid-19 after arriving in the U.S. feared being deported so they did not go to a hospital and are therefore unknown to authorities.

9. Even though U.S. officials have only tested a relative handful of the thousands of people who came from Covid-19 hotspots in China, they caught every single asymptomatic carrier.

10. Not a single asymptomatic carrier caught a flight from China to Southeast Asia and then promptly boarded a flight for the U.S.

I could go on but you get the picture: an extremely contagious pathogen that is spread by carriers who don’t know they have the virus to people who then infect others in a rapidly expanding circle has been completely controlled by U.S. authorities who haven’t tested or even tracked tens of thousands of potential carriers in the U.S.

These same authorities are quick to claim the risk of Covid-19 spreading in the U.S. is low even as the 14 infected people they put on a plane ended up infecting 25 passengers on the flight. These same authorities tried to transfer quarantined people to a rundown facility in Costa Mesa CA that was not suitable for quarantine, forcing the city to file a lawsuit to stop the transfer.

Do these actions instill unwavering confidence in the official U.S. response? You must be joking.

Do the math, people. The coronavirus is already in the U.S. but authorities have no way to track it due to its spread by asymptomatic carriers. People who don’t even know they have the virus are flying to intermediate airports outside China and then catching flights to the U.S.

None of the known characteristics of the virus support the confidence being projected by authorities. The tests are not reliable, few are being tested, carriers can’t be detected because they don’t have any symptoms, the virus is highly contagious, thousands of potential carriers continue to arrive in the U.S., etc. etc. etc.

The network of global travel remains intact. Removing a few nodes (Wuhan, etc.) does not reduce the entire network’s connectedness that enables the rapid and invisible spread of the virus.

Second, what authorities call over-reaction is simply prudent risk management. As I noted yesterday in How Many Cases of Covid-19 Will It Take For You to Decide Not to Frequent Public Places?, when an abstract pandemic becomes real, shelves are emptied and streets are deserted.

It doesn’t take thousands of cases to trigger a dramatic reduction in the willingness to mix with crowds of strangers. A relative handful of cases is enough to be consequential.

Many of the new jobs created in the U.S. economy over the past decade are in the food and beverage services sector, the sector that is immediately impacted when people decide to lower their risk by staying home rather than going out to crowded restaurants, theaters, bars, etc.

Many of these establishments are hanging on by a thread due to soaring rents, taxes, fees, healthcare and wages. Many of the employees are also hanging on by a thread, only making rent if they collect big tips.

Central banks can borrow money into existence but they can’t replace lost income. A significant percentage of America’s food and beverage establishments are financially precarious, and their exhausted owners are burned out by the stresses of keeping their business afloat as costs continue rising. The initial financial hit as people reduce their public exposure will be more than enough to cause many to close their doors forever.

As small businesses fold, local tax revenues crater, triggering fiscal crises in local government budgets dependent on ever-higher tax and fee revenues.

A significant percentage of America’s borrowers are financially precarious, one paycheck or unexpected expense away from defaulting on student loans, subprime auto loans, credit card payments, etc.

A significant percentage of America’s corporations are financially precarious, dependent on expanding debt and rising cash flow to service their expanding debt load. Any hit to their revenues will trigger defaults that will then unleash second-order effects in the global financial system.

The global economy is so dependent on speculative euphoria, leverage and debt that any external shock will tip it over the cliff. The U.S. economy is far more precarious than advertised as well.

The economic storm hasn’t passed; the false calm is only the eye of the financial hurricane.

Why this Draconian Response to COVID-19?

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By Jeffrey A. Tucker

Source: Activist Post

Imagine if you are the organizer of a major arts and tech event that attracts a quarter-million attendees. One week out from the conference, the mayor cancels your event. Your event is not named specifically, just that all events involving more than 2,500 people are officially banned. He does this using emergency powers, justified in the name of containing a virus.

And that’s it. This is what happened to South by Southwest, one of the most important events in the world in Austin, Texas, which has thus far not reported a single case of COVID-19. Based on last year’s numbers, It’s the end for:

  • 73,716 conference attendees and 232,258 festival attendees;
  • 4,700 speakers
  • 4,331 media/press attendees
  • 2,124 sessions
  • 70,00 trade show attendees occupying 181,400 square feet of exhibit space
  • 351 official parties and events
  • 612 international acts
  • 1,964 performance acts

Local merchants are devastated. All hotel and flight reservations are lost. It’s a financial calamity for the city (last year brought half a billion dollars for local merchants) and for untold millions of people affected by the abrupt decision.

Draconian, to say the least.

Making matters worse, a vicious and completely false report published by Variety said that the festival was aching for the city to make the call so that the festival could collect insurance money. This turns out to be entirely wrong: South by Southwest had no insurance against infectious disease. It was a smear and response to mass frenzy. After all, a petition on Change.org signed by 55,000 people had demanded the cancellation.

The city acquiesced to the mob. A grand and glorious conference was destroyed – the first of many this season.

Italy now has 16 million people under quarantine, which is to say that they are prisoners.

Anyone living in Lombardy and 14 other central and northern provinces will need special permission to travel. Milan and Venice are both affected. Prime Minister Giuseppe Conte also announced the closure of schools, gyms, museums, nightclubs and other venues across the whole country. The measures, the most radical taken outside China, will last until 3 April.

Americans have been quarantined on cruise ships and then forced to pay for their later hospitalization. The government that quarantines you has zero intention to pay the costs associated with your care, to say nothing of the opportunity costs of missing work.

The press isn’t helping. The New York Times has cheered it all on, aggressively advocating that governments go Medieval on this one.

In six months, if we are in a recession, unemployment is up, financial markets are wrecked, and people are locked in their homes, we’ll wonder why the heck governments chose disease “containment” over disease mitigation. Then the conspiracy theorists get to work.

The containment strategy was never debated or discussed. For the first time in modern history, governments of the world have taken it upon themselves to control population flows in the hopes of stemming the spread of this disease – regardless of the cost and with scant evidence that this strategy will actually work.

More and more, the containment response is looking like global panic. What’s interesting, Psychology Today points out, is that your doctor is not panicking:

COVID-19 is a new virus in a well-known class of viruses. The coronaviruses are cold viruses. I’ve treated countless patients with coronaviruses over the years. In fact, we’ve been able to test for them on our respiratory panels for the entirety of my career.

We know how cold viruses work: They cause runny noses, sneezing, cough, and fever, and make us feel tired and achy. For almost all of us, they run their course without medication. And in the vulnerable, they can trigger a more severe illness like asthma or pneumonia.

Yes, this virus is different and worse than other coronaviruses, but it still looks very familiar. We know more about it than we don’t know.

Doctors know what to do with respiratory viruses. As a pediatrician, I take care of patients with hundreds of different viruses that behave similarly to this one. We take care of the kids at home and see them if the fever is prolonged, if they get dehydrated, or if they develop breathing difficulty. Then we treat those problems and support the child until they get better.

Meanwhile, the New England Journal of Medicine reports as follows:

On the basis of a case definition requiring a diagnosis of pneumonia, the currently reported case fatality rate is approximately 2%. In another article in the Journal, Guan et al. report mortality of 1.4% among 1,099 patients with laboratory-confirmed Covid-19; these patients had a wide spectrum of disease severity. If one assumes that the number of asymptomatic or minimally symptomatic cases is several times as high as the number of reported cases, the case fatality rate may be considerably less than 1%. This suggests that the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively.

Slate’s piece on this topic offers more perspective:

This all suggests that COVID-19 is a relatively benign disease for most young people, and a potentially devastating one for the old and chronically ill, albeit not nearly as risky as reported. Given the low mortality rate among younger patients with coronavirus—zero in children 10 or younger among hundreds of cases in China, and 0.2-0.4 percent in most healthy nongeriatric adults (and this is still before accounting for what is likely to be a high number of undetected asymptomatic cases)—we need to divert our focus away from worrying about preventing systemic spread among healthy people—which is likely either inevitable, or out of our control—and commit most if not all of our resources toward protecting those truly at risk of developing critical illness and even death: everyone over 70, and people who are already at higher risk from this kind of virus.

Look, I’m obviously not in a position to comment on the medical aspects of this; I defer to the experts. But neither are medical professionals in a position to comment on the political response to this; mostly they have assiduously declined to do so.

Meanwhile, governments are willy-nilly making drastic decisions that profoundly affect the status of human freedom. Their decisions are going to affect our lives in profound ways. And there has thus far been no real debate on this. It’s just been presumed that containment of the spread rather than the care of the sick is the only way forward.

What’s more, we have governments all-too-willing to deploy their awesome powers to control human populations in direct response to mass public pressure based on fears that have so far not been justified by any available evidence. For this reason, we have every reason to be concerned.

Are we really ready to imprison the world, wreck financial markets, destroy countless jobs, and massively disrupt life as we know it, all to forestall some uncertain fate, even as we do know the right way to deal with the problem from a medical point of view? It’s at least worth debating.

‘What More Do You Need to Know?’ Health Insurance Stocks Drive Wall Street Rebound on Biden Super Tuesday Wins

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“Biden is the preferred candidate for the financial markets.”

By Eoin Higgins

Source: CommonDreams

Health insurance industry stocks surged Wednesday morning in the wake of former Vice President Joe Biden’s strong showing in the Democratic presidential primary’s Super Tuesday contests, opening up 600 points after traders appeared to bet the candidate’s resurgence would box out any chance of single-payer universal healthcare.

“What more do you need to know,” tweeted journalist Jack Mirkinson of the market’s spike.

Sanders has made Medicare for All a centerpiece of his campaign. The healthcare industry has poured millions in ad buys against Sanders after the Vermont senator won primaries in Iowa, New Hampshire, and Nevada.

“The industry has long seen Biden as their white knight,” said Dr. Adam Gaffney, the president of Physicians for a National Health Program and an outspoken Medicare for All advocate.

Biden on Tuesday won at least nine of the 14 states up for grabs to Sanders’ four. At press time, Maine was yet to be called, with Sanders and Biden locked in a razor-thin contest.

The market surge came after a rough week for the stock market, which at the end of February saw its biggest decline since the 2008 financial crisis after fears of the economic cost of a worldwide coronvirus pandemic increased.

Business commentators also made the connection between Sanders’ victories in the early primary states, particularly in Nevada, and the market’s poor performance last week.

On Fox Business February 28, billionaire Steve Forbes remarked that the weeklong drop was not only about fears of the coronavirus.

“There’s the political side,” Forbes said of the reason for the poor performance. “In the last week, week-and-a-half, the possibility of Bernie Sanders becoming president of the United States has increased, exponentially.”

According to the Washington Post:

Stocks of healthcare companies roared in response to Biden’s performance. Cigna was up more than 10 percent in morning trading, while UnitedHealth Group rose nearly 12 percent. Humana jumped 1.25 percent and Anthem soared nearly 14 percent.

Investor Ed Yardeni told the Post that Wednesday’s spike was a correction to earlier fears of what he called “Bernie Sanders’ socialist program.”

“The market’s sell-off last week on Sanders’ primary victories and rebound on Monday after Biden’s big win in South Carolina and this morning after Super Tuesday suggest that domestic U.S. politics may matter as much as the global health crisis on investors,” said Yardeni.

As Common Dreams reported, the results—which saw billionaire Michael Bloomberg and Sen. Elizabeth Warren (D-Mass.) coming in far behind the two frontrunners—transformed a once-crowded primary into a two-man race. Though Biden put up a good showing, exit polls from the contests showed a majority of Democratic voters backing the elimination of private insurance in favor of a government-run system guaranteeing healthcare for all.

The Dem Establishment Successfully Cinched a Biden Super Tuesday Victory

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Democratic presidential candidate former Vice President Joe Biden speaks at a primary election night campaign rally Tuesday, March 3, 2020, in Los Angeles. (AP Photo/Chris Carlson)

Super Tuesday has raised the stakes and set the stage for a battle for the Democratic Party’s soul; one that will decide if it stays the course with neoliberalism with Biden or moves towards a progressive social-democratic model with Sanders.

By Alan Macleod

Source: Mint Press News

Former Vice-President Joe Biden built on his victory in South Carolina last week to emerge as the only credible “stop Bernie” candidate after Super Tuesday – where voters in 14 states decided on their nominations for president. While results are still not official, it is clear that the former Delaware senator won the popular vote in at least nine states yesterday, including in Texas, Massachusetts and North Carolina, amassing at least 433 delegates. Sanders has currently secured 388, although that number is likely to rise after all of California is counted.

In one of the most remarkable and drastic political turnarounds in American history, Biden – thought of by many as a yesterday’s man – secured a stunning upset victory after a series of key endorsements. His campaign had been flagging, virtually out of money and without organization or many activists on the ground. As of Monday, he had spent just $1.5 million on TV ads in Super Tuesday states, with aides admitting to CNN their goal was merely to “remain competitive;” a remarkable admission for a presidential campaign.

But facing a Sanders nomination, the establishment wing of the party went into overdrive to find a viable alternative to the Vermont senator. Both Pete Buttigieg and Amy Klobuchar dropped out and immediately endorsed him, as did other figures like former Texas congressman Beto O’Rourke. In a matter of mere hours, the Democratic Party higher-ups managed to coalesce around him in a way the Republicans were unable to in 2016 to stop Trump, proving to the world that the party is certainly not incompetent and can organize and carry out operations with military precision when they perceive it is in their interest to do so.

While the establishment pooled its resources (and delegates) in favor of Biden, Massachusetts senator Elizabeth Warren has refrained from dropping out, let alone endorsing Sanders, thus splitting the progressive vote. Warren finished a distant third in her home state and secured only 28 delegates yesterday. In a defeatist message, her campaign managers said they would hold a meeting to “assess the path forward.”

Biden declared victory in Los Angeles last night, presenting himself as an opponent of the wealthy and a champion of the people: “Let’s get something straight. Wall Street didn’t build this country. You built this country. The middle class built this country. And unions built the middle class,” he told the crowd. But his speech was upstaged by anti-dairy industry protestors who stormed the stage. Earlier in the speech he also confused his wife for his sister.

https://twitter.com/Breaking911/status/1235044512918941698

While it is clear that he will now be the establishment’s candidate for better or worse, the former vice-president has a long history of making egregious errors in speaking. Earlier this week at a rally he tried and failed to recite the preamble of the Declaration of Independence. “We hold these truths to be self evident. All men and women created by the…you know, the thing” he stuttered. And while he promises the working-class “cures for cancer, Alzheimer’s and diabetes” under his presidency, he also told his billionaire backers that he believes they are being “demonized” and that “nothing would change” about America if he were chosen. “I need you very badly,” he told a group of extremely wealthy donors last year.

His policy history and positions, too, might be cause for concern for many voters in the presidential election. These include advocating for cuts to social services, fighting against abortion rights, and supporting NAFTA, the PATRIOT Act and the attacks on Iraq and Libya. And while he retains strong support among Southern black voters, he helped write the 1994 Crime Bill and the Anti-Drug Abuse Bill that exploded the prison population, and fought for segregation and against integration. President Trump has already nicknamed him “Handsy Joe” in reference to his inappropriate touching of women and girls.

While Sanders supporters will be disappointed with the results, other candidates had even worse nights. Chief among them was Michael Bloomberg, who spent more than half a billion dollars on his campaign, picking up just 12 delegates, a third of them in American Samoa. Given his poor performance, that works out to nearly $50 million per delegate. The former Mayor of New York dropped out today, endorsing Biden for the nomination. If he is willing to financially aid Biden anything like how he lavishly spent on himself, Sanders will be fighting a seriously uphill battle.

“It really is a class war we’re up against,” said author and progressive journalist Naomi Klein, who has been traveling with the Sanders team.

The vast majority of this campaign are working class people who are daring to hope for the barest decent things in life. It is this amazing process of raising people’s expectations…What we’re seeing with this establishment pushback, this is not against Bernie Sanders, it is against them. It is against people saying ‘I have a right to healthcare. I have a right to a living wage,’ and it is really sad to see.”

Biden has strong support among the wealthy, the elderly and among Southern black voters. But if he is to win outright and beat Trump in November, he will need to address the age gap in voting. Even in Alabama, where he fared worst, Sanders still comfortably won the vote of those under 30. While there is much work to be done, yesterday was a good day for the establishment wing of the Democratic Party.

Next week will see six more states as well as the Democrats Abroad primaries decided. But Super Tuesday has raised the stakes and set the stage for a battle for the Democratic Party’s soul; one that will decide if it stays the course with neoliberalism with Biden or moves towards a progressive social-democratic model with Sanders.

The Looming Financial Nightmare: So Much for Living the American Dream

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By John W. Whitehead

Source: The Rutherford Institute

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” ― Frédéric Bastiat, French economist

Let’s talk numbers, shall we?

The national debt (the amount the federal government has borrowed over the years and must pay back) is $23 trillion and growing.

The amount this country owes is now greater than its gross national product (all the products and services produced in one year by labor and property supplied by the citizens). We’re paying more than $270 billion just in interest on that public debt annually. And the top two foreign countries who “own” our debt are China and Japan.

The national deficit (the difference between what the government spends and the revenue it takes in) is projected to surpass $1 trillion every year for the next 10 years.

The United States spends more on foreign aid than any other nation ($50 billion in 2017 alone). More than 150 countries around the world receive U.S. taxpayer-funded assistance, with most of the funds going to the Middle East, Africa and Asia.

Meanwhile, almost 60% of Americans are so financially strapped that they don’t have even $500 in savings and nothing whatsoever put away for retirement, and yet they are being forced to pay for government programs that do little to enhance or advance their lives.

Folks, if you haven’t figured it out yet, we’re not living the American dream.

We’re living a financial nightmare.

The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are the ones who will pay for it.

As financial analyst Kristin Tate explains, “When the government has its debt bill come due, all of us will be on the hook.” It’s happened before: during the European debt crisis, Cypress seized private funds from its citizens’ bank accounts to cover its debts, with those who had been careful to save their pennies forced to relinquish between 40% to 60% of their assets.

Could it happen here? Could the government actually seize private funds for its own gain?

Look around you. It’s already happening.

In the eyes of the government, “we the people, the voters, the consumers, and the taxpayers” are little more than pocketbooks waiting to be picked.

Consider: The government can seize your home and your car (which you’ve bought and paid for) over nonpayment of taxes. Government agents can freeze and seize your bank accounts and other valuables if they merely “suspect” wrongdoing. And the IRS insists on getting the first cut of your salary to pay for government programs over which you have no say.

We have no real say in how the government runs, or how our taxpayer funds are used, but we’re being forced to pay through the nose, anyhow.

We have no real say, but that doesn’t prevent the government from fleecing us at every turn and forcing us to pay for endless wars that do more to fund the military industrial complex than protect us, pork barrel projects that produce little to nothing, and a police state that serves only to imprison us within its walls.

If you have no choice, no voice, and no real options when it comes to the government’s claims on your property and your money, you’re not free.

It wasn’t always this way, of course.

Early Americans went to war over the inalienable rights described by philosopher John Locke as the natural rights of life, liberty and property.

It didn’t take long, however—a hundred years, in fact—before the American government was laying claim to the citizenry’s property by levying taxes to pay for the Civil War. As the New York Times reports, “Widespread resistance led to its repeal in 1872.”

Determined to claim some of the citizenry’s wealth for its own uses, the government reinstituted the income tax in 1894. Charles Pollock challenged the tax as unconstitutional, and the U.S. Supreme Court ruled in his favor. Pollock’s victory was relatively short-lived. Members of Congress—united in their determination to tax the American people’s income—worked together to adopt a constitutional amendment to overrule the Pollock decision.

On the eve of World War I, in 1913, Congress instituted a permanent income tax by way of the 16th Amendment to the Constitution and the Revenue Act of 1913. Under the Revenue Act, individuals with income exceeding $3,000 could be taxed starting at 1% up to 7% for incomes exceeding $500,000.

It’s all gone downhill from there.

Unsurprisingly, the government has used its tax powers to advance its own imperialistic agendas and the courts have repeatedly upheld the government’s power to penalize or jail those who refused to pay their taxes.

Irwin A. Schiff was one of the nation’s most vocal tax protesters. He spent a good portion of his life arguing that the income tax was unconstitutional, and he put his wallet where his conscience was: Schiff stopped paying federal taxes in 1974.

Schiff paid the price for his resistance, too: he served three separate prison terms (more than 10 years in all) over his refusal to pay taxes. He died at the age of 87 serving a 14-year prison term. As constitutional activist Robert L. Schulz noted in Schiff’s obituary, “In a society where there is so much fear of government, and in particular of the I.R.S., [Schiff] was probably the most influential educator regarding the illegal and unconstitutional operation and enforcement of the Internal Revenue Code. It’s very hard to speak to power, but he did, and he paid a very heavy price.”

It’s still hard to speak to power, and those who do are still paying a very heavy price.

All the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little thought for the plight of its citizens.

To top it all off, all of those wars the U.S. is so eager to fight abroad are being waged with borrowed funds. As The Atlantic reports, “For 15 years now, the United States has been putting these wars on a credit card… U.S. leaders are essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

If Americans managed their personal finances the way the government mismanages the nation’s finances, we’d all be in debtors’ prison by now.

Still, the government remains unrepentant, unfazed and undeterred in its money grabs.

While we’re struggling to get by, and making tough decisions about how to spend what little money actually makes it into our pockets after the federal, state and local governments take their share (this doesn’t include the stealth taxes imposed through tolls, fines and other fiscal penalties), the police state is spending our hard-earned tax dollars to further entrench its powers and entrap its citizens.

For instance, American taxpayers have been forced to shell out more than $5.6 trillion since 9/11 for the military industrial complex’s costly, endless so-called “war on terrorism.”

That translates to roughly $23,000 per taxpayer to wage wars abroad, occupy foreign countries, provide financial aid to foreign allies, and fill the pockets of defense contractors and grease the hands of corrupt foreign dignitaries.

Mind you, that staggering $6 trillion is only a portion of what the Pentagon spends on America’s military empire.

That price tag keeps growing, too.

In this way, the military industrial complex will get even richer, and the American taxpayer will be forced to shell out even more funds for programs that do little to enhance our lives, ensure our happiness and well-being, or secure our freedoms.

As Dwight D. Eisenhower warned in a 1953 speech:

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?

This is still no way of life.

Yet it’s not just the government’s endless wars that are bleeding us dry.

We’re also being forced to shell out money for surveillance systems to track our movements, money to further militarize our already militarized police, money to allow the government to raid our homes and bank accounts, money to fund schools where our kids learn nothing about freedom and everything about how to comply, and on and on.

Are you getting the picture yet?

The government isn’t taking our money to make our lives better. Just take a look at the nation’s failing infrastructure, and you’ll see how little is being spent on programs that advance the common good.

We’re being robbed blind so the governmental elite can get richer.

This is nothing less than financial tyranny.

“We the people” have become the new, permanent underclass in America.

It’s tempting to say that there’s little we can do about it, except that’s not quite accurate.

There are a few things we can do (demand transparency, reject cronyism and graft, insist on fair pricing and honest accounting methods, call a halt to incentive-driven government programs that prioritize profits over people), but it will require that “we the people” stop playing politics and stand united against the politicians and corporate interests who have turned our government and economy into a pay-to-play exercise in fascism.

We’ve become so invested in identity politics that label us based on our political leanings that we’ve lost sight of the one label that unites us: we’re all Americans.

The powers-that-be want to pit us against one another. They want us to adopt an “us versus them” mindset that keeps us powerless and divided.

Trust me, the only “us versus them” that matters anymore is “we the people” against the police state.

We’re all in the same boat, folks, and there’s only one real life preserver: that’s the Constitution and the Bill of Rights.

The Constitution starts with those three powerful words: “We the people.”

The message is this: there is power in our numbers.

That remains our greatest strength in the face of a governmental elite that continues to ride roughshod over the populace. It remains our greatest defense against a government that has claimed for itself unlimited power over the purse (taxpayer funds) and the sword (military might).

This holds true whether you’re talking about health care, war spending, or the American police state.

While we’re on the subject, do me a favor and don’t let yourself be fooled into believing that the next crop of political saviors will be any different from their predecessors. They all talk big when they’re running for office, and when they get elected, they spend big at our expense.

As I make clear in my book Battlefield America: The War on the American People, this is how the middle classes, who fuel the nation’s economy and fund the government’s programs, get screwed repeatedly.

George Harrison, who would have been 77 this year, summed up this outrageous state of affairs in his song Taxman:

If you drive a car, I’ll tax the street,

If you try to sit, I’ll tax your seat.

If you get too cold I’ll tax the heat,

If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for

If you don’t want to pay some more

‘Cause I’m the taxman, yeah, I’m the taxman.

Now my advice for those who die

Declare the pennies on your eyes

‘Cause I’m the taxman, yeah, I’m the taxman

And you’re working for no one but me.

Data governance and the new frontiers of resistance

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The 21st century corporation is using algorithmic-based intelligence to accumulate data on a massive scale. Social movements need to grasp this change quickly.

By Anita Gurumurthy and Nandini Chami

Source: ROAR

Four centuries after the East India Company set the trend for corporate resource extraction, most of the world is now in the grip of unbridled corporate power. But corporate power is on the cusp of achieving “quantum supremacy” and social movements in the digital age need to understand this in order to shift gears in their struggles. The quantum shift here comes from “network-data” power; the ingredients that make up capitalism’s digital age recipe.

Contemporary capitalism is characterized by the accumulation of data-as-capital. Big Tech, as digital companies are collectively known, use the “platform” business model. This model provides a framework for interactions in the marketplace by connecting its many “nodes” — consumers, advertisers, service providers, producers, suppliers and even objects — that comprise the platform ecosystem, constantly harvesting their data and using algorithms to optimize interactions among them as a means to maximize profit.

The platform model emerged as a business proposition in the early 2000s when internet companies offering digital communication services began extracting user data from networked social interactions to generate valuable information for targeted advertising. It is estimated that by 2025, over 30 percent of global economic activity will be mediated by platform companies, an indication of the growing “platformization” of the real economy. In every economic sector, from agriculture to predictive manufacturing, retail commerce and even paid care work, the platform model is now an essential infrastructural layer.

Control over data-based intelligence gives platform owners a unique vantage point — the power to shape the nature of interactions among member nodes. Practices such as Amazon’s segmenting and hyper-targeting of consumers through price manipulation, Uber’s panoptic disciplining of its partner drivers, and TripAdvisor’s popularity ranking algorithm of listed properties, restaurants and hotels are all examples of how such platforms mediate economic transactions. The accumulation of data that feeds algorithmic optimization enables more intensified data extraction, in a self-propelling cycle that culminates in the platform’s totalizing control of entire economic ecosystems.

Amazon for instance, is no longer an online book store, and was perhaps never intended to be. With intimate knowledge about how the market works, Amazon is a market leader in anticipatory logistics and business analytics, providing both fulfillment and on-demand cloud-based computing services to third parties. Not only has it displaced traditional container-freight stations in port cities, it has begun to look increasingly like a shipping company. The dynamics of an intelligence economy have led to large swathes of economic activity being controlled by a handful of platform monopolies.

Studies suggest that in a matter of a couple of decades, platform monopolies have overtaken oil, automobile and financial corporations in market capitalization. Today, platform-based business models account for seven of the world’s top eight companies ranked by market capitalization. The pan-global platform corporation, with its DNA of data-based intelligence, has replaced the trans-national industrial corporation as the Leviathan of our times.

Enter the intelligent corporation

As the dominant form of economic organization in the capitalist world order, the corporation has always wielded power, not just in the market but also in political and socio-cultural realms. The rise of the “intelligent corporation” defined by the political economy of data capital has produced qualitative shifts in the exercise of corporate power, including the following.

From dominating the market to becoming the market

Like its predecessor, the intelligent corporation also aims at complete market domination. In platform-based capitalism, local business models based on intimate contextual knowledge are completely displaced by the data-based intermediation of marketplace and social transactions. It is by eliminating these disparate pockets of capital accumulation that platform owners maximize their profits.

The intelligent corporation also goes a step further, moving beyond “dominating the market” to “becoming the market.” Integrating across business lines, these companies both operate a platform and promote their own goods and services on it. This places them in direct competition with the businesses that use their infrastructure, and creates a conflict of interest. For example, Amazon uses its product marketplace data to consolidate its private labels, launching high-demand products at prices that undercut third-party sellers.

In this new strategy for acquiring market power, long-term market monopolization is privileged over the ability to break-even in the short run. The ecosystem that a platform seeks to capture has room only for one winner with the wherewithal to forgo immediate profits and invest in business integration — through aggressive acquisition — and systematic data-layer development. Other competitors are destined to fall by the wayside.

From cheap labor to freedom from labor

In the capitalist economy, the key contradiction is between capital and labor. Capital is in a perennial quest for freedom from labor through labor-substituting technological advances and territories to shift production to reduce labor costs. In the intelligence economy, capital seems to have come very close to realizing its primordial pursuit.

Using 360° surveillance, the intelligent corporation creates a self-optimizing ecosystem, manipulating each node, expanding its captive network, accumulating data capital and entrenching its dominance. It is able to achieve a global operational footprint with few assets and a minuscule employee base. Think Uber. Uber drivers are not considered to be employees in most places where the company runs its business. With a god’s eye view of the city and its roads, the customers and the driver, Uber takes over city transport, often without owning a single taxi. Passing off the liability to the driver, who must take a high-interest loan to acquire a vehicle to become Uber’s coveted “partner,” the corporation extracts from the driver more than just labor time.

In traditional labor-intensive manufacturing and services sectors, data capital is slowly but surely affecting far-reaching transformation. Projections show that automation based on artificial intelligence (AI) will eventually displace labor. It is estimated that over 40 percent of the global workforce will lose their jobs in AI-led disruption of manufacturing over the next 15–25 years. A limited number of high-paying jobs may open up for individuals with advanced skills in the development of data and AI technologies. But most of the labor force will end up in low-paid, personalized service work.

For countries in the Global South, the challenge will be especially pernicious. As rising wages erode the comparative advantage of labor in these economies, the shift to AI technology is likely to trigger a re-shoring trend whereby factories are relocated to richer countries that offer more sophisticated infrastructural support for deployment of AI systems. According to the World Bank, over two-thirds of the workforce in developing countries are likely to lose jobs. It is not clear how these changes will shift gender-based segmentation and gender hierarchies in labor markets. However, going by current trends, women seem to be the first to lose their jobs in this transition, with a reversal of both pay and status gains.

Planetary-scale time-space enclosure

Capturing previously non-commodified time and place has always been a central strategy of capitalist expansion. In the intelligence economy, we are witnessing a new phase of such “primitive accumulation” – through “data dispossession.” The expropriation of data from everyday social exchanges through the platform business model is comparable to the expropriation of natural resources for capitalist production in a previous age. The pervasive data extraction by platform companies has transformed data-mined social interaction into a factor of production, just as invaluable a resource as land for the creation of goods and services. The centralization of wealth and power today, derives from an unprecedented quality and scale of dispossession.

The dynamic of data dispossession is self-propelling. It is now well understood that platforms aggressively pursue a strategy of locking-in users, offering instant gratification in exchange for data and making it costly for them to leave a platform. The Chinese “super-platforms” WeChat and Meituan-Dianping combine news, entertainment, restaurant reviews, food delivery and ride-hailing, along with cross-cutting applications such as payment systems and digital wallets, demonstrating a “stickiness” that is almost addictive.

When participation in the platform on the platform owner’s terms becomes de facto the only choice for economic actors, data extractivism is normalized. Similar to the predatory practices of historical colonialism, the platform tactics of the intelligent corporation function as a neo-colonial project. The difference is that this time around, rather than European companies, the US and Chinese platform companies are in the driving seat.

A profoundly unsustainable exploitation of the natural world accompanies the rapid inroads of the intelligent corporation. Take the case of the vast ecological footprint of the online food-delivery sector. According to a 2018 study published in the science journal Resources, Conservation and Recycling, door-to-door fast-food delivery in China accounted for a nearly eightfold jump in packaging waste between 2015 and 2017, from 0.2 to 1.5 million tonnes. This has coincided with the exponential growth of the sector in the country, where the number of customers using food-delivery platforms has gone up from zero in 2009 to 406 million by the end of 2018! The intelligence economy is a veritable resource guzzler whose network data devices are expected to be consuming about one-fifth of global electricity by 2030 just to keep going.

The loss of self-determination for individuals and communities in these new intelligence-based modes of production reflects an asymmetry in power that was previously impossible. This is the route through which the brand-new corporation colonizes bodies and nature, takes control of production and social reproduction, and intensifies accumulation on a global scale.

The “deep corporate” and the death of the social contract

It is no secret that in the digital era, the deep state has had a makeover. Edward Snowden’s revelations and witness testimonies from China’s Uighur-dominated Xinjiang have exposed the dark workings of the contemporary military–industrial complex, the unholy nexus between Big Tech and the state. Trade justice activists have constantly pointed to the “hidden hand” of Silicon Valley and Chinese corporations using their governments to bat for their interests, reducing policy decisions to executive fiats for entrenching their power.

But what is only recently coming to light is the rise of the “deep corporate” — the extension of the Kraken-like tentacles of intelligent corporations into the heart of public life. The subsuming of social life by platform capitalism has distorted the political space thanks to the echo chambers of the automated public sphere. The contagion of mispropaganda and informational warfare in political campaigning has become impossible to contain in a public sphere determined by algorithmic filters. In this scenario, deliberative democracy itself is under the threat of extinction.

The social credit system being developed by China in partnership with eight tech companies takes the “corporatization” of governance to a whole new level. Access to benefits and citizens’ guaranteed rights are now predicated on behavioral scoring on the basis of online purchase history, financial transactions and social media connections on the partnering platforms. With the archetypal “good consumer” becoming the deserving citizen, citizenship is thus dislocated from political claims. The “deep corporate” acquires the formal authority to mediate the social contract.

Living with the intelligent corporation

We are living through a phase in capitalism that is marked by extreme market concentration, unprecedented inequality in wealth and the declining share of labor in global income; a state of affairs that has led even the IMF to express caution. It is no coincidence that this period of intensified economic injustice has coincided with the rise of platform capitalism and its real-world vehicle, the intelligent corporation.

What does living with the intelligent corporation mean?

What is new about this phase of capitalism that has spawned the intelligence economy is a deeply qualitative shift. Datafication and data capital transform the way capitalist “accumulation by dispossession” happens. “Intelligencification” makes plausible a planetary-scale colonization and commodification of everyday life by the new corporation in ways previously impossible. Both nature and caring bodies are trapped in a planetary enclosure insofar as everything and everybody can be turned into data.

It also feeds off and emboldens the financialization apparatus that runs the neoliberal economy. Through the perverse confluence of data and finance, the intelligent corporation universalizes and naturalizes its authority, destroying the marketplace of things and ideas.

Through data extractivism, the intelligent corporation ravages sociality, taking the ideological project of neoliberalism all the way to the expropriation of the political. This is a deep take-over, an “ontological encroachment” of human subjectivity.

Where does all this leave us?

As UNCTAD has highlighted, the pace of concentration of market power is extremely worrying. Consider this: Amazon’s profits-to-sales ratio increased from 10 percent in 2005 to 23 percent in 2015, while that of Alibaba increased in just four years from 10 percent in 2011 to 32 percent in 2015.

Policymakers across the world are struggling to reform their legacy laws to rein in the intelligent corporation. Even the domestic governments of powerful US and Chinese platform corporations are struggling to contain their excesses. The US Federal Trade Commission (FTC) is currently investigating Amazon and Facebook for abuse of market dominance while the US Justice Department is probing Google. The state of California is facing massive resistance from Uber and Lyft to its new regulation for labor rights of “gig” workers, with the two companies currently leading a $60 billion ballot initiative to extricate themselves from employer’s liability. In November 2019, the state administration for market regulation in China had to hold a meeting with Alibaba and other online retail platforms about their strong-arming of third-party vendors, in violation of existing regulations to curb anti-competitive conduct.

The loopholes of pre-digital taxation laws based on a physical presence in a given country have been effectively exploited by platform companies to escape tax liability, through profit shifting to low-tax jurisdictions. Similarly, when faced with liability for unfair market practices in overseas markets, it is very easy for platform companies to shift liability to their parent company outside the jurisdiction. For instance, Uber in South Africa resorted to the defense that its partner drivers were employees of the parent company headquartered in the Netherlands and not the South African subsidiary, in order to evade its liabilities under existing labor laws. The lack of binding international regulations governing cross-border data flows has also aided rampant data extractivism,

More recently, in the wake of malpractice lawsuits brought against Big Tech by their own employees; exposes about founding CEOs who have enjoyed a godly status; and public disenchantment with multiple revelations of clandestine data mining and algorithmic gaming, the early sheen seems to be wearing off. Google’s parent company Alphabet can no longer use its “Do the right thing” motto without irony. Facebook has been forced to switch to the “too big to fail” defense from the “protector and defender of the freedoms of the global community” line. Alibaba may not be able to proclaim its commitment to the development of small and medium enterprises in Africa for much longer. The façade has crumbled. And this rupture in the discursive hegemony of the intelligent corporation in which we are currently situated is the right moment to mount a collective challenge.

So, resist we must, so that the wealth of data and of networks can be appropriated and used to create a just and humane society. This means taking the intelligent corporation by the horns, and forging a movement that is able to grapple with the ethical–political boundaries of digital intelligence.

Taming the Leviathan and reclaiming the planet

Given the enormous economic and political clout of the modern corporation in the age of data, unshackling people and the planet from corporate power is an urgent task. Struggles against the extreme unfairness of the global trade and intellectual property regime by transnational social movements have shown the necessary connection between the agenda for development justice and the dismantling of corporate power.

Building alliances among movements has become a vital strategy in halting TNCs’ inexorable plunder. The trade justice movement against corporate globalization, the environment movement’s quest for sustainable development, feminist struggles to reclaim the body and the sphere of social reproduction from capital and workers’ struggle against the intensified squeeze on labor and the dismantling of social protection in neoliberal globalization are inspiring examples in this regard. Transnational civil society has painstakingly built alliances and solidarities across these movements to expose corporate excess, bringing pressure on the UN for a global binding treaty on TNCs’ human rights obligations in the face of near-insurmountable odds.

In the digital age, as corporate power assumes indomitable proportions — with tech CEOs carving out data dominions that they rule over — current frameworks of power analysis and action may not go very far. A concerted and coherent strategy is urgently needed in order to enable a more equitable distribution of the gains of data-based intelligence. The Digital Justice Manifesto released in November 2019 by the Just Net Coalition — through a process of strategic and sustained dialogue between digital rights, trade justice, feminist, environmental, labor and human rights groups and activists — outlines such a roadmap. As the Manifesto underlines, we need immediate action along three broad fronts to reclaim digital power from the intelligent corporation:

(a) Wrestling back ownership of our personal and collective data and intelligence by instituting an economic rights framework for data resources.

(b) Governing critical platform infrastructures as public utilities.

(c) Enforcing a local-to-global governance model for digital and data infrastructure that supports local economies and democratic self-determination of collectivities, preventing the enclosure of entire market and social ecosystems by a centralized intelligence. In other words, the governance of tech infrastructure must enable the flourishing of disparate local economies and make room for multiple platform models to function — co-operatives, social enterprises, public etc. — challenging the totalizing impetus of global intelligence capitalism.

Neoliberal globalization and financialization have led to profoundly unequal societies. The impunity of the TNC has been central to this dynamic. Social movements have placed several creative proposals to counter this: mandating charter renewal every five years overturning the principle of corporations’ perpetual legal existence; taxing stock trade on the basis of the holding period to contain excessive financial speculation; placing a cap on the individual assets of founders/CEOs and so on.

“Intelligencification” demands a new frontier for resistance. The power of the intelligent corporation must be contained through tactics small and big in political and cultural realms. A new wisdom about the governance of data must be explored for a truly emancipatory future for all.