The U.S. Economy In Two Words: Asymmetric Gains

Posted on July 4, 2018 by Reid Mukai

By Charles Hugh Smith

The Status Quo is in trouble if the bottom 95% wake up to the asymmetric gains that are the only possible output of our hyper-financialized economy.

The core dynamic of the U.S. economy in this era is asymmetric gains: the gains in income, wealth and power are increasingly concentrated in the top slice of the economy and society, while the income, wealth and power of the majority stagnate or decline.

The Status Quo must paper over this widening gulf with threadbare narratives that no longer match reality: for example, we’re an ownership society. We sure are: the vast majority of the nation’s productive assets are owned by the top 5%.

The U.S. economy has changed, but the transformation is largely invisible to the average participant and conventional economist. The previous iteration of the economy expired in the 1970s, an era of stagflation (stagnant growth and rising inflation that eroded the purchasing power of most households), higher energy costs and increasing global competition, an era in which the “external costs” of industrial-scale pollution finally came home to roost and the early stages of digital technologies began impacting human labor.

Stocks and bonds were destroyed in the 1970s. Investing capital in industrial production no longer generated outsized profits.

The 1980s ushered in a New Economy based on financial magic: the outsized profits flowed to those with access to credit and the tools of financialization: buying assets with borrowed money, selling the assets off in the global marketplace and reaping enormous gains by producing no goods or services.

We now inhabit a hyper-financialized economy in which the only way to get ahead is to speculate. For the middle class, this means speculating in housing: if you hit the jackpot and your house soars in value, then leverage this new wealth into the cash needed to buy a second property–or extract the equity to fund a more luxe lifestyle.

Entrepreneurs seek to generate “value” only as a means of cashing out via an initial public offering or selling their company to a global corporation. The “value” sought now is the perception of value–the magic of future promise that boosts valuations into the millions, or better yet, billions.

How many entrepreneurs are looking forward to owning their company ten years hence? Very few, as “the long haul” has no value in a hyper-financialized economy. If you don’t cash out in six months, your Big Idea might be worthless, leapfrogged by some other Big Idea.

In a hyper-financialized economy, hype is the most valuable skill. Those who can raise $100 million in capital for a fancy juicer win, as do those who sell the Big Idea to global corporations desperate not to miss out on the Next Big Thing.

In a hyper-financialized economy, future income is pulled into the present and monetized to benefit the top dogs. We borrow from the future to fund the inefficiencies of today. It’s a great system, and the Status Quo has the answer to everything: the government can never go broke because all it has to do is print more money.

What a swell idea. Isn’t that what Venezuela has done for the past decade? And how did that work for them? If you think that destroying the purchasing power of “money” is a winner, then by all means, go on believing that the government can never go broke because all it has to do is print more money.

Here’s my favorite chart of asymmetric gains. The vast majority of the gains reaped since the 2008-09 Global Financial Meltdown have flowed to the top .1%. This is not a bug, it is a feature of hyper-financialization. Indeed, it is the only possible output of the current system.

Meanwhile, the bottom 95% live in an economy where wages go nowhere and costs are soaring. The financial media cheers when wages (supposedly) rise by 2%, but nobody dares measure the impact of rising costs in services such as healthcare and higher education.

The Status Quo is in trouble if the bottom 95% wake up to the asymmetric gains that are the only possible output of our hyper-financialized economy. Hype and propaganda are the key tools of the present era, as these are required to disconnect perception from reality. How long the disconnect will last is anyone’s guess, but when the two reconnect, all that is solid now will melt into thin air.

Why America is the World’s First Poor Rich Country

Posted on July 3, 2018 by Reid Mukai

Or, How American Collapse is Made of a New Kind of Poverty

By Umair Haque

Source: Eudaimonia

Consider the following statistics. The average American can’t scrape together $500 for an emergency. A third of Americans can’t afford food, shelter, and healthcare. Healthcare for a family now costs $28k — about half of median income, which is $60k.

By themselves, of course, statistics say little. But together these facts speak volumes. The story they are beginning to tell is this.

America, it seems, is becoming something like the world’s first poor rich country. And that is the elephant in the room we aren’t quite grasping. After all, authoritarianism and extremism don’t arise in prosperous societies — but in troubled ones, which are growing impoverished, like America is today. What do I mean by all that?

Let’s begin with what I don’t mean. I don’t mean absolute poverty. Americans are not living on a few dollars a day, by and large, like people in, for example, Somalia or Bangladesh. America’s median income is still that of a rich country, around $50k, depending on how it’s counted. Nor do I really mean relative poverty — people living below median income. While that’s a growing problem in America, because the middle class is imploding, that is not really the true problem these numbers hint at, either.

America appears to be pioneering a new kind of poverty altogether. One for which we do not yet have a name. It is something like living at the knife’s edge, constantly being on the brink of ruin, one small step away from catastrophe and disaster, ever at the risk of falling through the cracks. It has two components — massive inflation for the basics of life, coupled with crushing, asymmetrical risk. I’ll come to what those mean shortly.

The average American has a relatively high income, that of a person in a nominally rich country. Only his income does not go very far. Most of it is eaten up by attempting to afford the basics of life. We’ve already seen how steep healthcare costs are. But then there is education. There is transport. There is interest and rent. There is media and communications. There is childcare and elderly care. All these things reduce the average American to constantly living right at the edge of ruin — one paycheck away from penury, one emergency away from losing it all.

But this isn’t true for America’s peers. In Europe, Canada, and even Australia, society invests in all these things — and the costs of basic necessities societies don’t provide are regulated. For example, I pay $50 dollars for broadband and TV in London — but $200 for the same thing in New York — yet in London, I get vastly more and better media for my money (even including, yes, American junk like Ancient Aliens). That’s regulation at work. And when basic goods like healthcare or elderly care or education are provided and managed at a social scale, that is when they are cheapest, and often of the best quality, too. Hence, healthcare costs far less in London, Paris, or Geneva — and life expectancy is longer, too.

So if you are earning $50k in America, it is a very different thing than earning $50k in France, Germany, or Sweden — in America, you must pay steeply for the basics of life, for basic necessities. Thus, incomes stretch much further in other countries, which enjoy a vastly higher quality of life, even though people there earn roughly the same amount, because they pay vastly less for basic necessities. Americans are rich, but only nominally — their money doesn’t buy nearly as much as their peers does, where it matters and counts most, for the basics of life.

What happens when societies don’t understand all the above? Well, a strange thing has happened to the American economy. While it’s true that things like TVs and Playstations have gotten cheaper, the costs of the basics of life have skyrocketed. All the things that really elevate people’s quality of life — healthcare, finance, education, transport, housing, and so on — have come to consume such a large share of the average household’s income that they have little left to save, invest, or spend on anything else. And what’s worse, while the basics of life have seen massive inflation, wages and incomes (not to mention savings and benefits and safety nets and opportunities) for most have stagnated. The result is an economy — and a society — that’s collapsing.

Yet all that is the straightforward effect of giving, for example, hedge funds control over drugs, or speculators control over housing, healthcare, and education — they will of course maximize profits, whereas investing in these things socially, or at least regulating them, minimizes real costs, and maximizes accessibility, affordability, and quality.

So the average American, who is left high and dry, must borrow, borrow, borrow, just to maintain a decent quality of life — because handing capitalism control of the basics of life has caused massive, skyrocketing inflation in necessities, while flatlining his income. Healthcare didn’t used to cost half of median income even a decade ago, after all — but now it does. So what happens when, in a decade or two, healthcare costs all of median income? How can an economy — let alone a society — function that way?

Well, what happens if the average American steps over the line? Misses a mortgage payment, gets ill and is unable to pay a few bills on time, can’t pay the costs of healthcare? Then they are punished severely and mercilessly. Their “credit rating” (note how banks and hedge funds don’t have them) is ruined. They can easily find themselves out on the street, without finance, without a second chance, without access to any kind of redress or support . And then they are rejected, shunned, and ostracized. They might not have an address anymore — so who will hire them? They are no longer a part of society — they have fallen through the cracks, and finding one’s way back is often next to impossible. Asymmetrical risk — corporations and lobbies and banks bear no risk at all, precisely because the average American bears them all now.

So Americans aren’t just absolutely or relatively poor, but poor in a new way entirely. First, the basics of life exploded in price, to the point that they are now unaffordable for many, maybe most, households. Second, Americans bear the risks of paying those unaffordable costs to an extreme degree, bearing the risks that institutions should, and so those risks are now ruinously high. A bank or hedge fund or corporation might go bankrupt, and liquidate its assets, and its owners stay rich — but if an American’s credit rating is ruined, loses his job, cannot pay his bills, or even if he declares bankruptcy, he falls through the cracks, hounded, embattled, institutionally black-marked. He finds himself outside society, with little way to get back in. Little wonder then that Americans work so much harder than anywhere else — they are always one step away from losing it all, from genuine ruin, but their peers in truly rich countries aren’t.

Marx probably would have called this immiseration. Neo-Marxist theorists call it precarity. And while there’s truth in both those ideas and perspectives, I think they miss three vital points.

We don’t see America as a poor country, but we should begin to. Americans live fairly abysmal lives — short, lonely, unhappy, full of work and stress and despair, compared to their peers. That is because they cannot afford better ones — predatory capitalism coupled with total economic mismanagement of social investments has made the basics of life ruinously unaffordable. In this way, it’s effectively a poor country — yes, there’s a tiny number of ultra-rich, but they are outliers now, off the map of the normal. Because it’s not just any kind of poverty, yesterday’s poverty, or even poverty as we are used to thinking about it.

America is pioneering a new kind of poverty. The kind of poverty that’s developed in America isn’t just bizarre and gruesome — it’s novel and unseen. It isn’t something that we understand well, economists, intellectuals, thinkers, because we have no good framework to think about it. It’s not absolute poverty like Somalia, and it’s not just relative poverty, like in gilded banana republics. It’s a uniquely American creation. It’s extreme capitalism meets Social Darwinism by way of rugged self-reliance crossed with puritanical cruelty.

The kind of poverty America’s pioneering today isn’t absolute, or even relative , but something more like perfectly tuned poverty, strategic poverty, basic poverty— nominally well-off people whose money doesn’t go far enough to make them actually live well, constantly living at the edge of ruin, and thus forced to choke down their bitter anger and serve the very systems which oppress and subjugate with more and more indignity and fear and servility by the year.

America’s still an innovator today. Unfortunately, what it’s innovating now is a new kind of poverty. Yet poverty is poverty. What happens in societies where poverty is growing? Authoritarianism rises, as people lose faith in democracy, which can’t seem to offer them working social contracts. Authoritarian soon enough becomes fascism — “this country, this land, its harvest — it is only for the true volk!”, the cry goes up, when there is not enough to go around. And the rest of the dark and grim story of the fall into the abyss you should know well enough by now. It ends in words we do not say.

Still, history, laughing, has told this tale to us many times. And it is telling it to tomorrow, again, in the tale of American collapse.

Neo-Liberalism and the Retreat of Democracy

Posted on July 2, 2018 by Reid Mukai

By David Schultz

Source: CounterPunch

Democracy across the world is under siege. This according to the latest Freedom House report documenting that for 2017, “democracy faced its most serous crisis in decades” as seventy-one countries experienced declines in freedom or fair government, including the United States, and only thirty-five an improvement. This was the twelfth consecutive year of decline in democracy world-wide.

The question is why? Why has confidence in democracy retreated? Freedom House does not provide an answer, but there is a reason. It is democracy’s marriage to neo-liberal capitalism has fostered the conditions leading to its own undoing, similar to the way Karl Marx once described in the Communist Manifesto the “gravedigger thesis” (What the Bourgeoisie therefore produces, above all, are its own grave diggers”) where capitalism would produce the conditions that would undermine its own existence.

From the 1960s until the early 1990s democracy was in the upswing internationally. African de-colonization produced initially popularly elected governments. In South America the demise of strongmen led to a wave of democratic regimes. And the fall of the Berlin Wall in 1989 and the break up of the USSR in 1991 produced the dismantling of communist authoritarian or totalitarian governments that made it possible for Francis Fukuyama to proclaim that democracy had won and emerged as the last grand global political meta-narrative.

Yet several problems upset this rosy picture. Most prominently, it was the marriage of these new emerging democracies with free market capitalism and the victory of neo-liberalism. Internationally as post-colonial and post-communist countries emerged, international organizations such as the World Bank and the IMF forced them to adopt market reforms, often pushing them into what was then called “shock therapy.” Shock therapy involved rapid privatization of state owned enterprises and rapid dismantling of welfare states. This shock therapy was often accompanied by significant corruption as a few rich oligarchs emerged who came to own these newly privatized state enterprises.

Simultaneously, emerging democracies were rapidly pushed into what sociologist Immanuel Wallerstein would call the world-capitalist system. This system turned politically to right in the 1970s and 1980s as Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States pushed neo-liberalism or market fundamentalism as an alternative to the Keynesian welfare state that had dominated the west since the 1930s. It was adopted both for ideological reasons and because of what political economist James O’Connor would call the fiscal crisis of the state tht affect economics across the world in the 1970s. This was a crisis of declining profit among private businesses and therefore declining revenue for states to fund welfare programs. Something had to give, and it was the welfare state.

Neo-liberalism is a political economic theory of the state committed to the laissez-faire market fundamentalism ideology that traces back to Adam Smith and David Ricardo. It includes a belief in comparative advantage, a minimalist state, and market freedom, and is, as articulated in the 1990s and 2000s, driven by finance capital. At the state level, neo-liberalism defines a theory of public administration. If neo-liberalism includes a commitment to market fundamentalism, then that also means that it is dedicated to a politics of limited government. This includes privatization, deregulation, and a scaling back of many traditional functions that capitalist and communist states had performed since at least World War II. But neo-liberalism as a theory transcends the state, providing also an international economic theory committed to free trade and globalism.

This emergence of neo-liberalism in the 1970s and its linkage to democracy is central to the crisis affecting the latter. As neo-liberalism retrenched the welfare state and pushed globalism it was accompanied by a dramatic increase in economic inequality in the world, as Thomas Piketty has pointed out. This occurred in the US and much of the western world. But it also impacted newly emerging democracies in Africa, Eastern Europe, and South America. Pressures for shock therapy market reforms, austerity, and open borders meant export of jobs to other countries, dismantling of social safety nets, and other economic pressures placed on governments and ruling parties.

Politically voters turned on globalism and free trade. This happened here with Trump voters in 2016, but also in Brexit in the UK. But many voters also blamed immigrants for the loss of jobs or social unrest in places ranging from France, to Italy, to Hungary. The increasing economic gap between rich and poor and, more importantly, the erosion of the economic conditions of the working class soured them on democracy. This paved the way for the emergence of strongmen as political leaders, the rise of far-right nationalist parties, and disenchantment with democracy and democratic structures to deliver the economic goods.

What we see today then in terms of the decline in support for democracy across the world is a product of its marriage to neo-liberalism. Capitalism and democracy always had an uneasy co-existence, but the neo-liberal democracy variant demonstrates the powerful contradictions in them. Either their linkage is producing outright rejection of democracy or a populist, rightist version that is merely democracy in form but not in substance.

Russia-gate and the Crisis of American Exceptionalism

Posted on June 28, 2018 by Reid Mukai

By Danny Haiphong

Source: Black Agenda Report

“Indications of deep unrest that occurred under Obama, such as the Occupy Wall Street movement, the Black Lives Matter movement, and the Sanders phenomena, have all been blamed on Russia.”

The era of Trump has been just as frustrating as the era of Obama. Over the last six months, I have channeled some of this frustration into the co-writing of a book with Professor of Liberation Theology Roberto Sirvent titled American Exceptionalism and American Innocence: The Fake News of US Empire. The book will consist of twenty-one chapters detailing just how important the ideologies of American exceptionalism and innocence are to the promotion of US empire, racism, and capitalist exploitation. Russia-gate was a catalyst for the work and has its own chapter in the book. The psychotic narrative has dominated political discourse in the United States for over two years with no end in sight. There was no way to avoid it.

Russia-gate is a manifestation of American exceptionalism. American exceptionalism posits that the American way of life is the most superior way of life. It is the white man’s burden personified in the nation-state. The ideology burdens Americans, defined as white and preferably capitalist, with the duty to civilize those outside of their class and racial affiliation. The twin evils of white rule and capitalist plunder reign supreme and are expanded and protected by a third evil: militarism. American exceptionalism says that war redeems the uncivilized from the perils of ungovernability, capitalist plunder leads the uncivilized to prosperity, and white rule bestows humanity itself upon the non-white world.

“American way of life is ‘white man’s burden’ personified in the nation-state.”

Russia-gate has profoundly challenged the logic of American exceptionalism in a period of American decline. Unlike the first Cold War, Russia has been labeled a threat not for its socialist political economy but because it has been accused of helping elect Donald Trump. The imaginary Russian threat to America is not terrorism or communism, but Russia as a state itself. Russia-gate is predicated upon the notion that the Russian Federation possesses both the will and the power to shape politics in America. This assumes that the American nation-state is neither invincible nor its political system exceptional. A contradiction to say the least.

Russia-gate is another myth of American exceptionalism made for and by the American oligarchy. It follows a long history of the American oligarchy’s need to create an “enemy” to vanquish as proof of its racial and economic superiority. Russian meddling in the 2016 elections has not been proven and will never be proven. The mental gymnastics that the US ruling class has performed to prove their own lie are truly astounding to watch. We have heard everything from Russian President Vladimir Putin conspiring with WikiLeaks and Donald Trump against Hillary Clinton to Trump benefitting from $100,000 worth in supposedly Russian purchased advertisements on social media to promote efforts of Black Lives Matter activists and white nationalists alike. It seems that with each passing day, examples of Russian meddling in US politics become only more absurd and detached from reality. That is, unless one could conceive of $100,000 worth in social media ads superseding the most militarized and high-tech surveillance apparatus in human history or the most corporately-controlled, war-thirsty political system in human history.

“The imaginary Russian threat to America is not terrorism or communism, but Russia as a state itself.”

Russia-gate has buried all truth underneath the lie that the US is under attack from Russia. Putin is under every bed and in every wireless router in America. Untold numbers of Russians are hacking into social media accounts and turning the “alt-left” into Russian trolls. Russia has been conveniently positioned as the most dangerous and heinous nation in the world to instill fear and pro-American chauvinism into the minds of struggling workers and poor people. Who better to promote the lies of American exceptionalism than the spooks in the American intelligence services that have been at the vanguard of Russia-gate since day one?

All seventeen intelligence agencies led by the likes of James Clapper and John Brennan coalesced with Hillary Clinton and her big tent of Wall Street donors to spread the Russia-gate lie back in 2016. Russia-gate’s intelligence objectives were always numerous. The first objective was to make Trump’s campaign promise to ease relations with Russia a political impossibility regardless of the orange billionaire’s actual intentions. The second was to politically neuter the Sanders wing of the Democratic Party in the aftermath of the DNC’s theft of the primary. And the third was to demonize radical and revolutionary forces capable of moving struggling workers and poor people, especially Black people, in the United States away from the two-party system and toward efforts to imagine independent political alternatives. These goals ultimately explain why publications like yours truly have been labeled dupes of Russia and subsequently censored on social media and why the Green Party’s Jill Stein was subject to federal investigation for ties to Russia.

“The mental gymnastics that the US ruling class has performed to prove their own lie are truly astounding to watch.”

American exceptionalism is a potently racist and diseased ideological force that has prevented a public discussion on the consequences of Russia-gate from taking place. We have the Democratic Party and their allies in the intelligence services to thank for this. One can find banners and signs condemning Trump as Putin’s puppet or, homophobically, as “his bitch” at Democratic Party-led demonstrations. Hardline Democrats have expressed outrage over Trump’s mythical connections to Russia but have directed none toward the professional liars leading the campaign. American intelligence agencies are responsible for the COINTELPRO operations that assassinated scores of liberation fighters like Fred Hampton and sent many others like Mumia Abu-Jamal to a life of imprisonment. They are the same liars who told us there were Weapons of Mass Destruction (WMDs) in Iraq and Gaddafi-led genocidal crimes in Libya. These professional liars have led US operations to overthrow over fifty foreign governments around the world in the same number of years, killing millions in Asia, Africa, and Latin America to enrich monopoly capital.

American exceptionalism requires that people in the US forget the atrocities of its government to be truly believed, especially in this time of crisis. The architects of Russia-gate have attempted to place the entirety of what calls itself the left in the US into a permanent political coma by blaming Russia for Trump. Under the spell of Russia-Trump fever, the racist and capitalist rulers of US imperialism can rest comfortably knowing that eight years of Obama-led imperialism — let alone, the genocidal foundations of the US — have been forgotten. Indications of deep unrest that occurred under Obama, such as the Occupy Wall Street movement, the Black Lives Matter movement, and the Sanders phenomena, have all been blamed on Russia. Trump has been vilified as a product of Russian-backed “alt-left” and “alt-right” insurgency when the reality is that the blame for Trump falls at the feet of the hobbling imperialist system.

“Russia has been conveniently positioned as the most dangerous and heinous nation in the world to instill fear and pro-American chauvinism into the minds of struggling workers and poor people.”

Russia-gate personifies everything that is wrong with narrow, Democratic Party-led anti-Trumpism. Trump has been made into a larger than life character in part because US imperialism needs him in the spotlight. If you can’t get rid of him, use him. Criminalizing Trump as a “Manchurian candidate” of Russia has given US imperialism room to continue its NATO-led war provocations in Eastern Europe, its imperial ventures in Syria, and its incessant war maneuvers toward Iran and Korea. It has also given the ruling class a convenient scapegoat to avoid accountability in the rapid decline in living standards across world. Millions are living half-lives under the threat of racist state-sponsored terror and mass unemployment and underemployment. Billions have no wealth at all. All of this is just fine so long as those pesky Russians stop meddling in US affairs.

Russia-gate is what American exceptionalism looks like in its most desperate state. The ideology makes it easy to fall into the trap of blaming Trump for everything, into calling him a fascist or worse, a Russian, as nearly the entire ruling class has pushed us into doing. It is easy to turn a blind-eye to the bi-partisan consensus on endless war and austerity when you have Putin on the brain. Trump can be labeled a fascist for scapegoating immigrants and blamed for Obama’s immigration policies, as prominent CNN and New York Times journalists were caught doing late last month. We can forget the hundreds of years of racist, capitalist oppression inherent to US empire and betray the impoverished masses whose lives are only becoming more imperiled by a system that has nothing to offer but worsening degrees of poverty and war.

“It is easy to turn a blind-eye to the bi-partisan consensus on endless war and austerity when you have Putin on the brain.”

Our commitment must be to the truth. There is no truth to Russia-gate. Russia-gate has muzzled the Black left and pushed the entire left into an even more conservative position than it was prior. Russia-gate has villainized Russia in a period when the world needs the people of the US to align with Russia and China and whoever else is willing stop endless US wars abroad. Russia-gate has once again exposed why it is so difficult for workers in the US to view themselves as an exploited class even when the system has so obviously failed them. That the ruling class can so easily criminalize Russia as it kills Syrians and lynches Black Americans with impunity only amplifies the urgency of the moment. We must vigilantly struggle to expose Russia-gate as a farce, a farce rooted in the mythology of American exceptionalism. We need more to reject this mythology if we are to participate in the global class war with any hope for victory.

Danny Haiphong is an activist and journalist in the New York City area. He is currently writing a book with Roberto Sirvent entitled American Exceptionalism and American Innocence: The Fake News of US Empire. He can be reached at wakeupriseup1990@gmail.com

USA in a Debt Trap Death Spiral

Posted on June 27, 2018 by Reid Mukai

By F. William Engdahl

Source: New Eastern Outlook

The US economy and its financial structures have never recovered from the great financial meltdown of 2008 despite the passage of ten years. Little discussion has been given to the fact that the Republican Congress last year abandoned the process of mandatory budget cuts or automatic sequestration that had been voted in a feeble attempt to rein in the dramatic rise in US government debt. That was merely an added factor in what soon will be recognized as a classic debt trap. What is now looming over not just the US economy but also the global financial system is a crisis that could spell the end of the post-1944 dollar system.

First some basic background. When President Nixon, on advice of Paul Volcker, then at US Treasury, announced on August 15, 1971 the unilateral end of the Bretton Woods gold-dollar system, to replace it with a floating dollar, Washington economists and Wall Street bankers realized that the unique role of the US dollar as leading reserve currency held by all central banks and the currency for world commodity and other trade, especially oil, gave them something that appeared to be a gift from monetary heaven.

So long as the world needed US dollars, Washington could run government deficits without end. Foreign central banks, especially the Bank of Japan in the 1980’s and since the turn of the century, the Peoples’ Bank of China, would have little choice but to reinvest their surplus trade dollar earnings in interest-bearing AAA-rated US Treasury securities. This perverse dollar system allowed Washington to finance its wars in faraway places like Afghanistan or Iraq with other peoples’ money. During the Administration of George W. Bush, when Washington’s annual budget deficit exceeded annually one trillion dollars, Vice President Dick Cheney cynically quipped, “debt doesn’t matter; Reagan proved that.” Up to a point that appeared so. Now we are getting dangerously near to that “point” where debt does matter.

Federal Debt Rise

There are generally speaking three major divisions of debt measured in the US economy: Federal debt of Washington, corporate debt and private household debt. Today, owing in large part to ten years of historic low interest rates following the largest financial crisis in history–the 2007-2008 sub-prime crisis that became a global systemic crisis after September 2008–all three sectors have borrowed as if there was no tomorrow because of the near-zero Federal Reserve interest rates and their various Quantitative Easings. Nothing so radical can last forever.

Since the financial crisis erupted in 2008 US Federal debt has more than doubled from $10 trillion to over $21 trillion today. Yet conditions were made manageable by a Federal Reserve emergency policy that dealt with the financial and banking crisis by buying almost $500 billion annually of that debt. Much of the remainder was bought by China, Japan and even Russia and Saudi Arabia. Further debt levels were restrained by the bipartisan spending caps established in the Budget Control Act of 2011 that had kept recent deficits partially in check.

Now conditions of future US Federal debt and deficit growth are pre-programmed for systemic crisis over the next several years.

‘Trumponomics’ Disaster

The economics of the Trump Tax Cuts Act of 2017, signed in December, dramatically cut certain taxes on business corporations from 35% to 21%, but did not offset that with revenue increases elsewhere. The promise is that cheaper taxes will spur economic growth. This is a myth under present economic conditions and overall public and private debt burdens. Instead, the new tax law, assuming ideal economic conditions, will decrease expected revenues by a total of $1 trillion over the next 10 years. If the economy goes into severe recession, highly likely, tax revenues will plunge and the deficits will explode even more.

What the new Trump tax cut act will do is dramatically increase the size of the US annual budget deficit. The Congressional Budget Office estimates that as early as Fiscal Year 2019 the annual deficit that must be financed by debt will reach $1 trillion. Then the Treasury Borrowing Advisory Committee expects government debt issues of $ 955 billion for FY2018, compared with $ 519 billion in FY 2017. Then for FY 2019 and 2020 the deficit will exceed $1 trillion. By 2028, ten years from now, under mild economic assumptions, the size of the USA Federal debt will rise to an untenable $34 trillion from roughly $21 trillion today, and the deficit in 2028 will exceed $1.5 trillion. And this year 2018 alone, with historically low interest rates the cost of interest only on the total Federal debt will reach $500 billion.

Zombie borrowers…time bombs

Now after almost a decade of unprecedented low interest rates to bail out Wall Street and create new asset inflation in stocks, bonds and housing, the Fed is in the early stages of what some call QT or Quantitative Tightening. Interest rates are rising and have been for the past year, so far very gradually as the Fed is being cautious. The Fed however is continuing to raise rates, and now the Fed Funds stands at 1.75% after nearly ten years at effectively zero. Were they to stop now it would signal a market panic that the Fed knew something far worse than they say.

Because never in its history has the Federal Reserve indulged in such a monetary experiment with so low rates so long, the effects of reversing are going to be as well unprecedented. At the onset of the 2008 financial crisis the Fed rates were around 5%. That is what the Fed is aiming at to return to “normal.” However, with rising interest rates, the lowest credit sector, so-called non-investment grade or “junk bonds” face domino style defaults.

Moody’s Credit Rating has just issued a warning that, barring some sort of miracle, as US interest rates rise, and they are, as much as 22% of US corporations that are being kept alive borrowing at historically low interest, not only in shale oil but in construction and utilities, so-called “zombie” corporations, will face an avalanche of mass defaults on their debt. Moody’s writes that, “low interest rates and investor appetite for yield has pushed companies into issuing mounds of debt that offer comparatively low levels of protection for investors.” The Moody’s report goes on to state some alarming numbers: since 2009, the level of global non-financial junk-rated companies has soared by 58%, representing $3.7 trillion in outstanding debt, the highest ever. Some 40%, or $2 trillion, are rated B1 or lower. Since 2009, US corporate debt has increased by 49%, hitting a record total of $8.8 trillion. Much of that debt has been used to fund stock repurchases by the companies to boost their stock price, the main reason for the unprecedented Wall Street stock market bubble.

Fully 75% of federal spending is economically non-productive including military, debt service, social security. Unlike during the 1930s Great Depression when levels of Federal debt were almost nil, today the debt is 105% of GDP and rising. Spending on national economic infrastructure including the Tennessee Valley Authority and a network of federally-build dams and other infrastructure resulted in the great economic boom of the 1950s. Spending $1.5 trillion on a dysfunctional F-35 all-purpose fighter jet program won’t do it.

Into this precarious situation Washington is doing its very best to antagonize the very countries that it needs to finance these deficits and buy the US debt—China, Russia and even Japan. As financial investors demand more interest to invest in US debt, the higher rates will trigger the default avalanche Moody’s warns. This is the real backdrop to the dangerous US foreign policy actions of the recent period. No one in Washington seems to care and that’s the alarming fact.

The Coming Collapse

Posted on June 26, 2018 by Reid Mukai

By Chris Hedges

Source: Occupy.com

The Trump administration did not rise, prima facie, like Venus on a half shell from the sea. Donald Trump is the result of a long process of political, cultural and social decay. He is a product of our failed democracy. The longer we perpetuate the fiction that we live in a functioning democracy, that Trump and the political mutations around him are somehow an aberrant deviation that can be vanquished in the next election, the more we will hurtle toward tyranny. The problem is not Trump. It is a political system, dominated by corporate power and the mandarins of the two major political parties, in which we don’t count. We will wrest back political control by dismantling the corporate state, and this means massive and sustained civil disobedience, like that demonstrated by teachers around the country this year. If we do not stand up we will enter a new dark age.

The Democratic Party, which helped build our system of inverted totalitarianism, is once again held up by many on the left as the savior. Yet the party steadfastly refuses to address the social inequality that led to the election of Trump and the insurgency by Bernie Sanders. It is deaf, dumb and blind to the very real economic suffering that plagues over half the country. It will not fight to pay workers a living wage. It will not defy the pharmaceutical and insurance industries to provide Medicare for all. It will not curb the voracious appetite of the military that is disemboweling the country and promoting the prosecution of futile and costly foreign wars.

It will not restore our lost civil liberties, including the right to privacy, freedom from government surveillance, and due process. It will not get corporate and dark money out of politics. It will not demilitarize our police and reform a prison system that has 25 percent of the world’s prisoners although the United States has only 5 percent of the world’s population. It plays to the margins, especially in election seasons, refusing to address substantive political and social problems and instead focusing on narrow cultural issues like gay rights, abortion and gun control in our peculiar species of anti-politics.

This is a doomed tactic, but one that is understandable. The leadership of the party, the Clintons, Nancy Pelosi, Chuck Schumer, Tom Perez, are creations of corporate America. In an open and democratic political process, one not dominated by party elites and corporate money, these people would not hold political power. They know this. They would rather implode the entire system than give up their positions of privilege. And that, I fear, is what will happen. The idea that the Democratic Party is in any way a bulwark against despotism defies the last three decades of its political activity. It is the guarantor of despotism.

Trump has tapped into the hatred that huge segments of the American public have for a political and economic system that has betrayed them. He may be inept, degenerate, dishonest and a narcissist, but he adeptly ridicules the system they despise. His cruel and demeaning taunts directed at government agencies, laws and the established elites resonate with people for whom these agencies, laws and elites have become hostile forces. And for many who see no shift in the political landscape to alleviate their suffering, Trump’s cruelty and invective are at least cathartic.

Trump, like all despots, has no ethical core. He chooses his allies and appointees based on their personal loyalty and fawning obsequiousness to him. He will sell anyone out. He is corrupt, amassing money for himself—he made $40 million from his Washington, D.C., hotel alone last year—and his corporate allies. He is dismantling government institutions that once provided some regulation and oversight. He is an enemy of the open society. This makes him dangerous. His turbocharged assault on the last vestiges of democratic institutions and norms means there will soon be nothing, even in name, to protect us from corporate totalitarianism.

But the warnings from the architects of our failed democracy against creeping fascism, Madeleine Albright among them, are risible. They show how disconnected the elites have become from the zeitgeist. None of these elites have credibility. They built the edifice of lies, deceit and corporate pillage that made Trump possible. And the more Trump demeans these elites, and the more they cry out like Cassandras, the more he salvages his disastrous presidency and enables the kleptocrats pillaging the country as it swiftly disintegrates.

The press is one of the principal pillars of Trump’s despotism. It chatters endlessly like 18th-century courtiers at the court of Versailles about the foibles of the monarch while the peasants lack bread. It drones on and on and on about empty topics such as Russian meddling and a payoff to a porn actress that have nothing to do with the daily hell that, for many, defines life in America. It refuses to critique or investigate the abuses by corporate power, which has destroyed our democracy and economy and orchestrated the largest transfer of wealth upward in American history.

The corporate press is a decayed relic that, in exchange for money and access, committed cultural suicide. And when Trump attacks it over “fake news,” he expresses, once again, the deep hatred of all those the press ignores. The press worships the idol of Mammon as slavishly as Trump does. It loves the reality-show presidency. The press, especially the cable news shows, keeps the lights on and the cameras rolling so viewers will be glued to a 21st-century version of “The Cabinet of Dr. Caligari.” It is good for ratings. It is good for profits. But it accelerates the decline.

All this will soon be compounded by financial collapse. Wall Street banks have been handed $16 trillion in bailouts and other subsidies by the Federal Reserve and Congress at nearly zero percent interest since the 2008 financial collapse. They have used this money, as well as the money saved through the huge tax cuts imposed last year, to buy back their own stock, raising the compensation and bonuses of their managers and thrusting the society deeper into untenable debt peonage. Sheldon Adelson’s casino operations alone got a $670 million tax break under the 2017 legislation. The ratio of CEO to worker pay now averages 339 to 1, with the highest gap approaching 5,000 to 1.

This circular use of money to make and hoard money is what Karl Marx called “fictitious capital.” The steady increase in public debt, corporate debt, credit card debt and student loan debt will ultimately lead, as Nomi Prins writes, to “a tipping point—when money coming in to furnish that debt, or available to borrow, simply won’t cover the interest payments. Then debt bubbles will pop, beginning with higher yielding bonds.”

An economy reliant on debt for its growth causes our interest rate to jump to 28 percent when we are late on a credit card payment. It is why our wages are stagnant or have declined in real terms—if we earned a sustainable income we would not have to borrow money to survive. It is why a university education, houses, medical bills and utilities cost so much. The system is designed so we can never free ourselves from debt.

However, the next financial crash, as Prins points out in her book “Collusion: How Central Bankers Rigged the World,” won’t be like the last one. This is because, as she says, “there is no Plan B.” Interest rates can’t go any lower. There has been no growth in the real economy. The next time, there will be no way out. Once the economy crashes and the rage across the country explodes into a firestorm, the political freaks will appear, ones that will make Trump look sagacious and benign.

And so, to quote Vladimir Lenin, what must be done?

We must invest our energy in building parallel, popular institutions to protect ourselves and to pit power against power. These parallel institutions, including unions, community development organizations, local currencies, alternative political parties and food cooperatives, will have to be constructed town by town. The elites in a time of distress will retreat to their gated compounds and leave us to fend for ourselves. Basic services, from garbage collection to public transportation, food distribution and health care, will collapse. Massive unemployment and underemployment, triggering social unrest, will be dealt with not through government job creation but the brutality of militarized police and a complete suspension of civil liberties.

Critics of the system, already pushed to the margins, will be silenced and attacked as enemies of the state. The last vestiges of labor unions will be targeted for abolition, a process that will soon be accelerated given the expected ruling in a case before the Supreme Court that will cripple the ability of public-sector unions to represent workers. The dollar will stop being the world’s reserve currency, causing a steep devaluation. Banks will close. Global warming will extract heavier and heavier costs, especially on the coastal populations, farming and the infrastructure, costs that the depleted state will be unable to address. The corporate press, like the ruling elites, will go from burlesque to absurdism, its rhetoric so patently fictitious it will, as in all totalitarian states, be unmoored from reality. The media outlets will all sound as fatuous as Trump. And, to quote W.H. Auden, “the little children will die in the streets.”

As a foreign correspondent I covered collapsed societies, including the former Yugoslavia. It is impossible for any doomed population to grasp how fragile the decayed financial, social and political system is on the eve of implosion. All the harbingers of collapse are visible: crumbling infrastructure; chronic underemployment and unemployment; the indiscriminate use of lethal force by police; political paralysis and stagnation; an economy built on the scaffolding of debt; nihilistic mass shootings in schools, universities, workplaces, malls, concert venues and movie theaters; opioid overdoses that kill some 64,000 people a year; an epidemic of suicides; unsustainable military expansion; gambling as a desperate tool of economic development and government revenue; the capture of power by a tiny, corrupt clique; censorship; the physical diminishing of public institutions ranging from schools and libraries to courts and medical facilities; the incessant bombardment by electronic hallucinations to divert us from the depressing sight that has become America and keep us trapped in illusions. We suffer the usual pathologies of impending death. I would be happy to be wrong. But I have seen this before. I know the warning signs. All I can say is get ready.

Humanity’s ‘Dirty Little Secret’: Starving, Enslaving, Raping, Torturing and Killing our Children

Posted on June 25, 2018 by Reid Mukai

© UNICEF/UN0126672/Brown
A drawing by a Rohingya boy reveals the horrific experiences he endured while fleeing from Myanmar to Bangladesh, October 2017.

By Robert J. Burrowes

In a recent article titled ‘Challenges for Resolving Complex Conflicts’, I pointed out four conflict configurations that are paid little attention by conflict theorists.

In this article, I would like to discuss a fifth conflict configuration that is effectively ignored by conflict theorists (and virtually everyone else). This conflict is undoubtedly the most fundamental conflict in human society, because it generates all of the violence humans perpetrate and experience, and yet it is utterly invisible to almost everyone.

I have previously described this conflict as ‘the adult war on children’. It is indeed humanity’s ‘dirty little secret’.

Let me illustrate and explain the nature and extent of this secret war. And what we can do about it.

Every day, according to some estimates, human adults kill 50,000 of our children. The true figure is probably significantly higher. We kill children in wars. See, for example, ‘Scourging Yemen’. We kill them with drones. We kill them in our homes and on the street. We shoot them at school.

We also kill children in vast numbers by starving them to death, depriving them of clean drinking water, denying them medicines – see, for example, ‘Malaria is alive and well and killing more than 3000 African children every day’ – or forcing them to live in a polluted environment, particularly in parts of Africa, Asia and Central/South America. Why? Because we use military violence to maintain an ‘economic’ system that allocates resources for military weapons, as well as corporate profits for the wealthy, instead of resources for living.

We also execute children in sacrificial killings after kidnapping them. We even breed children to sell as a ‘cash crop’ for sexual violation, child pornography (‘kiddie porn’) and the filming of ‘snuff’ movies (in which children are killed during the filming), torture and satanic sacrifice. And these are just some of the manifestations of the violence against children that have been happening for centuries or, in some cases, millennia. On these points, see the video evidence presented at the recent Judicial Commission of Inquiry into Human Trafficking and Child Sex Abuse organized by the International Tribunal for Natural Justice.

The opening statement by Chief Counsel Robert David Steele refers to an estimated eight million children trafficked annually – with 600,000-800,000 of these children (excluding both those bred within the USA without birth certificates and those imported without documentation) in the United States alone – and mentions such practices as ritual torture and ritual murder as well as training dogs to rape children and toddlers. He mentions the range of organizations involved from Oxfam and the Boy Scouts of America to ‘child-service’ agencies and police forces as well as various United Nations organizations, where pedophiles (those who prey on children) rise through the ranks to exercise enormous control. He also points out that many of the children bred or kidnapped into this system usually last about two years before dying (often after being raped several times each hour for some of that time) or being killed outright. He also mentions (with evidence provided in other video presentations) the forced removal of body organs from children of Falun Gong practitioners in China.

Steele, who is a former CIA operations officer, also points out that the 1,000 US military bases around the world are ‘not there for national defense; they are there to serve as lilypads for the smuggling of guns, gold, cash, drugs and small children’. The obvious and clear inference to be drawn from his statement is that the US military is heavily involved in child trafficking (as well as its well-known involvement in drug and weapons trafficking, for example), which means that vast numbers of US military personnel know about it too. And do nothing.

The compelling testimony at the Commission of Inquiry of survivor/perpetrator Ronald Bernard will give you a clear sense of the deep elite engagement (that is, the 8,000-8,500 ‘elite’ individuals running central banks, governments, secret service agencies, multinational corporations, terrorist organizations and churches) in the extraordinary violence inflicted on children, with children illegally trafficked internationally along with women, weapons, drugs, currencies, gold and wildlife.

In a particularly poignant series of moments during the interview, after he has revealed some of the staggering violence he suffered as a child at the hands of his father and the Church, Bernard specifically refers to the fact that the people engaged in these practices are terrified (and ‘serving the monster of greed’) and that, during his time as a financial entrepreneur, he was working with people who understood him as he understood them: individuals who were suffering enormously from the violence they had suffered as children themselves and who are now so full of hatred that they want to destroy life, human and otherwise. In short: they enjoy and celebrate killing people and destroying the Earth as a direct response to the violence they each suffered as a child.

There are more video testimonies by survivors, expert witnesses, research scholars in the field and others on the International Tribunal for Natural Justice website and if you want to read scholarly books documenting aspects of this staggering violence against children then see, for example, ‘Childhunters: Requiem of a Child-killer’ and ‘Epidemic: America’s Trade in Child Rape’.

For further accounts of the systematic exploitation, rape, torture and murder of children over a lengthy period, which focuses on Canada’s indigenous peoples, Rev. Kevin Annett’s evocative report ‘Hidden from History: The Canadian Holocaust – The Untold Story of the Genocide of Aboriginal Peoples by Church and State in Canada’, and his books ‘Unrelenting’ and ‘Murder by Decree: The Crime of Genocide in Canada’ use eyewitness testimonies and archival documentation to provide ‘an uncensored record of the planned extermination of indigenous children in Canada’s murderous “Indian residential schools”’ from 1889 to 1996.

Apart from what happened in the Indian Residential Schools during this period, however, the books also offer extensive evidence documenting the ongoing perpetration of genocide, including child rape, torture and killing, against Canada’s indigenous peoples by its government, the Royal Canadian Mounted Police and the Catholic, Anglican and United Churches since the 19^th century. Sadly, there is plenty more in Kevin’s various books and on the website of the International Tribunal into Crimes of Church and State which also explain the long-standing involvement of the Vatican in these genocidal crimes against children.

Of course, Canada is not alone in its unrelenting violence against indigenous children (and indigenous peoples generally). The United States and Australia, among many others, also have long records of savagery in destroying the lives of indigenous children, fundamentally by taking their land and destroying their culture, traditional livelihoods and spirituality. And when indigenous people do not simply abandon their traditional way of being and adopt the dominant model, they are blamed and persecuted even more savagely, as the record clearly demonstrates.

Moreover, institutional violence against children is not limited to the contexts and settings mentioned above. In the recently conducted Royal Commission into Institutional Responses to Child Sexual Abuse undertaken in Australia, childcare services, schools, health and allied services, youth detention, residential care and contemporary out-of-home services, religious activities, family and youth support services, supported accommodation, sporting, recreational and club activities, youth employment, and the military forces were all identified as providing contexts for perpetrating violence against children.

Over half of the survivors suffered sexual violation in an institution managed by a religious organization such as places of worship and for religious instruction, missions, religious schools, orphanages, residential homes, recreational clubs, youth groups, and welfare services. Another one-third of survivors suffered the violence in an institution under government management such as a school, an out-of-home care service, a youth detention centre or at a health service centre. The remaining 10% suffered violence in a private organization such as a child care centre, a medical practice or clinic, a music or dance school, an independent school, a yoga ashram or a sports club, a non-government or not-for-profit organization.

Needless to say, the failure to respond to any of this violence for the past century by any of the institutions ‘responsible’ for monitoring, oversight and criminal justice, such as the police, law enforcement and agencies responsible for public prosecution, clearly demonstrates that mechanisms theoretically designed to protect children (and adults) do not function when those same institutions are complicit in the violence and are, in any case, designed to defend elite interests (not ‘ordinary’ people and children). Hence, of course, this issue was not even investigated by the Commission because it was excluded from the terms of reference!

Separately from those children we kill or violate every day in the ways briefly described above, we traffic many others into sexual slavery – such as those trafficked (sometimes by their parents) into prostitution to service the sex tourism industry in countries such as Thailand, Cambodia, the Dominican Republic, the Philippines and India – we kidnap others to terrorize them into becoming child soldiers with 46 countries using them according to Child Soldiers International, we force others to work as slave laborers, in horrific conditions, in fields, factories and mines (and buy the cheap products of their exploited labor as our latest ‘bargain’) with Human Rights Watch reporting over 70,000,000 children, including many who aren’t even, technically-speaking, slaves, working in ‘hazardous conditions’ – see ‘Child Labor’ – and we condemn millions to live in poverty, homelessness and misery because national governments, despite rhetoric to the contrary, place either negligible or no value on children apart from, in some cases, as future wage slaves in the workforce.

We also condemn millions of children, such as those in Palestine, Tibet, Western Sahara and West Papua, to live under military occupation, where many are routinely imprisoned, shot or killed.

In addition, while fighting wars we cause many children to be born with grotesque genetic deformities because we use horrific weapons, like those with depleted uranium, on their parents. See ‘“Falluja Babies” and Depleted Uranium: America’s Toxic Legacy in Iraq’ and ‘Depleted uranium used by US forces blamed for birth defects and cancer in Iraq’.

In other cases, we cause children shockingly debilitating injuries, if they are not killed outright, by using conventional, biological and chemical weapons on them directly. See ‘Summary of historical attacks using chemical or biological weapons’.

But war also destroys housing and other infrastructure forcing millions of children to become internally displaced or refugees in another country (often without a living parent), causing ongoing trauma. Worldwide, one child out of every 200 is a refugee, whether through war or poverty, environmental or climate disruption. See ‘50mn children displaced by war & poverty worldwide’.

We also inflict violence on children in many other forms, ranging from ‘ordinary’ domestic violence to genital mutilation, with UNICEF calculating that 200 million girls and young women in 30 countries on three continents have been mutilated. See ‘Female genital mutilation/cutting’.

And we deny children a free choice (even those who supposedly live in a ‘democracy’) and imprison vast numbers of them in school in the delusional belief that this is good for them. See ‘Do We Want School or Education?’ Whatever other damage that school does, it certainly helps to create the next generation of child-destroyers. And, in many countries, we just imprison children in our jails. After all, the legal system is no more than an elite tool to control ‘ordinary’ people while shielding the elite from accountability for their grotesque violence against us all. See ‘The Rule of Law: Unjust and Violent’.

While almost trivial by comparison with the violence identified above, the perversity of many multinational corporations in destroying our children’s health is graphically illustrated in the film ‘Global Junk Food’. In Europe, food manufacturers have signed up to ‘responsibility pledges’, promising not to add sugar, preservatives, artificial colours or flavours to their products and to not target children.

However, the developing world is not in Europe so these ‘responsibility pledges’ obviously do not apply and corporations such as Coca-Cola, McDonald’s, Kentucky Fried Chicken and Domino’s Pizza sell their junk food in developing countries (with the video above showcasing Brazil and India) loaded with excess oil, salt and sugar and even using fake cheese.

The well-documented report reveals corporations like these to be nothing more than drug dealers, selling toxic food to ill-informed victims that deliver a lifetime of diabetes and obesity to huge numbers of children. So, just as weapons corporations derive their profits from killing children (and adults), junk food corporations derive their profits from destroying the health of children (and adults). Of course, the medical industry, rather than campaigning vigorously against this outrage, prefers to profit from it too by offering ‘treatments’, including the surgical removal of fat, which offer nothing more than temporary but very profitable ‘relief’.

But this is far from representing the only active involvement of the medical industry in the extraordinary violence we inflict on children. For example, western children and many others are rarely spared a plethora of vaccinations which systematically destroy a child’s immune system, thus making their health ongoingly vulnerable to later assaults on their well-being. For a taste of the vast literature on this subject, see ‘Clinical features in patients with long-lasting macrophagic myofasciitis’, ‘Vaccines: Who’s Allergic To Thimerosal (Mercury), Raise Your Hand’ and ‘Vaccine Free Health’.

And before we leave the subject of food too far behind, it should be noted that just because the junk food sold in Europe and some other western countries has less fat, salt, sugar, preservatives and artificial colors and flavours in it, this does not mean that it is healthy. It still has various combinations of added fat, salt, sugar, preservatives and artificial colors and flavours in it.

Separately from this: don’t forget that virtually all parents are systematically poisoning their children by feeding them food grown by the corporate agribusiness giants which is heavily depleted of nutrients and laced with poisons such as glyphosate. For a taste of the vast literature, see ‘The hidden truth about glyphosate EXPOSED, according to undeniable scientific evidence’. Of course, in many countries we are also forcing our children to drink fluoridated water to the detriment of their health too. See ‘Research Exposes How our Water is Making us Depressed, Sick: Fluoridated water is much to blame’.

Obviously, organically/biodynamically grown food, healthily prepared, and unfluoridated water are not health priorities for their children, according to most parents.

As our ultimate act of violence against all children, we are destroying their future. See ‘Killing the Biosphere to Fast-track Human Extinction’.

So how do we do all of this?

Very easily, actually. It works like this.

Perpetrators of violence learn their craft in childhood. If you inflict violence on a child, they learn to inflict violence on others. The child rapist and ritual child killer suffered violence as a child. The terrorist suffered violence as a child. The political leader who wages war suffered violence as a child. The man who inflicts violence on women suffered violence as a child. The corporate executive who exploits working class people and/or those who live in Africa, Asia or Central/South America suffered violence as a child. The racist and religious bigot suffered violence as a child. The soldier who kills in war suffered violence as a child. The individual who perpetrates violence in the home, in the schoolyard or on the street suffered violence as a child. The parent who inflicts violence on their own children suffered violence as a child.

So if we want to end violence, exploitation, ecological destruction and war, then we must finally admit our ‘dirty little secret’ and end our longest and greatest war: the adult war on children. And here is an incentive: if we do not tackle the fundamental cause of violence, then our combined and unrelenting efforts to tackle all of its other symptoms must ultimately fail. And extinction at our own hand is inevitable.

How can I claim that violence against children is the fundamental cause of all other violence? Consider this. There is universal acceptance that behavior is shaped by childhood experience. If it was not, we would not put such effort into education and other efforts to ‘socialize’ children to fit into society. And this is why many psychologists have argued that exposure to war toys and violent video games shapes attitudes and behaviors in relation to violence.

But it is far more complex than these trivialities suggest and, strange though it may seem, it is not just the ‘visible’ violence (such as hitting, screaming at and sexually abusing) that we normally label ‘violence’ that causes the main damage, although this is extremely damaging. The largest component of damage arises from the ‘invisible’ and ‘utterly invisible’ violence that we adults unconsciously inflict on children during the ordinary course of the day. Tragically, the bulk of this violence occurs in the family home and at school. See ‘Why Violence?’ and ‘Fearless Psychology and Fearful Psychology: Principles and Practice ’.

So what is ‘invisible’ violence? It is the ‘little things’ we do every day, partly because we are just ‘too busy’. For example, when we do not allow time to listen to, and value, a child’s thoughts and feelings, the child learns to not listen to themSelf thus destroying their internal communication system. When we do not let a child say what they want (or ignore them when they do), the child develops communication and behavioral dysfunctionalities as they keep trying to meet their own needs (which, as a basic survival strategy, they are genetically programmed to do).

When we blame, condemn, insult, mock, embarrass, shame, humiliate, taunt, goad, guilt-trip, deceive, lie to, bribe, blackmail, moralize with and/or judge a child, we both undermine their sense of Self-worth and teach them to blame, condemn, insult, mock, embarrass, shame, humiliate, taunt, goad, guilt-trip, deceive, lie, bribe, blackmail, moralize and/or judge.

The fundamental outcome of being bombarded throughout their childhood by this ‘invisible’ violence is that the child is utterly overwhelmed by feelings of fear, pain, anger and sadness (among many others). However, mothers, fathers, teachers, religious figures and other adults also actively interfere with the expression of these feelings and the behavioral responses that are naturally generated by them and it is this ‘utterly invisible’ violence that explains why the dysfunctional behavioral outcomes actually occur.

For example, by ignoring a child when they express their feelings, by comforting, reassuring or distracting a child when they express their feelings, by laughing at or ridiculing their feelings, by terrorizing a child into not expressing their feelings (e.g. by screaming at them when they cry or get angry), and/or by violently controlling a behavior that is generated by their feelings (e.g. by hitting them, restraining them or locking them into a room), the child has no choice but to unconsciously suppress their awareness of these feelings.

However, once a child has been terrorized into suppressing their awareness of their feelings (rather than being allowed to have their feelings and to act on them) the child has also unconsciously suppressed their awareness of the reality that caused these feelings. This has many outcomes that are disastrous for the individual, for society and for nature because the individual will now easily suppress their awareness of the feelings that would tell them how to act most functionally in any given circumstance and they will progressively acquire a phenomenal variety of dysfunctional behaviors, including some that are violent towards themself, others and/or the Earth.

From the above, it should also now be apparent that punishment should never be used. ‘Punishment’, of course, is one of the words we use to obscure our awareness of the fact that we are using violence. Violence, even when we label it ‘punishment’, scares children and adults alike and cannot elicit a functional behavioural response. See ‘Punishment is Violent and Counterproductive’.

If someone behaves dysfunctionally, they need to be listened to, deeply, so that they can start to become consciously aware of the feelings (which will always include fear and, often, terror) that drove the dysfunctional behavior in the first place. They then need to feel and express these feelings (including any anger) in a safe way. Only then will behavioral change in the direction of functionality be possible. See ‘Nisteling: The Art of Deep Listening’.

‘But these adult behaviors you have described don’t seem that bad. Can the outcome be as disastrous as you claim?’ you might ask. The problem is that there are hundreds of these ‘ordinary’, everyday behaviors that destroy the Selfhood of the child. It is ‘death by a thousand cuts’ and most children simply do not survive as Self-aware individuals. And why do we do this? We do it so that each child will fit into our model of ‘the perfect citizen’: that is, obedient and hardworking student, reliable and pliant employee/soldier, and submissive law-abiding citizen. In other words: a slave.

Of course, once we destroy the Selfhood of a child, it has many flow-on effects. For example, once you terrorize a child into accepting certain information about themself, other people or the state of the world, the child becomes unconsciously fearful of dealing with new information, especially if this information is contradictory to what they have been terrorized into believing. As a result, the child will unconsciously dismiss new information out of hand.

In short, the child has been terrorized in such a way that they are no longer capable of thinking critically or even learning (or their learning capacity is seriously diminished by excluding any information that is not a simple extension of what they already ‘know’). If you imagine any of the bigots you know, you are imagining someone who is utterly terrified. But it’s not just the bigots; virtually all people are affected in this manner making them incapable of responding adequately to new (or even important) information. This is one explanation why many people are ‘climate deniers’ and most others do nothing in response to the climate catastrophe.

Of course, each person’s experience of violence during childhood is unique and this is why each perpetrator becomes violent in their own particular combination of ways.

But if you want to understand the core psychology of all perpetrators of violence, it is important to understand that, as a result of the extraordinary violence they each suffered during childhood, they are now (unconsciously) utterly terrified, full of self-hatred and personally powerless, among another 20 psychological characteristics. You can read a brief outline of these characteristics and how they are acquired on pages 12-16 of ‘Why Violence?’

As should now be clear, the central point in understanding violence is that it is psychological in origin and hence any effective response must enable both the perpetrator’s and the victim’s suppressed feelings (which will include enormous fear about, and rage at, the violence they have suffered) to be safely expressed. As mentioned above, for an explanation of what is required, see ‘Nisteling: The Art of Deep Listening’.

Unfortunately, this nisteling cannot be provided by a psychiatrist or psychologist whose training is based on a delusionary understanding of how the human mind functions. See ‘Defeating the Violence of Psychiatry’ and ‘Psychiatry: Science or Fraud? The professor’s trick that exposed the ongoing Psychiatry racket…’ Nisteling will enable those who have suffered from psychological trauma to heal fully and completely, but it will take time.

So if we want to end violence (including the starvation, trafficking, rape, torture and killing of children), exploitation, ecological destruction and war, then we must tackle the fundamental cause. Primarily, this means giving everyone, child and adult alike, all of the space they need to feel, deeply, what they want to do, and to then let them do it (or to have the feelings they naturally have if they are prevented from doing so). See ‘Putting Feelings First’. In the short term, this will have some dysfunctional outcomes. But it will lead to an infinitely better overall outcome than the system of emotional suppression, control and punishment which has generated the incredibly violent world in which we now find ourselves.

This all sounds pretty unpalatable doesn’t it? So each of us has a choice. We can suppress our awareness of what is unpalatable, as we have been terrorized into doing as a child, or we can feel the various feelings that we have in response to this information and then ponder (personal and collective) ways forward.

If feelings are felt and expressed then our responses can be shaped by the conscious and integrated functioning of thoughts and feelings, as evolution intended, and we can plan intelligently. The alternative is to have our unconscious fear controlling our thinking and deluding us that we are acting rationally.

It is time to end the most fundamental conflict that is destroying human society from within – the adult war on children – so that we can more effectively tackle all of the other violence that emerges from this cause too.

So what do we do?

Let me briefly reiterate.

If you are willing, you can make the commitment outlined in ‘My Promise to Children’. If you need to do some healing of your own to be able to nurture children in this way, then consider the information provided in the article ‘Putting Feelings First’.

In addition, you are also welcome to consider participating in ‘The Flame Tree Project to Save Life on Earth’ which maps out a fifteen-year strategy for creating a peaceful, just and sustainable world community so that all children (and everyone else) has an ecologically viable planet on which to live.

You might also consider supporting or even working with organizations like Destiny Rescue, which works to rescue children trafficked into prostitution, or any of the many advocacy organizations associated with the network of End Child Prostitution and Trafficking.

But for the plethora of other manifestations of violence against children identified above, you might consider using Gandhian nonviolent strategy in any context of particular concern to you. See Nonviolent Campaign Strategy or Nonviolent Defense/Liberation Strategy. And, if you like, you can join the worldwide movement to end all violence by signing online ‘The People’s Charter to Create a Nonviolent World’.

In summary: Each one of us has an important choice. We can acknowledge the painful truth that we inflict enormous violence on our children (which then manifests in a myriad complex ways) and respond powerfully to that truth. Or we can keep deluding ourselves and continue to observe, powerlessly, as the violence in our world proliferates until human beings are extinct.

If you want a child who is nonviolent, truthful, compassionate, considerate, patient, thoughtful, respectful, generous, loving of themself and others, trustworthy, honest, dignified, determined, courageous, powerful and who lives out their own unique destiny, then the child must be treated with – and experience – nonviolence, truth, compassion, consideration, patience, thoughtfulness, respect, generosity, love, trust, honesty, dignity, determination, courage, power and, ideally, live in a world that prioritizes nurturing the unique destiny of each child.

Alternatively, if you want a child to turn out like the perpetrators of violence described above, to be powerless to respond effectively to the crises in our world, or to even just turn out to be an appalling parent, then inflict violence – visible, ‘invisible’ and ‘utterly invisible’ – on them during their childhood.

Tragically, with only the rarest of exceptions, human adults are too terrified to truly love, nurture and defend our children from the avalanche of violence that is unleashed on them at the moment of birth.

Biodata: Robert J. Burrowes has a lifetime commitment to understanding and ending human violence. He has done extensive research since 1966 in an effort to understand why human beings are violent and has been a nonviolent activist since 1981. He is the author of ‘Why Violence?’ His email address is flametree@riseup.net and his website is here.

Robert J. Burrowes
P.O. Box 68
Daylesford, Victoria 3460
Australia

Email: flametree@riseup.net

Websites:
Nonviolence Charter
Flame Tree Project to Save Life on Earth
‘Why Violence?’
Feelings First
Nonviolent Campaign Strategy
Nonviolent Defense/Liberation Strategy
Anita: Songs of Nonviolence
Robert Burrowes
Global Nonviolence Network

Assets of world’s “high net wealth” millionaires surged to $70 trillion in 2017

Posted on June 22, 2018 by Reid Mukai

By Barry Grey

Source: WSWS.org

The concentration of the planet’s wealth in the hands of a narrow financial elite is growing by leaps and bounds. A new report published Tuesday reveals that the wealth of the world’s 18.1 million “high net worth individuals”—those having investable assets of $1 million or more—shot up by 10.6 percent last year to top $70 trillion for the first time ever.

The “World Wealth Report 2018,” issued by the consulting firm Capgemini, revealed that the combined wealth of the world’s millionaires rose for the sixth consecutive year in 2017 to reach $70.2 trillion. It is on target to surpass $100 trillion by 2025.

Capgemini defines a high net wealth individual (HNWI) as someone with assets above $1 million, excluding his or her primary residence, collectibles, consumables and consumer durables. This defines a wealthy elite that owns more than $1 million in stocks, bonds, real estate or other investments.

The number of HNWIs grew almost 10 percent, or 1.6 million. The United States, Japan, Germany and China are the four largest markets for millionaires, accounting for 61 percent of the world’s HNWIs. The US tops the list with 5.3 million HNWIs, a 10 percent increase from 2016.

However, the Asia-Pacific region has most of these millionaires overall and accounted for the bulk of the increase in both the number of HNWIs (74.9 percent of the total) and the rise in their global wealth (68.8 percent). Economic inequality appears to be rising faster in this region than any other. Japan saw a 9 percent increase in HNWI millionaires, China an 11 percent rise and India a stunning 20 percent increase.

The financial oligarchy itself resides within what the report calls “ultra-high net wealth individuals,” those with $30 million or more in investable assets. They comprise only 1 percent of HNWIs, or 174,000 individuals, but they account for a vastly disproportionate share of the overall wealth of HNWI millionaires, as well as the increase in HNWI wealth. These ultra-HNWIs own some 35 percent of total NHWI wealth. In 2017, their ranks grew by 11.2 percent and their wealth by 12 percent, reaching $24.5 trillion.

The main factor driving the rapid enrichment of the financial aristocracy is the record rise in stock prices. “High net worth individuals around the world enjoyed investment returns above 20 percent for the second year in a row,” Anirban Bose, head of Capgemini’s financial services global strategic business unit, wrote in the report’s preface. The report noted that global market capitalization grew 21.8 percent in 2017.

The stock market has served as the primary mechanism for central banks and governments around the world to increase the wealth of the financial oligarchy, which dominates the world economy and all of the official institutions of society and dictates the policies of governments. For decades, the central banks, led by the US Federal Reserve, working in tandem with governments of the nominal “left” no less than the right, have deliberately engineered a vast transfer of wealth from the working class to the ruling elite by pursuing policies designed to pump up the financial markets.

These polices have been intensified since the 2008 financial crash. The Fed and the US government, first under Bush and then Obama, responded to the Wall Street meltdown by enacting measures to ensure that the oligarchs recouped all of their losses and were able to exploit the crisis to further enrich themselves. In addition to bailing out the banks and hedge funds with trillions of dollars in tax-payer money, they provided virtually free credit to Wall Street by means of near-zero interest rates and used “quantitative easing”—a euphemism for money-printing—to offload the banks’ bad loans onto the Fed’s balance sheet.

From the low-point of the post-crash recession in March 2009 to the present, US stock prices have risen four-fold, stoking a similar stock bonanza internationally.

This stock market boom and the entire process of social plunder have depended on the suppression of working class opposition and a savage attack on workers’ living standards by means of austerity and wage-cutting. The throttling of the class struggle has been contracted out to the trade unions, the industrial police agencies of the ruling class.

One of the most significant findings in the Capgemini report is that the total financial wealth of the world’s HNWIs more than doubled between 2008 and 2017, rising from $32.8 trillion to $70.2 trillion. This same period has seen, in the world inhabited by the vast majority of humans, a growth of poverty, hunger, homelessness, disease and, in the United States, a decline in life expectancy, a surge in infant and maternal mortality, and record rates of suicide and drug addiction.

This attack has continued and intensified under Trump, as well as governments in Europe, Latin America and Asia. Just last week the Federal Reserve raised interest rates and announced a tightening of monetary policy in response to the growth of workers’ strikes and protests. The oligarchy is petrified that lower unemployment and a tight labor market will encourage a militant wages movement that would undercut the entire basis of the stock market surge. It is moving to slow the economy and drive up unemployment.

To place the wealth of the world’s multi-millionaires and billionaires in perspective, the total of $24.5 trillion owned by “ultra-high net wealth individuals” is almost one-fifth of the world gross domestic product of $135 trillion.

$24.5 trillion is more than the GDP of the United States. It is more than the combined GDPs of the next three countries—China, Japan and Germany.

Just the global increase in ultra-HNWI wealth in 2017, $2.6 trillion, is larger than the GDPs of countries such as Italy, Brazil, Canada and Russia.

What could this money be used for were it not squandered to satisfy the demands of the rich and the super-rich for mansions, private jets and yachts? To give an example, the United Nations estimates it would cost $30 billion a year to eradicate world hunger. That means the money currently controlled by the world’s ultra-HNWIs could eliminate world hunger for 817 years.

The “World Wealth Report 2018” is only the latest in a wave of studies documenting the ever tightening grip of a tiny financial oligarchy and its ultra-wealthy periphery over the world’s resources. Wealth concentration on such a scale makes it impossible to seriously address a single social issue. The staggering diversion of resources into private wealth accumulation by the financial oligarchy starves society of the resources it needs to deal with the most basic problems.

The working class has no choice but to confront head-on the problem of economic inequality. The financial elite enforces its social interests through the wholesale buying of political parties and politicians, making democracy under capitalism nothing but a hollow shell. Any attempt within the framework of the profit system to carry out a modest reallocation of resources to ensure that all people had the basic rudiments of nutrition, health care and education would provoke a furious response from the oligarchy, which has at its disposal not only the courts, politicians and mass media, but, even more decisively, the police and the army.

When social reform becomes impossible, social revolution becomes inevitable. There is no avoiding the conclusion that it is necessary to expropriate the wealth of the financial oligarchs.

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Neo-Liberalism and the Retreat of Democracy