Tag Archives: Economic Collapse

How big corporations are draining the life out of a sick America

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If today’s companies were truly offering a fair return to the taxpayers who built their businesses, they’d be doing a lot more to ensure that all Americans have the means to support their families.

By Paul Buchheit

Source: Nation of Change

When Dr. Jonas Salk was asked about a patent on his polio vaccine in 1955, he said, “There is no patent. Could you patent the sun?” When Gilead Sciences recently developed an anti-Covid drug for about $12 per treatment, they set the price at $3,200.

As Republicans and business leaders decry the word ‘social’ as anti-American, they continue to promote the free-market “winner take all” philosophy that has caused over half of our nation to try to survive without adequate health care and life savings and job opportunities. Our richest corporations are much to blame. A review of the facts should make this clear.

They continue to cheat on taxes

After building their businesses on 70 years of taxpayer-funded research and development, six dominant tech companies (Apple, Amazon, Google, Microsoft, Facebook, and Netflix), which together are worth over $7 trillion, have avoided over a hundred billion dollars in taxes over the past decade.

The profits of some of the largest U.S. corporations are surging in this pandemic year of sickness and death. And the levels of fraud and deceit keep growing along with the profits. A shocking analysis by the Tax Justice Network concludes that “Multinational firms operating around the world are shifting over $1 trillion in profits every year to corporate tax havens.” A trillion dollars a year, lost to the people in need of jobs and food and housing.

They’ve rigged the system

Fifty years of lobbying against their own tax responsibilities has borne fruit for the big corporations. First of all, the corporate tax rate has dropped from about 35 percent to a low of 11 percent in 2019.

Secondly, the payroll tax has been used to make up the corporate shortfall. In the past fifty years the corporate percent of tax revenue from major sources has decreased from 23 percent to 7 percent. The payroll tax percent has increased from 24 percent to 39 percent. Corporations have drastically cut their taxes while putting more of the tax burden on workers.

It gets more insidious. In the past ten years Republicans have waged an anti-IRS campaign, slashing the budget of one of the most productive and cost-effective government agencies, and eliminating the positions of highly specialized employees who might have been expected to go after the largest corporations and the biggest cheaters.

And it gets personal. According to the IRS’ own Taxpayer Advocate, the average U.S. household pays $3,000 per year to make up for the delinquents and deadbeats.

Their greed reached new heights

With the 2017 corporate tax cuts came the lofty assurances that money would be freed up for new investment in jobs and R&D. So what happened? Hypocrisy happened. In the following year S&P 500 companies set a new record for buying back their stock to artificially boost stock prices for management and investors — a practice that was illegal until the Reagan years. While about a third of S&P companies are now curtailing stock buybacks in response to the pandemic, others have depleted so much of their funds that they have turned to the pandemic-inspired CARES Act for relief to “distressed industries.”

Start with the airlines. The Big Four spent $42.5 billion on buybacks between 2014 and 2019, and now they’re asking for $50 billion in bailout money. Delta CEO Ed Bastian had the audacity to say “the owners of a business deserve a return, too.” Boeing, which was actually borrowing money to buy back stock, is now asking for a $17 billion bailout from taxpayers.

Merck, whose 1950s slogan was “Medicine is for people, not for profits,” spent $10 billion on R&D in 2018 and $14 billion on share repurchases and dividends.

At Home Depot, according to the Roosevelt Institute and the National Employment Law Project, the money spent on buybacks could have boosted the average employee’s salary by $18,000 a year.

And fast food giants including KFC, Wendy’s, and Papa John’s, who, according to the New York Times, had spent great sums of money on buybacks, now need $145 billion of taxpayer funding to avoid mass layoffs.

They show disdain for the American worker

Stock buybacks are only part of the corporate trend to diminish the state of the worker. Automation is eliminating millions of jobs. The old argument that the loss of jobs to technology has always been followed by a new and better class of work becomes meaningless when the machines start doing our thinking for us. And when the changes are occurring at such a rapid pace. A McKinsey report states: “Those earlier workforce transformations took place over many decades, allowing older workers to retire and new entrants to the workforce to transition to the growing industries. But the speed of change today is potentially faster.” The speed of change is faster still because of the loss of jobs during the Covid pandemic.

Common arguments in favor of the tech companies are that (1) they’re making a lot of people rich, and (2) they’re providing all of us with remarkable products. Well, they’re making about 20% of Americans rich. And their products are a result of 70 years of taxpayer-funded research and development, much of it by government agencies. If today’s companies were truly offering a fair return to the taxpayers who built their businesses, they’d be doing a lot more to ensure that all Americans have the means to support their families.

The Pandemic Is Accelerating Trends That Are Disrupting the Foundations of the Economy

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By Charles Hugh Smith

Source: Of Two Minds

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses.

Fundamentally, the economy of 2019 was not very different from the economy of 1959: people went shopping at retail stores, were educated at sprawling college campuses, went to work downtown, drove to the doctor’s office or hospital, caught a flight at the airport, and so on.

The daily routine of the vast majority of the workforce was no different from 1959. In 2019, the commutes were longer, white-collar workers stared at screens rather than typewriters, factory workers tended robots and so on, but the fundamentals of everyday life and the nature of work were pretty much the same.

Beneath the surface, the fundamental change in the economy was financialization, the commodification of everything into a financial asset or income stream that could then be leveraged, bundled and sold globally at an immense profit by Wall Street financiers.

This layer of speculative asset-income mining had no relation to the actual work being done; it existed in its own derealized realm.

For decades, these two realms—the structure of everyday life (to borrow Braudel’s apt term) and the abstract, derealized but oh so profitable realm of financialization–co-existed in an uneasy state of loosely bound systems.

If you squinted hard enough and repeated the mantras often enough, you could persuade yourself there was still some connection between the everyday-life economy and the realm of financialization.

The two realms have now disconnected, and the real-world economy has been ripped from its moorings, as patterns of work and every-day life that stretch back 70 years to the emergence of the postwar era unravel and dissolve.

The trends that are currently fatally disrupting retail, education, office work and healthcare have been in place for years. When I wrote my 2013 book about the digitized future of higher education in a low-cost union of high-touch and low-touch learning, The Nearly Free University, all these trends were already clearly visible to those willing to look beyond the models embedded in the economy for decades or even centuries.

Visionaries like Peter Drucker foresaw the complete disruption of the education and healthcare sectors as far back as 1994. Post-Capitalist Society.

The problem with this disruption is it eliminates tens of millions of jobs–not just the low-paying jobs in retail and dining-out, but high-paying jobs in university administration, healthcare, and other core service sectors.

The last real-world connection between everyday life and financialization was the over-supply of everything that could be financialized: the way to reap the big profits was expand whatever could be leveraged and sold. So retail and commercial space ballooned, colleges proliferated, cafes sprang up on every corner, etc.

Meanwhile, financialization’s unquenchable thirst for higher profits stripped everything of the redundancy and buffers required to stabilize the system in times of crisis. So hospitals no longer kept inventory because by the logic of financialization, all that mattered was maximizing the return on capital–nothing else could possibly matter in the derealized realm of speculative profiteering.

Now healthcare finds itself trapped between the pincers of financialization’s stripmining and the collapse of retail in-person demand–the financial foundation of the entire system. Under the relentless pressure of financialization’s stripmining and profteering, healthcare only survives if it can bill somebody somewhere a staggering amount for everything from office visits to procedures to hospital stays to medications.

Once that avalanche of billing dries up, the entire sector implodes: a sector that accounts for almost 20% of the U.S. economy.

Higher education is also imploding, and for the same reason: its output no longer justified its enormous cost structure. The same can be said of overbuilt retail and commercial space: the financial justification for sky-high rents have imploded and will never come back. The over-supply is so monumental and the collapse of demand so permanent, the gigantic pyramid of debt and speculative excess piled on all these excesses is collapsing.

A bailout by the Federal Reserve won’t change the fundamentals of the collapse of financialization; all the Fed can do is reserve scarce lifeboat seats for its billionaire banker-financier pals. (Warren, you know Bill, have you met Jamie, Jeff, Tim and the rest of the Zillionaire Rat-Pack?)

Despite the record highs in the stock market–the ultimate expression of financialization disconnected from the real-world economy–financialization is also imploding. Financialization still claimed a connection to the real world of income streams and the value of the collateral underlying all the speculative profiteering: the high rents paid by the restaurants on the ground floor and the businesses for office space above justified the high value of the collateral, the commercial building.

Foundational swaths of the real-world economy have been swept away, and so the collateral is largely worthless. Lots of people want their employer to start paying for business-class airline seats again so they can jet around the country on somebody else’s dime, staying in pricey hotels and attending conferences, but these activities no longer have any financial justification.

The economy of 1959 is finally expiring. The enormous time and money sinks of transporting humans hither and yon no longer have any financial justification.

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses. We all know that automation is replacing human labor, but the real change is the collapse of the financial justification for the enormously costly systems we now depend on to generate jobs: healthcare, retail, tourism, dining out, education, working downtown, and all the professions dependent on managing all this complexity.

While the elimination of low-skill jobs–a longstanding trend–is attracting attention, the implosion of the 1959 economic model and financialization will soon sweep away millions of high-paying professional jobs that no longer have any financial justification.

As the 1959 economy implodes, so does the tax system based on payroll taxes and property taxes. This article sketches out the perverse incentives for employers to invest in automation rather than hire workers: Covid-19 Is Dividing the American Worker (WSJ.com)

There are alternatives, but they require accepting the implosion of both the 1959 economic model and its evil offspring, financialization.

I sketched out an alternative way of organizing work, everyday life and finance in my book A Radically Beneficial World. There are alternative ways of organizing civilization other than the insanely wasteful and exploitive system we now inhabit.

If you are reading this, you might be a conspiracy theorist

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By John Steppling

Source: Off-Guardian

…a permanent modern scenario: apocalypse looms…and it doesn’t occur.”
Susan Sontag, AIDs and its Metaphors

“I should not misuse this opportunity to give you a lecture about, say, logic. I call this a misuse, for to explain a scientific matter to you it would need a course of lectures and not an hour’s paper. Another alternative would have been to give you what’s called a popular scientific lecture, that is a lecture intended to make you believe that you understand a thing which actually you don’t understand, and to gratify what I believe to be one of the lowest desires of modern people, namely the superficial curiosity about the latest discoveries of science. I rejected these alternatives.”
Ludwig Wittgenstein, A Lecture on Ethics

If you’re reading this, then you’ve probably been called a conspiracy theorist. Also you’ve been derided and shamed for questioning the “science” of the Covid debacle.

The idea of science is now a badly corrupted idea. In a nation, today, (the USA) which in educational terms ranks 25th globally in science skills and reading, and well below that in math; all one hears is a clarion call to science. In reading skills the US placed below Malta, Portugal, and right about the same as Kazakhstan.

But in a nation that no longer reads, and *can* no longer read, it is not surprising that knowledge is absorbed via the new hieroglyphics of gifs (interestingly the creator of gifs wanted it pronounced with a soft g the more to sound like a peanut butter brand) and memes.

So-called ‘response memes’ are the new version of conversation, and most register and communicate (sic) confusion. As beer ad marketers know, the state of your brain after consuming a six pack is pretty much the standard target ideal for advertising. And it relays a message that six pack confusion is actually a good and perhaps even sexy state in which to find oneself.

Education is for those with money, those who can afford the proper foundational skills to get into Harvard, MIT, Cal Tech and the Stanford. For everyone else science is Star Trek.

But I digress. The point is that most Americans imagine that they revere science, and they ridicule anyone they think of as unscientific. But they think of it in cult terms, really. Its a religion of sorts. The only people who don’t are those ‘real’ religious zealots, Dominionist and Charismatic Christians (like Mike Pompeo, Mike Pence, Rick Perry, Betsy DeVos et al) who hold positions of enormous power in the US government under the least scientific president in history.

The Christian right doesn’t like any science, ANY science. But for most of that target demographic (the educated mostly white 30%), the cry is to “trust the science”…even the great Greta says to “trust the science”.

The problem is, science is not neutral, its as politicized as media and news and the pronouncements of celebrities.

In May 2020, The Lancet published an article revisiting the 1957 and 1968 Influenza pandemics.

The 1957 outbreak was not caused by a coronavirus—the first human coronavirus would not be discovered until 1965—but by an influenza virus. However, in 1957, no one could be sure that the virus that had been isolated in Hong Kong was a new pandemic strain or simply a descendant of the previous 1918–19 pandemic influenza virus.

The result was that as the UK’s weekly death count mounted, peaking at about 600 in the week ending Oct 17, 1957, there were few hysterical tabloid newspaper headlines and no calls for social distancing. Instead, the news cycle was dominated by the Soviet Union’s launch of Sputnik and the aftermath of the fire at the Windscale nuclear reactor in the UK.

By the time this influenza pandemic — known colloquially at the time as “Asian flu” — had concluded the following April, an estimated 20 000 people in the UK and 80 000 citizens in the USA were dead. Worldwide, the pandemic, sparked by a new H2N2 influenza subtype, would result in more than 1 million deaths.

To date, Covid 19 has not reached the million death marker in the US And yet we are seeing the most draconian lockdowns in modern history, the total suspension of democratic process and a level of hysteria (especially in the U.S. and UK) unprecedented. I wrote about some aspects of this on my blog here, mostly touching on the cultural effects

Allow me to quote The Lancet again.

The subsequent 1968 influenza pandemic — or “Hong Kong flu” or “Mao flu” as some western tabloids dubbed it — would have an even more dramatic impact, killing more than 30 000 individuals in the UK and 100 000 people in the USA, with half the deaths among individuals younger than 65 years — the reverse of COVID-19 deaths in the current pandemic.

Yet, while at the height of the outbreak in December, 1968, The New York Times described the pandemic as “one of the worst in the nation’s history”, there were few school closures and businesses, for the most, continued to operate as normal.

I remember the 68 Hong Kong flu. I was in my last year of high school. The summer after was Woodstock, the ‘summer of love’. Not a lot of social distancing going on. But we are past numbers and statistics having any real meaning. The Covid narrative is now in the realm of allegory.

The media perspective is utterly predictable. Liberal outlets that have the inside track to government are seen to be reinforcing the mainstream story (VOX, Slate, Huff Post, The Guardian and Washington Post). In a recent VOX article the message was only a sociopath would NOT wear a mask and that the ‘science’ was unanimous.

Of course its no such thing. But the message of sites like VOX, or Daily Beast, or Wa Po or the truly reprehensible Guardian, are always going to be to hammer away ‘on message’. The same is true for what passes for moderate news organs like the NY Times, ABC News, The Hill, and BBC. There has been virtually no dissenting opinions expressed in these rags.

All these news outlets are given clear messages by the spin doctors in government, by the White House, and by contacts within the State Department and Pentagon. And by the advertising firms employed by the state (such as Ruder Finn).

“Ad agencies are not in the business of doing science.”
Dr. Arnold S. Relman (Madison Ave. Has Growing Role In the Business of Drug Research, NY Times 2002)

The WHO, the CDC, and most every other NGO or government agency of any size hires advertising firms. The WHO, which is tied to the United Nations, is a reasonably sinister organization, actually.

Just picking up a random publication from the WHO, on what they call ‘the tobacco epidemic’ and you find on page 33 the following chapter heading “Objective: Effective surveillance, monitoring and evaluation systems in place to monitor tobacco use.”

Reading further and all this is really saying is that the populace of any country is best put under surveillance. It’s for their own good, you see.

But back to the science. Here is a small trip down memory lane…

Institutions of medicine, global and national possess no more integrity than your average NGO (Amnesty International, Médecins Sans Frontières, Oxfam et al). And that means not very much.

To understand the nature of institutional corruption one must understand Imperialism. The institutions of Imperialist nations are going to further Imperialist ideology. (see Antonio Gramsci, ideological hegemony). The US is not in the business of helping Americans.

Modern monopoly forms better reflect that scientific knowledge, and its advanced application to production, are concentrated, ultimately, not in physical objects but in human beings and human interaction with those objects. It is monopoly of the labour power of the most highly educated workers, by both imperialist states and Multi National Corporations, that forms the ultimate and most stable base of imperialist reproduction.

– Sam King (Lenin’s theory of imperialism: a defence of its relevance in the 21st century, MLR)

The idea of super-exploitation needs to be conceptually generalised at the necessary level of abstraction and incorporated in the theory of imperialism. Super-exploitation is a specific condition within the capitalist mode of production […] the hidden common essence defining imperialism.

he working class of the oppressed nations/Third World/Global South is systematically paid below the value of labour power of the working class of the oppressor nations/First World/Global North. This is not because the Southern working class produces less value, but because it is more oppressed and more exploited.

– Andy Higginbottom (Structure and Essence in Capital 1, quoted by John Smith Imperialism in the Twenty-First Century)

The US jobless rate just hit 2.1 million. Officially. Making the total something over forty million. Its much higher in reality. Nobody has work. There is no work and we are at the start of a period of massive evictions, foreclosures, and delinquencies — and the homeless population will soon reach Biblical proportions (in some cities, such as Los Angeles, its already Biblical). Will be simply of a magnitude never before seen.

Hence the authoritarian policing of lockdowns in, for example, New Zealand, suggests something like a practice run. The ruling class in western nations knows full well this is coming. And one wonders if it’s not, in fact, a part of the plan (oh here is where someone says conspiracy theory…probably Louis Proyect).

Yes it’s a fucking conspiracy theory. It is a theory based on evidence, however.

Why are the US and UK and a host of other countries deliberately ensuring a massive depression? Because they care about your health? They are worried we all might catch the flu? Has the US ever demonstrated a concern with your health and well being before?

Remember how many discretionary tax dollars go to health care and how much to defense. Conspiracies do occur. The denial of that fact seems to be a hallmark of the pseudo or false left. Does the suspension of democratic process not cause this soft left any problems at all? Look at Sweden, at Belarus…no lockdown and no problem.

It should be noted that there are a great many terrific doctors in the US. Dedicated and brilliant, often. But they are not the system. The system is run for profit.

With about three-fourths of Americans under lockdown, the unintended consequences will be vast. There has been a notable decrease in the number of heart attack and stroke patients arriving at hospitals, presumably because they are afraid of catching the coronavirus or of not finding a hospital bed.

As the economy spirals downward, we can also expect an increase in mental health crises, domestic violence and suicides. While lockdown supporters say that to have a functioning economy, we must have good public health, the reverse is also true: To have good public health, we must have a functioning economy.

– Alex Berezow PhD (Geopolitical Futures, 2020)

Alfred Willener wrote an interesting book in 1970, analysing May 68 in France. He analyses the answers students gave to various questionnaires they responded to. The section regarding science is worth quoting.

‘The scandalous fact is that, for all the means that science has put at our disposal, most people live not much better than in the Middle Ages’. The system benefits from science in the following way: through the atom bomb, through ‘the power of statistical research’, through computers, through the chemical industry being ‘in the hands of the state’, through space research.

‘In the end, you realize’, concludes one reasonably logical reply, ‘that technological progress, which makes economic growth possible, does not satisfy the fundamental needs of man and is used above all to maintain and strengthen the system’.

Lastly, I should like to quote one quite unexpected reply, which forms the extreme point of pessimism: ‘ Everyone is oppressed by science.’

– Alfred Willener (The Action-Image of Society on Cultural Politicization)

I doubt seriously one would get such responses today in any European or North American country. The contemporary indoctrination regards science is acute. And the media abounds in junk science. Click bait science. And this is where most people have their opinions formed for them.

There is a paper put out by one of the founders of the World Economic Forum, Klaus Schwab, called The Great Reset. The conclusion of the book reads…

…at a global level, if viewed in terms of the global population affected, the corona crisis is (so far) one of the least deadly pandemics the world has experienced over the last 2000 years.”

In other words, a mortality of .06% is simply not commensurate with the extreme measures the governments of the world (the West in particular) are taking.

There is no question, none, that those measures, the lockdown, the masks, the distancing, and the attending *diseases of despair*, will kill more people by a factor of ten than the virus itself.

This is not even to begin discussing the psychological harm done, in particular to children. And not just harm to children, but severe harm to the most vulnerable.

What is being internalized by children is three fold. One, there is something inherently sick and contagious about ME. Two, everyone MIGHT be a threat to my health. And three, obey authority, because you don’t want to end up like those smelly homeless people were are trying to hard to avoid.

Children take things personally. They tend to blame themselves. Even in the comparative sanity of Norway, where I reside, children are increasingly anxious about the world. How could they not be? All this for a health risk of .06%.

But it is more than just the decimation of the economy in the US and UK. It is a dismantling of the culture. One in three museums closed because of Covid will not re-open. Ever. Where does all that art go?

Just a guess but probably very wealthy collectors will gobble it up at wholesale prices.

The predictable outcome of these lockdowns, certainly in the US, is a guaranteed minimum income. Very minimum. Restrictions on travel, all freedom of movement in fact, will not soon return to normal. Various forms of surveillance and tracking, as well as health certifications, are the goal of the state.

Also, if this pandemic succeeded so well, with so little resistance, why not have another? And there is another aspect to the SWAT mask police, and that is that western society is becoming alarmingly hypochondriacal. Children are kept out of school for runny noses. If all kids with snotty noses were kept out of class, nobody would get an education.

There is a dire future of two or three generations now developing and maturing with very weak immune systems. So that if a natural mutation takes place one day, from a Corona virus or any other, a genuinely serious pandemic could kill tens of millions.

It is not a speculation that there are people who prosper and even benefit during an economic crisis—as smaller business owners struggle, large corporations and banks benefit from huge government subsidies, giving them more power to buy failing small businesses, for example. And it is a fact that many of those people have enormous economic power to shape the policies that can benefit themselves.

It is not a speculation that they would appreciate having strict measures of control against the people by limiting their freedom of speech, freedom of assembly, and freedom to travel, or by installing means of surveillance, check points and official certifications for activities that might give freedom to the people beyond the capitalist framework.

It is not a speculation that they would benefit from moving our social interactions to the digital realm, which can commodify our activities as marketable data for the advertising industry, insurance industry and any other moneyed social institutions Including education, political institution, legal institution, and financial institution.

Such matters should be seen within the context of the western history being shaped by unelected capitalists with their enormous networks of social institutions.

– Hiroyuki Hamada (Wrong Kind of Green, April 2020)

The collapse of retail is accelerating. This is emerging as a monopolization of retail. Few shops will remain, in fact, except luxury stores in select gated areas. The rest will be online and probably rudimentary. The culture and the economy are being strip-mined and recreated for a select clientele. The collapse of the economy means the collapse of the bottom 90% or so.

The very richest men and corporations on the planet are making huge profits.

And yet, there are precious few voices of dissent to the master narrative in the US. In Norway, the lockdown was about five weeks. But its a sparsely populated country and one hardly noticed it save for the kids being home and not in school. But schools reopened and the Prime Minister actually made a speech apologizing, in effect, for an *unnecessary* lockdown. She had been frightened.

But now, with a mild uptick in positive cases the country is considering stricter limitations on travel. Why?

There is no uptick in deaths, only in positive test results. The fact remains the virus attacks the aged and the already sick. But this is very telling, I think. The Norwegian government doesn’t want to be seen as disobedient. They don’t want to not follow the grand plan provided by western agencies and experts. Even if they seemingly don’t really believe it.

(The saddest aspect is the voice of Dr. Mads Gilbert, a known advocate for Palestinian rights, who has weighed in on the side of fear. Why? I have no idea. But it is worth noting his predictions from March 2020 were staggeringly wrong.)

But clearly the groupthink pressure is powerful and small nations do not want to be singled out for bucking the *science*. There are economic coercions threatened, tacitly, as well. The pressure to conform is huge and it takes a Herculean effort — both individually and as a nation, to resist. And *experts* seem to have a hard time admitting they were wrong.

The science has been consistently wrong from day one.

As I say, this is now allegory. Or fable. There is nothing reasonable or rational in the lockdown measures of the US and UK and NZ. Or anywhere. And this is not even to touch upon the criminality of the Gates Foundation and Bill Gates buying public influence and visibility. Not trained in any medical discipline, Gates has somehow made himself one of the faces of the pandemic.

And to deconstruct Gates’ language is to find a disturbing quality of authoritarian hubris. Gates utters declarations as if he were God speaking to his flock. All from a man who has done little save steal from his partners and exploit the poor of India and Africa. One of the most striking aspects of this whole last few months has been the enormous and coordinated effort the Gates machine has put into rehabilitating his image.

If you google “Crimes of the Gates Foundation” for example, you will get ten different fact-checkers officially denying any crimes and another half dozen articles ridiculing those who question Gates motives, his profit from vaccines, or even his alignment with eugenicists (depopulation adherents)– all are derided as, yes, conspiracy theorists.

If you dare to question the rushing of an untested vaccine you are called an anti-vaxxer.

My children are vaccinated. I just don’t like the idea of a hurried untested vaccine produced for a virus that needs no vaccine. And one promoted by a creepy millionaire.

But clearly the Gates charm offensive is in overdrive. The pastel cardigan is everywhere. And yet, his favorable rating in recent surveys is around 56%. That is actually not very high given the amount of self-promotion involved. It’s better than Mark Zuckerberg and Joe Biden, though. Gates is not likeable. No amount of spin can change that.

The final factor to note is the Trump effect. Many liberals would literally rather see dead in the street if it meant discrediting Trump. It is no longer quite a zero sum game, though. But overall the hatred of Trump is now at a religious level, too.

And behold, the opposition is Joe Biden and Kamala Harris. If you want a window in the black heart of Biden, watch and/or listen to his testimony around the Waco inferno. The inherent sadism and lack of humanity is glaringly apparent.

As for Kamala Harris:

As a San Francisco social worker, I sat on the school district committee that met with families of chronically truant students. Once, when we asked a student why he didn’t go to school, he said there was too much police tape and shootings at his school bus stop.

Harris, as CA Attorney General, was putting parents/caregivers in jail if their child was chronically truant. Also as Attorney General, she denied a DNA test to Kevin Cooper, a very likely innocent man who came within hours of execution in 2004.

– Riva Enteen (Counterpunch Aug. 2020)

These are the servants of capital.

The left should be emphasising the economic aspect of lockdown because it is the working class who are the principal victims of lockdown.”
Phil Shannon (Lockdown Skeptics, June 2020)

A Downing street tweet today:

We’re putting tougher measures in place to target serious breaches of coronavirus restrictions. Fines for not wearing a face-covering will double for repeat offences, up to £3,200.”

This is a class-based assault. The wealthy will not be fined for not wearing a face-covering on their private beaches, or dinner parties at the yacht club.

If the “Market” Never Goes Down, The System Is Doomed

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By Charles Hugh Smith

Source: Of Two Minds

The reliance on “good news” narratives dooms our financial system and economy to a death spiral once reality breaks through the induced euphoria.

“Markets” that never go down aren’t markets, they’re signaling mechanisms of the Powers That Be. Markets are fundamentally clearing houses of information on price, demand, sentiment, expectations and so on–factual data on supply and demand, shipping costs, cost of credit, etc.–and reflections of trader and consumer emotions and psychology.

If markets are never allowed to go down, the information clearing house has been effectively shut down. Whatever information leaks out has been edited to fit the prevailing narrative, which in this moment is “central banks will never let markets go down ever again, so jump in and ride the guaranteed Bull to easy gains.”

The past 12 years offer ample evidence for this narrative: every dip draws a near-instantaneous monetary-policy response that reverse the dip and gooses markets higher.

That permanent monetary intervention distorts markets doesn’t matter to participants. Who cares if markets have become “markets,” simulacra of real markets that are now nothing but signaling mechanisms that all is well so buy, buy, buy? If gains are essentially guaranteed, who cares that markets are not longer information clearing houses?

Indeed. There’s no reason to care until the fatal spiral downward surprises us all. Here’s an analogy of what happens when real information gets edited to fit a convenient narrative.

Unfortunately, the patient has cancer which is starting to metastasize, i.e. spread to other organs in the body. But unbeknownst to the patient, this accurate information is considered “bad news,” so the test results and other information is carefully edited to show the cancer is actually shrinking–the exact opposite of what the actual facts reflect.

The patient is naturally delighted with this false data because it appears he’s on the mend and doesn’t need any surgery or other drastic treatments.

If participants don’t have information that reflects actual conditions, they cannot help but make disastrous decisions. Falsified or heavily edited information is misleading, and so all decisions made on the assumption this information is accurate will be fatally skewed.

Symptoms of the fatal spread of the disease are masked by stimulants that not only mask the spread but give the patient a sense of euphoric power and supreme confidence.

Imagine the patient’s terrible dismay when symptoms break through the euphoria and he learns his cancer is now terminal. Increasing the tragedy is his awareness that had the authorities in charge of his care given him the real-world data instead of the carefully edited “happy story” version, treatments could have been undertaken that might have extended his life. Now those options have been lost forever.

That’s the situation in our economy and financial system. The information cleared in markets has been suppressed, distorted and edited for 12 long years of permanent and ever-increasing monetary interventions, as the “doses” of intervention required to maintain the cocaine-like euphoria and supreme confidence in central bank manipulation of “markets” so they always signal the “good news” of guaranteed gains ratchets higher on every intrusion of reality.

The reliance on “good news” narratives dooms our financial system and economy to a death spiral once reality breaks through the induced euphoria. Our last chances to clear the financial cancers eating away at our economy are slipping away forever, masked by the “market’s” cocaine-like euphoria and supreme confidence in central-bank guaranteed gains.

If the stock market is never allowed to go down, this is the equivalent of telling the cancer-riddled patient that their cancer has disappeared, even as the disease is leading inexorably to the patient’s needless demise.

Stories Of Economic Despair From America’s Worst Economic Downturn Since The Great Depression Of The 1930s

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By Michael Snyder

Source: End of the American Dream

The economic pain that we are witnessing right now is far greater than anything that we witnessed during the last recession.  U.S. GDP declined by 32.9 percent on an annualized basis last quarter, more than 100,000 businesses have permanently shut down since the COVID-19 pandemic first hit the United States, and more than 54 million Americans have filed new claims for unemployment benefits over the last 19 weeks.  Up until just recently, a $600 weekly unemployment “supplement” and a federal moratorium that prevented many evictions had helped to ease the suffering for millions of American families, but both of those measures have now expired.  As a result, a tremendous amount of economic pain which had previously been deferred will now come rushing back with a vengeance.  Millions of American families are no longer going to be able to pay their bills, and experts are warning that we could soon see an “eviction crisis” that is absolutely unprecedented in American history.

48-year-old Thomas Darnell of West Point, Mississippi never thought that he would be in this position.  He had been a factory worker for over 20 years until he lost his job in May, and since then he hasn’t been able to find another.  And then on top of everything else, everyone in his house caught COVID-19…

First, he was furloughed for three weeks in April and then laid off in May. Then things got worse: His entire household of seven, including himself, his wife, three kids and daughter-in-law, along with his baby grandson, contracted coronavirus after they saw their immediate family over the Independence Day weekend.

“I’m tired and shaky. Even after a few weeks, I’m still trying to recover,” Darnell says, who has since been cleared of the virus but still has lingering symptoms.

He is concerned that employers will be scared away by his recent illness, and he is becoming desperate because he is running out of money.

With no health insurance and no paychecks coming in, Darnell and his wife have gotten to the point where they have to make a choice between buying insulin or buying groceries…

He can’t afford health insurance, which has added to his anxiety because he and his wife are both diabetic, he says. Like Bolei, Darnell and his wife have been forced to make a grueling decision between either paying for their medications or keeping food on the table.

“Do we buy insulin or groceries? It’s a hard juggle,” Darnell says. “I’m willing to make less money and start working again to get health insurance, but no one is hiring.”

The weekly $600 unemployment supplements from the federal government had helped to keep them going for a while, but now those payments have ended, and the immediate future is looking quite bleak.

In Richmond, Virginia, a mother of eight named Shamika Rollins wasn’t sure how she was going to make it when her hours as a home health aid were reduced.  Unpaid bills started piling up, and then she got an eviction notice a few weeks ago.  The following comes from CBS News…

Shamika Rollins’ eight children share two bedrooms in Richmond, Virginia. But she’s worried about losing their home after she says she received an eviction notice in June.

“First thing, I panic, and then next thing, I look, and I’m like, I got my kids. And it’s like, okay, now you gotta figure this out,” she told CBS News correspondent Adriana Diaz.

If a miracle does not happen, Rollins and her eight children will soon be out in the street, and this is causing her to have “a lot of sleepless nights”…

“I have a lot of sleepless nights,” Rollins said. “My mind is constantly racing, you know, what’s your next move?”

Sadly, there are millions of other Americans in the exact same position.

In fact, experts are projecting that up to 40 million Americans could be evicted from their homes during this pandemic.

Many small business owners are also facing heartbreaking choices during this downturn.  A restaurant owner in Delaware named Alex Heidenberger “hasn’t paid the mortgage on his home the past four months” as he desperately tries to keep his once profitable restaurants alive…

Heidenberger, who typically draws about $20,000 a month in profit from the restaurant, now receives nothing. He says he hasn’t paid the mortgage on his home the past four months. He served lifeguard duty for a couple of weeks, mostly to help a beach crew depleted by COVID-19 quarantines but also to make some cash.

“I’m working harder than I have ever worked in my life,” he says, adding that he puts in about 80 hours a week at the two restaurants. Yet, “I have no money… This is all I think about. I don’t sleep.”

The COVID-19 pandemic has hit the restaurant industry particularly hard.  Americans are not eating out as regularly as they once did because of the virus, and it is probably going to remain that way for the foreseeable future.

In Massachusetts, a restaurant owner named John Pepper once had eight thriving locations, but at this point only two of them remain open…

John Pepper used a PPP loan to pay employees and reopen four of his eight Boloco restaurants when Massachusetts lifted its shutdown order in early May. But with the money spent and business at the restaurants down as much as 70%, Pepper had to again close two locations. The staff of 125 he had before the virus outbreak is down to 50.

“A lot of this is out of our hands at this point,” Pepper says. “At this moment, I don’t see getting my full payroll back.”

Overall, we are facing a “restaurant apocalypse” in the U.S. that is unprecedented in size and scope.

According to one estimate, we could lose more than a third of all of our restaurants by the end of this calendar year…

As many as 231,000 of the nation’s roughly 660,000 eateries will likely shut down this year, according to an estimate from restaurant consultancy Aaron Allen & Associates provided to Bloomberg News. This will bring the industry’s steady growth to a halt and mark the first time in two decades that U.S. restaurant counts don’t climb. Restaurants have already shed millions of jobs this year, economic data show.

What we are watching is truly horrifying.  So many hopes and dreams went into each one of those restaurants that are shutting down, and countless restaurant owners are going to be completely financially ruined by all of this.

For other Americans, this economic downturn has put their very lives at risk.  In Colorado, 70-year-old Catherine Azar was already dealing with heart problems and diabetes, and now she is in danger of being thrown out into the street…

“It’s hard for me to conceive of someone being willing to put another person out in the street in the middle of a deadly pandemic, and I’m high risk. I’m 70. I have heart issues and I’m diabetic,” Azar said.

Rollins and Azar are just two of the 43 million Americans at risk of eviction in the coming months. For context, about 1 million Americans were evicted in 2010, the year after the Great Recession.

How long do you think that a 70-year-old woman with heart problems and diabetes would last on the street or in a shelter?

And as millions upon millions of Americans get evicted during the months ahead, the shelters are all going to fill up really fast.

America simply was not prepared for an economic downturn of this nature, and the truth is that much bigger challenges are still ahead.

So please do not look down on anyone that needs help right now, because soon you may find yourself in the exact same position.

Why Does It Feel Like We’re in “Life During Wartime”?

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By Charles Hugh Smith

Source: Of Two Minds

The laughably hopeless hope is that by propping up the corpses, the populace will discern some faint flicker of life in the decaying carcasses and return to their free-spending ways.

Call it cultural synchronicity, but it increasingly feels like we’re living in the 1979 Talking Heads song Life During Wartime, which was anchored by the lyric “This Ain’t No Party, This Ain’t No Disco, This Ain’t No Foolin’ Around.” Indeed.

It also feels like Life During Wartime because the propaganda is so blatant and intense: we’re winning the war on Covid-19, and our wars on everything else, too, of course, as war is the favored metaphor and favored policy at the end of the Empire.

The ceaseless propaganda is that “a vaccine is right around the corner.” The inconvenient reality is that Corporate Insiders Pocket $1 Billion in Rush for Coronavirus Vaccine: Well-timed stock bets have generated big profits for senior executives and board members at companies developing vaccines and treatments.

In other words, wartime profiteering isn’t just allowed, it’s encouraged–yet another sign that we’re in the final decay/collapse phase of Imperial Pretensions.

It’s easy to mix up the propaganda and the counter-propaganda, because they’re both so extreme. There is no middle ground, only pre-packaged positions which dictate which “data” is cherry-picked to support the political partisanship that’s being defended.

Is Data Our New False Religion? (June 23, 2020)

In a world of thousands of unread papers published in hundreds of scientific journals no one even reads and a corrupt culture of “science for sale,” there’s a veritable orchard to cherry-pick.

“Robert Horton, editor in chief of The Lancet, one of the most respected professional peer reviewed publications in the world dealing with biomedical research had this to say in an editorial published by The Lancet in April of 2015:”

“The case against science is straightforward: much of the scientific literature, perhaps half, may simply be untrue. Afflicted by studies with small sample sizes, tiny effects, invalid exploratory analyses, and flagrant conflicts of interest, together with an obsession for pursuing fashionable trends of dubious importance, science has taken a turn towards darkness.”

source: What is medicine’s 5 sigma?

“And this, published in 2009, by Dr. Marcia Angell, former editor of The New England Journal of Medicine, another world leading publication in medical research:”

“It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of The New England Journal of Medicine.”

Skeptical of medical science reports? (ncbi.nlm.nih.gov)

Metaphorically speaking, the civilian populace believes “we’re winning” until the bombs start dropping on their homes. For some reason, this doesn’t feel like “winning.”

The V-shaped recovery is the propaganda war the status quo must win, for this is the narrative battle for the hearts and minds of the populace. The fear here is that should the populace lose confidence in The V-shaped recovery, they might reduce their borrowing and spending and increase their saving, dooming an economy that depends entirely on marginal spending funded by debt to keep from imploding.

As the chart of the rising wedge model of breakdown below illustrates, when big-ticket costs ratchet higher like clockwork–rent, property taxes, childcare, higher education, debt, healthcare, etc.– while income stagnates for the bottom 90%, any drop in spending, no matter how modest, breaks the system because any reduction in spending reduces tax revenues, corporate profits and debt payments below the critical threshold.

This is why the Federal Reserve is so keen on bailing out bankrupt-in-all-but-name corporations and banks: The laughably hopeless hope is that by propping up the corpses, the populace will discern some faint flicker of life in the decaying carcasses and return to their free-spending ways.

This is also why “stimulus” is being scattered from helicopters: the hope is that by substituting borrowed trillions for earned trillions, people will substitute magical thinking for clear-eyed recognition that the era of “growth” has transitioned into the era of DeGrowth, a state of affairs that signals the demise of all the bloated, sclerotic institutions operated to benefit insiders and Corporate America’s cartels and monopolies: the most protected bastions of the era, colleges and hospitals, are going broke and closing.

As Marx noted, “everything solid melts into air” when it’s no longer financially viable. Helicopter “stimulus” just creates a temporary illusion of solidity.

And then there’s the immense profitability of Big Tech pushing propaganda, partisanship, anger and indignation: If you’re not terrified about Facebook, you haven’t been paying attention.

The foundations are collapsing, but by all means, please keep your eye on the decaying corpses: didn’t an eyelid flicker in that one? I could swear that one moved its foot…

This is “life in wartime,” where the battles are waged in narratives, confidence and magical thinking.

Forget the V, W or L Recovery: Focus on N-P-B (June 29, 2020)

The Fed’s Casino Is In Flames, But Please Continue Gambling (June 18, 2020)

Our Wile E. Coyote Economy: Nothing But Financial Engineering (June 12, 2020)

Unstoppable: The Greatest Depression and the Reverse Wealth Effect (June 10, 2020)

A Bigger Picture

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Baluchitherium. Gone but not forgotten.

By James Howard Kunstler

Source: Kunstler.com

The Covid-19 virus itself didn’t run the United States into a ditch but it exposed the weakness and rot in the nation’s drive-train, and now all of us passengers on that disabled bus must decide whether to stay helplessly inside the smoldering wreckage arguing over who’s to blame, or begin a long, uncertain march down the road on our own two feet to a place of new arrangements.

In 1918, the country was lashed by a far deadlier pandemic disease at the same time it was fighting a world war, and daily life barely missed a step. The economy then was emphatically one of production, not the mere consumption of things made elsewhere in the world (exchanged for US IOUs), nor of tanning parlors, nail salons, streaming services, and Pilates studios. The economy was a mix of large, medium, and small enterprises, not just floundering giants, especially in the retail commerce of goods. We lived distributed in towns, cities not-yet-overgrown, and a distinctly rural landscape devoted to rural activities — not the vast demolition derby of entropic suburbia that has no future as a human habitat. Banking was only five percent of the economy, not the bloated matrix of rackets now swollen to more than forty percent of so-called GDP. Government at the federal and state levels was miniscule compared to the suffocating, parasitic leviathan it is now.

What happened? Like Hemingway’s old quip about a man going broke slowly and then all-at-once, we allowed everything in American life to creep into hapless giantism too cumbersome to adapt to new conditions, and suddenly conditions have changed. And now it’s all coming apart: the dying chain stores, the giant zombie companies that can only exist by borrowing money to buy back their own stocks, the auto-makers who have run out of lending schemes for non-creditworthy customers, the shale oil fracking companies that could never make a red cent, the agri-biz farmers grown morbidly obese on a diet of credit and government subsidies (just like their end-customers grew obese on engineered snack-foods), the Wall Street lords of financialization hypothecating fortunes by leveraging the stripped assets of everything not nailed down from sea to shining sea, the swelling underclass conditioned to helplessness, addiction, and vice, the inescapable ambient tyranny of media hype, propaganda, and disinformation, and, of course, the catastrophe that government has become.

Get this: none of these things now wobbling and staggering will be resurrected. They’re all going extinct, like the Baluchitherium of the Oligocene. To keep propping them up — as the Federal Reserve sedulously props up financial markets — will only promote the illusion that we don’t have to move on and conduct daily human life differently. A worldwide contraction was already underway before Covid-19 stepped onstage. The contraction was sending a very loud and clear message: gigantism went as far as it could go and now it’s up to the smaller and nimbler to carry on. Beware the promises of the sclerotic authorities asking you to remain in thrall to them — and dependent on them.

Expect these authorities to screw up even the next big exercise in their own franchise: the 2020 election. It will be the climax to a season of political hysteria and will complete the chapter of our history that left us on that smoldering big bus in the ditch. The scramble away from that disaster scene will be frightful and desperate. No matter who ends up in control of the government — or pretends to be — the same forces of contraction and decomplexifying will actually rule and you will have to act accordingly.

Many people will seek to escape the places they live now to find new homes and livelihoods elsewhere. These demographic movements are already underway. New York City is hemorrhaging much of its tax base as the wealthy flee, Chicago too, and the whole state of California. These places will be overwhelmed by functional bankruptcy, even if legal legerdemain allows them to avoid declaring it. Other states, counties and municipalities — including many suburban blobs — will also founder, meaning all the usual support systems and safety nets vanish. Many supply chains will break. Money may either be scarce or worthless, which are two ways of going broke.

Right now, start planning where you might go and what you can do. The turmoil will be filled with opportunity to find ways to be useful to other people, to devise work-arounds for ruptured systems and relationships, in getting food to people, making things they need, distributing them, fixing things that are broken where possible, and moving people and stuff from point A to point B. There will be plenty of work for people who are willing to do it. Keep in mind that it’s entirely up to you to make good choices.

Don’t despair, and if you find yourself veering toward it, get over yourself. It’s just part of becoming stronger than you thought you could be,  and the times will require it of you anyway. The offices that gave out brownie points for avouched victimhood will also be shutting down. Won’t that be a relief? Welcome to the joyful illumination that life is difficult for everybody. Who is ready for this epic journey?

This Is a Financial Extinction Event

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By Charles Hugh Smith

Source: Of Two Minds

The lower reaches of the financial food chain are already dying, and every entity that depended on that layer is doomed.

Though under pressure from climate change, the dinosaurs were still dominant 65 million year ago–until the meteor struck, creating a global “nuclear winter” that darkened the atmosphere for months, killing off most of the food chain that the dinosaurs depended on. (See chart below.)

The ancestors of modern birds were one of the few dinosaur species to survive the extinction event, which took months to play out.

It wasn’t the impact and shock wave that killed off dinosaurs globally–it was the “nuclear winter” that doomed them to extinction. As plants withered, the plant-eating dinosaurs expired, depriving the predator dinosaurs of their food supply.

This is a precise analogy for the global economy, which is entering a financial “nuclear winter” extinction event. As I’ve been discussing for the past few months, costs are sticky but revenues and profits are on a slippery slope.

Businesses still have all the high fixed costs of 2019 but their revenues are sliding as the “nuclear winter” weakens consumer spending, investment in new capacity, etc.

Despite all the hoopla about a potential vaccine, no vaccine can change four realities: one, consumer sentiment has shifted from confidence to caution and from spending freely to saving. This is the financial equivalent of “nuclear winter”: there is no way to return to the pre-impact environment.

Two, uncertainty cannot be dissipated, either. There are no guarantees a vaccine will be 99% effective, that it will last more than a few months, that it won’t have side-effects, etc. There are also no guarantees that consumers will resume their care-free spending ways as credit tightens, incomes decline, risks emerge and the need for savings becomes more compelling.

Three, consumer behavior and uncertainty have already changed, and so businesses that cannot survive on much lower revenues won’t last long enough to emerge from the “nuclear winter” of uncertainty and a shift in sentiment.

Four, assets based on 2019 revenues, profits and demand are now horrendously overvalued, and the repricing of all assets will bring down the predators, i.e. the banks.

As I’ve noted here before, the top 10% of households account for almost 50% of consumer spending. These households are older, and own the majority of assets –between 80% and 90% of stocks, bonds, business equity, rental real estate, etc. This is the demographic with the most to lose in returning to care-free air travel, jamming into crowded venues and cafes, etc.

This demographic has “been there, done that” and foregoing fine dining, sports events, concerts, cruises, etc. is not much a burden and may actually be a relief.

Meanwhile, the entire food chain of landlords, banks, local government, employees, etc. depends on enterprises returning to 100% of 2019 revenues. As tenants stop paying rent, landlords default on mortgages, sending banks into insolvency, leaving local government with less tax revenues and employees with fewer job prospects.

To a degree few appreciate, the “recovery” since 2009 has been dependent on over-spending, over-borrowing and over-speculating: as spending, borrowing and speculation all pull back to what would have been “normal” levels two generations ago, the economy collapses because it’s become completely dependent on over-spending, over-borrowing and over-speculating.

As consumers and businesses retrench, borrowing declines while defaults and bankruptcies eviscerate bank profits and balance sheets. As spending declines, businesses with high fixed costs and pre-pandemic business models (crowding people together in close quarters, etc.) cannot generate enough revenues to survive. As the collateral of commercial real estate and profit streams collapse, assets are repriced all down the food chain, reversing the wealth effect: as people feel poorer, they borrow and spend less, creating a feedback loop of lower valuations, lower spending, lower profits, lower borrowing all of which feed back into each other, pushing everything lower.

The lower reaches of the financial food chain are already dying, and every entity that depended on that layer is doomed: the small business die-off will bring down distributors, banks, landlords, and employment, and as the this layer collapses then the top predators will starve to death as well: Big Tech, healthcare, higher education, tourism, local tax revenues, etc.

The clouds are spreading and thickening, and the dawn sky is tinted an ominous red. This is a financial extinction event, and the Fed’s pathetic shamans can’t reverse history.