Medicare is a successful and treasured government program that provides health care for seniors, for those with disabilities and for those with end-stage renal disease. The Traditional Medicare (TM) approach provides quality and necessary health care with administrative costs that are far lower than that of private health care insurance such as Medicare Advantage (MA). However, this highly valued public program is now at risk of being turned into just another cash cow for Wall Street investors and the private health insurance industry at the public’s expense.
The CMMI
How is this happening? Well, the 2010 Affordable Care Act established the Center for Medicare and Medicaid Innovation (CMMI). This Center’s goal was identifying “ways to improve healthcare quality and reduce costs in the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) programs.”
Importantly, this Innovation Center was granted the authority to test alternative payment and service delivery models on a national scale without congressional approval. Being able to avoid Congressional politics makes sense as long as there is assurance that these public programs won’t be undercut.
CMMI’s record
Initially the CMMI focused on relatively small pilot projects. In a December 2021 article, Ryan Grim of The Intercept addressed the CMMI and its projects. Grim quoted from a February 2021 article by Brad Smith, who became the CMMI director in January 2020. Smith wrote: “the vast majority of the Center’s models have not saved money, with several on pace to lose billions of dollars. Similarly, the majority of models do not show significant improvements in quality.” Smith identified “inflated benchmarks” — in which providers wildly overestimate what they expect a patient will cost — and providers’ ability to “game” the payment models as key drivers of losses for the government. Smith’s concern about inflated benchmarks and gaming the system likely also apply to the private MA plans that cost more than the TM approach.
Direct Contracting
Former President Trump’s appointees to lead the CMMI greatly extended the scope of the pilot project idea and focused on a direct contracting entities (DCEs) model. According to Physicians for a National Health Program (PNHP), these DCEs are essentially third-party middlemen that receive a capitated monthly payment from the Centers for Medicare & Medicaid Services (CMS) for covering some defined portion of each enrollees’ medical expenses — and may keep what they don’t pay for in care. PNHP added: “Virtually any company can apply to be a DCE, including investor-backed startups that include primary care physicians, [Medicare Advantage] plans and other commercial insurers, accountable care organizations (ACOs) or ACO-like organizations, and for-profit hospital systems.”
This profit-based incentive model could threaten the health of enrollees as well as quickly lead to the privatization of this vitally important public program. This privatization has been a long-held dream of many conservative ideologues as well as Wall Street.
The Biden Administration and DCEs
I had hoped that President Biden’s administration would have stopped the implementation of the DCE models. However, according to PNHP, the CMS Innovation Center’s chief strategy officer said in late October 2021 that the agency “envisions a future where every Medicare beneficiary and most Medicaid beneficiaries are in an accountable care relationship by 2030,” signaling their intention to rapidly expand the DCE program to cover all TM beneficiaries in the next 8 years. Note that this change would likely be without the understanding or consent of TM beneficiaries. However, the Biden administration did delay the worst type of the proposed DCE models, but two other types are going forward.
PNHP added: “Currently, the pilot involves 53 DCEs in 38 states, D.C., and Puerto Rico, covering 30 million of the 36 million TM beneficiaries. … A majority of DCEs (28 of 53 total) are controlled by investors — not providers — and most have ties to MA commercial insurers.” This is hardly a pilot project.
What you can do
PNHP asks that you call your member of Congress at (202) 224-3121 and request that they demand Health and Human Services end this Medicare DCE program; hold hearings on DCEs; establish Congressional oversight of the Center for Medicare and Medicaid Innovation; and sign its petition at pnhp.org.
As the Federal Reserve signals it will raise interest rates in March, we talk to Christopher Leonard, author of the new book The Lords of Easy Money, about how the Federal Reserve broke the American economy. He details the issues with quantitative easing, a radical intervention instituted by the federal government in 2010 to encourage banks and investors to lend more risky debt to combat the recession. “The Fed’s policies over the last decades have stoked the world of Wall Street,” says Leonard. “It has pumped trillions of dollars into the banking system and thereby inflated these markets for stocks, for bonds. And that drives income inequality.”
TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.
AMYGOODMAN: This is Democracy Now! I’m Amy Goodman, with Nermeen Shaikh.
Amidst growing concerns about inflation in the U.S., the Federal Reserve announced Tuesday it will start hiking interest rates in March. To look at what this will mean for working people and everyone beyond the 1%, we’re joined by Christopher Leonard, longtime business reporter. His new book is out this week, The Lords of Easy Money: How the Federal Reserve Broke the American Economy.
Welcome to Democracy Now! It’s great to have you with us, Christopher. If you can start off with a Federal Reserve 101: What does it mean to lift interest rates? And why do you say it’s broken, the American economy?
CHRISTOPHERLEONARD: Yes. Thank you. Great question. And, you know, the Federal Reserve can seem like this very kind of obscure and highly technical institution that only matters to Wall Street, but I really think that’s not the case. It is critical to understand what this central bank does and how it has affected our economy. You know, one of my central preoccupations as a business reporter is trying to understand growing income inequality in the United States and why we live in this sort of funhouse-type economy where we can see stock markets breaking records, corporate debt markets breaking records, while the middle class is really treading water with stagnant wages and falling further behind. What the Federal Reserve has done over the last decade helps explain why this is happening.
So, you know, at the root level, we created the Federal Reserve as the central bank to do one key thing: It creates our currency. The Federal Reserve literally creates and manages our currency. That thing we call a U.S. dollar is in reality a Federal Reserve note. So, the central bank’s job is to make sure that the dollar retains its value. So that’s why you always hear this talk about, you know, the Federal Reserve hiked interest rates today, or it cut interest rates today. What they’re doing is expanding or contracting the supply of money.
So, why does that matter? Well, here’s why. Over the last decade, the Fed has really moved itself to the center of American economic life. The Fed has engaged in an unprecedented series of experiments in printing new money. Let me put it this way: In the first century of its existence, the Fed expanded the pool of base money — you know, what the economists called the monetary base. The Fed expanded that pool of money to about $900 billion. So, that’s a trillion dollars in printing money over a century. But then, after the crash of ’08, between 2008, 2014, the Fed prints $3.5 trillion. So that’s three-and-a-half centuries’ worth of money printing in a few short years.
Now, that money is not a neutral force. When the Fed creates new dollars, it doesn’t create them in the checking account of normal people, right? It creates new dollars — specifically and by design, it creates new dollars on Wall Street in the bank accounts of 24 select institutions. And they’re the folks you’d suspect: you know, JPMorgan, Goldman Sachs, Wells Fargo. That’s where the Fed is creating these new dollars. So the Fed’s policies over the last decades have stoked the world of Wall Street. It has pumped trillions of dollars into the banking system, and thereby it’s inflated these markets for stocks, for bonds. And that drives income inequality, because, you know, just the tiny 1% at the top of our wealth ladder controls 40% of all the assets, whereas the bottom half of Americans, you know, those of us who earn a living by getting a paycheck rather than by owning assets — the bottom half of Americans only own about 5% of all the assets. So the Fed’s policies have enriched the very rich, the biggest of the big banks, while leaving the middle class behind.
And now we find ourself in this position, that’s really actually quite a dangerous moment, in 2022, where we’re seeing price inflation start to increase dramatically. So, the Fed is being forced to tighten the money supply and to try to back off these stimulus programs it’s created. The real risk here, I think, for everybody in America is that as the Fed does this, as it hikes rates and pulls back on the stimulus, it’s going to cause those asset markets to fall. And, you know, to put that in common parlance, it’s risking creating a financial market crash as the Fed is forced to hike interest rates. And again, to me, one of the key problems with this is that over the decade of these easy money policies, the middle class has really been left out. And once again, it will be the middle class that’s going to have to pay the bill if we see another financial market crash.
NERMEENSHAIKH: Well, Chris, could you respond to what we see everywhere in the media, namely that inflation rates now are almost at 7%, higher than they’ve been since the 1980s? I mean, that level of inflation also impacts the vast majority of Americans adversely. What other steps could be taken to reduce inflation?
CHRISTOPHERLEONARD: So, it’s just fascinating. And one key thing I would really like to point out, that I learned while reporting this book, is that we should, I think, think about two kinds of inflation. There’s inflation of prices, which is what we’re talking about right now, that really sharp increase in the price of food, fuel, television sets, cars. That’s price inflation. But then you’ve got inflation of assets, which is what the Fed has been pushing so hard for decades. So, that’s a rise in the value of homes and stocks and corporate bonds. So we’ve actually had runaway asset inflation for a decade, but we haven’t seen price inflation. And we’re starting to see it now.
And as you point out, price inflation can just, frankly, be devastating for the middle class, if wages don’t keep up with the increase in prices — which, unfortunately, is exactly what we’re seeing now. So, wages are kind of creeping up a little bit, but we’re seeing this runaway increase in prices, which presents us with a terrible dilemma. And to be blunt, the Federal Reserve is responsible for the price inflation, at least to a certain degree, by pumping all of this money into the economy.
So, you know, your question is: How can you fight it, and what can you do?
AMYGOODMAN: We have 30 seconds.
CHRISTOPHERLEONARD: Quite unfortunately, one of the few ways to do this is to hike interest rates, which is going to create damage to our economy. Many other important measures will take a lot of time, such as improving the supply chain or cracking down on monopolies. So, we’re going to see interest rates hiked, and it’s going to be a bumpy ride.
AMYGOODMAN: Well, we clearly have to come back to this conversation, Christopher Leonard, business reporter and author. New book out this week, it’s called The Lords of Easy Money: How the Federal Reserve Broke the American Economy.
And that does it for our show. I’m Amy Goodman, with Nermeen Shaikh. Remember, wearing a mask is an act of love.
In the lead-up to recent climate talks in Glasgow, Scotland, some were calling COP26 the “Finance COP.” This was, in part, because Mark Carney, the former governor of the Bank of England, had been working tirelessly to secure new climate commitments from financial institutions across the globe.
Carney finally had his big moment in Glasgow when he announced that over 450 of the world’s largest financial institutions — including banks, insurers, pension funds and asset managers — had joined theGlasgow Financial Alliance for Net Zero (GFANZ) and committed to achieving net zero emissions by 2050. “The architecture of the global financial system has been transformed to deliver net zero,”stated Carney as he unveiled the news.
There were, however, two key words missing from the financial sector’s big moment. Not once in the 1,349-wordpress release proclaiming the financial industry’s new-found dedication to climate action did the words “fossil fuels” appear. To say that this is problematic is an understatement.
One study calculated that 71 percent of all of history’s greenhouse gas emissions come from just 100 fossil fuel companies. Not only that, but fossil fuel corporations have spent 40 yearsfunding climate denial andwaging war against even incremental proposals for climate action.
To tackle the climate crisis without confronting fossil fuels is like trying to put out a fire without doing anything to stop the people pouring gasoline on the flames. But that appears to be the approach that the financial sector is taking. Nowhere is this more obvious than on Wall Street.
In the five years after the Paris Agreement was signed in 2015, just six U.S. banks — JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley and Goldman Sachs — have loaned a little shy of$1.2 trillion to the fossil fuel industry. To give that some context, consider that $1.2 trillion is more than double the current share market value of ExxonMobil, Chevron and BP combined.
In spite of their deep ties with the fossil fuel industry, every major U.S. bank has signed on to the Glasgow Financial Alliance for Net Zero and committed to achieving net zero emissions by 2050. Yet none of them have committed to ending their support of the industries that are most driving the climate crisis. Indeed, they seem intent on doing the opposite. Goldman Sachs CEO David Solomon recentlyvowed to continue providing finance to the oil and gas industry; Chase CEO Jamie Dimon has expressedsimilar sentiments.
A few months before the start of COP26, JPMorgan Chase, the world’s largest funder of fossil fuels, became the first major U.S. bank to set 2030 climate targets. Unfortunately, rather than actually reducing the overall greenhouse gas emissions associated with its lending, Chase chose to reusea convoluted accounting trick often used by Big Oil known as “carbon intensity,” pledging that by 2030, it will achieve a 15 percent reduction in the “carbon intensity” of the oil and gas firms it finances.
Here’s how Chase’s carbon intensity commitments work: Imagine you are the CEO of an oil firm. Your company owns 1,000 oil wells. You receive a $10 billion loan from Chase. You use that loan to buy 400 additional oil wells and 400 windmills. This means you are digging up and burning more oil than ever before; your overall contributions to climate change have gone up significantly. But because you are now also profiting from wind power, the “carbon intensity” of your company has gone down — an accounting trick that allows your oil company to expand oil production and banks like Chase to meet their greenwashed climate targets.
During COP26, Morgan Stanley became the second U.S. bank to release 2030 climate targets,announcing a plan to slash emissions in the energy, auto and manufacturing sectors. Unfortunately, Morgan Stanley’s targets are only a half-step better than Chase’s.
Thepress release announcing Morgan Stanley’s 2030 targets claims that the company’s targets are based on the International Energy Agency’s (IEA)Net Zero by 2050 pathway. However, a key part of the IEA’s recommendations was that “there is no need for investment in new fossil fuel supply in our net zero pathway.” Unsurprisingly, a promise from Morgan Stanley, the world’s largest funder of new LNG terminals, to immediately end support for the expansion of the oil and gas industry was not forthcoming.
Given the collective failures of Carney, Chase and Morgan Stanley, it’s understandable that many activists denounced COP26 as nothing more than a “greenwashing festival.” This failure also makes it clear that we need the federal government to regulate financial institutions that are unwilling to do what’s necessary to curtail catastrophic climate change.
There have been some small first steps toward reigning in Wall Street’s ability to wreck our climate. In May 2021, President Biden issued the first-ever Executive Order on Climate-Related Financial Risk, directing federal regulators to analyze and mitigate the risk that climate change poses to the economy.
In response, the Financial Stability Oversight Council (FSOC), the federal government’s most powerful financial regulator, released a report outlining what the climate crisis should mean for the financial sector. Unfortunately, although FSOC affirmed that U.S. financial regulators do, in fact, have the authority and obligation to address the climate crisis, it failed in several key regards. Most importantly, the report didn’t even mention that U.S. banks are actively driving the climate crisis by financing the continued expansion of the fossil fuel industry.
Of greater hope is the Fossil Free Finance Act. Introduced by Representatives Mondaire Jones, Rashida Tlaib and Ayanna Pressley last fall, the Fossil Free Finance Act would prohibit the funding of new fossil fuel projects by 2022 and the funding of all fossil fuel projects by 2030. It is legislation that meets the scale and urgency of the climate challenge — which is, of course, exactly what is required.
Yet so far, only 22 Members of Congress have signed on to co-sponsor the Fossil Free Finance Act. If our elected officials are at all serious about addressing the climate crisis, that number must grow dramatically in 2022.
In the face of massive support for Medicare for All and the failure of the U.S.’s for-profit health care system, the inevitable fall of the medical-industrial complex can be predicted, if not with precision, with certainty. Everyone is aware of the impending demise, none more so than those in charge of the for-profit health care system and their supporters in Congress, as evidenced by the frenetic activity at the Centers for Medicare and Medicaid Services (CMS) to transfer the traditional Medicare program to the insurance industry as fast as humanly possible. Given this urgency, physicians representing Physicians for a National Health Program delivered a petition signed by 13,000 individuals, including 1,500 physicians, to Health and Human Services Secretary Xavier Becerra this week demanding the end to the privatization of Medicare.
Privatization, the transfer of a public good to private, for-profit entities, is already true for over 40 percent of Medicare in the form of Medicare Advantage, private insurance plans that have been persistently and pervasively overpaid by Medicare for decades. As Kip Sullivan recently described in “Single Payer Health Care Financing,” this fraud has been going on for decades.
In 1995, the U.S. General Accounting Office (GAO) warned Congress that Medicare was overpaying Health Maintenance Organizations (HMOs), the precursors to Medicare Advantage plans, by 6 to 28 percent compared to what it would have paid had all those HMO enrollees remained in traditional Medicare because most HMOs benefited from “favorable selection,” meaning, healthier patients enrolled in HMOs. In 1999, the GAO again warned Congress that Medicare spent more on beneficiaries enrolled in HMOs than it would have had those beneficiaries been enrolled in traditional Medicare. The following year, the GAO told Congress that it was largely excess Medicare payments to HMOs, not their efficiencies, that allowed plans to attract large numbers of beneficiaries, again exceeding costs expected under the traditional program, adding billions to Medicare spending.
Twenty-six years later, in its 2021 report to Congress, the Medicare Payment Advisory Commission wrote, “The Commission estimates that Medicare currently spends 4 percent more for beneficiaries enrolled in MA [Medicare Advantage] than it spends for similar enrollees in traditional fee-for-service (FFS) Medicare.” This low number is difficult to square with the profit that insurance companies are making and the extra benefits that they offer. What has been clear to Congress for decades, is that Medicare Advantage, which inserts a middleman to “manage” care between CMS and doctors and hospitals, costs more than traditional Medicare, which does not require a middleman between the senior and the provider. From 1972 to 2004, overpayment by Medicare to HMOs was the rule and due mostly to favorable selection. After 2004, overpayment persisted for Medicare Advantage plans (formerly known as Medicare + Choice) for two reasons: favorable selection (“cherry picking,” or selecting healthy patients, as well as “lemon dropping,” or getting rid of sick patients, perfected by HMOs) and upcoding.
What is upcoding? When a doctor bills the insurance company or Medicare for a patient, the doctor uses a diagnosis code. For example, a patient who is seen for pneumonia will be billed with the diagnosis code for pneumonia. But what if instead of just billing for pneumonia, the physician also coded for shortness of breath, hypoxia (low oxygen level), productive cough and exposure to tuberculosis, some of which might or might not be accurate, but could certainly be present in someone with pneumonia? This would be upcoding and would be considered fraud, but in the Medicare Advantage world, upcoding is known as risk-score gaming, and it is perfectly legal.
Risk-score gaming is how Medicare Advantage has been drawing serious overpayments since its full implementation in 2006. Medicare Advantage does this by submitting diagnosis codes that create more CMS Hierarchical Condition Categories (HCCs) for each patient. For example, a 76-year-old female with obesity, type 2 diabetes, major depression and congestive heart failure has an HCC risk score of 1.03. For this patient, CMS pays a Medicare Advantage plan that does not upcode $9,000.
If however, the Medicare Advantage plan upcodes — same patient, same medical conditions but more codes: morbid obesity instead of obesity, diabetes with retinopathy instead of diabetes; a mild, single episode of major depression instead of unspecified major depression; chronic obstructive lung disease instead of asthma and a stage 3 ulcer instead of ulcer — her risk score jumps to 3.63, and CMS pays the Medicare Advantage plan for the same patient $32,000. The plan reaps obscene profits, some of which goes to marketing, some of which goes to improve benefits driving up the number of new members, but most of which go back into profits, all the while draining the Medicare trust fund, driving up Part B premiums (monthly payments made by beneficiaries to Medicare) and diverting taxpayer funds from other social services.
For each 0.1 increase in risk score at current enrollment levels, there are $15 billion in overpayments ($13 billion from CMS, and $2 billion from Part B beneficiaries) and the Medicare Advantage plan takes $3.5 billion in profits. Risk-score gaming is the business model for Medicare Advantage and creates a major transfer of wealth to Medicare Advantage from taxpayers and traditional Medicare recipients.
All evidence points against using the multibillion-dollar health insurance industry to improve outcomes and save money. But evidence is no match for profit. In 2019, the Medicare budget approached $800 billion, and by 2026, it is projected to be $1.35 trillion. This amount of taxpayer money keeps capitalists up at night, especially the medical-industrial complex types, scheming up ways to grab some for themselves. Lucky for these capitalists, CMS is continuing its march towards privatization, or what is known in the parlance of health economists, “de-risking” all of Medicare, meaning eliminating the risk of providing health insurance to seniors by having someone else bear the risk. But the truth is the exact opposite: These overpayments are allowing the insurance industry to pretend they bear risk when in fact it’s the taxpayer who is bearing risk.
There is much profit to be gained by “bearing the risk” for Medicare through favorable selection and upcoding, as evidenced by the outsized profits for insurers in Medicare Advantage compared to margins in the group or individual market. There should be little surprise, then, that the industry is chomping at the bit to “bear the risk,” that is, be overpaid to insure the remaining 60 percent of seniors who have deliberately chosen not to enroll in Medicare Advantage, those that are safely (or so they thought) enrolled in traditional Medicare.
But safe they are not, and every enrollee in traditional Medicare should take note: A program known as the Global and Professional Direct Contracting model in a little-known government agency known as the Center for Medicare and Medicaid Innovation (“The Innovation Center”) is already moving them, without their knowledge or consent, to “risk-bearing,” for-profit middlemen known as Direct Contracting Entities (DCEs). The goal: to end what’s left of traditional Medicare.
The Innovation Center was created under the Affordable Care Act (ACA) in 2010 with a mandate to test “innovative” payment and service delivery models for Medicare that would decrease costs, and if not improve, at least not worsen care. The ACA gave full authority to the Innovation Center to scale up any model it deemed fit, to all of Medicare without congressional approval. In the past 10 years, 54 models have been developed, 50 of which failed and all of which continue to use market-driven models of care. Not one model has been developed to test out single-payer, which actually would decrease costs and save lives. The latest demonstration project, created in the waning days of the Trump administration and greenlighted by the Biden administration, is the DCE model, which is being rolled out to traditional, fee-for-service Medicare beneficiaries without congressional approval or anyone’s vote.
What is a Direct Contracting Entity? Simply put, it is a “risk-bearing,” for-profit middleman to manage health care for traditional Medicare beneficiaries, just like Medicare Advantage plans are for seniors who have signed up for Medicare Advantage plans. The difference is that while 26 million seniors have voluntarily signed up for a middleman when they chose Medicare Advantage, the 38 million seniors in traditional Medicare have not.
How do you get seniors who have specifically chosen traditional Medicare to switch to a non-traditional Medicare-Advantage-like plan with a mysterious name like “Direct Contracting Entity”? You don’t tell them! You lure their primary care providers to participate in a DCE by promising the doctors much better Medicare reimbursement rates and more time with their patients, and once the doctors sign up with a DCE, all their patients are automatically “aligned” by CMS with the DCE the doctor has chosen. The DCE sends patients a letter they are likely not going to read or understand, and presto! Millions of seniors previously on traditional Medicare now belong to a DCE. That’s how DCEs leverage and monetize the doctor-patient relationship for the profit of corporations.
DCE middlemen accept capitated payments for seniors in traditional Medicare just like Medicare Advantage plans, “cherry pick and lemon drop,” deny care, upcode, spend as little as 60 percent on health care for beneficiaries (compared to Medicare Advantage’s 85 percent), and keep the rest as profit. The playbook is an old one, and it works.
There are 53 DCEs in 38 states and Washington, D.C., mostly owned by for-profit, private equity firms, investor-owned primary care practices, Accountable Care Organizations(a network of doctors and hospitals that is jointly accountable for the health of a group of Medicare patients and that receives financial incentives from Medicare to save money on patient care while meeting certain quality metrics) and Medicare Advantage plans. Many DCEs are owned by publicly traded corporations straight out of Wall Street. These are the corporations that will potentially manage the care of up to 30 million seniors who thought they were free of insurance companies. Instead, their health will be weighed against profit. And in a market-driven, for-profit health care system, the bottom line always wins.
But the most important question still remains: Why the urgency to “de-risk” (privatize) Medicare, no matter the cost? Enter Liz Fowler, architect behind the ACA, an industry darling who ensured health insurance companies would reap billions every year under the ACA, the new director of the Innovation Center brought in by the Biden administration to oversee the full privatization of Medicare. Industry giants and Washington insiders can read the writing on the wall as well as anyone else. They are acutely aware that a majority of Americans say it is the government’s responsibility to provide health care for all. They know that a pandemic has shined a light on the inefficiencies, inequities and indifference of our health care system. They know that Americans died in greater numbers and at increased rates compared to countries with universal health care systems in place. In the face of this inevitability, what would the medical-industrial complex and Congress do? Sell off Medicare, and fast, before Americans actually get Medicare for All.
Health and Human Services Secretary Becerra, a supporter of Medicare for All, and CMS Administrator Chiquita Brooks-Lasure have the authority to terminate the Direct Contracting model program. Congress has the power to hold hearings on the Innovation Center and pass legislation to provide congressional oversight to the Center’s pilot programs. The Innovation Center has put a hold on new DCE applications, to the consternation of industry, but all signs point to the continuation of using DCEs to privatize traditional Medicare. The Innovation Center will put a pretty bow around DCEs and talk about “equitable outcomes” and “person-centered care” but we should not be fooled: The end of Medicare is near. It is up to us to demand DCEs, not Medicare, be ended.
On Monday, the White House announced that President Joe Biden is planning to nominate Republican Jerome Powell for his second term as chair of the Federal Reserve, one of the most influential positions in Washington.
Alongside Powell, Biden will nominate Lael Brainard as vice chair. Brainard is the only Democrat on the seven-person Fed board and was previously being considered by the White House as a leading candidate to replace Powell.
The two appointments will then go to the Senate, where progressive lawmakers will likely put up a fight against Powell’s nomination — particularly Sen. Elizabeth Warren (D-Massachusetts), who has called Powell a “dangerous man” due to his record over his first four-year tenure.
Since Powell’s original nomination by Donald Trump, he has been panned by progressive advocates and lawmakers for not being strict enough when it comes to regulating banks and Wall Street. He has also been criticized for his ignorance on climate issues.
In a statement announcing the nomination, the White House noted the administration’s belief that it is important to have steady leadership at the Fed as the pandemic continues.
“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” said Biden. There are three remaining nominations to the Fed board that the president has yet to announce.
Biden bucked progressive recommendations in nominating Powell for a second term, perhaps as an attempt to appeal to bipartisanship. That appeal may have serious consequences, as economics experts have warned that Powell’s record is alarming during an unstable time for the U.S. economy.
“[A] Powell renomination raises serious concerns simply based on his record,” Gerald Epstein wrote for Truthout in September. While Powell has rightly earned praise for his support of maximum employment and his handling of economic turmoil during the early months of the pandemic, Epstein wrote, “supporters who focus only on these areas are ignoring another crucial component of the Fed’s job — financial regulation and financial stability — where Powell has a much more problematic record.”
As Fed chair, Powell rolled back financial regulations that were put in place after the Great Recession, including Dodd-Frank, legislation that was implemented to prevent predatory mortgage lending and to curb the excessive risk-taking that led to the crisis. Many of the moves Powell made early in the pandemic were only necessary because of existing weaknesses in the financial system, Epstein noted.
The Fed has been embroiled in several scandals during Powell’s tenure — one including Powell himself. Last year, just before the stock market crashed in October, Powell sold between $1 million and $5 million in stock. Vice Chair Richard Clarida made a similar stock transaction in February of 2020, just before new pandemic policy changes were announced.
Wall Street investors have hit the jackpot. Soon they’ll be able to buy, own, and dictate The Commons, public lands, the world of Mother Nature. In fact, a pilot project is already in the works with ecosystems up for sale as Wall-Streeters anxiously prepare to gobble up the valued benefits of Mother Nature.
According to the NYSE PR Dept. they’ll IPO nature: “To preserve and restore the natural assets that ultimately underpin the ability for there to be life on Earth.” What? Really?
And, according to NYSE COO Michael Blaugrund: “Our hope is that owning a natural asset company is going to be a way that an increasingly broad range of investors have the ability to invest in something that’s intrinsically valuable, but, up to this point, was really excluded from the financial markets.”
Then, does this mean that neoliberal capitalism is becoming nature’s beneficent caretaker so environmentalists can stop wringing their hands about the horrendous loss of wild vertebrate life, down a whopping 68%, and loss of wetlands and loss of huge chunks of rainforests these past few decades, all of which echoes a guttural sound of impending extinction? Answer: Don’t count on it.
For starters, there’s something extraordinarily distasteful and downright disgusting about Wall Street buying control of nature’s resource capabilities. It bespeaks of an upside down world where the ludicrous becomes acceptable, but is it really acceptable? Is it?
The main character in this new scheme to own the world is a new asset class with a very plain name that says it all: Natural Asset Company or NAC. Yes, if you are a billionaire, get ready to buy up to 30% of the world’s natural resource beneficence to society. It’s going to be offered on the biggest auction block of the world, the New York Stock Exchange under the cover of sustainability of nature and protection of biodiversity, wink, wink!
Of course, this prompts a series of questions, headlined by when does Mother Nature morph into a tollbooth?
In simplest of terms, NACs allow for the formation of specialized corporations the hold the rights to the ecosystem services produced on a given chunk of land. The services might be sequestration of carbon or clean water or possibly rare Tibetan mountain air or maybe a lake teeming with trout in the wilderness. The possibilities are endless when auctioning off major chunks of an asset as big as the planet.
The NAC will maintain, manage and grow the natural asset that it has commoditized, working towards maximizing the profit potential of the natural asset, although, of course, this is not emphasized in the PR material. Nevertheless, it could lead to near-infinite profits. After all, the living Earth does rejuvenate and replenish and service ecosystems on its own accord, a natural process that goes on forever. Why not own it?
If ever there has been a time for the people of the world to drop whatever they are doing and focus on one issue, now is that time. The Commons is for sale! Think long and hard about that proposition, study it, discuss it, and decide whether to agree that Mother Nature should be monetized. If not in agreement, then do something, tell everybody, tell anybody who’ll listen, carry poster boards in the street, join a protest march, bang pots and pans, do something to relieve that breakneck pressure building around your temples!
The Intrinsic Exchange Group, in partnership with the NYSE, is currently working with the Costa Rica government on a pilot project of NACs in the country in order to institute its protocol for ownership of forests, lakes, waterfalls, mountains, meadows, caves, wetlands, in essence, all of nature. Costa Rica is the proving grounds for ownership of Mother Nature, whether she likes it or not.
First, NAC identifies a natural asset, like a forest, for example, which is quantified using special protocols that have already been developed by various coalitions amongst multinational corporations, which in and of itself is remarkably terrifying. The NAC decides who has the rights to the natural asset’s productivity and how it is to be managed. It is then monetized via an IPO on the stock exchange. Thus, the NAC becomes “the Issuer” to potential buyers of the natural asset that the NAC represents. Essentially, NAC is a real estate agent of Mother Nature. The buyers are institutional investors, or the occasional billionaire, that want to own the rights to the benefits of wetlands or rainforests or natural water springs or rarified mountainous air or hot springs or whatever they want to own. The world is their oyster to buy, own, enjoy, and profit by.
Throughout all human history nature has been The Commons or the cultural and natural resource for all of society inclusive of natural processes like air and water. But now private investors are deleting The Commons with claims of “conservation and sustainability” of 30% of what’s called “protected areas” of our precious worldwide assets.
According to initial calculations, NACs will unlock $4Quadrillion in assets as a new feeding ground for Wall Street investors to buy the rights to clean water and clean air and trout streams and bass-laden lakes and gorgeous picturesque waterfalls and lagoons, an entire forest, or maybe eventually extend into the oceans. Who knows the range of possibilities once nature is transacted on Wall Street.
Monetizing nature!
What’s next, what’s left?
The Commons is property shared by all, inclusive of natural products like air, water, and a habitable planet, forests, fisheries, groundwater, wetlands, pastures, the atmosphere, the high seas, Antarctica, outer space, caves, all part of ecosystems of the planet.
The sad truth is Mother Nature, Inc. will lead to extinction of The Commons, as an institution, in the biggest heist of all time. Surely, private ownership of nature is unseemly and certainly begs a much bigger relevant question that goes to the heart of the matter, to wit: Should nature’s ecosystems, which benefit society at large, be monetized for the direct benefit of the few?
Just in time for the UN’s policy push for “30 x 30” – 30% of the earth to be “conserved” by 2030 – a new Wall Street asset class puts up for sale the processes underpinning all life.
A month before the 2021 United Nations Climate Change Conference (known as COP26) kicked off in Scotland, a new asset class was launched by the New York Stock Exchange that will “open up a new feeding ground for predatory Wall Street banks and financial institutions that will allow them to dominate not just the human economy, but the entire natural world.” So writes Whitney Webb in an article titled “Wall Street’s Takeover of Nature Advances with Launch of New Asset Class”:
Called a natural asset company, or NAC, the vehicle will allow for the formation of specialized corporations “that hold the rights to the ecosystem services produced on a given chunk of land, services like carbon sequestration or clean water.” These NACs will then maintain, manage and grow the natural assets they commodify, with the end goal of maximizing the aspects of that natural asset that are deemed by the company to be profitable.
The vehicle is allegedly designed to preserve and restore Nature’s assets; but when Wall Street gets involved, profit and exploitation are not far behind. Webb writes:
[E]ven the creators of NACs admit that the ultimate goal is to extract near-infinite profits from the natural processes they seek to quantify and then monetize….
Framed with the lofty talk of “sustainability” and “conservation”, media reports on the move in outlets like Fortune couldn’t avoid noting that NACs open the doors to “a new form of sustainable investment” which “has enthralled the likes of BlackRock CEO Larry Fink over the past several years even though there remain big, unanswered questions about it.”
BlackRock is the world’s largest asset manager, with nearly $9.5 trillion under management. That is more than the gross domestic product of every country in the world except the U.S. and China. BlackRock also runs a massive technology platform that oversees at least $21.6 trillion in assets. It and two other megalithic asset managers, State Street and Vanguard (BlackRock’s largest shareholder), already effectively own much of the world. Adding “natural asset companies” to their portfolios could make them owners of the foundations of all life.
A $4 Quadrillion Asset — The Earth Itself
Partnering with the New York Stock Exchange team launching the NAC is the Intrinsic Exchange Group (IEG), major investors in which are the Rockefeller Foundation and the Inter-American Development Bank, notorious for imposing neo-colonialist agendas through debt entrapment. According to IEG’s website:
We are pioneering a new asset class based on natural assets and the mechanism to convert them to financial capital. These assets are essential, making life on Earth possible and enjoyable. They include biological systems that provide clean air, water, foods, medicines, a stable climate, human health and societal potential.
The potential of this asset class is immense. Nature’s economy is larger than our current industrial economy ….
The immense potential of “Nature’s Economy” is estimated by IEG at $4,000 trillion ($4 quadrillion).
Webb cites researcher and journalist Cory Morningstar, who maintains that one of the aims of creating “Nature’s Economy” and packaging it via NACs is to drastically advance massive land grab efforts made by Wall Street and the oligarch class in recent years, including those made by Wall Street firms and billionaires like Bill Gates during the COVID crisis. The land grabs facilitated through the development of NACs, however, will largely target indigenous communities in the developing world. Morningstar observes:
The public launch of NACs strategically preceded the fifteenth meeting of the Conference of the Parties to the Convention on Biological Diversity, the biggest biodiversity conference in a decade. Under the pretext of turning 30% of the globe into “protected areas”, the largest global land grab in history is underway. Built on a foundation of white supremacy, this proposal will displace hundreds of millions, furthering the ongoing genocide of Indigenous peoples.
The UN’s “30 x 30”
The land grab of which Morningstar speaks is embodied in a draft agreement called the “Post-2020 Global Biodiversity Framework,” currently being negotiated among the 186 governments that are signatories to the Convention for Biological Diversity. Part I of its 15th meeting (COP15) closed on October 15, just ahead of COP26 (the 26th UN Climate Change Conference of the Parties) hosted in Glasgow from October 31 through November 12. COP26 focuses on climate change, while COP 15 focuses on preserving diversity. Part II of COP15 will be held in 2022. The draft text for the COP 15 nature pact includes a core pledge to protect at least 30% of the planet’s land and oceans by 2030.
In September 2020, 128 environmental and human rights NGOs and experts warned that the 30 x 30 plan could result in severe human rights violations and irreversible social harm for some of the world’s poorest people. Based on figures from a paper published in the academic journal Nature, they argued that the new target could displace or dispossess as many as 300 million people. Stephen Corry of Survival International contended:
The call to make 30% of the globe into “Protected Areas” is really a colossal land grab as big as Europe’s colonial era, and it’ll bring as much suffering and death. Let’s not be fooled by the hype from the conservation NGOs and their UN and government funders. This has nothing to do with climate change, protecting biodiversity or avoiding pandemics – in fact it’s more likely to make all of them worse. It’s really all about money, land and resource control, and an all out assault on human diversity. This planned dispossession of hundreds of millions of people risks eradicating human diversity and self-sufficiency – the real keys to our being able to slow climate change and protect biodiversity.
How that is to be done is not clearly specified, but proponents insist it is not a “land grab.” Critics, however, contend there is no other way to pull it off. Only about 12% of land and water in the U.S. is now considered to be “in conservation,” including wilderness lands, national parks, national wildlife refuges, state parks, national monuments, and private lands with permanent conservation easements (contracts to surrender a portion of property rights to a land trust or the federal government). According to environmental expert Dr. Bonner Cohen, raising that figure to 30%, adding 600 million acres to the total, “means putting this land and water (mostly land) off limits to any productive use in perpetuity. To accomplish this goal, the federal government will have to buy up – through eminent domain or other pressures on landowners making them ‘willing sellers’ of their property – millions of acres of private land.”
This requires restricting a land area the size of the State of Nebraska every year, each year, for the next nine years, or in other words a landmass twice the size of Texas by 2030.
This goal is especially radical given that the President has no constitutional authority to take action to conserve 30% of the land and water.
The Real Threat to Mother Nature
The federal government may have no constitutional authority to take the land, but a megalithic private firm such as BlackRock could do it simply by making farmers and local residents an offer they can’t refuse. This ploy has already been demonstrated in the housing market.
According to a survey reported in The Guardian on October 12, 2021, nearly 40% of U.S. households are facing serious financial problems, including struggling to afford medical care and food; and 30% of lower income households (those earning under $50,000 per year) said they had lost all their savings during the coronavirus pandemic. In the first quarter of 2021, 15% of U.S. home sales went to large corporate investors including BlackRock, which beat out families in search of homes just by offering substantially more than the asking price. Sometimes whole neighborhoods were bought up at once for conversion into rental properties.
BlackRock’s chairman Larry Fink is on the board of the World Economic Forum, which until recently featured a controversial promotional video declaring “You will own nothing, and you’ll be happy.”
We all want a clean environment, and we want to preserve species biodiversity. But that includes human biodiversity – acknowledging the rights of rural landowners and Indigenous peoples, the land’s natural stewards. The greatest threat to the land is not the people living on it but those well-heeled investors who swoop in to buy up the rights to it, financializing the earth for profit.
Not just private property but those public lands and infrastructure once known as “the commons” are now under threat. We face an existential moment in our economic history, in which accumulated private wealth is acquiring carte blanche control of the essentials of life. Whether that juggernaut can be stopped remains to be seen, but the first step in any defensive action is to be aware of the threat at our doorsteps.
A month before the 2021 United Nations Climate Change Conference (known as COP26) kicked off in Scotland, a new asset class was launched by the New York Stock Exchange that will “open up a new feeding ground for predatory Wall Street banks and financial institutions that will allow them to dominate not just the human economy, but the entire natural world.” So writes Whitney Webb in an article titled “Wall Street’s Takeover of Nature Advances with Launch of New Asset Class”:
For weeks, conservative Democrats in Congress have prevented the passage of the Build Back Better Act and the Freedom to Vote Act. Congressmember Ilhan Omar of Minnesota has been a vocal critic of Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, who have stalled the bills and forced President Biden to radically scale back the price tag of his agenda. “All Democrats are essentially on board,” Omar says, “except for these two, who are essentially doing the bidding of Big Pharma, Big Oil and Wall Street.” The Build Back Better Act, which began at $3.5 trillion when Biden introduced the bill, has reportedly been lowered to half the original amount due to resistance in Congress. Progressive initiatives that are in danger of being dropped include free community college, extended paid family leave and lower prescription drug prices.
TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.
AMYGOODMAN: We begin today’s show looking at how key elements of President Biden’s domestic agenda are in jeopardy. On Wednesday, Senate Republicans blocked passage of the Freedom to Vote Act. Not a single Republican supported the bill. Senate Democrats could pass the sweeping voting rights legislation, but only if they voted to end the filibuster. However, two conservative Democrats — Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona — oppose doing so.
Manchin and Sinema have also forced President Biden to radically scale back the Build Back Better Act, which began as a proposed $3.5 trillion spending bill over 10 years to vastly expand the social safety net and combat the climate crisis. Biden has reportedly lowered the topline price tag on the package to $1.75 trillion — half the original bill. Manchin wants the bill to be even smaller, pushing for $1.5 trillion over 10 years. Initiatives that could be dropped include free community college, extended paid family leave and an initiative to lower prescription drug prices. Manchin has also demanded Democrats strip out funding for the Clean Electricity Performance Program, a critical climate initiative to replace coal- and gas-fired power plants with renewable energy sources. Democrats are also moving away from proposals to increase the tax rate on the rich and corporations.
On Wednesday, Mother Jones magazine reported Manchin has been privately telling associates he’s considering leaving the Democratic Party and declaring himself a, quote, “American Independent” if he doesn’t get his way in slashing the size of the Build Back Better Act. Manchin rejected the report.
We go now to Washington, where we’re joined by Congressmember Ilhan Omar of Minnesota, who’s been a vocal critic of Senator Manchin’s efforts to obstruct passage of both the Build Back Better Act and the Freedom to Vote Act. After the voting rights bill failed in the Senate Wednesday, Congressmember Omar tweeted, “The filibuster—and the Democratic Senators who continue to uphold it—are killing our democracy.”
Congressmember Ilhan Omar, welcome back to Democracy Now!
REP. ILHANOMAR: Great to be with you, Amy.
AMYGOODMAN: You have to wonder at this point, when we talk about “President Joe,” if we’re talking about President Joe Biden or President Joe Manchin. He is one senator but holds so much power. Though the $3.5 trillion spending — the $3.5 trillion spending bill, talking about scaling it back to $1.7 trillion, that’s only a bit over the $1.5 trillion that this one senator has demanded. Can you talk about the significance of his power and also how it is related to him being the number one recipient of oil, gas and coal money in the U.S. Senate?
REP. ILHANOMAR: Well, thank you so much, Amy, for having me.
I think it is really important for people to understand just the level of obstruction that this one senator is causing to the agenda of the president and everything we are trying to accomplish as Democrats on behalf of the American people. You know, so, for so long people have said, “Washington is corrupt. You know, they’re not watching out for the interests of the people.” And what’s playing out right now with these senators really is giving people a front-row seat to what they have always talked about.
And we have to get past this. We have to be able to bring these senators on board. We have to be able to accomplish this agenda, because, truly, what is on the line? It’s investment in child care. It’s investment in expanding paid family leave. It’s an agenda to try to get vision, dental and hearing paid for for seniors. It’s trying to address the climate crisis so that there is something for the future generation. It’s, you know, trying to do everything that we can so that people in our communities can feel the impact of their government. And as you said, you know, all Democrats are essentially on board, except for these two, who are essentially doing the bidding of Big Pharma, Big Oil and Wall Street.
NERMEENSHAIKH: Representative Omar, how do you think that these senators — you said it’s essential to bring them on board. What can Democrats do to persuade them to get on board?
REP. ILHANOMAR: We have to continue talking. You know, this agenda is too big to fail. We’ve made these promises to the American people for a really long time. Investment in child care, paid family leave, in home and community-based care, these are things that are not just going to help particular communities, but it will help all communities across this country. And if we do not continue to have this conversation to move them along so that we can get it done, then we will not only fail to get our agenda done, but we would have failed the American people.
AMYGOODMAN: Congressmember Omar, I wanted to continue on this issue of Senator Manchin’s power by talking about his business holdings in West Virginia. The intercept recently published a report headlined, “Joe Manchin’s Dirty Empire.” It says, quote, “For decades, Manchin has profited from a series of coal companies that he founded during the 1980s. His son, Joe Manchin IV, has since assumed leadership roles in the firms, and the senator says his ownership is held in a blind trust. Yet between the time he joined the Senate and today, Manchin has personally grossed more than $4.5 million from those firms, according to financial disclosures. He also holds stock options in Enersystems Inc., the larger of the two firms, valued between $1 and $5 million.” So, maybe this isn’t a matter so much of ideology, but, straightforward, the amount of money that he stands to make or lose based on this Build Back Better Act. He has demanded the stripping out of the section on renewable energy. Can you talk about this and if this is raised in dealing with him, and what it would mean if he did leave the Democratic Party? Or do you think it’s an empty threat?
REP. ILHANOMAR: I think it is important for these connections to be made, and certainly for his constituents to recognize this. You know, we have a representative democracy, where you elect someone to represent your interests, not the interests of corporations and not their own interests. This, to me, sounds like legalized corruption. And if it was happening, you know, anywhere else in the world, we would be appalled by it. But the fact that it continues to happen, not just with Manchin but so many others, you know, begs the question: How are we going to continue to have the kind of democracy that we can be proud of, and talk about transparency, accountability and ending corruption to other parts of the world, when we allow it to happen within our own country? You know, the devastation economically that is visible in West Virginia, when you talk about all kinds of measures, it’s the bottom of the 50 states almost always. And to have a senator that isn’t focusing on creating the kind of investments that will uplift the communities that he represents is something that we need to seriously address.
AMYGOODMAN: So, let’s talk about what’s in the act and what’s not in the act, and what are lines in the sand, if you will. I mean, you’ve got the proposed cuts being cutting free community college for two years, cutting the Clean Electricity Performance Program, reducing paid family leave — now at the federal level, there isn’t paid family leave, but it would go from 12 weeks to four weeks — child tax credit, funding for home care. Can you talk about those that are now threatened, but also what remains, like universal pre-K, like Medicare expansion, etc., and what you think is significant here, and how much power the Progressive Caucus has? You’re the largest caucus in Congress.
REP. ILHANOMAR: So, first of all, I just will say, you know, it’s not done until it’s done. Nothing has been agreed to by all parties, so I can’t really say what is in and what is out at the moment. You know, we’re obviously still negotiating. We’re obviously still having these conversations. Some of the things that you had mentioned would be some red lines for some of our members within the Progressive Caucus, and they have raised those concerns. And so, we’re still at the drawing board and trying to finalize a deal that can get the support of the Progressive Caucus and can have the support of these senators, so that we are able to actually pass this piece of legislation.
What we are arguing for is that four principles should be used by Congress in the final package. We want to make sure that there is — there are transformative investments, that whatever piece of legislation we end up voting on touches people’s lives immediately, that they provide universal benefits, and that they keep the president’s commitment to racial equity. And so, whether we end up cutting the duration of the investment or not, you know, we will see. But right now things are still up in the air, and conversations are still taking place. So, I wouldn’t say this is out, this is in, just yet.
NERMEENSHAIKH: Representative Omar, we’d like to move on now to the Freedom to Vote Act. On Wednesday, Senate Republicans blocked debate on the Freedom to Vote Act, and you tweeted in response, quote, “The filibuster—and the Democratic Senators who continue to uphold it—are killing our democracy.” Could you talk about what happened and elaborate on what you said?
REP. ILHANOMAR: Yeah. We know, obviously, that our democracy is under threat. And if we do not address the kind of challenges that are posed to our democracy with legislation, we are — you know, we are going to fail our democracy. And we’re seeing Democrats in the Senate not understand that urgency. We have these two senators that are beholden more to this filibuster, that is Senate procedure and not codified in our Constitution, that are willing to uphold that and not uphold the resiliency and health of our democracy so that it could continue to flourish.
NERMEENSHAIKH: And, Representative Omar, another issue on which you’ve been vocal has to do with the increasing reports of what’s being called modern-day slavery in Libya: the widespread abuse of migrants in detention centers there. You wrote in a press statement, quote, “The U.S. needs a comprehensive strategy to address the ongoing human trafficking and modern day slavery crisis in Libya.” Could you talk about what you know of what’s happening, and what strategy you’re proposing the U.S. pursue?
REP. ILHANOMAR: Yeah. Thank you so much for that question. What’s happening in Libya is truly heartbreaking. As someone who comes from one of the countries in Africa where people are being enslaved in Libya, I and so many others have, you know, personally been touched. We know family members, we know friends, we know people who are personally impacted in Libya. We have seen routine reports of rampant abuse, torture, sexual violence, extortion of migrants in Libya from sub-Saharan African countries. It is really painful that it is not getting the attention and response that it needs. And, you know, instead of welcoming thousands of refugees fleeing violence and instability, the Libyan Coast Guards hand migrants over to militias who systematically torture, rape, abuse and enslave them. The European Union is making it worse by turning away migrants and, instead, arming these same militias that are committing these abuses.
The United States hasn’t had a comprehensive strategy to engage and to address this ongoing human trafficking crisis and this modern-day slavery. I’ve met with representatives from United Nations orgs that are dealing with this situation. And what they’re asking for is for the United States to step up, for us to help create a strategy, and for us to have a conversation with the European Union, because, you know, what’s taking place in Libya is a human rights crisis. It’s a human tragedy. It’s not something that we should allow to happen today. And it is something that needs the attention of the United States and other countries, as well.
AMYGOODMAN: Two questions, one about vaccine equity in the world, what some call vaccine apartheid. As you heard in our headlines, you know, the FDA is quickly approving vaccines for children and also boosters to people as young as 40 years old. Can you talk about the issue of vaccine availability in the world? While the Western nations are massively vaccinating their populations, in some places, particularly the continent you come from, from Africa, we’re looking at 1% and 2% and 5% of the population vaccinated, not because of choice, but because they don’t have access. While President Biden has supported the TRIPS waiver at the WTO, it’s a question of expending political capital to force other countries, like Germany and Britain, where the pharmaceutical companies are based that are making billions, do the same. Can you talk about what has to be done?
REP. ILHANOMAR: Yes, you’re right. We do have to spend political capital on this. This is, you know, a catastrophe. Vaccine apartheid is real. There are so many people across the world who are celebrating, you know, 5%, 10%, 20% vaccination, because that is the best that they can do with the limited resources that they have, while their wealthy counterparts are not doing their part, and providing not just an overall vaccination, but even boosters, as you said, which is happening here in the United States, and which will rapidly expand. Booster shots are not just going to be available for those who are at risk and older than 40. We’re going to provide it to everyone soon. And we are even providing vaccinations to young children now, when so many people around the world can’t even vaccinate their most vulnerable members of their communities.
So, yes, it is the right thing for the United States to spend its political capital, to say, “Let’s come together as a world and address this pandemic,” that doesn’t recognize boundaries and doesn’t recognize that someone is wealthy and someone is poor. Everyone has suffered from it. And, you know, as you know, I’ve lost my father to COVID-19. There are so many people who have been tragically touched by this pandemic. And we are now at a moment where we can help those within our borders and extend that aid to others in different countries.
AMYGOODMAN: And our deep condolences again on the loss of your father. Do you think that the U.S. should be requiring Moderna to release its recipe, given how heavily subsidized, publicly subsidized their research was?
REP. ILHANOMAR: Yes. And I’ve said that from the start. But at this moment, Amy, it is going to take a long time for that recipe to be utilized, and a lot of these countries don’t have those resources. So what we’re asking for is for the excess amounts that exist in some of the wealthiest countries, including ours here in the United States, to be donated and for that transfer to happen in an urgent matter to every corner of the world.
AMYGOODMAN: Finally, Congressmember Omar, you’re calling on President Biden to intervene in the construction of the Enbridge Line 3 pipeline in your state, in northern Minnesota, and to protect Indigenous sovereignty and the environment. In this last week, more than 600 people, overwhelmingly Indigenous, were arrested in Washington, D.C., in this Native American-led climate protest. You also have The Guardian newspaper revealing that Enbridge paid Minnesota police $2.4 million in reimbursements, all costs tied to the arrests and surveillance of hundreds of water protectors. Can you talk about this and what needs to happen now?
REP. ILHANOMAR: The president has to intervene. I have called on the president to intervene to stop this pipeline. Just yesterday, the president addressed our Boundary Waters and talked about tribal sovereignty and treaty rights. And it was astonishing, really, to hear these statements coming in regards to the wilderness and the Boundary Waters, when we are not using a similar statement in regards to Line 3 and what it means for the northern — for northern Minnesota and our Indigenous brothers and sisters, and what it means for their tribal sovereignty, what it means for the treaty rights, which are supreme laws in this land, and what it means for their livelihood, what it means in regards to their wildlife. I mean, the Anishinaabe communities in Minnesota say it is their culture, that they were told to go where food grows on water, and wild rice is their life. It’s their culture. It’s their tradition. It’s basically their existence. And we don’t have this president addressing the urgency of stopping this pipeline, that will essentially destroy their land and ultimately pollute everybody that has access to the Mississippi.
AMYGOODMAN: Well, Congressmember Ilhan Omar, we want to thank you so much for being with us, Minnesota congressmember representing the 5th Congressional District. Her memoir is titled This Is What America Looks Like: My Journey from Refugee to Congresswoman. You can go to democracynow.org to see our extended interview with Congressmember Omar about her memoir.
And a quick correction in our Guantánamo Bay headline: Asadullah Haroon Gul is the first prisoner in 10 years, not two years, to win a habeas corpus argument. He is the Guantánamo prisoner.
Next up, we look at Senator Joe Manchin’s “dirty empire” in West Virginia. Stay with us.
It seems that everywhere you look in America you see homelessness. Rarely, though, do you hear that Wall Street is helping cause it.
Thirty-two percent seems to be the magic threshold, according to new research funded by the real estate listing company Zillow. When neighborhoods hit rent rates in excess of 32 percent of neighborhood income, homelessness explodes. And we’re seeing it play out right in front of us in cities across America because a handful of Wall Street billionaires want to make a killing.
Housing prices have gone out of control since my dad bought his house in 1957 when I was six years old. He got a Veteran’s Administration-subsidized loan and picked up the brand-new 3-bedroom ranch house my brothers and I grew up in, in suburban south Lansing, Michigan. It cost him $13,000, which was about twice what he made every year working a good union job in a tool-and-die shop.
When my dad bought his home in the 1950s the median price of a single-family house was around 2.2 times the median American family income. Today, the Fed says, the median house sells for $374,900 while the median American income is $35,805 — a ratio of more than ten-to-one between housing costs and annual income.
As the Zillow study notes:
“Across the country, the rent burden already exceeds the 32 percent [of median income] threshold in 100 of the 386 markets included in this analysis….”
And wherever housing prices become more than three times annual income, homelessness stalks like the grim reaper.
And it’s true that we haven’t been building enough new housing, particularly low income housing, as 40 years of Reaganism have driven down wages and income for working class people relative to all of their expenses.
But that’s not what’s been uniquely driving housing prices into the stratosphere — and, as a consequence, the crisis in homelessness — over the past decade. You can thank speculation for much of that.
As the Zillow-funded study noted: “This research demonstrates that the homeless population climbs faster when rent affordability — the share of income people spend on rent — crosses certain thresholds. In many areas beyond those thresholds, even modest rent increases can push thousands more Americans into homelessness.”
“Unusual high appreciation of the aforementioned urban centers is due to the ever growing influx of foreign buyers — mostly wealthy Chinese — who view American residential real estate as the safest investment commodity. … According to a National Realtors Association survey, the Chinese spent $22 billion on U.S. housing in 12 months through March 2014…. [Other foreign buyers include primarily include] Canadians, British, Indians and Mexicans.”
But foreign investment has been down for the past few years; what’s taken over and is really driving home prices today are massive, multi-billion-dollar funds that sweep into neighborhoods and buy everything available, bidding against families and driving up housing prices.
As noted in a Wall Street Journal article titled “Meet Your New Landlord: Wall Street,” in just one suburb (Spring Hill) of Nashville, “In all of Spring Hill, four firms … own nearly 700 houses … [which] amounts to about 5% of all the houses in town.”
This is the tiniest tip of the iceberg.
“On the first Tuesday of each month,” notes the Journal article about a similar phenomenon in Atlanta, investors “toted duffels stuffed with millions of dollars in cashier’s checks made out in various denominations so they wouldn’t have to interrupt their buying spree with trips to the bank…”
The same thing is happening in cities and suburbs all across America; the investment goliaths use fine-tuned computer algorithms to sniff out houses they can turn into rental properties, making over-market and unbeatable cash bids often within minutes of a house hitting the market.
After stripping neighborhoods of homes families can buy, they then begin raising rents as far as the market will bear.
In the Nashville suburb of Spring Hill, the vice-mayor, Bruce Hull, told the Journal you used to be able to rent “a three bedroom, two bath house for $1,000 a month.” Today, the Journal notes, “The average rent for 148 single-family homes in Spring Hill owned by the big four [Wall Street investor] landlords was about $1,773 a month…”
Ryan Dezember, in his book Underwater: How Our American Dream of Homeownership Became a Nightmare, describes the story of a family trying to buy a home in Phoenix. Every time they entered a bid, they were outbid instantly, the price rising over and over, until finally the family’s father threw in the towel.
“Jacobs was bewildered,” writes Dezember. “Who was this aggressive bidder?”
Turns out it was Blackstone Group, now the world’s largest real estate investor. At the time they were buying $150 million worth of American houses every week, trying to spend over $10 billion. And that’s just a drop in the overall bucket.
In 2018, corporations bought 1 out of every 10 homes sold in America, according to Dezember, noting that, “Between 2006 and 2016, when the homeownership rate fell to its lowest level in fifty years, the number of renters grew by about a quarter.”
This all really took off around a decade ago, when Morgan Stanley published a 2011 report titled “The Rentership Society,” arguing that snapping up houses and renting them back to people who otherwise would have wanted to buy them could be the newest and hottest investment opportunity for Wall Street’s billionaires and their funds.
Turns out, Morgan Stanley was right. Warren Buffett, KKR and The Carlyle Group have all jumped into residential real estate, along with hundreds of smaller investment groups, and the National Home Rental Council has emerged as the industry’s premiere lobbying group, working to block rent control legislation and other efforts to control the industry.
As John Husing, the owner of Economics and Politics Inc., told The Tennessean newspaper, “What you have are neighborhoods that are essentially unregulated apartment houses. It could be disastrous for the city.”
Meanwhile, as unionization levels here remain among the lowest in the developed world, Reagan’s ongoing war on working people continues to wipe out America’s families.
At the same time that housing prices, both to purchase and to rent, are being driven through the roof by foreign and Wall Street investors, a new survey published this month by NPR, the Robert Wood Johnson Foundation and the Harvard TH Chan School of Public Health found that American families are in crisis.
“Thirty-eight percent (38%) of [all] households across the nation report facing serious financial problems in the past few months.
“There is a sharp income divide in serious financial problems, as 59% of those with annual incomes below $50,000 report facing serious financial problems in the past few months, compared with 18% of households with annual incomes of $50,000 or more.
“These serious financial problems are cited despite 67% of households reporting that in the past few months, they have received financial assistance from the government.
“Another significant problem for many U.S. households is losing their savings during the COVID-19 outbreak. Nineteen percent (19%) of U.S. households report losing all of their savings during the COVID-19 outbreak and not currently having any savings to fall back on.
“At the time the Centers for Disease Control and Prevention’s (CDC) eviction ban expired, 27% of renters nationally reported serious problems paying their rent in the past few months.”
These are not separate issues, and they are driving an explosion in homelessness.
“Communities where people spend more than 32 percent of their income on rent can expect a more rapid increase in homelessness.
“Income growth has not kept pace with rents, leading to an affordability crunch with cascading effects that, for people on the bottom economic rung, increases the risk of homelessness.
“The areas that are most vulnerable to rising rents, unaffordability and poverty hold 15 percent of the U.S. population — and 47 percent of people experiencing homelessness.”
The Zillow study makes grim reading and is worth checking out. In community after community, when rent prices exceed 32 percent of median home income, homeless explodes. It’s measurable, predictable, and is destroying what’s left of the American working class, particularly people of color.
The loss of affordable homes also locks otherwise middle class families out of the traditional way wealth is accumulated — through home ownership: over 61% of all American middle-income family wealth is their home’s equity. And as families are priced out of ownership and forced to rent, they become more vulnerable to homelessness.
Housing is one of the primary essentials of life. Nobody in America should be without it, and for society to work, housing costs must track incomes in a way that makes housing both available and affordable.
If ever there was a time to solve to this problem — and regulate corporate and foreign investment in American single-family housing — it’s now.
“Polarization” is the word most associated with the positions of the Republicans and Democrats in Congress. The mass media and the commentators never tire of this focus, in part because such clashes create the flashes conducive to daily coverage.
The quiet harmony between the two parties created by the omnipresent power of Big Business and other powerful single-issue lobbyists is often the status quo. That’s why there are so few changes in this country’s politics.
In many cases, the similarities of both major parties are tied to the fundamental concentration of power by the few over the many. In short, the two parties regularly agree on anti-democratic abuses of power. Granted, there are always a few exceptions among the rank & file. Here are some areas of Republican and Democrat concurrence:
1. The Duopoly shares the same stage on a militaristic, imperial foreign policy and massive unaudited military budgets. Just a couple of weeks ago, the Pentagon budget was voted out of a House committee by the Democrats and the GOP with $24 billion MORE than what President Biden asked for from Congress. Neither party does much of anything to curtail the huge waste, fraud, and abuse of corporate military contractors, or the Pentagon’s violation of federal law since 1992 requiring annual auditable data on DOD spending be provided to Congress, the president, and the public.
2. Both Parties allow unconstitutional wars violating federal laws and international treaties that we signed onto long ago, including restrictions on the use of force under the United Nations Charter.
3. Both Parties ignore the burgeoning corporate welfare subsidies, handouts, giveaways, and bailouts turning oceans of inefficient, mismanaged, and coddled profit-glutted companies into tenured corporate welfare Kings.
4. Both Parties decline to crack down on the nationwide corporate crime spree. They don’t even like to use the phrase “corporate crime” or “corporate crime wave.” They prefer to delicately allude to “white-collar crime.”
Trillions of dollars are at stake every year, yet neither party holds corporate crime hearings nor proposes an update of the obsolete, weak federal corporate criminal laws.
In some instances, there is no criminal penalty at all for willful and knowing violations of safety regulatory laws (e.g., the auto safety and aviation safety laws). Senator Richard Blumenthal (D-CT) is trying to find just one Republican Senator to co-sponsor the “Hide No Harm Act” that would make it a crime for a corporate officer to knowingly conceal information about a corporate action or product that poses the danger of death or serious physical injury to consumers or workers.
5. Both Parties allow Wall Street’s inexhaustibly greedy CEOs to prey on innocents, including small investors. They also do nothing to curb hundreds of billions of dollars in computerized billing fraud, especially in the health care industry. (See, License to Steal by Malcolm K. Sparrow and a GAO Report about thirty years ago).
6. The third leading cause of death in the U.S. is fatalities from preventable problems in hospitals and clinics. According to the Johns Hopkins School of Medicine study in 2015, a conservative estimate is that 250,000 people yearly are dying from preventable conditions. Neither Congress nor the Executive Branch has an effort remotely up to the scale required to reduce this staggering level of mortality and morbidity. Nor is the American Medical Association (AMA) engaging with this avoidable epidemic.
7. Both Parties sped bailout of over $50 billion to the airline industry during Covid-19, after the companies had spent about $45 billion on unproductive stock buybacks over the last few years to raise the metrics used to boost executive pay.
8. Both Parties starve corporate law enforcement budgets in the Justice Department, the regulatory agencies, and such departments as Labor, Agriculture, Interior, Transportation, and Health and Human Services. The Duopoly’s view is that there be no additional federal cops on the corporate crime beat.
9. Both Parties prostrate themselves before the bank-funded Federal Reserve. There are no congressional audits, no congressional oversight of the Fed’s secret, murky operations, and massive printing of money to juice up Wall Street, while keeping interest rates near zero for trillions of dollars held by over one hundred million small to midsize savers in America.
10. Both Parties are wedded to constant and huge bailouts of the risky declining, uncompetitive (with solar and wind energy) nuclear power industry. This is corporate socialism at its worst. Without your taxpayer and ratepayer dollars, nuclear plants would be closing down faster than is now the case. Bipartisan proposals for more nukes come with large subsidies and guarantees by Uncle Sam.
11. Both Parties hate Third Parties and engage in the political bigotry of obstructing their ballot access (See: Richard Winger’s Ballot Access News), with hurdles, harassing lawsuits, and exclusions from public debates. The goal of both parties is to stop a competitive democracy.
12. Both Parties overwhelmingly rubber-stamp whatever the Israeli government wants in the latest U.S. military weaponry, the suppression of Palestinians and illegal occupation of the remaining Palestinian lands, and the periodic slaughter of Gazans with U.S. weapons. The Duopoly also supports the use of the U.S. veto in the UN Security Council to insulate Israel from UN sanctions.
13. Continuing Republican Speaker Newt Gingrich’s debilitating internal deforms of congressional infrastructures, the Democrats have gone along with the GOP’s shrinking of committee and staff budgets, abolition of the crucial Office of Technology Assessment’s (OTA) budget, and concentration of excessive power in the hands of the Speaker and Senate leader. This little noticed immolation reduces further the legislature’s ability to oversee the huge sprawling Executive Branch. The erosion of congressional power is furthered by the three-day work week Congress has reserved for itself.
14. Even on what might seem to be healthy partisan differences, the Democrats and the GOP agree not to replace or ease out Trump’s Director of the Internal Revenue Service, a former corporate loophole tax lawyer, or the head of the U.S. Postal Service, a former profiteer off the Post Office who will shortly curtail service even more than he did in 2020 (See: First Class: The U.S. Postal Service, Democracy, and the Corporate Threat, by Christopher W Shaw).
Right now, both Parties are readying to give over $50 billion of your tax money to the very profitable under-taxed computer chip industry companies like Intel and Nvidia, so they can make more profit-building plants in the U.S. These companies are loaded with cash. They should invest their own money and stop the stock buyback craze. Isn’t that what capitalism is all about?
Both Parties vote as if the American middle-class taxpayer is a sleeping sucker. Politicians from both parties exploit voters who don’t do their homework on voting records and let the lawmakers use the people’s sovereign power (remember the Constitution’s “We the People”) against them on behalf of the big corporate bosses.
Sleep on America, you have nothing to lose but your dreams.
Economic observers commonly remark that the chair of the Federal Reserve System is the second most powerful person in Washington. Though probably an overstatement, this trope nonetheless reflects the fact that our central bank has an enormous impact on financial conditions not only in the United States but also, because of the key role of the U.S. dollar in global markets. That means the Fed can, for good or ill, impact economic growth, employment, wages, inflation and investment from Alabama to Azerbaijan. And, as the primary leader of such a powerful institution, the chair of the Fed holds the key to most of these policies.
The four-year term of the current chairperson, Jerome Powell, ends February 2022, and President Joe Biden must soon decide whether to reappoint him. Even under normal circumstances, this decision would be highly consequential. But now, the implications could be monumental.
The Biden administration and the United States face a number of profound challenges which the Federal Reserve must help confront: facilitating the continued economic recovery from the pandemic’s destruction; promoting maximum employment and decent living standards, including accelerating opportunities for oppressed racial and ethnic groups and others facing unfair structural barriers; helping to make the economy more resilient to global warming and, more importantly, assisting the U.S. and the world make the massive but critical transformation to a fossil fuel-free economy; and accelerating efforts to protect the economy from reckless, destructive and unstable financial decisions by politically and economically powerful megabanks and other financial institutions.
Importantly, the Biden administration is taking on most of these challenges. President Biden wants to end the pandemic, combat the climate crisis, address structural racism and inequality, “build back better,” and promote full employment — while keeping the financial system from melting down for the third time in less than 15 years. Whom he picks to be the next Federal Reserve chairperson could not be more important. The next chair of the Federal Reserve will lead the Fed in playing an appropriate, active and effective role to help address these issues at this critical time, or he or she will drag the Fed’s feet and even oppose the actions that must be taken. The success of the Biden administration’s agenda, to say nothing of the health and welfare of the American people, could hang in the balance.
Some progressive lawmakers, including Sen. Elizabeth Warren (D-Massachusetts), Rep. Ayanna Pressley (D-Massachusetts) and Rep. Alexandria Ocasio-Cortez (D-New York) and progressive groups have raised serious questions about a Powell reappointment. But there are many, across the political spectrum, who think the choice is obvious: that Biden should simply reappoint Powell, since he seems to be doing a good job. But this is far from obvious. In fact, a Powell renomination raises serious concerns simply based on his record. And then when the challenges facing the U.S. and the Biden administration are considered, these serious concerns mount further.
Republicans in Congress believe that the Fed should “just” focus on the outcomes that the Federal Reserve is narrowly tasked with addressing, namely maximum employment and stable prices. And since the great financial crisis of 2007-2009, financial stability has also been added as an explicit important goal. But even if the focus is “only” on these three goals, Powell’s record is problematic. And if we take into account the ramifications of the failure to address systemic racism in the labor market and the climate emergency, then reaching these three basic goals (maximum employment, stable prices and financial stability) becomes a much more difficult task. So we cannot neatly separate out these broader goals from the narrower list.
In terms of the substantive policy arguments, many of those in the center and on the left who are supporting Powell’s reappointment appear to be basing their views on Powell’s record on the first two of the standard mandates: maximum employment and price stability. With the onset of the pandemic, Powell committed the Fed to placing a monetary floor under the severely threatened economy by injecting the economy with massive amounts of liquidity, supporting broader swaths of the economy — albeit sometimes grudgingly, like in the case of the municipal lending facility — by administering special lending facilities created by Congress to support small businesses, municipalities, and others during the dark days of Spring and Summer 2020, and by resisting pressure to pull back many of these supports even as the economy was recovering and inflation fears began to mount. Powell’s support of maximum employment pre-dated the pandemic and dovetails with a mission of attacking structural racial and ethnic employment inequality by supporting the adoption of new monetary policy guidance that would allow for the temporary overshooting of the inflation target in order to sustain economic recovery that would generate demand for workers deeper and deeper into the pool of the unemployed and underemployed.
In these areas — employment and prices — with positive spillover effects on aspects of racial and ethnic inequality — Powell deserves good marks.
But supporters who focus only on these areas are ignoring another crucial component of the Fed’s job — financial regulation and financial stability — where Powell has a much more problematic record. By supporting questionable policies in the area of financial regulation, Powell has likely jeopardized some of the progress made on employment issues. These policies have most likely also greatly exacerbated wealth inequality, minimizing the otherwise positive results that would follow the change in monetary policy toward the Fed’s inflation target.
As experts on financial regulation at the Americans for Financial Reform (AFR) and Better Markets have documented, in recent years, during the Trump Presidency, Powell supported numerous Federal Reserve initiatives to roll back financial regulations that had been put in place as a response to the Great Financial Crisis of 2007-2009. In addition, as AFR notes,
The Powell Fed did more than water down Dodd-Frank reforms…. It also weakened core supervisory tools that federal bank regulators have always used to monitor bank risk-taking and compliance with laws. Led by Chair Powell, the Fed has effectively turned off some of the early warning systems regulators used to detect emerging risks to the financial system.
These de-regulatory moves came just prior to the global financial market meltdown in March 2020 when the pandemic hit, a meltdown made potentially much worse by the buildup of speculative excesses and high debts that U.S. financial regulators, led by Powell’s Fed, had allowed to accumulate. As Better Markets puts it, “Many of the Fed’s actions in response to the pandemic were necessary given the unprecedented uncertainty it caused…. But it is important to remember that the scale and scope of those actions were needed not just because of the pandemic, but because of preexisting fragility and instability in the financial system.” As a result of the turmoil exacerbated by previous failures to regulate, especially the nonbank financial system, the Federal Reserve had to commit trillions of dollars to sustain the financial system.
The Fed did run some congressionally mandated programs to help small businesses and municipal, state and local governments. But the latter program was so narrowly drawn and involved such high interest rates that it provided very little direct help. The upshot is that, despite having more than 10 years to implement a thorough-going financial regulatory regime, in March 2020, the Fed still found itself in the position of having to bail out the financial markets when the pandemic hit, while simultaneously giving relatively short shrift to specialized facilities to help out communities, small businesses and local governments. In the absence of a strong commitment to financial regulation and the will to enforce it, this destructive cycle of speculative excesses, financial crises and bailouts is simply going to continue.
Central Bank Independence: The Perennial Red Herring
Right-wing, mainstream and even some progressive observers have argued that Biden should reappoint Powell in order to protect the so-called independence of the Federal Reserve. One version of this argument is that it is “traditional” for the incoming President to reappoint the current Fed Chair to a second term in order to acknowledge the Fed’s independence. According to this view, it would be good to restore this “tradition” since Donald Trump violated it by refusing to reappoint Janet Yellen as chair of the Fed. However, there are several problems with this argument. First, there is no such tradition at the Fed. More importantly, the idea of Federal Reserve “independence” is mostly a cover to protect the outsized power that the financial industry holds over Fed policy, and to undermine the democratic control of the Fed that is written into its by-laws and is consistent with a functioning democracy.
If one looks at the Fed chairs since 1936 when the current governance structure was adopted, some incoming presidents did reappoint the current chairs and some did not. And some were pushed out and some simply resigned.
Marriner Eccles was chair from 1936-1948 and when Harry Truman was elected president, he appointed a different chairperson, Thomas McCabe. Arthur Burns, who had been Richard Nixon’s appointee was not reappointed by Jimmy Carter when he became president. Paul Volcker, chair from 1979-1987, would not have been reappointed a second time by Ronald Reagan. And, as mentioned earlier, Trump did not reappoint Yellen. So, far from a tradition, the reappointment of a Fed chair occurs sometimes, at other times, not.
As far as central bank independence is concerned, it is certainly true that the presidential abuse of central banking powers for narrow political goals, such as being reelected, or supporting personal real estate investing goals, is a potential recipe for disaster. The solution to this problem is to not elect such people to be president.
But no central bank can or should be “independent” from political influence in a democracy. The Federal Reserve’s governing laws, as amended during the 1930s, make it a creature of Congress with its structure also being influenced by the U.S. president’s appointment powers. These laws were created to make sure that the Federal Reserve is responsive to the needs of the overall economy, as interpreted by our elected officials, and not disproportionately influenced by the Fed’s natural constituency: Wall Street. And the pressures to cater to Wall Street — because of the close ties between the Fed and the financial markets, the natural revolving-door tendencies of regulatory agencies and, most importantly, the desire by Federal Reserve officials to cultivate a powerful political constituency to help it maintain its autonomy from governmental authority — are extremely strong.
As a result, central banks that are independent from their political authorities tend to be highly dependent on private banks and other financial institutions. In this way, it is too easy to get Federal Reserve policy that is lax toward the financial institutions they are supposed to be regulating while they engage in highly risky, speculative and dangerous activities, and then turn around and bail them out when they get in trouble.
So for progressives and others to trot out this shibboleth of “central bank independence” in defense of reappointing Jerome Powell is troubling, given the implications for more Wall Street control of the Fed.
To be sure, the possible presidential abuse of the Federal Reserve System would be problematic. But for the president to exercise his or her legally authorized influence on the choice of the Federal Reserve’s priorities, at a time of great economic transition and need, is simply an act of exercising one of the key channels of democratic, public input into these important policies. The Federal Reserve’s amended laws authorized more presidential control as part of an attempt to try to reduce the destructive powers of Wall Street on the Fed. (Congress, of course, is the other key democratic channel of influence).
Given the serious destructive power that financial deregulation has had on both the economic and political power of the megabanks and their capacity to destabilize our economy, Jerome Powell’s poor record of upholding strict financial regulatory rules is a serious concern, even if his expansionary monetary policies and apparent commitment to full employment is important.
No Need to Choose Between Commitment to Full Employment and Financial Stability
The important point is that we do not have to choose between desirable goals of monetary policy; there is no necessary trade-off. There are other strong candidates for Fed chair: for example, Federal Reserve Governor Lael Brainard, who has a strong commitment both to full employment monetary policy and to strong financial regulation.
The problems with reappointing a Fed chair who is not committed to strong financial regulation are not the end of the story. What about the other big challenges we face that President Biden has high up on his agenda? Improving the access of communities of color to good jobs and to fight systemic racism are a strong priority of President Biden and the Democrats. Jerome Powell and the Fed’s new strategy for prioritizing full employment and allowing temporary over-shooting of their inflation target in order to generate more employment opportunities for those typically at the back of the employment line is a good step in the right direction. But a financial crisis caused by lax regulations and enforcement could easily derail this policy by crunching the economy and labor market.
In addition, there are serious concerns about Powell’s commitment to using the Fed’s tools to combat the climate crisis. Powell’s Fed has been reluctant to limit banks’ lending to fossil fuel companies, even though this increases risks to banks, given the likely constraints to be placed by governments on fossil fuel production in the near future. Nor has Powell made a commitment to using the power of Fed asset buying and lending to help finance green energy, as envisaged, for example, in the Green New Deal policies.
These policies would, to be sure, be highly controversial. Some Republican lawmakers, such as Pennsylvania’s Pat Toomey, are already pushing back hard on the idea that the Fed should promote climate friendly policies. But that is all the more reason why it is necessary to have a Fed chair and other Federal Reserve board members who will be aggressive and fearless in pushing these policies.
Thankfully, Biden has the chance to change significantly the orientation of the Fed board. Not only is the position of the Federal Reserve chair open, Biden will also have the opportunity to appoint a Federal Reserve vice chair and the Fed governor who is the point person on financial regulation. Experienced progressives, such as former Fed Reserve board governor Sarah Bloom Raskin, a firm advocate of strong financial regulation; William Spriggs, professor of economics at Howard University and chief economist at the AFL-CIO who is an expert on labor markets, including labor issues related to workers of color; or my colleague Robert N. Pollin of the University of Massachusetts Amherst, an authority on finance and the job creation impacts of Green investments would be ideal candidates for these positions.
Still, Biden is being urged by some moderates and even progressives to offer a “balanced ticket,” to satisfy all elements of his constituency, a ticket that would include retaining Jerome Powell as chair.
This would be a mistake. The Fed will either be a significant, powerful and leading institution that helps to implement Biden’s transformational agenda, or it will be lagging behind and even dragging the agenda back. It is time for Biden to be bold and to create a Federal Reserve to match his crucial economic agenda. He should seize the opportunity while available.
As the eviction moratorium sputters uncertainly onward, a new genre of news article has emerged from the chaos: the woes of the so-called “mom-and-pop landlord.” These landlords — individuals with just a handful of rental properties — are hard-pressed to keep up mortgages and maintenance due to their inability to collect rent during the COVID crisis. Most landlords featured in such stories agree that ending the moratorium is the answer.
“What’s the difference between me and a grocery store or a restaurant?” Carol Kelly asked The Washington Post. “You would never go into a restaurant and say, ‘Please feed me for the next 12 months and I’ll give an IOU.’” Michelle Quinn, a partner at a law firm, agreed. “Really the landlords are the party taking the brunt of the effect of the pandemic…. They’re giving tenants a break, but not giving landlords a break,” she told Forbes.
Some claims verge on self-aggrandizement. “Next to the front-line medical workers and emergency responders, I think the small-business landlords who have kept their tenants housed should be getting a good deal of credit,” Jerry Howard, CEO of the National Association of Home Builders, told Politico.
Others point to emotional distress as reason to overturn the moratorium. “The stress and anxiety, the mental stuff,” Vanie Mangal told The New York Times in one of the most high-profile articles on afflicted landlords, “It’s too much.” The Times article described a nightmare scenario: destructive and noisy tenants who refuse to pay rent or negotiate. The article neglected to mention what internet sleuths quickly figured out: The units in question are illegal and have been the subject of neighbor complaints, including unaddressed flooding issues.
As Mangal’s situation suggests, the plight of the small landlord is complicated. It is true that the so-called mom-and-pop landlords are feeling the squeeze, though not to the extent they like to pretend. At worst, these beleaguered landlords will lose their rental properties, while those they evict stand to lose housing, a financially stable future and even their lives as the Delta variant surges. Yet landlord complaints are not entirely unfounded. As mom and pops begin to exit the rental market, large corporate entities are already swooping in to buy up the excess stock, which threatens to funnel wealth into the pockets of the ultra-rich, put further pressure on remaining small landlords to sell and create worse conditions for tenants down the road
Who Owns Rental Property?
The term “mom-and-pop landlord” has no official definition and does little to convey the actual spectrum of landlords within the rental market. Housing reports instead tend to divide the rental landscape into individuals and business entities.
According to the Brookings Institute, business entities control just over 60 percent of rental housing, and own an average of 20 units each. The rest of the U.S.’s rental stock belongs to unincorporated individuals. Most of these small landlords do well financially — 70 percent of individual landlords make over $90,000 per year, well over the national median income of $79,900.
There are, however, some small landlords who may be in a very precarious position as a result of the eviction moratoriums. The small minority of these landlords making less than $50,000 per year depend on rent for 20 percent of their total income, which means a lack of rent can constitute a genuine hardship. This burden falls especially heavily on senior citizens who depend on rental income for their retirement; according to the Urban Institute, 34 percent of property owners of two- to four-unit buildings are over the age of 65. Of these, 81 percent have no other job and 40 percent still owe mortgage payments on their rental properties.
Is it true that only the elimination of eviction moratoria can help these landlords? Under analysis, most of their arguments in favor of resuming evictions fall apart.
Disproportionate Harm?
Greta Arceneaux, like many landlords, feels abandoned by the government. “I don’t understand how they can come up with all of this financial aid for the homeless, for renters, for agriculture, for big business, for airplanes,” she told Time Magazine. “And they’re forgetting about the small mom-and-pop people that have two units or four units.”
Arceneaux may not be aware of it, but the American Rescue Plan (ARP) passed in March 2021 has instituted two programs that can help small landlords. While only businesses with a payroll were able to take advantage of Paycheck Protection Program (PPP) loans, the Economic Injury Disaster Loan (EIDL) program offers businesses adversely affected by the pandemic — including small landlords — loans of up to $500,000. The ARP also set aside nearly $10 billion in relief specifically for landlords making less than 150 percent of median income in their area.
Even without considering these programs, it is disingenuous to focus on the plight of small landlords without looking at the comparatively larger harm of eviction. Evictions mean more than the loss of housing. Evicted tenants can often only find housing in far worse neighborhoods, which exposes them to poorer education for their children, physical and mental health troubles, and deepening financial insecurity.
“It doesn’t really hold water to me to say that landlords are uniquely hurting relative to their tenants during the pandemic,” says Max Besbris, assistant professor of sociology at the University of Wisconsin-Madison. Besbris points out that evictions disproportionately impact Black women and other women of color, which can lead to increasing inequality in the long-term. A 2019 study found that homeowners have an average net worth of $255,000, while the average tenant has a net worth of $6,200. Landlords, who own more than one home, are far more comfortable than the tenants they wish to evict.
Unlike their tenants, mom-and-pop landlords also have backup from powerful organizations that work to protect their interests. In Maryland, for example, many small landlords belong to the Maryland Multi-Housing Association, an organization dedicated to lobbying both state and national government for landlord-friendly legislation.
Evictions and the Delta Variant
In a June CNBC article, the CEO of the Small Multifamily Owners Association indulged in a bit of hyperbole. “The eviction moratorium is killing small landlords, not the pandemic,” asserted Dean Hunter, who is a landlord himself. This callous statement, printed two months ago in the wake of over 600,000 dead of COVID-19 in the U.S., seems positively ghoulish in light of the surge in COVID cases due to the Delta variant.
Multiple studies of the effects of eviction moratoria demonstrate that prohibitions on evictions save lives. A study published in the Journal of Urban Health in January 2021 found that evictions lead to overcrowding, houselessness, decreased access to health care, and an inability to adhere to CDC recommendations such as social distancing, all of which increase COVID transmission. An April 2021 study reinforced these conclusions when scientists used established epidemiological modeling techniques to simulate the transmission of COVID with and without strict eviction prevention. In every simulation, evictions led to more infections — not merely among those evicted but across entire urban areas. These findings became more dramatic when applied to poorer neighborhoods.
These predictions hold tragically true in practice. A July study, published in the American Journal of Epidemiology, studied 44 states with eviction moratoria between March 13 and September 30, 2020. Some of these states allowed their moratoria to lapse, while others kept eviction protections in place. Controlling for other variables, the study found that, 16 weeks after lifting moratoria, states experienced twice as many COVID infections and five times as many deaths as states that left moratoria in place.
“As the Delta variant spreads faster than the virus that was circulating last summer, we need to think about how these more transmissible variants of the virus might affect what we see when moratoriums lapse,” said Kathryn Leifheit, an epidemiologist at UCLA and one of the authors of the study. “The research that we did demonstrates that preventing evictions … are a really critical tool to help people stay safe and avoid infections.”
Wall Street Landlords
While allowing evictions to resume would be devastating for tenants by nearly any metric, moratoria without efficient rent relief come with long-term hazards as well.
According to a study by the National Rental Home Council (NHRC), 12 percent of single-housing landlords have already sold their properties as a result of their inability to collect rent, with more sales likely to follow.
“A lot of people who are small-time landlords are going to sell these properties that have become liabilities as a result of the pandemic,” Besbris said. “They’re going to sell them to much bigger corporations … what we call institutional landlords, who own hundreds if not thousands of properties.”
Institutional landlords are large corporate entities, such as private equity firms or real estate investment trusts (REITs), which allow investors to buy and sell shares in a large holding of rental property owned and managed by the fund. The nine largest REITs own nearly 250,000 single-family homes.
This “financialization” of housing means that trading of shares generates more revenue than the housing itself. Such practices ensure that money from rental property flows to shareholders rather than remaining in the community. Financialization can also cause disastrous bubbles and instability, as when the financialization of mortgages led to the 2008 recession.
Ironically, the housing bust of 2008 led directly to the financialization of single-family rental properties. In 2012, the Federal Housing Financial Agency launched a pilot program that allowed investors to buy foreclosed houses in bulk under the condition that they rent the houses for several years. The program, meant to stabilize the housing market, led to massive investments by REITs in single-family houses.
REITs and other equity firms are already moving to buy the property small landlords sell, along with anything else they can get their hands on. According to a report by Redfin, corporate investors bought nearly 68,000 homes in the second quarter of 2021, shattering previous records. Such practices drive up prices and make it more difficult for regular people to become homeowners. Little wonder housing prices reached an all-time high in March 2021.
Not only does this practice divert yet more of America’s wealth into the pockets of the ultra-rich, corporate landlords may be significantly worse for tenants than smaller landlords. Though Besbris emphasizes that more research is needed before sociologists can draw definitive conclusions, “It does seem that institutional landlords are worse for tenants in a lot of ways.”
What research exists supports this conclusion. A study by the Atlanta Federal Reserve found that corporate landlords are 8 percent more likely to evict tenants than individuals. This willingness to evict may result from the practice of charging late fees and other hidden fees, which can make evictions not just cost-neutral, but even profitable. This finding comes from a report released by the Alliance of Californians for Community Empowerment (AACE), Americans for Financial Reform, and Public Advocates. Rental contracts also offload responsibility for maintenance onto tenants, including for appliance breakdowns and sewer issues. These institutional investors especially target communities of color: in Fulton County, Georgia, for example, corporate landlords own over 75 percent of housing in Black neighborhoods, compared to just 33 percent in white neighborhoods. Researchers in California have observed similar trends.
Rent Relief Now
The elimination of eviction moratoria would be devastating and even life-threatening. Yet the status quo threatens to give corporations even more power over everyday American life. What should be done?
“We could essentially have rent subsidies right now, instead of letting landlords evict their tenants, from whom they might still be owed a lot of money,” Besbris says. “We have the money for it. We just haven’t distributed it.”
The ARP of 2021 earmarked $46 billion for rental assistance. As of June 30, only $3 billion of this aid had been distributed. This money would both keep tenants in their homes and help save rental stock from the clutches of Wall Street financiers. Local government in Baltimore and Santa Fe provide models of how aid could be distributed more efficiently: both have worked closely with nonprofit organizations and activists to distribute aid more quickly.
“Rental assistance is now available in every state to cover up to a year-and-a-half of back and future bills,” says Patrick Newton of the National Association of Realtors. “We should direct our energy toward the swift implementation of this assistance.”
With multiple challenges to the eviction moratorium working their way through the court system, judges ignoring the moratorium entirely and assistance programs operating at a glacial pace, it remains to be seen whether the United States is capable of distributing rent relief swiftly enough to avert the humanitarian crisis of mass evictions looming on the horizon.
Since the advent of neoliberalism 40 years ago, societies virtually all over the world have undergone profound economic, social and political transformations. At its most basic function, neoliberalism represents the rise of a market-dominated world economic regime and the concomitant decline of the social state. Yet, the truth of the matter is that neoliberalism cannot survive without the state, as leading progressive economist Robert Pollin argues in the interview that follows. However, what is unclear is whether neoliberalism represents a new stage of capitalism that engenders new forms of politics, and, equally important, what comes after neoliberalism. Pollin tackles both of these questions in light of the political implications of the COVID-19 pandemic, as most governments have implemented a wide range of monetary and fiscal measures in order to address economic hardships and stave off a recession.
Robert Pollin is distinguished professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts-Amherst and author of scores of books, including Back to Full Employment (2012), Greening the Global Economy (2015) and Climate Crisis and the Global Green new Deal: The Political Economy of Saving the Planet (co-authored with Noam Chomsky, 2020).
C.J. Polychroniou: Neoliberalism is a politico-economic project associated with policies of privatization, deregulation, globalization, free trade, austerity and limited government. Moreover, these principles have reigned supreme in the minds of most policymakers around the world since the early 1980s, and continue to do so. Is neoliberalism a new stage of capitalism?
Robert Pollin: Let’s first be clear on what we mean by “neoliberalism.” The term neoliberalism draws on the classical meaning of the word “liberalism.” Classical liberalism is the political philosophy that embraces the virtues of free-market capitalism and the corresponding minimal role for government interventions. According to classical liberalism, free-market capitalism is the only effective framework for delivering widely shared economic well-being. In this view, only free markets can increase productivity and average living standards while delivering high levels of individual freedom and fair social outcomes. Policy interventions to promote economic equality within capitalism — through, for example, taxing the rich, big government spending on social programs, or regulating market activities through, for example, decent minimum wage standards and regulations to prevent financial markets from becoming gambling casinos — will always end up doing more harm than good, according to this view.
For example, establishing living wage standards as the legal minimum — at, say $15 an hour or higher — would cause unemployment to rise, since, according to classical liberalism, employers won’t be willing to pay unskilled workers more than what the free market determines they are worth. Similarly, regulating financial markets will inhibit capitalists from undertaking risky investments that can raise living standards. Classical liberals will argue that the Wall Street Masters of the Universe are infinitely more qualified than government bureaucrats in deciding what to do with their own money. And if the Wall Street investors make dumb decisions, then so be it; let them fail. In that way, [classical liberalism says] the free market rewards smart decisions and punishes bad ones, all to the greater benefit of the whole society.
Now to neoliberalism: Neoliberalism is a contemporary variant of classical liberalism that became dominant worldwide around 1980, beginning with the elections of Margaret Thatcher in the U.K. and Ronald Reagan in the United States. At that time, it was certainly a new phase of capitalism. Thatcher’s dictum that “there is no alternative” to neoliberalism became a rally cry, supplanting what had been, since the end of World War II, the dominance of Keynesianism and social democracy in global economic policymaking. In the high-income countries of Western Europe and North America along with Japan, in particular, this Keynesian/social democratic version of capitalism featured, to varying degrees, a commitment to low unemployment rates, decent levels of support for working people and workplace conditions, extensive regulations of financial markets, public ownership of significant financial institutions and high levels of public investment.
Of course, this was still capitalism. Disparities of income, wealth and opportunity remained intolerably high, along with the social malignancies of racism, sexism and imperialism. Ecological destruction, in particular global warming, was also beginning to gather force over this period, even though few people took notice at the time. Nevertheless, all told, Keynesianism and social democracy produced dramatically more egalitarian as well as more stable versions of capitalism than the neoliberal regime that supplanted these models.
It is critical to understand that neoliberalism was never a project to replace social democracy with true free-market capitalism. Rather, contemporary neoliberals are committed to free-market policies when they support the interests of big business and the rich as, for example, with lowering regulations in the workplace and financial markets. But these same neoliberals become far less insistent on free market principles when invoking such principles might damage the interests of big business, Wall Street and the rich.
An obvious example is the historically unprecedented levels of support provided during the COVID recession to prevent economic collapse. Just in 2020 in the U.S. for example, the federal government pumped nearly $3 trillion into the economy, equal to about 14 percent of total economic activity (GDP) to prevent a total economic collapse. On top of that, the U.S. Federal Reserve injected nearly $4 trillion — equal to about 20 percent of GDP — to avoid a Wall Street meltdown. Of course, pumping government money into the U.S. economy, at a level equal to roughly one-third of total GDP, all in no more than one year’s time, completely contradicts any notion of free-market, minimal government capitalism.
How would you assess the effects of neoliberal practices on the U.S. economy and society at large?
How neoliberalism works in practice, as opposed to rhetoric, was powerfully illustrated over the past year during the COVID-19 pandemic and recession. That is, due to the public health emergency, employment and overall economic activity throughout the world fell precipitously, since major sections of the global economy were forced into lockdown mode. In the U.S., for example, nearly 50 percent of the entire labor force filed for unemployment benefits between March 2020 and February 2021. However, over this same period, the prices of Wall Street stocks — as measured, for example, by the Standard and Poor’s 500 index, a broad market indicator — rose by 46 percent, one of the sharpest one-year increases on record. Similar interventions throughout the world achieved similar results elsewhere. Thus, according to the International Monetary Fund, overall economic activity (GDP) contracted by 3.5 percent in 2020, which it describes as a “severe collapse … that has had acute adverse impacts on women, youth, the poor, the informally employed and those who work in contact-intensive sectors.” At the same time, global stock markets rose sharply — by 45 percent throughout Europe, 56 percent in China, 58 percent in the U.K. and 80 percent in Japan, and with Standard & Poor’s Global 1200 index rising by 67 percent.
But, of course, these patterns of relentless rising inequality didn’t begin with the COVID recession. Consider, for example, the relationship between corporate CEOs and their workers over the course of neoliberalism. As of 1978, just prior to the rise of neoliberalism, the CEOs of the largest 350 U.S. corporations earned $1.7 million, which was 33 times the $51,200 earned by the average private-sector nonsupervisory worker. As of 2019, the CEOs were earning 366 times more than the average worker, $21.3 million versus $58,200. Under neoliberalism, in other words, the pay for big corporate U.S. CEOs has increased more than tenfold relative to the average U.S. worker.
Of course, there are real lives hovering behind these big statistical patterns. For example, recent research by Anne Case and Angus Deaton has documented powerfully an unprecedented rise, pre-COVID, in what they term “deaths of despair” — i.e., a decline in life expectancy through rising increases in suicide, alcoholism and drug addiction among white working-class people in the U.S. Case and Deaton explain this rise of deaths by despair to the decline in decent-paying and stable working-class jobs that has resulted from neoliberalism. In short, neoliberalism is fundamentally a program of champagne socialism for big corporations, Wall Street and the rich, and “let them eat cake” capitalism for almost everyone else.
Amid our current summer of unprecedented wildfires and flooding, the consequences of global warming are now everywhere before us. But we need to be clear on the extent to which global warming and the rise of neoliberal dominance have been intertwined. Indeed, as of 1980, the year Ronald Reagan took office, the average global temperature was still at a safe level, equal to that of the preindustrial period around 1800. Under 40 years of neoliberalism, the average global temperature has risen relentlessly, to where it is now 1.0 degrees Celsius above the preindustrial average. Climate scientists have insisted that we cannot allow the global average temperature to exceed 1.5 degrees Celsius above the preindustrial level. Moreover, the Intergovernmental Panel on Climate Change (IPCC) just released its Sixth Assessment Report, which projects we will be breaching this 1.5-degree threshold by 2040 unless we enact fundamental changes in the way the global economy operates. Step one must be to stop burning oil, coal and natural gas to produce energy. Under neoliberalism, we have allowed fossil fuel companies to continue profiting off of destroying the planet.
Large-scale government interventions are considered an anathema to neoliberal policymakers. Yet, as you and your colleague Jerry Epstein have argued, neoliberalism seems to rely extensively on the state for its own survival. Can you talk a bit about the connection between neoliberalism and government support?
The extraordinary bailout policies that were enacted during the COVID recession were by no means an aberration from what has been standard practice throughout the 40 years that neoliberalism has dominated global economic policymaking.
Indeed, it was only 13 years ago, in 2008, that Wall Street hyper-speculation brought the global economy to its knees during the Great Recession. To prevent a 1930s-level depression at that time, economic policymakers throughout the world — including the United States, the countries of the European Union, Japan, South Korea, China, India and Brazil — all enacted extraordinary measures to counteract the crisis created by Wall Street. As in 2020, these measures included financial bailouts, monetary policies that pushed central bank-controlled interest rates close to near-zero and large-scale fiscal stimulus programs financed by major expansions in central government deficits.
In the United States, the fiscal deficit reached $1.4 trillion in 2009, equal to 9.8 percent of GDP. The deficits were around $1.3 trillion in 2010 and 2011 as well, amounting to close to 9 percent of GDP in both years. These were the largest peacetime deficits prior to the 2020 COVID recession. As with the 2020 crisis, the interventions led by the Federal Reserve to prop up Wall Street and corporate America were even more extensive than the federal government’s deficit spending policies. Moreover, this total figure does not include the full funding mobilized in 2009 to bailing out General Motors, Chrysler, Goldman Sachs and the insurance giant AIG, all of which were facing death spirals at that time. It is hard to envision the form in which U.S. capitalism might have survived at that time if, following true free-market precepts as opposed to the actual practice of neoliberal champagne socialism, these and other iconic U.S. firms would have been permitted to collapse.
Bailout operations of this sort have occurred with near-clockwork regularity throughout the neoliberal era, starting with Ronald Reagan. Thus, in 1983 under Reagan, the U.S. government reached a then peacetime high in the U.S. for federal deficit spending, at 5.7 percent of GDP. At the time, the U.S. and global economy were still mired in the second phase of the severe double-dip recession that lasted from 1980 to ‘82. Reagan was also facing a reelection campaign in 1984. Of course, both as a political candidate and all throughout his presidency, Reagan preached loudly that big government was always the problem, never the solution. Yet Reagan did not hesitate to flout his own rhetoric in overseeing a massive fiscal bailout when he needed it.
If neoliberalism is bad economics and there is a continued need to bailout the current system from recurring crises and disasters, why is it still around after 40 or so years? What keeps it in place? And how likely is it that the return to “emergency Keynesianism” may spell the end of the neoliberal nightmare?
Neoliberalism is not “bad economics” for big corporations, Wall Street and the rich. To the contrary, neoliberalism has been working out extremely well for these groups. The regular massive bailout operations have been neoliberalism’s life-support system. It is due to these bailouts, first and foremost, that neoliberalism remains today as the dominant economic policy framework globally.
But it is also true that neoliberalism can be defeated, and supplanted by a policy framework that is committed to high levels of social and economic equality as well as ecological justice — which is to say, a project that has a reasonable chance of protecting human life on earth as we know it. Many people, including myself, like the term “Global Green New Deal” to characterize this project. It’s fine if other people prefer different terms. The point is that this project will obviously require massive and sustained levels of effective political mobilization throughout the world. Whether such mobilizations can be mounted successfully remains the open question moving forward. I myself am inspired by the extent to which the environmental and labor movements, in the U.S. and elsewhere, are increasingly and effectively joining forces to make this happen.
Recently leaked data revealed that Amazon CEO Jeff Bezos and several other U.S. billionaires have paid zero federal income taxes in some past years.
This has Senate Minority Leader Mitch McConnell up in arms — but not because of what the scandal reveals about our rigged tax system. Instead, McConnell wants to go after the whistleblowers who exposed the scandal.
“These people ought to, whoever did this, ought to be hunted down and thrown into jail,” McConnell said in a radio interview.
What I suspect really bothers McConnell is that this data is likely to increase the pressure on him and other lawmakers to raise taxes on the wealthy. For the first time in decades, serious proposals to do just that are actually on the table in Washington. And the timing couldn’t be better.
Poor and low-income Americans have paid the biggest price for the pandemic, while U.S. billionaires have seen their fortunes increase by more than $1 trillion. Now is the moment for America’s ultra-rich to contribute their fair share to an economic recovery that will make the nation stronger in the face of future crises.
How are billionaires getting away with paying so little to Uncle Sam now? A key reason is that our current tax system rewards wealth, not work.
The top tax rate on paycheck income is nearly double the rate at which Wall Street windfalls are taxed. But while you and I rely on our paychecks to make ends meet, the very rich make most of their money from financial investments.
In fact, America’s top 1 percent hold more than half of all U.S. wealth invested in stocks and mutual funds.
In short, their wealth makes their money for them. Yet they’re taxed at far lower rates.
President Joe Biden wants to get rid of this perverse tax preference for the wealthy. He’s proposing that we tax wealth the same as work for people who earn more than $1 million a year.
Another Biden proposal would close a loophole that allows the wealthy to escape capital gains taxes altogether on assets they pass on to their heirs. Under his plan, individuals who inherit family businesses and farms — and continue to operate them — would not be affected.
In 12 recent polls, voters, including independents, support these and other Biden tax proposals by 60 percent or more.
Some Congressional Democrats are calling on the president to go further to tax the top 1 percent. Senators Bernie Sanders and Elizabeth Warren have proposed an annual wealth tax on fortunes over $50 million, as well as levies on Wall Street speculation and excessive CEO pay.
Equitable reforms like these are critical if we want to modernize our public infrastructure and give families the economic security they need to fulfill their potential in the world’s richest country.
If we don’t unrig our tax code, billionaires will keep getting away with stiffing Uncle Sam — and sticking the rest of us with the bill.
Refusing to touch the 2017 GOP tax cuts for the wealthy and large corporations, a bipartisan group of 21 senators is proposing a series of alternative infrastructure funding mechanisms that critics say amount to a thinly veiled scheme to privatize the nation’s roads, bridges, and water systems.
In a two-page memo (pdf) outlining its yet-to-be-finalized infrastructure plan, the bipartisan group lists “public-private partnerships, private activity bonds, and asset recycling” as potential ways to finance the package, which calls for $579 billion in new spending over five years.
Asset recycling refers to the practice of leasing out or selling off public infrastructure to private corporations and using the proceeds to fund other projects — a policy that Australia has used widely and that former U.S. President Donald Trump proposed replicating in 2017.
As the U.S. research nonprofit In the Public Interest noted in a 2017 report (pdf), “the Australian asset recycling program ultimately crashed and burned, and the fund itself was formally ended in December 2016.”
“Our own country’s experience shows that transferring control of public infrastructure to private interests is fraught with problems,” the brief continued. “One such example is the privatization of Chicago’s parking meters. In 2009, Chicago signed a 75-year public-private partnership with a consortium of companies for the operation of the city’s 36,000 parking meters. Although the city received $1.15 billion in the deal, Chicago drivers will pay the consortium at least $11.6 billion to park at meters over the life of the contract. The contact required Chicago to raise parking meter fees by 200 to 800%, depending on the area of the city, from 2009 to 2013.”
In a statement issued Thursday as the details of the bipartisan proposal began to emerge, Mary Grant of advocacy group Food & Water Watch warned that the plan “would pile further burdens on communities struggling to recover from the Covid pandemic.”
“It promotes privatization and so-called ‘public-private partnerships’ instead of making public investments in publicly-owned infrastructure,” Grant said. “This package does not provide adequate funding to rebuild and repair our country’s infrastructure; it is nothing more than an outrageously expensive way to borrow funds, with the ultimate bill paid back by households and local businesses in the form of higher rates.”
“Communities across the country have been ripped off by public-private schemes that enrich corporations and Wall Street investors,” Grant continued. “This deal is a disaster in the making, and it must be rejected.”
Rianna Eckel, an organizer with Food & Water Watch, similarly cautioned that the bipartisan proposal “would facilitate a Wall Street takeover of public services like water — which would lead to higher rates, worse service, and job cuts.”
Food & Water Watch estimated in a March report (pdf) that, on average, privately owned utilities charge households 59% more than local governments for drinking water service.
Bad: the new bipartisan infrastructure "plan" is to privatize everything!
The top proposed financing sources would facilitate a Wall Street takeover of public services like water – which would lead to higher rates, worse service, and job cuts.
Led by Sens. Kyrsten Sinema (D-Ariz.) and Rob Portman (R-Ohio), the bipartisan group is crafting its infrastructure plan as an alternative to President Joe Biden’s original American Jobs proposal, which calls for over $2 trillion in new spending over eight years financed partially by raising taxes on corporations and the wealthy.
Morris Pearl, chair of the Patriotic Millionaires, said Thursday that by deeming any changes to the 2017 GOP tax law off limits, the bipartisan Senate group is showing that it’s “more interested in having less Infrastructure investment in order to justify keeping in place a rigged tax code that favors corporations and the rich rather than actually coming up with a plan that solves the enormous challenges that our country faces.”
“If the choice is between a good deal and a bipartisan deal, Democratic senators must choose the good deal,” said Pearl. “They must prioritize doing what the American people are asking for, which is to raise taxes on the rich and corporations. Two-thirds of voters support raising taxes on corporations to pay for President Biden’s infrastructure investment.”
As the bipartisan group continues to hash out the details of its proposal behind closed doors, Sen. Bernie Sanders (I-Vt.) and Senate Democrats are considering a package that includes up to $6 trillion in infrastructure and safety-net spending.
On top of major investments in physical infrastructure and green energy, the $6 trillion plan would lower the Medicare eligibility age from 65 to 60 and expand the healthcare program’s benefits to cover vision, hearing, and dental. The proposed expansion would be paid for by allowing Medicare to negotiate prescription drug prices, which Sanders’ office estimates would raise $450 billion in revenue over a decade.
“As chairman of the budget committee, I believe that now is the time to address the long-term crises facing working families,” Sanders tweeted Thursday. “And, yes. We can pay for many of these proposals by demanding that the wealthy and large corporations start paying their fair share of taxes.”
What do nations care about the cost of war, if by spending a few hundred millions in steel and gunpowder they can gain a thousand millions in diamonds and cocoa? ― W.E.B. DuBois
He died. In an assisted (sic) care (oxymoron) home (nope) facility/prison (yes). Homeless for a few years; he was a photographer; and his life went to shit in four years. He overspent on photo equipment, a studio, gave away shoots, and alas, he ended up living in his car, putting the entire inventory in an expensive storage unit, and then he tried surviving.
I met him when I was a social worker helping him as a short-term veteran (Army, 12 months, no combat) in a housing program, 24/7, where my job was to get him on his feet, get his VA benefits together, get him back on some financial track, and getting him inspired to live.
He was curious, could run in mixed company, and he was fragile. That is the way of families — estranged, bizarre old men (father) moving on with second and third wives, and just giving shit about offspring.
I worked for the Starvation Army, one bloody year, and you can read about that hell hole of a fake (maybe not) religious wacko institution (poverty pimps): Here, Here and Here, over at Dissident Voice.
The preachers and lecturers deal with men of straw, as they are men of straw themselves. Why, a free-spoken man, of sound lungs, cannot draw a long breath without causing your rotten institutions to come toppling down by the vacuum he makes. Your church is a baby-house made of blocks, and so of the state.
…The church, the state, the school, the magazine, think they are liberal and free! It is the freedom of a prison-yard.
He lost one leg to diabetes, and it was typical – small black dot on his foot, and then, living the rough life, cold weather chills in a vehicle, long walks in the cold when the car broke down. Bad diet, and stress.
They chopped it (the leg) off at the knee. He was having eye/vision issues. He was a smart guy, even did a trivia night for his fellow homeless vets and their families. His memory, though, was flagging. He never wanted to learn how to deal with a prosthetic leg. He was getting more and more confused, obsessed with CNBC-type shit, and anti-trump disease to the max.
He had to be reminded of everything, daily, and we worked on getting him housing vouchers, and, alas, he was finally getting Social Security, and then, the VA took care of some of his stuff.
He went to a couple of my fiction readings in Portland, and he was always there for my movie nights to watch some documentary that pushed to push against the military mindset, and he was there to listen to me rail and rail.
He found out his estranged father left some money to him when he died. It was a windfall, and my vet could not handle all the information and financial asides. It took two years to get that money, and he gave one leech a $10,000 loan for some scheme for a new dog food patent (right!), and alas, that leech never paid him back. The vet’s dead, and this deadbeat who pried money from him has no reason to pay back.
Before death, and after the Starvation Army, my vet got into an apartment (with my help), and they screwed him over. The one ground floor apartment with a large step and stoop, impossible for him to navigate his wheelchair, that wasn’t in the bargain. He already signed the lease and wanted out of the Starvation Army. He and I worked on getting the apartment to build a stone or cement pathway from the back slider, to the parking lot, so he could get his Uber or handicap buses trips.
It was another eye opener – largest (now #3) property management company in the USA for apartments, out of Texas, and not one of them responded to my emails or calls. Terrible, since that has never happened to me ever in my life. I have always gotten responses, even harsh ones back. From cops, senators, CEOs, IRS, more. These people are human leeches.
Pinnacle comes in at number three in the rankings for the largest property managers in the country, with 172,000 units under management. The company manages a diverse array of assets, including mixed-use properties, commercial properties, affordable developments, senior properties, and student housing. It also specializes in the turnaround of distressed assets and assisting in the management of HOAs and condo associations. Pinnacle is headquartered in Dallas, Texas, and is currently headed by President and CEO Rick L. Graf.
So think about that. He had to pay for this walkway, and it was an improvement for that unit, to say the least, so why should he have to pay? He had volunteers with a construction company and from the Rotary Club, and that Pinnacle nixed it. They had to have their vetted company. We are talking about $500 for the job using volunteers and a bonded contractor, versus the $2500 through Pinnacle’s outfit.
That apartment life did not last long. He was having major choking issues, and cognitive ones. He wasn’t eating right. No phone calls taken, or texts.
We are talking about a man, 68, no family. He had no one but a friend he met at the Rotary Club and acquaintances. And me, his former social worker. Who happened to move on the Coast, so I was 3 hours from him one way, via car.
He had to leave the apartment, to a care center (sic). That apartment would not give him a break, since he had to break the lease because of medical reasons. No big deal he was a veteran.
These are parasites.
Then, he ends up in one of the larger senior living places, and that was a living hell for him as he slipped more and more, had no decent meals, and never had a case manager for months. Then, lockdown, March 2020.
Brookdale Senior Living owns and operates over 700 senior living communities and retirement communities in the United States. Brookdale was established in 1978 and is based in Brentwood, Tennessee. In the late 1990s and early 2000s, Fortress Investments became the majority owner of Brookdale, holding approximately 51% of its share. Currently, Glenview Capital Management (a hedge fund) holds the largest number of shares. Brookdale has approximately 70,000 staff members and 100,000 residents. As of 2018, it was the largest operator of senior housing in the United States. In 2021, a New York Times investigation revealed that Brookdale submitted wrong and manipulated data to the government, thus inflating ratings of the quality of care in Brookdale facilities. Shortly thereafter, the state of California filed a lawsuit against Brookdale, alleging that the company manipulated the federal government’s nursing-home ratings system.
He was paying out of his social security and this money he got from his father: $4100 a month plus another $2000 for “special services.” There were no “Special services.” This happens every minute in the USA. Imagine, a society with how many aging people? How many with chronic illness? Who the fuck has $6100 a month to pay for these scabies outfits?
Again, we can either prepare for the ultimate disaster that disaster capitalism gives us, or, put our heads back in that sand:
In 10 years, more than half of middle-income Americans age 75 or older will not be able to afford to pay for yearly assisted living rent or medical expenses, according to a study published Wednesday in Health Affairs.
The researchers used demographic and income data to project estimates of a portion of the senior population, those who will be 75 or older in 2029, with a focus on those in the middle-income range — currently $25,001 to $74,298 per year for those ages 75 to 84.
And it doesn’t look good for that group because of the rising costs of housing and health care. The researchers estimated that the number of middle-income elders in the U.S. will nearly double, growing from 7.9 million to 14.4 million by 2029. They will make up the biggest share of seniors, at 43%. — Source
This three paragraphs cited above are from a two-year-old article. You think the plandemichas assisted with this? Socialism is about planning for and building out facilities and holistic ways to help the aging, the poor, the sick. Capitalism is about planning for and setting out a million ways to fleece and fleece people. Maybe blood and plasma and bone marrow transplants are the only way to get through. Or, just donating body and soul to Big Pharma for their Mengele stuff. A 10 by 10 room, with a roommate, and mac’n’cheese six days a week, fasting on Thursdays.
This is how America runs, as a continuing criminal enterprise, an elaborate multi-layered system of bilking and outright theft, casino capitalism on steroids, and zero concern by the majority of the people with investments, banks (owners) and the elected officials to make safety nets. Who the hell can afford $6100 a month for a studio apartment? Crappy food? Surly workers (underpaid, over worked)? This is prison on a whole other level.
He had to go to the VA, via ambulance, and with taxis, a few times with this female friend.
She got him to get a will prepared, and to get some things in order, but he was failing, vacant, not there, and alas, he died August 2020 age 70, and that should never have happened. If I had a community, 100 acres, gardens, small (tiny) homes, pets, chickens, and community conversations, he would NOT have died. Life expectancy dropped because he ended up in an apartment, isolated, alone, scared, and with deeper cognitive issues. A supportive community getting him off his duff, getting him involved, would have saved him. Could save millions of Americans. Hundreds of millions of global citizens.
So who owns the land, the farms, the concepts of living and aging in place, intergenerational, cooperatives, decent air and water? Dog-eat-dog. And who thinks that a coronavirus lives and breathes in the summer? Oh, that flu season, now 365 days a year, some rain or shine.
You know, I didn’t get a chance to talk to this vet too much about his concerns around lockdown, the SARS-CoV2, and, well, like many things once a person ages, sometimes talking real stuff about real things is too much for a mind that is going south.
Not all pandemics are caused by the obvious suspects. Though the media have us whipped up into a frenzy over a select cast of superstar pathogens, the villain in the next global drama may be lurking in the unlikeliest of places; perhaps it hasn’t even been discovered yet.
“I think the chances that the next pandemic will be caused by a novel virus are quite good,” says Kevin Olival, a disease ecologist from the EcoHealth Alliance, a US-based organisation that studies the links between human and environmental health. “If you look at Sars, which was the first pandemic of the 21st Century, that was a previously unknown virus before it jumped into people and spread round the world. So there’s a precedent there – there are many, many viruses out there in the families that we’re concerned with.”
Out of millions of viruses on the planet, very few have ever caused a major outbreak Olival is not alone. Earlier this year, Microsoft co-founder Bill Gates warned that the next pandemic could be something we’ve never seen before. He suggested that we prepare for its emergence as we would for a war.
Meanwhile, the WHO is so firmly convinced that they have updated their list of pathogens most likely to cause a massive, deadly outbreak to include “Disease X” – a mystery microorganism which hasn’t yet entered our radar. By Zaria Gorvett, 13th November 2018
The irony of ironies, I was talking about things like this way before that BBC (bad bad organization) put out these pabulum pieces as quoted about NOV. 2018, a year before the official Wuhan and Italian flu hit (sic).
The death of the vet, of course, create a nightmare for his friend, designated as the executor of his “estate.”
Comcast screwed the estate by keeping service going (charging $90 a month) even though he was dead. He had a storage unit that was charging $215 a month. That Brookdale ended up hitting the estate with more bills in the thousands. The apartment complex, Pinnacle, was looking for several thousand for fees and penalties. The bills came in, and the collection agencies rose to the occasion.
And this vet’s friend (sic) who had borrowed the money paid nothing back.
It is May, 2021, and those proceeds to his small estate have not yet been disbursed. Pandemic lockdown has hurt the process. Two of the beneficiaries are a free clinic that attended to this vet’s needs during his hours of need. And a food pantry out of a church who also helped him with food and electricity money.
He probably had $340,000 total, most of it in a Morgan Stanley account. Mind you, this is all from his dead old man, and the vet had not expected that. There are tax filing fees, moving expenses for his stuff to a furniture nonprofit, fees for the storage unit. Some prescription bills and other outstanding bills that should have just vanished. The creditors came out of the woodwork, and because I was not a family member, brother, say, of nephew, all those bills got paid. If I had been that family member, I would/could have wrangled many of the bills into either zeroed out bills, or some with a dime on the dollar. It takes letter writing, advocating, and pounding down these leeches.
As of May 18, 2021, the five beneficiaries – two nonprofits in need – have not seen a cent. Because the executor has had to do so much, and the fact the vet had no family, my vet’s estate is getting whittled down by that great American tick – middle men, fees, penalties, taxes, this and that amount extracted as part of the ugly middle and middle man/woman mentality of the USA.
Some people came up to the plate and did pro bono work, but because I was close to this whole thing, and talked with the executor a lot, I see how the total amount that could have been distributed five ways — $70,000 each – might now be even close to $60,000 each. What the beneficiaries don’t know won’t hurt them, right? All those leeches sucking the dead, well, they just don’t know it. It was money they were not expecting, so what’s the big deal.
That’s not the point. This is a minute-to-minute situation in USA. Millions of people and their families get screwed in the tens of billions each year by the ticks and leeches. I have had to deal with PayDay loan companies, repo men, collection agencies, courts, companies, telecoms and hospitals and others who have their hands out for more and more cuts of many of my clients who were making $730 a month in Social Security, and some way less. I contacted hospitals and businesses and others to get fees and bills reduced or zeroed out.
Young or old, many of the homeless people I worked with could NEVER work in a competitive work environment. Their health and minds are shot to shit. Much of that (PTSD and complex PTSD) was caused by the Armed Forces, and by the systems of punishment that hit these guys and gals after departing that shit hole.
Not everything in their lives is someone else’s fault and responsibility. They made bad choices. Booze and drugs, you betcha, took them down. Bad food, bad thinking smoking, and more, deteriorated them at a young age. Trying to pay rent, evictions, etc., all that adds up to the weathering.
Living in a truck or car or tent or in a garage, that also weathers these people. In the end, pre-Covid and now during it, these people are throwaways. The Stock Market is busting at the seams. Zoom school, and Zoom work for the middle class, the new normal abnormal. The rest of the workforce or citizen? Screwed blued and tattooed.
The irony is that my vet friend “made” more money in that investment account dead than when he was alive. And we know the great history of Morgan Stanley.
I’m writing this because I am delaying something bigger, and poetry, tied to the absolute hell hole that is American Zionism a la Israeli Zionism. War crimes that are ten thousand George Floyd’s “I Can’t Breathe” murder.
And I can’t wrap my head around this in a rural community. No marching here, no groups, and hell, in France and Germany and England, it is illegal to peacefully march for Palestine.
I’m thinking about Canada and USA, supporting murderous arms and murderous policies of that racist “country.” I am thinking about my vet’s account at Morgan Stanley:
The broker got him stocks in Walmart, Northrop Grumman, Microsoft, Facebook, Google, Blackstone, BlackRock. This guy was a friend, and asked about investing, and I had a guy in mind, but my buddy went with a friend of the Rotary who said this broker with Morgan Stanley would take care of him. My buddy wanted social responsible investing, and that, alas, is yet another bullshit marketing tool of the masters of the casino capitalist Walled Street.
Northrop Grumman’s medium-caliber cannons boast unrivaled reliability and effectiveness. When paired with our exceptional training, services, certified accessories and warranties, the result is exceptional value and performance over the entire gun system lifecycle. The company has produced solid propulsion systems for the Ground-based Midcourse Defense interceptor, as well as for the Trident II D-5 and Minuteman III strategic missiles. Northrop Grumman has 100 percent propulsion success on strategic production motors. For nearly half a century, Northrop Grumman and its heritage companies have been designing and developing bomb fuses that have stayed on pace with the technological advancements of the time.
How many parts in a missile or Bushmaster automatic cannon? Parts equal jobs. Parts designed equal academic jobs. Think of all those people in all those companies, in factories and warehouses, and manufacturing plants, and marketing plants, paint plants, PR plants, all of them down to the web master and the photographer making money on dead Palestinian children. It comes down to that.
I have relatives whose kids (grown adults) are blonde beauties in the sense of USA beauty, and they are tall, and lean, and they are pulling down $120,000 a year as 28 year old’s, working for one of those California based military death companies.
Here, five — to include Raytheon, Northrup Lockheed Martin, Aerojet Rocketdyne, Flir Systems
Here are California Dreaming Death Machine (139) openings for just one hiring site —
In 2019, here are the top states, but remember, those figures are not the true amount of money made on death since so much more tied to offensive weapons and space should be factored in. Sort of the multiplier effect of all the businesses service and hard industries making bank because of those contractors and their employees and their subcontractors and their employees living and eating the California dream, or whichever state listed is the dream. Forget about the billions in Hollywood and their enormous entanglement of people making money off those Tom Clancy, et al crap movies. Death, death, death, even in the form of liberal actors spewing off on this or that thing, but in the end, they love the DoD.
California: $66.2 billion
Virginia: $60.3 billion
Texas: $54.8 billion
Florida: $29.8 billion
Maryland: $26.1 billion
Connecticut: $19.7 billion
Pennsylvania: $18.1 billion
Washington: $17.8 billion
Alabama: $16.0 billion
Massachusetts: $15.8 billion
So, I am having a difficult time focusing, with this Industrial Complex tied to killing Palestinians, and so many other people’s of the world, through the training, outfitting, arming, and educating of the despots of the world. This is a telling interview. Malak Mattar, Dan Cohen and Miko Peled join MintCast to discuss the ongoing Israeli violence in the Gaza Strip. See interview here.
I am still processing all of this, trying to listen to Zoom continuing education credited things like trauma and social service workers in a time of lockdown and Covid-19. Things like that, which are bullshit, really. Just amazing bullshit now on Zoom, most of it. But I am just cruising through these people who believe they are thinking and saying something new.
BAR’s poet in residence Raymond Nat Turner is an accomplished performing artist. You can find much more of his work at https://www.youtube.com/user/zigilow
BAR’s poet in residence Raymond Nat Turner is an accomplished performing artist. You can find much more of his work at YouTube.
+–+
The acrobats are back…(gimme a bleepin’ break!)
The acrobats are back—riding bareback and backwards on Donkeys! They’re back juggling hocus-pocus focus groups; Back, spinning Wall Street straw into fools’ gold for the war- mongering mouth of a punch drunk politician. Back hallucinating on FDR Fairytales. Back somersaulting over scarlet streets, strikes and factory seizures; back vaulting over violence/militant eviction resistance
The acrobats are back—Lilliputian left-Munchkin Marxists—juggling Classless analysis; doing back-flips erasing millions; Tumbling above herds of handcuffed communists, socialists, anarchists, trade unionists who waged pitched battles with Pinkerton-police-national guard-gun thugs. The acrobats are back turning cartwheels; Flipping history on its head— Landing squarely in the laps of generals and statesmen…
The acrobats are back—flipping LBJ minus 34 dead and smoke-filled skies over Watts/43 dead in Detroit/27 dead, 1400 arrests in Newark; LBJ minus millions marching NO to Jim Crow, war/women’s oppression; Minus martyrs—whose M’s include Mickey, Medgar, Malcolm, Martin… The acrobats are back, dancing in donkey dung down the Yellow Brick Road for the Emerald City Intersectional Empire—strangely resembling the Pentagon…
The acrobats are back—daredevils who dangled dangerously for 8 yrs. from the Drone Ranger’s dick. They’re back—Capitalist Hill cartwheels and flips—sticking stealth socialist landings as Comrade Schmo plays them like The Great Oz—ominously warning: “Pay no attention to Wall Street-War-Profiteer- Big Pharma/Fossil Fuel-Credit Card Companies behind my thin blue curtain of Promises!” Then he quietly pulls his pistol and mumbles, ”What’s in your wallet?”
And the reality is that Wall Street and those Mutual Funds and Exchange Tradeable Funds (ETF’s), all are tied to bombing, booze, tobacco, big pharma, the entire shooting match. Just can’t go to sleep at night, or can’t look myself in the mirror, when thinking about all that time and energy and research and writing, and educating, and the reality is we are what we are — war criminals. Or, read, “Try as You May to Deny, but Evil is in Our DNA“!
Israeli Forces spokesman Zilberman announced the start of the bombing of Gaza, specifying that “80 fighters are taking part in the operation, including the advanced F-35s” (The Times of Israel, May 11, 2021). It is officially the baptism of fire for the US Lockheed Martin’s fifth-generation fighter, whose production Italy also participates in as a second-level partner.
Israel has already received twenty-seven F-35s from the US, and last February decided to buy no longer fifty F-35s but seventy-five. To this end the government has decreed a further allocation of 9 billion dollars: 7 were granted by a US to Israel free military “aid” of 28 billion, 2 were granted as a loan by the US Citibank.
While Israeli F-35 pilots were being trained by the U.S. Air Force in Arizona and Israel, the US Army Engineers built in Israel special hardened hangars for the F-35s, suitable for both fighters’ maximum protection on the ground, and their rapid take-off on attack. At the same time, the Israeli military industries (Israel Aerospace and Elbit Systems) in close coordination with Lockheed Martin enhance the fighter renamed “Adir” (Powerful): above all its ability to penetrate enemy defenses and its range of action which was nearly doubled.
These capabilities are certainly not necessary to attack Gaza. Why then are the most advanced fifth-generation fighters used against Palestinians? Because it serves to test F-35s fighters and their pilots in real war action using Gaza homes as targets on a firing range. It does not matter if in the target houses there are entire families.
The F-35s, added to the hundreds of fighter-bombers already supplied by the US to Israel. are designed for nuclear attack particularly with the new B61-12 bomb. The United States will shortly deploy these nuclear bombs in Italy and other European countries, and will also provide them to Israel, the only nuclear power in the Middle East with an arsenal estimated at 100-400 nuclear weapons. If Israel doubles the range of F-35 fighters and is about to receive eight Boeing Pegasus tankers from the US for refueling the F-35s in flight, it is because it is preparing to launch an attack, even nuclear, against Iran.
The coronavirus pandemic, the deepening economic crash, dangerously divisive political responses, and exploding social tensions have thrown an already declining American capitalist system into a tailspin. The consequences of these mounting and intertwined crises will shape our future. In this unique collection of over 50 essays, “The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself,” Richard D. Wolff argues clearly that “returning to normal” no longer responds adequately to the accumulated problems of US capitalism. What is necessary, instead, is transition toward a new economic system that works for all of us.
“A blueprint for how we got here, and a plan for how we will rescue ourselves” – Chris Hedges
“A magnificent source of hope and insight.” – Yanis Varoufakis
“In this compelling set of essays, and with his signature clarity, intensity, accessibility and deference to historical and present perspective, Wolff has issued not just a stark warning, but concrete reasoning, as to why this time really should be different.” – Nomi Prins
“One of the most powerful and incisive voices in America. As an economist he transcends that “dismal science”, he is a tribune of Main St, a voice of the people.” – George Galloway
“Wolff clearly explains the ways that capitalism exacerbates unemployment, inequality, racism, and patriarchy; and threatens the health and safety of workers and communities – i.e., most of us.” – Jessica Gordon-Nembhard, Ph.D.
“If you care about deeper measures of social health as Americans suffer the worst economic crisis since the Great Depression, you will find here a wealth of insight, statistics, and other ammunition that we all need in the fight for a more just society.” – Adam Hochschild
“The current failed system has a noose around all of our necks. Richard Wolff offers an economic vision that gets our society off the gallows.” – Jimmy Dore
Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world. — Henry Kissinger, interview with the Observer, 1983, on his book, Years of Upheaval
Chicago Public Schools (CPS) is in a deep and enduring fiscal crisis. After decades of budget cuts, Chicago’s public K–12 schools have been hollowed out, magnifying the hardships of stagnant wages, rising housing prices, and more faced by the city’s working class. Pundits have predictably blamed CPS’s fiscal crisis on either the greedy teachers’ union (Republicans’ and a few austerity-minded Democrats’ scapegoat) or on conservative suburban and rural “downstate” politicians in Illinois hostile to urban children’s plight (most Democrats’ scapegoat).
But Chicago is a one-party city, controlled by the Democrats, in a solidly blue state, where Democrats usually control the state government.
Let’s make no mistake, we are already in WWIII. A more noble term is “The Great Reset” – the World Economic Forum’s (WEF) eloquent description of a devastated worldwide economy, countless bankruptcies and unemployment, abject misery, famine, death by starvation, disease and suicide. Hundreds of millions of people have already been affected by this “collateral” damage of the “covid-19” fear-propaganda bio-war, with a death-toll maybe already in the tens of millions, but which in reality cannot even be assessed at this time.
And this only one year into this criminal madness, a diabolical elite of multi-multi billionaires has pushed upon us, We the People. We are only in the first year of the war which by the Reset’s plan is to last the entire decade 2020-2030. The agenda is supposed to be completed by 2030. it’s also called UN Agenda 2030. See also here.
The WEF is, in fact, nothing more than an NGO, registered in a lush suburb of Geneva, Switzerland. Its members are, however, a collection of dirty-rich people: High-ranking politicians, heads of corporations, banking gnomes, artists and Hollywood personalities – none of them are people’s elected officials with a mandate to rule the world. Yet, they are effectively ruling the world, by coopting, coercing, or threatening the entire UN system and its 193 member countries into their obedience. Because they think they have all the money in the world, and they can. Mind you, money acquired in a fraudulent system designed by them. – But more importantly, because We, the People, let them.
The Great Reset has three major goals, all of equal importance (i) massive depopulation, (ii) shifting all assets from the bottom and the middle to the top; following the motto for the masses, at the end “You will own nothing and be happy”. That is Klaus Schwab’s conclusion for the completion of The Great Reset; and (iii) a complete digitized control over everything – money, mind, personal records and behaviors – a combination of Aldous Huxley’s “Brave New World”, and George Orwell’s “1984”. See Mike Whitney’s article “The COVID-19 Vaccine; Is the Goal Immunity or Depopulation?”.
As we can see, the WEF is involved at every level in the Plandemic and its consequences, especially the consequences that favor the Great Reset. As Klaus Schwab in the Great Reset so revealingly says, the pandemic opens a “small window of opportunity” during which these consequences (meaning the reshaping of the world) have to be realized. Everything has to work like clockwork.
So far, it seems to be on track. Though, as more people are waking up and scientists consciousness make them leaving their straight-jacketed matrix-jobs, resistance is growing exponentially.
The NGO, trillion-dollar members-powerhouse, WEF, is outranking the world’s peoples designed and implemented UN system by far. Recently the WEF, now in association with Carnegie Endowment for International Peace, was warning of a cyber-attack on the western monetary system. To emphasize their point, they said, it is “Not a Question of If but When.“
According to the Last American Vagabond (LAV), a “report published last year by the WEF-Carnegie Cyber Policy Initiative, calls for the merging of Wall Street banks, their regulators and intelligence agencies as necessary to confront an allegedly imminent cyber-attack that will collapse the existing financial system.”
The LAV article goes on saying
In 2019, the same year as Event 201 took place (Event 201 – 18 October 2019, in NYC, simulating the current SARS-CoV-2 plandemic and destruction of the world economy), the Endowment launched its Cyber Policy Initiative with the goal of producing an “International Strategy for Cybersecurity and the Global Financial System 2021-2024.” That strategy was released just months ago, in November 2020 and, according to the Endowment, was authored by “leading experts in governments, central banks, industry and the technical community” in order to provide a “longer-term international cybersecurity strategy”, specifically for the financial system.
The Cyber Policy Initiative emanating from the joint venture’s WEF- Carnegie Endowment report of November 2020, is contained in a paper titled “International Strategy to Better Protect the Financial System.” It begins by noting that the global financial system, like many other systems, are “going through unprecedented digital transformation, which is being accelerated by the coronavirus pandemic.” It concludes with the warning that:
Malicious actors are taking advantage of this digital transformation and pose a growing threat to the global financial system, financial stability, and confidence in the integrity of the financial system. Malign actors are using cyber capabilities to steal from, disrupt, or otherwise threaten financial institutions, investors and the public. These actors include not only increasingly daring criminals, but also states and state-sponsored attackers.
A fully digitized monetary system has been on the WEF’s and IMF’s agenda for years. They cannot wait to implement it. So, if indeed, a cyber-attack on the western monetary system actually will take place, there is no question, who has planned and implemented it.
The drive for total digitization of everything, but foremost the (western) world’s monetary system, is an integral part of The Great Reset. It is supported, of course, by the banking and finance sector, including western central banks. Its implementation is to be accelerated by the covid-fraud, but encounters fierce resistance in many countries, especially in the Global South but also in the western industrialized countries, where intellectual groups realize what this means for the resources and assets worked for and owned by the people – it will be easily ‘expropriated’ so to speak, for example, for disobedience, as the control will be fully with the banks.
And this leads to the conclusion of the nefarious Great Reset – “You will own nothing and be happy”.
Luckily, the East, led by China and Russia, has gradually withdrawn from the western monetary system and are largely independent, monetary-sovereign countries. Therefore the western digitization drive does not apply to the East which is further enhanced by the China-Russia led Shanghai Cooperation Organization – SCO – accounting for about half the world’s population and a third of the world’s economic output – GDP.
If Klaus Schwab and the WEF’s “Illuminati” would have their way, by 2030 the grand flock of humans will be transformed into “transhumans” – a kind of semi-robots that responds to AI signals controlled by The Great Reset’s masterminds (sic), which by then will have become the leaders of a tyranny, called the New or One World Order – OWO. We, the People, would then have become the new AI-directed serfs. Or, as per Aldous Huxley’s Brave New World, the “epsilon people”.
Let that not happen. Let’s unite and resist with all our powers. We are – still – 7.8 billion people against a few pathological soulless multi-billionaires.
Peter Koenig is an economist and geopolitical analyst. He is also a Research Associate of the Centre for Research on Globalization. Read other articles by Peter.
Let’s make no mistake, we are already in WWIII. A more noble term is “The Great Reset” – the World Economic Forum’s (WEF) eloquent description of a devastated worldwide economy, countless bankruptcies and unemployment, abject misery, famine, death by starvation, disease and suicide. Hundreds of millions of people have already been affected by this “collateral” damage of the “covid-19” fear-propaganda bio-war, with a death-toll maybe already in the tens of millions, but which in reality cannot even be assessed at this time.
And this only one year into this criminal madness, a diabolical elite of multi-multi billionaires has pushed upon us, We the People. We are only in the first year of the war which by the Reset’s plan is to last the entire decade 2020-2030. The agenda is supposed to be completed by 2030. it’s also called UN Agenda 2030. See also here.
The WEF is, in fact, nothing more than an NGO, registered in a lush suburb of Geneva, Switzerland. Its members are, however, a collection of dirty-rich people: High-ranking politicians, heads of corporations, banking gnomes, artists and Hollywood personalities – none of them are people’s elected officials with a mandate to rule the world. Yet, they are effectively ruling the world, by coopting, coercing, or threatening the entire UN system and its 193 member countries into their obedience. Because they think they have all the money in the world, and they can. Mind you, money acquired in a fraudulent system designed by them. – But more importantly, because We, the People, let them.
The Great Reset has three major goals, all of equal importance (i) massive depopulation, (ii) shifting all assets from the bottom and the middle to the top; following the motto for the masses, at the end “You will own nothing and be happy”. That is Klaus Schwab’s conclusion for the completion of The Great Reset; and (iii) a complete digitized control over everything – money, mind, personal records and behaviors – a combination of Aldous Huxley’s “Brave New World”, and George Orwell’s “1984”. See Mike Whitney’s article “The COVID-19 Vaccine; Is the Goal Immunity or Depopulation?”.
As we can see, the WEF is involved at every level in the Plandemic and its consequences, especially the consequences that favor the Great Reset. As Klaus Schwab in the Great Reset so revealingly says, the pandemic opens a “small window of opportunity” during which these consequences (meaning the reshaping of the world) have to be realized. Everything has to work like clockwork.
So far, it seems to be on track. Though, as more people are waking up and scientists consciousness make them leaving their straight-jacketed matrix-jobs, resistance is growing exponentially.
The NGO, trillion-dollar members-powerhouse, WEF, is outranking the world’s peoples designed and implemented UN system by far. Recently the WEF, now in association with Carnegie Endowment for International Peace, was warning of a cyber-attack on the western monetary system. To emphasize their point, they said, it is “Not a Question of If but When.“
According to the Last American Vagabond (LAV), a “report published last year by the WEF-Carnegie Cyber Policy Initiative, calls for the merging of Wall Street banks, their regulators and intelligence agencies as necessary to confront an allegedly imminent cyber-attack that will collapse the existing financial system.”
The LAV article goes on saying
In 2019, the same year as Event 201 took place (Event 201 – 18 October 2019, in NYC, simulating the current SARS-CoV-2 plandemic and destruction of the world economy), the Endowment launched its Cyber Policy Initiative with the goal of producing an “International Strategy for Cybersecurity and the Global Financial System 2021-2024.” That strategy was released just months ago, in November 2020 and, according to the Endowment, was authored by “leading experts in governments, central banks, industry and the technical community” in order to provide a “longer-term international cybersecurity strategy”, specifically for the financial system.
The Cyber Policy Initiative emanating from the joint venture’s WEF- Carnegie Endowment report of November 2020, is contained in a paper titled “International Strategy to Better Protect the Financial System.” It begins by noting that the global financial system, like many other systems, are “going through unprecedented digital transformation, which is being accelerated by the coronavirus pandemic.” It concludes with the warning that:
Malicious actors are taking advantage of this digital transformation and pose a growing threat to the global financial system, financial stability, and confidence in the integrity of the financial system. Malign actors are using cyber capabilities to steal from, disrupt, or otherwise threaten financial institutions, investors and the public. These actors include not only increasingly daring criminals, but also states and state-sponsored attackers.
A fully digitized monetary system has been on the WEF’s and IMF’s agenda for years. They cannot wait to implement it. So, if indeed, a cyber-attack on the western monetary system actually will take place, there is no question, who has planned and implemented it.
The drive for total digitization of everything, but foremost the (western) world’s monetary system, is an integral part of The Great Reset. It is supported, of course, by the banking and finance sector, including western central banks. Its implementation is to be accelerated by the covid-fraud, but encounters fierce resistance in many countries, especially in the Global South but also in the western industrialized countries, where intellectual groups realize what this means for the resources and assets worked for and owned by the people – it will be easily ‘expropriated’ so to speak, for example, for disobedience, as the control will be fully with the banks.
And this leads to the conclusion of the nefarious Great Reset – “You will own nothing and be happy”.
Luckily, the East, led by China and Russia, has gradually withdrawn from the western monetary system and are largely independent, monetary-sovereign countries. Therefore the western digitization drive does not apply to the East which is further enhanced by the China-Russia led Shanghai Cooperation Organization – SCO – accounting for about half the world’s population and a third of the world’s economic output – GDP.
If Klaus Schwab and the WEF’s “Illuminati” would have their way, by 2030 the grand flock of humans will be transformed into “transhumans” – a kind of semi-robots that responds to AI signals controlled by The Great Reset’s masterminds (sic), which by then will have become the leaders of a tyranny, called the New or One World Order – OWO. We, the People, would then have become the new AI-directed serfs. Or, as per Aldous Huxley’s Brave New World, the “epsilon people”.
Let that not happen.
Let’s unite and resist with all our powers.
We are – still – 7.8 billion people against a few pathological soulless multi-billionaires.
After Bernie Madoff’s death, we dig into how he pulled off one of the biggest Ponzi schemes in history. Reporter Steve Fishman explores what lessons the fallen financier’s story holds for today. Madoff duped thousands of investors out of tens of billions of dollars, and his scam rocked Wall Street for years.
Fishman, who spent years interviewing investors, regulators and even Madoff himself from inside federal prison, traces the rise and fall of his scheme. We learn how Madoff pulled it off and why nobody caught on for decades. We also hear from experts who say investors still are vulnerable to financial fraud, especially in the era of bitcoin and other cryptocurrencies.
This week, Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey re-introduced the Green New Deal. One crucial arm of it is the Green New Deal for Public Housing, a bill to rebuild and revitalize the nation’s public housing infrastructure. Momentum by lawmakers to reinvest in our existing public housing infrastructure has been building for years. Combined with President Biden’s push for a $2 trillion infrastructure plan, there is a real opportunity to rebuild our economy with the public at the forefront.
Meanwhile, the largest Wall Street players continue to do well, even in a still-struggling economy. The recent volatility in the price of GameStop stock, combined with the prevalence of easy-to-use trading apps like Robinhood, has led to a surge of interest in trading in the stock market by so-called “retail” (nonprofessional) traders. In the media narrative that followed, some proclaimed the triumph of David vs. Goliath. But the largest players on Wall Street have reaped massive rewards off the volatility. Goldman Sachs and Morgan Stanley both reported record first-quarter profits, thanks in part to massive revenues in their trading divisions.
Robinhood’s lofty marketing claims say it aims to “democratize finance.” But if we truly want to democratize our economy, it’s going to take more than a few more retail traders getting rich in the stock market while the profits of the titans of finance continue to climb. It will take committed, long-term public investments. One idea to facilitate these very investments is being considered by Congress to channel both public and private capital into public infrastructure projects.
Flipping the Script on Public-Private Investments
On April 14, the House Financial Services Committee held a hearing to discuss infrastructure ideas to help realize President Biden’s “build back better” economic vision. Among the ideas discussed at the hearing was a proposal by Cornell University Law Professor Saule Omarova: a National Investment Authority that could fund public projects large and small, but also provide a way for the public to invest their money without having to rely on Wall Street.
Today, major Wall Street players act as a middle man on nearly every kind of investment. They take fees each step of the way — be it when private companies go public, cities sell bonds to fund projects, or even when the public chooses to invest in mutual funds or other financial products that aim to produce a steady return. If you’re lucky enough to be able to save for retirement, unless you buy a savings bond, whatever you do, you give Wall Street a cut. If we created a National Investment Authority, there would be a new asset class that would let savers invest purely in public projects, whether that be the Green New Deal, high-speed rail or other projects to benefit the entire country.
Another problem the National Investment Authority solves is the current funding gap we have for large-scale, long-term public projects. As Professor Omarova writes, the current approach to infrastructure funding in the United States is to “allow private markets to decide which projects are worthy of funding.” But Wall Street is generally uninterested in investing in projects that might take more than a lifetime to create profits, let alone a few years.
When Wall Street does invest in public projects, it demands tolls and fees that can guarantee near-term returns, like when Chicago leased off its parking meter system in 2008 to private investors. These investors are now on track to recoup their entire investment by 2021, and then enjoy 62 more years of profits, all paid for by the city’s residents. Meanwhile, parking meter rates doubled in the first five years, and Chicago is now contractually restricted from improving the downtown streets with the leased meters, preventing them from adding bicycle lanes or expanding sidewalks.
What happened in Chicago is just one example of so-called public-private partnerships, where cities and states sell off public assets to private actors, just to balance their budgets. But the idea of the National Investment Authority is to flip the public-private partnership script. It would compel private money to fund public projects under public control instead.
The way it would do this is by creating a new asset class, backed by the full faith and credit of the federal government, which would create a new financial product nearly as safe as Treasuries (U.S. government bonds widely seen by the financial markets as one of the safest, least risky investments that exist). Because of the government backing, it could not only be attractive to the general public, but even to pension funds and other long-term institutional investors who want a decent return with less risk. While there’s no reason the National Investment Authority couldn’t be solely funded with public dollars, a combination of public dollars and private investment could make it go even further.
Operationally, the National Investment Authority would be a new public entity that sits between the Federal Reserve and the Treasury Department. It would have a dedicated mission to invest strategically in projects that would create socially inclusive, equitable and environmentally sustainable economic growth. To ensure it doesn’t stray from its mission, it would have multiple measures for accountability: a governing board, a public interest council, an audit panel and separate oversight by audits from the Government Accountability Office.
It would have two arms: an Infrastructure Bank and an agency to invest in leapfrog, moonshot-type projects. The Infrastructure Bank would issue grants, loans, insurance and more to support public infrastructure like roads, clean energy facilities and water treatment plants. The other arm would be an asset manager, with a portfolio of equity investments in environmentally safe, socially beneficial long-term projects.
There’s precedent in the United States for this kind of organized, vast investment in public projects. The National Investment Authority is a modernized version of a New Deal–era program called the Reconstruction Finance Corporation. First created by President Hoover, Franklin D. Roosevelt grew it and used it to help the country out of the Great Depression. The Reconstruction Finance Corporation funded projects big and small, and at the time, its investments were larger than those of all of Wall Street combined. Institutions like the Small Business Administration and Fannie Mae and Freddie Mac (which help to facilitate investment in housing by buying mortgages from lenders) are still-surviving subsidiaries of the Reconstruction Finance Corporation.
While the American Rescue Plan has provided a much needed short-term stimulus to the public, the future of the U.S. economy remains uncertain. Supplemental unemployment insurance and the suspension on most federal student loan payments are both due to expire in the fall. One of the lessons learned from the last financial crisis is that Wall Street actors will grab the best assets on the cheap after a market crash, leading to further dominance of our economy by a few giant, private players.
The National Investment Authority could ensure this doesn’t repeat, acting to reverse the trend toward privatization and make real investments in public projects. It’s an idea that’s popular — a majority of voters (54 percent) support the idea, according to polling by the Justice Collaborative. Combined with the president’s push for the infrastructure bill and the reintroduction of the Green New Deal, the moment seems ripe for transformational public investments.
While low-wage workers are still waiting for a raise in the minimum wage, Wall Street employees enjoyed a 10 percent bump in their bonuses in the first year of the pandemic, according to new data from the New York State Comptroller.
Wall Street Pay v. the Minimum Wage
Since 1985, the average Wall Street bonus has increased 1,217 percent, from $13,970 to $184,000 in 2020. If the minimum wage had increased at that rate, it would be worth $44.12 today, instead of $7.25.
The total bonus pool for 182,100 New York City-based Wall Street employees was $31.7 billion — enough to pay for more than 1 million jobs paying $15 per hour for a year.
These bonuses come on top of salary and other forms of compensation. The average salary (with bonuses) for all securities industry employees in New York City was $406,700 in 2019. At the very top end, CEOs of the top five U.S. investment banks hauled in an average of $27.9 million in total compensation in 2019.
Because the very rich can squirrel away much of their income, huge Wall Street bonuses don’t have nearly the stimulus effect as raising pay for low-wage workers who have to spend nearly every dollar they make.
Wall Street Bonuses and Gender and Racial Inequality
The rapid increase in Wall Street bonuses over the past several decades has contributed to gender and racial inequality, since workers at the low end of the wage scale are disproportionately people of color and women, while the lucrative financial industry is overwhelmingly white and male, particularly at the upper echelons.
Nationwide, men make up 63 percent of all securities industry employees and 33 percent of the 1.1 million minimum wage workers.
The CEOs of the five largest U.S. investment banks were all white men in 2020. The share of these banks’ senior executives and top managers who are male ranges from 66-82 percent. (JPMorgan Chase: 75%, Goldman Sachs: 77%, Bank of America: 66%, Morgan Stanley: 82%, and Citigroup: 66%)
At the five largest U.S. investment banks, the share of senior executives and top managers who are white ranges from 71 to 83 percent. (JPMorgan Chase: 81%, Goldman Sachs: 77%, Bank of America: 81%, Morgan Stanley: 83%, and Citigroup: 71%)
Nationally, securities industry employees are 80.5 percent white, 5.8 percent Black, 11.5 percent Asian, and 8.1 percent Latino. By contrast, whites make up an estimated 55.4 percent of people in jobs that pay less than $15 per hour.
Washington Inaction on Wall Street Pay and Minimum Wage
Since 2010, the year the Dodd-Frank financial reform became law, regulators have failed to implement that law’s Wall Street pay restrictions and Congress has failed to raise the minimum wage. These two failures speak volumes about who has influence in Washington — and who does not.
Powerful Wall Street lobbyists have succeeded in blocking Section 956 of the 2010 Dodd-Frank financial reform legislation, which prohibits financial industry pay packages that encourage “inappropriate risks.” Regulators were supposed to implement this new rule within nine months of the law’s passage but have dragged their feet — despite widespread recognition that these bonuses encouraged the high-risk behaviors that led to the 2008 financial crisis, costing millions of Americans their homes and livelihoods.
In 2011, regulators issued a proposed rule that did not go far enough to prevent the type of behavior that led to the 2008 crash. As spelled out in detail in Institute for Policy Studies comments to the SEC, the proposed rule fell short in several areas, including overly lenient bonus deferrals, weak stock-based pay restrictions, and enforcement proposals that leave too much discretion to bank managers. While regulators responded to criticism by agreeing to issue a new proposal, this work was not completed before the end of the Obama administration.
During the Trump administration, regulators put the issue on a back burner as Republicans maneuvered to get rid of the Wall Street pay restrictions altogether. In 2017, the U.S. House of Representatives passed the Financial CHOICE Act, which would’ve repealed most of the Dodd-Frank reform package, including the Wall Street pay provision. Due to Democratic opposition in the Senate, the Wall Street deregulation bill that was adopted was significantly scaled back and did not affect financial industry pay.
Congress Should Build on the Modest Executive Pay Reform in the American Rescue Plan
In the American Rescue Plan Act passed in March 2021, Congress made a step forward in executive pay reform by expanding corporate tax deductibility limits on such compensation. Under the law, corporations will not be able to deduct any compensation exceeding $1 million paid to the 10 highest compensated employees, up from the current number of five executives. This is an important step towards eliminating taxpayer subsidies for excessive compensation. However, particularly for Wall Street firms, limiting the deductibility cap to just 10 employees is insufficient.
If average compensation for the 182,100 securities industry employees in New York is more than $400,000, then many thousands of Wall Street employees likely make more than $1 million. This would include high-powered traders with significant power over the stability of our financial system. Senators Jack Reed and Richard Blumenthal and Rep. Lloyd Doggett have introduced a bill that would expand the $1 million deductibility cap to all employees of publicly held corporations.
Another recently introduced bill, the Tax Excessive CEO Pay Act, would go further to incentivize firms to rein in pay at the top and lift up wages at the bottom. This proposal would increase the tax rate on corporations with large gaps between CEO and median worker pay, with the highest rate increase of five percentage points hitting companies with pay ratios of 500 to 1 or more.
In the new political landscape, lawmakers have a chance to end the Washington gridlock that has kept the federal minimum wage a poverty wage, while allowing the reckless bonus culture to continue to flourish on Wall Street — even during a pandemic.
Just over two months into the new year, 2021 has already seen a flurry of public banking activity. Sixteen new bills to form publicly-owned banks or facilitate their formation were introduced in eight U.S. states in January and February. Two bills for a state-owned bank were introduced in New Mexico, two in Massachusetts, two in New York, one each in Oregon and Hawaii, and Washington State’s Public Bank Bill was re-introduced as a “Substitution.” Bills for city-owned banks were introduced in Philadelphia and San Francisco, and bills facilitating the formation of public banks or for a feasibility study were introduced in New York, Oregon (three bills), and Hawaii.
In addition, California is expected to introduce a bill for a state-owned bank later this year, and New Jersey is moving forward with a strong commitment from its governor to implement one. At the federal level, three bills for public banking were also introduced last year: the National Infrastructure Bank Bill (HR 6422), a new Postal Banking Act (S 4614), and the Public Banking Act (HR 8721). (For details on all these bills, see the Public Banking Institute website here.)
As Oscar Abello wrote on NextCity.org in February, “2021 could be public banking’s watershed moment.… Legislators are starting to see public banks as a powerful potential tool to ensure a recovery that is more equitable than the last time.”
Why the Surge in Interest?
The devastation caused by nationwide Covid-19 lockdowns in 2020 has highlighted the inadequacies of the current financial system in serving the public, local businesses, and local governments. Nearly 10 million jobs were lost to the lockdowns, over 100,000 businesses closed permanently, and a quarter of the population remains unbanked or underbanked. Over 18 million people are receiving unemployment benefits, and moratoria on rent and home foreclosures are due to expire this spring.
Where was the Federal Reserve in all this? It poured out trillions of dollars in relief, but the funds did not trickle down to the real economy. They flooded up, dramatically increasing the wealth gap. By October 2020, the top 1% of the U.S. population held 30.4% of all household wealth, 15 times that of the bottom 50%, which held just 1.9% of all wealth.
State and local governments are also in dire straits due to the crisis. Their costs have shot up and their tax bases have shrunk. But the Fed’s “special purpose vehicles” were no help. The Municipal Liquidity Facility, ostensibly intended to relieve municipal debt burdens, lent at market interest rates plus a penalty, making borrowing at the facility so expensive that it went nearly unused; and it was discontinued in December.
The Fed’s emergency lending facilities were also of little help to local businesses. In a January 2021 Wall Street Journal article titled “Corporate Debt ‘Relief’ Is an Economic Dud,” Sheila Bair, former chair of the Federal Deposit Insurance Corporation, and Lawrence Goodman, president of the Center for Financial Stability, observed:
The creation of the corporate facilities last March marked the first time in history that the Fed would buy corporate debt… The purpose of the corporate facilities was to help companies access debt markets during the pandemic, making it possible to sustain operations and keep employees on payroll. Instead, the facilities resulted in a huge and unnecessary bailout of corporate debt issuers, underwriters and bondholders….This created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized credit.
….This presents a double whammy for the young companies that have been hit hardest by the pandemic. They are the primary source of job creation and innovation, and squeezing them deprives our economy of the dynamism and creativity it needs to thrive.
In a September 2020 study for ACRE called “Cancel Wall Street,” Saqib Bhatti and Brittany Alston showed that U.S. state and local governments collectively pay $160 billion annuallyjust in interest in the bond market, which is controlled by big private banks. For comparative purposes, $160 billion would be enough to help 13 million families avoid eviction by covering their annual rent; and $134 billion could make up the revenue shortfall suffered by every city and town in the U.S. due to the pandemic.
Half the cost of infrastructure generally consists of financing, doubling its cost to municipal governments. Local governments are extremely good credit risks; yet private, bank-affiliated rating agencies give them a lower credit score (raising their rates) than private corporations, which are 63 times more likely to default. States are not allowed to go bankrupt, and that is also true for cities in about half the states. State and local governments have a tax base to pay their debts and are not going anywhere, unlike bankrupt corporations, which simply disappear and leave their creditors holding the bag.
How Publicly Owned Banks Can Help
Banks do not have the funding problems of local governments. In March 2020, the Federal Reserve reduced the interest rate at its discount window, encouraging all banks in good standing to borrow there at 0.25%. No stigma or strings were attached to this virtually free liquidity – no need to retain employees or to cut dividends, bonuses, or the interest rates charged to borrowers. Wall Street banks can borrow at a mere one-quarter of one percent while continuing to charge customers 15% or more on their credit cards.
Local governments extend credit to their communities through loan funds, but these “revolving funds” can lend only the capital they have. Depository banks, on the other hand, can leverage their capital, generating up to ten times their capital base in loans. For a local government with its own depository bank, that would mean up to ten times the credit to inject into the local economy, and ten times the profit to be funneled back into community needs. A public depository bank could also borrow at 0.25% from the Fed’s discount window.
North Dakota Leads the Way
What a state can achieve by forming its own bank has been demonstrated in North Dakota. There the nation’s only state-owned bank was formed in 1919 when North Dakota farmers were losing their farms to big out-of-state banks. Unlike the Wall Street megabanks mandated to make as much money as possible for their shareholders, the Bank of North Dakota (BND) is mandated to serve the public interest. Yet it has had a stellar return on investment, outperforming even J.P. Morgan Chase and Goldman Sachs. In its 2019 Annual Report, the BND reported its sixteenth consecutive year of record profits, with $169 million in income, just over $7 billion in assets, and a hefty return on investment of 18.6%.
The BND maximizes its profits and its ability to serve the community by eliminating profiteering middlemen. It has no private shareholders bent on short-term profits, no high-paid executives, no need to advertise for depositors or borrowers, and no need for multiple branches. It has a massive built-in deposit base, since the state’s revenues must be deposited in the BND by law. It does not compete with North Dakota’s local banks in the retail market but instead partners with them. The local bank services and retains the customer, while the BND helps as needed with capital and liquidity. Largely due to this amicable relationship, North Dakota has nearly six times as many local financial institutions per person as the country overall.
The BND has performed particularly well in economic crises. It helped pay the state’s teachers during the Great Depression, and sold foreclosed farmland back to farmers in the 1940s. It has also helped the state recover from a litany of natural disasters.
Its emergency capabilities were demonstrated in 1997, when record flooding and fires devastated Grand Forks, North Dakota. The town and its sister city, East Grand Forks on the Minnesota side of the Red River, lay in ruins. The response of the BND was immediate and comprehensive, demonstrating a financial flexibility and public generosity that no privately-owned bank could match. The BND quickly established nearly $70 million in credit lines and launched a disaster relief loan program; worked closely with federal agencies to gain forbearance on federally-backed home loans and student loans; and reduced interest rates on existing family farm and farm operating programs. The BND obtained funds at reduced rates from the Federal Home Loan Bank and passed the savings on to flood-affected borrowers. Grand Forks was quickly rebuilt and restored, losing only 3% of its population by 2000, compared to 17% in East Grand Forks on the other side of the river.
What’s their secret? Much credit goes to the century-old Bank of North Dakota, which — even before the PPP officially rolled out — coordinated and educated local bankers in weekly conference calls and flurries of calls and emails.
According Eric Hardmeyer, BND’s president and chief executive, BND connected the state’s small bankers with politicians and U.S. Small Business Administration officials and even bought some of their PPP loans to help spread out the cost and risk….
BND has already rolled out two local successor programs to the PPP, intended to help businesses restart and rebuild. It has also offered deferments on its $1.1 billion portfolio of student loans.
Public Banks Excel Globally in Crises
Publicly-owned banks around the world have responded quickly and efficiently to crises. As of mid-2020, public banks worldwide held nearly $49 trillion in combined assets; and including other public financial institutions, the figure reached nearly $82 trillion. In a 2020 compendium of cases studies titled Public Banks and Covid 19: Combatting the Pandemic with Public Finance, the editors write:
Five overarching and promising lessons stand out: public banks have the potential to respond rapidly; to fulfill their public purpose mandates; to act boldly; to mobilize their existing institutional capacity; and to build on ‘public-public’ solidarity. In short, public banks are helping us navigate the tidal wave of Covid-19 at the same time as private lenders are turning away….
Public banks have crafted unprecedented responses to allow micro-, small- and medium-sized enterprises (MSMEs), large businesses, public entities, governing authorities and households time to breathe, time to adjust and time to overcome the worst of the crisis. Typically, this meant offering liquidity with generously reduced rates of interest, preferential repayment terms and eased conditions of repayment. For the most vulnerable in society, public banks offered non-repayable grants.
The editors conclude that public banks offer a path toward democratization (giving society a meaningful say in how financial resources are used) and definancialization (moving away from speculative predatory investment practices toward financing that grows the real economy). For local governments, public banks offer a path to escape monopoly control by giant private financial institutions over public policies.
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Cornel West is a preeminent public intellectual, a brilliant philosopher-gadfly and a towering thinker whose critically engaging voice and fearless speech have proven indispensable for calling out injustice wherever it exists. He is a force grounded within a prophetic tradition that refuses idols, even if that idol is democracy itself. He is a bluesman who grapples with the funk of life through a cruciform of love within a crucible of catastrophe, where despair never has the last word.
West isn’t a typical professional philosopher. As a professor at Yale in the mid-1980s, he was arrested for attempting, through protest, to get the university to withdraw its investments from all companies that were doing business in Apartheid South Africa. And he relentlessly exposes the limits of disciplinary smugness and the hypocrisy of epistemological “purity.”
West is arguably the most publicly visible philosopher in contemporary America, but despite his prominence and brilliance, he was recently denied the option of being considered for tenure at Harvard, where he currently teaches, and where he had previously held tenure.
In a massive outcry, students at the university have mobilized in support of West, describing Harvard’s refusal to consider West’s bid for tenure as “an urgent matter of equity and parity” and a blatant devaluation of Black scholarship that could lead to “a mass exodus of Black scholars.”
At this tense decision point, as West decides whether to stay at the institution after this level of disrespect, I asked him to share his thoughts on optimism, racism, capitalism and what it means to be a philosopher of African descent within the American empire in the 21st century.
George Yancy:I was surprised and disturbed to hear about your situation at Harvard University. It is my understanding that a faculty committee was reviewing your renewal and that committee asked that you be considered for tenure. Yet, that consideration, as I understand it, was denied. I immediately thought about forms of academic institutional fear when it comes to maintaining scholars — especially Black scholars and scholars of color — who engage critically in processes of calling academic insularity into question, calling empire into question, calling forms of institutional and systemic injustice into question. Given your conceptualization of vocation as tied to a form of calling that allows suffering to speak, I immediately thought about how certain institutions might care more for their self-image and their donors as opposed to keeping scholars who cause “good trouble,” as that towering figure, the late Congressman John Lewis would say. Some may very well fear the vocational work that you do so well, with so much fire, courage and love. Talk about how you understand the distinction between vocation and profession.
Cornel West: Yes, that’s a very important place to begin my brother, because, for me, intellectual vocation and prophetic witness sit at the very center of my work. And for me, I am just building on Max Weber in many ways, especially two great essays of his from 1917 and 1919. What it is to have a Beruf, a calling, is very different than having a career. When you are wedded to a vocation, when you are wedded to a calling, it is tied to the Negro National Anthem; you are lifting your voice. You are not just lifting an echo, you’re not a copy, you’re not an imitation. Rather, you have a distinctive, unique and singular voice to be brought to bear and that voice is found only by bouncing up against earlier voices, the voices of the dead and the voices of the quick, but it’s the best voices, the most courageous voices, the most visionary voices. And it means then that you’re always going to be over against establishments, over against status quos — no matter what color.
Every vocation is connected to a sense of history in which you are involved in an invocation. And every calling that you have is tied to a certain kind of recalling and interpretation of the past. And every interpretation of the past is an interpretation of the present. Or, as Michel Foucault used to say, every history of the past is a history of the present and vice versa. And, therefore, you situate yourself within a particular vocation and tradition headed toward — for me — revolution.
It’s revolution in the spiritual sense, revolution in the political sense and revolution in the economic sense, which is a massive transfer of power, of respect, of wealth. It is a transfer that is not about putting others down, but it’s a democratizing, it’s a sharing of that respect, the sharing of that wealth, the sharing of those resources and so forth. So that radical democratic end is informed by this intense commitment to vocation, finding voice, but always situating your voice in relation to a certain tradition, or what Antonio Gramsci called a “critical historical inventory.” That’s Socratic, it’s self-examination.
But all of us are always already in circumstances not of our own choosing, and so we have to situate ourselves in particular historical traditions, and my traditions come from the magnificent West family, Clifton and Irene West, from the Shiloh Baptist church, and from the Black radical tradition. But it also comes from the best of my teachers, Hilary Putnam, John Rawls, Tim Scanlon, Thomas Nagel, Richard Rorty, Martin Kilson, Preston Williams, one can go on and on. So, I am a fusion, I am a hybrid of the best from whence I come, and the best of my formal education, but all of them are just feeding into a particular vocation and witness, an intellectual vocation and a prophetic witness.
George, as you said in your brilliant foreword on me written for Teodros Kiros’s new book, Conversations with Cornel West (2021), my intellectual vocation and prophetic witness are profoundly cruciform, profoundly Christian, tied to the cross, tied to service, tied to the willingness to empty oneself, to give of oneself, to donate oneself.
This is how you use the term kenosis, which is a form of emptying. I agree with it and use it in my own work.
Yes! It’s kenosis in that very deep sense. That’s why I’m always pulled by the great artists of kenosis. It could be Rembrandt’s The Return of the Prodigal Son, which is kenosis on the canvas, the emptying of the self, of father to sons. Or it could be James Brown on the stage, the emptying of himself for four hours straight, nonstop; it could be Aretha Franklin behind the microphone, the emptying of herself. That is kenosis at work.
And do you see a relationship between kenosis and pedagogy? Like you, I tell my students that when they come to my class that they need to be prepared for their prejudices and dogmatic assumptions to die.
Beautiful!
I like the idea of kenosis or emptying. As you know, Michel Foucault talks about a certain kind of death in relationship to parrhesia, or courageous speak. In fact, he sees the process of parrhesia as a risk of a kind of physical death, where one stands on the precipice of risking one’s own life. What do you think about that? You talk often of having your black suit on, what you call your cemetery clothes. I want you to speak to the gravitas of this unique voice that you’ve crafted, a voice that is always already in relationship to your parents and your siblings. I know that you reject a Cartesian position of an insular or hermetically sealed voice. For you, your voice is always moving beyond yourself, it is rhizomatic and multi-historically grounded. My sense is that you take very seriously the idea that vocation and voice will often create deep tension in relationship to issues of empire such that one’s very life is at stake.
Absolutely! As you know, one of the differences between the grand Cartesian subject is that the “real problem” is epistemological skepticism. Whereas for the bluesman like myself, or the blues-woman, the real problem is catastrophe and that catastrophe is not just epistemic.
The catastrophe is bodily, it is corporeal, psychic, spiritual. It’s where one wrestles with forms of death — spiritual death, psychic death, social death, civic death. All of those continually bombarding you. So, when I say that I’m a bluesman in the life of the mind, some people say, “That’s kind of interesting.” No! That is a particular tradition of a way of being-in-the-world.
So, if I put my cemetery clothes on every day, if I’m coffin-ready every day, it means a particular kind of catastrophe, like physical death, is always already there on a continuum with the other forms of death. And to be a Black man in a white supremacist civilization, where Black love is a crime, where Black hope is a joke, where Black freedom is a pipe dream, and Black history is a curse, then I’ve got to fight that no matter what. So, I’m going to love and be willing to be criminalized. I’m going to fight for freedom and be willing to be crushed. I’m going to try to provide some kind of hope and be willing to be laughed at as a joke.
So, one is radically cutting over against oneself. And then when you add the cruciform character and the tragic-comic content to it, it means that you’re in but not of this empire, you’re in but not of this white supremacist society, trying to be in but not of this predatory capitalist society, you’re in but not of this patriarchal, homophobic society, but you know all that’s inside of you, too. And that is part of the paradox, the white supremacy that is inside of me. I grew up within a patriarchal empire, so I’m going to have the patriarchy in me. So, I have to fight that every day. That’s part of learning how to die. That needs to die daily in order for me to emerge as a stronger love warrior, freedom fighter and wounded healer.
What does it mean to be a philosopher of African descent within the American empire in the 21st century?
You begin with the giants in your own philosophical tradition. I can talk about Lucius Outlaw; Bernard Boxill; Joyce M. Cook, the first Black woman to receive the doctorate in philosophy from Yale University in 1965 and who you knew so very well; Eugene Holmes, Alain Locke, Leonard Harris, Howard McGary, and others. These are folk, many of whom I’ve been blessed to know, whose voices are forever inside of me that I wrestle with. And all of us are then bouncing off of those voices of American philosophers: from William James, to John Dewey, to Alfred North Whitehead, to W.V.O. Quine, to Stanley Cavell, and then European philosophers.
There are also some who have been willing to go back to recuperate certain African philosophers. For example, Maulana Karenga has taught me a lot about Maat, which is a concept that links us to Egyptian moral philosophy. We’ve got Eastern philosophy from Asia. I’m very open to dialogue across the board. So, it ought to be global, but you really do need to acknowledge the degree to which certain philosophers have had more influence on your thinking. I would never want to say, as you can imagine, that there’s any generic answer to what Black philosophers ought to do or say.
We’ve all got different voices, just like musicians.
My particular voice is one that has been deeply shaped by critiques of empire, predatory capitalism, and white supremacy in the ways in which all of these are interwoven. But what makes me a little different from some of my brothers and sisters is that I tend to look at the world through the lens of the cross, through a moral and spiritual lens. So, I’m very tied to the prophetic voices of Hebrew scripture. I view Hebrew scripture as one of the great moral revolutions in the spreading of hesed, which is a steadfast love and loving kindness of orphan and widow, the hungry, and the shelterless, the homeless and the oppressed.
So, when the Palestinian Jew named Jesus goes to the Temple, which is the largest edifice east of Rome, with hundreds of Roman soldiers, bankers and intellectuals, and the chattering classes, and runs them out, well, that is very much like running out elites in the White House, Pentagon, Congress, Hollywood, Wall Street, Harvard, Yale, Princeton and Emory. And you’re running them out not because you’re demonizing them, but because there’s too much callousness and indifference toward the poor that you see in their way of life.
You see too much commodification that makes their souls too cold and their hearts too coarse. There’s too much bureaucratization that distances them from the lived experience of people who are trying to struggle. There’s too much white supremacy in terms of its mistreatment of precious Black people and Brown people and so on. I’m much more explicit about the cross and the Christian tradition. Many of my precious brothers and sisters within the philosophical tradition, Black or what have you, swerve away from that particular Christian stream and strand. And that’s fine with me. It’s a matter of our voices bouncing up against one another yet again.
Your work is not only interdisciplinary, but it is also de-disciplinary, where one may need to call into question one’s own discipline as such. Your work, as a public intellectual, engages not just a specialized few, but aims to intervene within a larger conversation that has implications for the destiny of large numbers of people. I think that this vision puts you at odds with certain neoliberal assumptions within academia. This is the work that you do. Whether you’re discussing the precious lives of our Palestinian or Jewish brothers and sisters, you’re asking across the board for all of us to empty, to undergo kenosis, in relationship to all forms of corrupt power and domination. And within academic spaces, you’re also calling into question forms of corruption, bureaucratization, neoliberalism and hegemonic power. I see you as an indispensable gadfly within that space. So, how do you understand what is going on at Harvard with respect to not even wanting to consider you being considered for tenure? How do you see the voice that you’ve developed and nurtured, the vocation that you’ve chosen, the gadfly that you are, in relationship to your situation at Harvard? Is there not an important relationship or tension here? Do you not see this as part of the problem?
Oh absolutely. It goes back to the issue of intellectual vocation, and prophetic witness. I have always had a deep tension with the academic division of knowledge. Think about my heroes going back to Socrates and Jesus, or Ralph Waldo Emerson and William James. When Emerson gave that famous speech on July 15, 1838, the Harvard Divinity Address, they didn’t invite him back for 30 years. Why? Because he spoke his mind; he said what he meant and he meant what he said and he cut radically against the grain. What was Ralph Waldo Emerson? He was a kind of poet, a kind of preacher, a kind of circuit lecturer, a kind of philosopher. But what was he? Well, he was Emerson, you know what I mean?
Think of William James on June 24, 1903, when he gave his famous speech, “The True Harvard.” What is the true Harvard for James? It’s what he called the “undisciplinables,” the people that can never be disciplined, they don’t fit within the disciplines. William James had no A.B., B.A., M.A., or Ph.D. So, how does he end up being the greatest public philosopher alongside John Dewey in the 20th century? He had an M.D., that was it; but he had a calling, he had a witness. He had a form of self-confidence in his way of pursuing the life of the mind in the world of ideas to be conversant with his voice, with a whole host of other voices, but he went on his own way. He was nonconformist. He was in the academy, but not of it. He wrote his famous essay entitled, “The Ph.D. Octopus,” which was published in the early 1900s. He argues that the worst thing will be intense forms of specialization, and intense forms of professionalization that will lose sight of the forest, will be shining all the nuts in the corner, with no sense of the forest, no way of connecting the parts with the whole, where the whole is always bigger than the sum of the parts.
He got one life and then, boom, he drops the mic in 1910. He dies leaving us to make sense of what he’s left in his corpus. Emerson, in 1882, drops the mic and dies. And W.E.B. Du Bois was the same way. He was the student of William James. And that’s just within the American context. We can go to Russia and go from Vissarion Belinsky to Anton Chekhov. And Chekhov, for me, of course, is deeper than all the Americans. He’s a medical doctor, poet, playwright, short story writer, exemplary freedom fighter, prison reformer, but always looking at the world through moral and spiritual lens as a Darwinian, as a secular thinker. And what does he say about philosophers? Chekhov says that he doesn’t trust philosophers because they remind him of generals, they just want to enlist people in their army. I don’t want to join their army. I’ll read Friedrich Nietzsche, I’ll read Nicholas of Cusa, I’ll read Charles Darwin. I’ll read as many of them as I can, but I’m going to be Anton Chekhov, grandson of a slave. You know what I mean?
I do. It is indicative of your unique voice and your ethical fortitude. This raises the question of your situation at Harvard. How does your situation speak to Black scholars, what does it communicate, especially to those who want to cultivate their voices, who refuse to be echoes, who want to engage in deep interdisciplinary and de-disciplinary work? It seems to me that there is a problematic message that is being communicated. There is a sense of communicated fear in terms of what we should or shouldn’t say. I can’t see any basis upon which Harvard would not even consider you for tenure. And I was so delighted to see the significant support by the Harvard graduate students, undergraduates, and others throughout the country who are pushing back against Harvard’s decision. How do Black scholars and scholars of color remain strong in the face of what you’re dealing with?
Well, this is minimal in terms of what our brothers and sisters on the block have to come to terms with, with what Black working-class people have to deal with. The fundamental common denominator, though, is that we’ve got to fortify in order to fructify, we’ve got to be strong in order to generate fruit in the form of deeds, fruit in the form of visions, of organizations, of institutions, of structures that bring power and pressure to bear.
A little crisis of the professional managerial class of Black folk, yes, it’s important, but it still pales in the face of the catastrophes of our brothers and sisters who constitute the masses of Black and poor working people. We always have to work with what we have, and we have to use what we have in order not to sell our souls for a mess of pottage. The saddest thing that happens is when those folk who adjust to injustice then parade around as a success. We’re talking about greatness here.
Greatness does not adjust to injustice. It doesn’t adapt to indifference and then pose and posture as if that is success. Not at all. The worst thing that could happen is that young folk think that it’s just about getting into the academy to be successful, become the next wave of peacocks. That’s not what it’s about at all.
So, I would hope that my example, given all of my privileges and all of my blessings, will communicate the message that young people should be fortified. Don’t be disrespected. We come from a great people. Black people are a world historical people whose gifts have disproportionately shaped the cultures of the world. And there’s just no doubt about that, so you’ve got to be true to that, and you are true to that with your humility and your tenacity. And you have to be willing to speak the truth — to the powerful and the powerless.
When Harvard treats me in this way, that’s a sign of its spiritual and intellectual bankruptcy. Now, it could bounce back, but you have to call it for what it is. You have to acknowledge that there’s new styles of Jim Crow in the life of the mind and the country. It’s just a fact.
You look at The New York Review of Books. Thank God there are brilliant essays by brother Brandon Terry, but other than Darryl Pinkney and Anthony Appiah, it has basically been a case of Jim Crow. How many of your books, how many of John Hope Franklin’s books, how many of Houston Baker’s books, how many of Hortense Spillers’ books have been reviewed? Intellectual work that’s taken place in the last 40 years has been rendered invisible because of the Jim Crow quality of the ways in which they review books. And that’s just one example.
We have to be honest about that and say that we can do better. And we must do better. And, in fact, if you subtract the number of Black people in the Department of African and African American Studies at Harvard and only include Black folk in other departments, Harvard looks like the National Hockey League. There’s hardly any Black folks at all. That’s how Wall Street looks. That’s how elite formation looks. That’s how Silicon Valley looks, especially at the top.
You see, that’s still Jim Crow, new style. So, when people say, “Ah Brother West, you are so hard on Harvard, you’re so hard on the professional managerial class,” I say, “Come on.” I’m not even beginning to tell the truth in terms of allowing this suffering to speak. Yes, let’s pursue veritas. Let us take veritas seriously, the motto of Harvard, and see its own weak will to truth about itself. That’s the best kind of witness that becomes very important. Not in a spirit of hatred or revenge. This is Coltranean all the way down. This is a love of truth, a love of beauty, a love of goodness and a love of the Holy for those of us who are religious.
That sounds very Baldwinian. I’m thinking here of where James Baldwin talks about how love removes the masks that we fear we cannot live without and yet know that we cannot live within.
Oh yeah. That’s the genius from Harlem. Baldwin is another brother who never went to college, but at least two colleges went through him.
As you know, Martin Luther King Jr. was critical of what he called the triplets of racism, materialism or capitalism, and militarism. In fact, he became very unpopular once he broadened his critique of North America beyond issues related to civil rights. As a public intellectual, as one who speaks about parrhesia, or courageous speech, talk about how you understand the intersection between racism, materialism or capitalism, and militarism. Of course, all three are linked to empire-building.
Intellectual vocation and prophetic witness is tied to integrity, not popularity. It is tied to quality, not quantity. And it is tied to substance, not superficial spectacle. The very way in which you look at a problem is going to be informed by important levels of integrity, quality, political, spiritual and moral substance. So, all the talk about identity these days will not mean much at all if it is not rooted in integrity and high quality and solidarity. You see, racial identity and gender identity could just be weaponized for another middle-class project that would reproduce neoliberal politics that will unleash Wall Street greed, generate high levels of poverty, no accountability of the elites at the top, and everybody walks around with a smile, because you got some Black folk and Brown folk at the top. And it just means that the class hierarchy is more colorful, and the imperial hierarchy is more colorful, but people are still suffering. King comes from our tradition, brother. He’s a wave in our ocean. You and I know about 400 years of being chronically hated and yet we keep dishing out love warriors like Martin Luther King, and Stevie Wonder, who’s thinking about going to Ghana. Four-hundred years of being terrorized and yet we keep dishing out freedom fighters like Fannie Lou Hamer. Traumatized and yet we keep dishing out wounded healers like Aretha Franklin. That’s a great people with a great tradition. We’re human beings like everybody else, but I’m talking about the best of who we are. So, when we think of a Martin Luther King, we say, “What would the analogues in the academy look like? What would the intellectuals look like if they were fundamentally grounded in those traditions of love warriors, freedom fighters and wounded healers?” I think that is our challenge. I think that you’ve done a magnificent job in your corpus and you’ve been so true to this tradition. And I think this is true for a variety of different thinkers and philosophers, but it just means, in the end, that we love the people, we’re servants of the people, that we want to use our gifts to enable others, we want to use whatever we have, to empty ourselves, to donate and give ourselves, to be of service to others, such that they can be stronger, they can be more empowered when the worms get our bodies.
And it isn’t easy, because we have this lingering Trumpian, neo-fascist moment.
Right, but neofascism is not new to us. Not new at all.
We are bluesmen and women and we are never, ever surprised by evil, we are never ever paralyzed by despair.
Just over two months into the new year, 2021 has already seen a flurry of public banking activity. Sixteen new bills to form publicly-owned banks or facilitate their formation were introduced in eight U.S. states in January and February. Two bills for a state-owned bank were introduced in New Mexico, two in Massachusetts, two in New York, one each in Oregon and Hawaii, and Washington State’s Public Bank Bill was re-introduced as a “Substitution.” Bills for city-owned banks were introduced in Philadelphia and San Francisco, and bills facilitating the formation of public banks or for a feasibility study were introduced in New York, Oregon (three bills), and Hawaii.
In addition, California is expected to introduce a bill for a state-owned bank later this year, and New Jersey is moving forward with a strong commitment from its governor to implement one. At the federal level, three bills for public banking were also introduced last year: the National Infrastructure Bank Bill (HR 6422), a new Postal Banking Act (S 4614), and the Public Banking Act (HR 8721). (For details on all these bills, see the Public Banking Institute website here.)
As Oscar Abello wrote on NextCity.org in February, “2021 could be public banking’s watershed moment.… Legislators are starting to see public banks as a powerful potential tool to ensure a recovery that is more equitable than the last time.”
Why the Surge in Interest?
The devastation caused by nationwide Covid-19 lockdowns in 2020 has highlighted the inadequacies of the current financial system in serving the public, local businesses, and local governments. Nearly 10 million jobs were lost to the lockdowns, over 100,000 businesses closed permanently, and a quarter of the population remains unbanked or underbanked. Over 18 million people are receiving unemployment benefits, and moratoria on rent and home foreclosures are due to expire this spring.
Where was the Federal Reserve in all this? It poured out trillions of dollars in relief, but the funds did not trickle down to the real economy. They flooded up, dramatically increasing the wealth gap. By October 2020, the top 1% of the U.S. population held 30.4% of all household wealth, 15 times that of the bottom 50%, which held just 1.9% of all wealth.
State and local governments are also in dire straits due to the crisis. Their costs have shot up and their tax bases have shrunk. But the Fed’s “special purpose vehicles” were no help. The Municipal Liquidity Facility, ostensibly intended to relieve municipal debt burdens, lent at market interest rates plus a penalty, making borrowing at the facility so expensive that it went nearly unused; and it was discontinued in December.
The Fed’s emergency lending facilities were also of little help to local businesses. In a January 2021 Wall Street Journal article titled “Corporate Debt ‘Relief’ Is an Economic Dud,” Sheila Bair, former chair of the Federal Deposit Insurance Corporation, and Lawrence Goodman, president of the Center for Financial Stability, observed:
The creation of the corporate facilities last March marked the first time in history that the Fed would buy corporate debt… The purpose of the corporate facilities was to help companies access debt markets during the pandemic, making it possible to sustain operations and keep employees on payroll. Instead, the facilities resulted in a huge and unnecessary bailout of corporate debt issuers, underwriters and bondholders….This created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized credit.
…. This presents a double whammy for the young companies that have been hit hardest by the pandemic. They are the primary source of job creation and innovation, and squeezing them deprives our economy of the dynamism and creativity it needs to thrive.
In a September 2020 study for ACRE called “Cancel Wall Street,” Saqib Bhatti and Brittany Alston showed that U.S. state and local governments collectively pay $160 billion annuallyjust in interest in the bond market, which is controlled by big private banks. For comparative purposes, $160 billion would be enough to help 13 million families avoid eviction by covering their annual rent; and $134 billion could make up the revenue shortfall suffered by every city and town in the U.S. due to the pandemic.
Half the cost of infrastructure generally consists of financing, doubling its cost to municipal governments. Local governments are extremely good credit risks; yet private, bank-affiliated rating agencies give them a lower credit score (raising their rates) than private corporations, which are 63 times more likely to default. States are not allowed to go bankrupt, and that is also true for cities in about half the states. State and local governments have a tax base to pay their debts and are not going anywhere, unlike bankrupt corporations, which simply disappear and leave their creditors holding the bag.
How Publicly-owned Banks Can Help
Banks do not have the funding problems of local governments. In March 2020, the Federal Reserve reduced the interest rate at its discount window, encouraging all banks in good standing to borrow there at 0.25%. No stigma or strings were attached to this virtually free liquidity – no need to retain employees or to cut dividends, bonuses, or the interest rates charged to borrowers. Wall Street banks can borrow at a mere one-quarter of one percent while continuing to charge customers 15% or more on their credit cards.
Local governments extend credit to their communities through loan funds, but these “revolving funds” can lend only the capital they have. Depository banks, on the other hand, can leverage their capital, generating up to ten times their capital base in loans. For a local government with its own depository bank, that would mean up to ten times the credit to inject into the local economy, and ten times the profit to be funneled back into community needs. A public depository bank could also borrow at 0.25% from the Fed’s discount window.
North Dakota Leads the Way
What a state can achieve by forming its own bank has been demonstrated in North Dakota. There the nation’s only state-owned bank was formed in 1919 when North Dakota farmers were losing their farms to big out-of-state banks. Unlike the Wall Street megabanks mandated to make as much money as possible for their shareholders, the Bank of North Dakota (BND) is mandated to serve the public interest. Yet it has had a stellar return on investment, outperforming even J.P. Morgan Chase and Goldman Sachs. In its 2019 Annual Report, the BND reported its sixteenth consecutive year of record profits, with $169 million in income, just over $7 billion in assets, and a hefty return on investment of 18.6%.
The BND maximizes its profits and its ability to serve the community by eliminating profiteering middlemen. It has no private shareholders bent on short-term profits, no high-paid executives, no need to advertise for depositors or borrowers, and no need for multiple branches. It has a massive built-in deposit base, since the state’s revenues must be deposited in the BND by law. It does not compete with North Dakota’s local banks in the retail market but instead partners with them. The local bank services and retains the customer, while the BND helps as needed with capital and liquidity. Largely due to this amicable relationship, North Dakota has nearly six times as many local financial institutions per person as the country overall.
The BND has performed particularly well in economic crises. It helped pay the state’s teachers during the Great Depression, and sold foreclosed farmland back to farmers in the 1940s. It has also helped the state recover from a litany of natural disasters.
Its emergency capabilities were demonstrated in 1997, when record flooding and fires devastated Grand Forks, North Dakota. The town and its sister city, East Grand Forks on the Minnesota side of the Red River, lay in ruins. The response of the BND was immediate and comprehensive, demonstrating a financial flexibility and public generosity that no privately-owned bank could match. The BND quickly established nearly $70 million in credit lines and launched a disaster relief loan program; worked closely with federal agencies to gain forbearance on federally-backed home loans and student loans; and reduced interest rates on existing family farm and farm operating programs. The BND obtained funds at reduced rates from the Federal Home Loan Bank and passed the savings on to flood-affected borrowers. Grand Forks was quickly rebuilt and restored, losing only 3% of its population by 2000, compared to 17% in East Grand Forks on the other side of the river.
What’s their secret? Much credit goes to the century-old Bank of North Dakota, which — even before the PPP officially rolled out — coordinated and educated local bankers in weekly conference calls and flurries of calls and emails.
According Eric Hardmeyer, BND’s president and chief executive, BND connected the state’s small bankers with politicians and U.S. Small Business Administration officials and even bought some of their PPP loans to help spread out the cost and risk….
BND has already rolled out two local successor programs to the PPP, intended to help businesses restart and rebuild. It has also offered deferments on its $1.1 billion portfolio of student loans.
Public Banks Excel Globally in Crises
Publicly-owned banks around the world have responded quickly and efficiently to crises. As of mid-2020, public banks worldwide held nearly $49 trillion in combined assets; and including other public financial institutions, the figure reached nearly $82 trillion. In a 2020 compendium of cases studies titled Public Banks and Covid 19: Combatting the Pandemic with Public Finance, the editors write:
Five overarching and promising lessons stand out: public banks have the potential to respond rapidly; to fulfill their public purpose mandates; to act boldly; to mobilize their existing institutional capacity; and to build on ‘public-public’ solidarity. In short, public banks are helping us navigate the tidal wave of Covid-19 at the same time as private lenders are turning away….
Public banks have crafted unprecedented responses to allow micro-, small- and medium-sized enterprises (MSMEs), large businesses, public entities, governing authorities and households time to breathe, time to adjust and time to overcome the worst of the crisis. Typically, this meant offering liquidity with generously reduced rates of interest, preferential repayment terms and eased conditions of repayment. For the most vulnerable in society, public banks offered non-repayable grants.
The editors conclude that public banks offer a path toward democratization (giving society a meaningful say in how financial resources are used) and definancialization (moving away from speculative predatory investment practices toward financing that grows the real economy). For local governments, public banks offer a path to escape monopoly control by giant private financial institutions over public policies.
For most Americans, what threatens health also threatens wealth. The COVID-19 pandemic triggered the worst economic crisis in nearly a century, with millions suddenly facing hunger, unemployment, or eviction. But Wall Street doesn’t represent most Americans. In the parallel universe of the financial industry, stock indices soared to historic peaks as Americans wished good riddance to the deadliest year in our history. Detached from the daily lives of most Americans, the stock market surge almost exclusively benefited the disproportionately wealthy, and the pandemic once again lived up to its distinction as “the great clarifier.”
For years, Wall Street has been increasingly out of touch with the underlying economy of workers, jobs, and wages, and the fortunes reaped by hedge funds and billionaires have not helped the millions of Americans in dire need.
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