Tag: Economics

Is America Now a Failed State?

Umair Haque thinks the answer to that question is Yes. 

His article is entitled, “It’s Not that I’m Negative, America Really is Screwed.” I am not an economist, but my inclination is to agree.

Here is an excerpt:

The economics of American collapse say that it’s probably too late to fix America. It’s probable that this is the new normal. Chaos, decline, incompetence, malice, poverty, hopelessness, despair.

Let me explain, as clearly as I can.

You can see, right about now, that America is what political scientists call a failed state. A President who tells people to drink bleach during a pandemic. 90,000 dead, of which 90% are needless. A society that’s not able to provide basics for it’s citizens anymore. A nation in which income, savings, life expectancy, happiness, trust are all in free-fall. This is the stuff of epic social collapse.

Now, the reason that America collapsed is straightforward. Americans never invested in building expansive social systems, unlike Europe. Systems to provide healthcare, retirement, childcare, finance, and so forth.

The result has been twofold. One, the average American now goes without these things. That’s because they’re largely unavailable. For example, the fresh food that I can get on any block in Europe is simply absent in huge chunks of the States. You buy processed food, or you don’t get food. The same is true of many, many things, like, say, education, or income. You don’t have a job with guarantees and protections like in Canada or Europe. You have a lower quality — not just quantity — of income.

Two, the the average American pays prices that the rest of the world considers absolutely absurd — because they are — for the very same things. Having a child? That’ll be $50K, thank you. An operation? That’ll be more than a house. Want to educate a kid? There go your life savings. Want a few fresh apples? That’ll be ten times the price Canadians or Europeans pay. These things — the basics of life — are eminently affordable in the rest of the rich world. In America, though, they cost more than the average person can afford.

How do I know that? Because the average American now dies in debt…

You can read the entire article here.

The Rich Get Richer as the Rest Suffer

Over at the Medium website, Francis Taylor details the many ways that corona virus has exposed the deepening chasm separating the rich from everyone else in America.

His article is “COVID 19 Has Exposed the Class Divide.” Below is an excerpt.

Throughout the pandemic, American billionaires have continued to make fabulous profits. As Tommy Beer of Forbes reports, their total net worth has increased by more than $400 billion since March 18. While the poorest struggle simply to survive, the rich see their fortunes grow. And some have even show their willingness to throw workers into the thresher of capitalism. Both Tilman Fertitta and Lloyd Blankfein have called for the economy to re-open, knowing full well that they will not be exposed to the worst of the risks.

But special mention has to go to Jeff Bezos and his Amazon empire. The massive conglomerate, having provided an extra $2 an hour for the warehouse workers braving a pandemic, now plans to end the increase by the close of May.

It should be noted that the additional wage has been in place for less than three months.

This terminated increase follows Amazon’s decision to scrap unlimited unpaid leave for workers who fear the Coronavirus and its dismissal of Christian Smalls after he spearheaded a walkout at their Staten Island Warehouse over safety concerns. Although the company maintains that Smalls and other protesting workers were fired for violating internal policies, Tim Bray, a former vice president at Amazon Web Services, avers that past workers have been “turfed” for whistleblowing. He also quit the company earlier this May, citing these punitive measures as the main reason.

It would seem then that Amazon is sending a clear message to its workers: the lot of you are interchangeable cogs, and if you squeak with acrimony you can always be replaced.

You can read the entire article here.

How Big Pharma Helped to Write and Will Profit from the Corona Virus Bill

Investigative journalist Sharon Lerner has an important article at The Intercept explaining how U.S. pharmaceutical companies, enabled by the recent Corona Relief Bill approved by Congress, are planning to make a killing (pun intended) during the covid19 pandemic. It is entitled, “Big Pharma Prepares to Profit From the Coronavirus.”

Warning: prepare to be disturbed, very disturbed.

Here is an excerpt:

“’Pharmaceutical companies view Covid-19 as a once-in-a-lifetime business opportunity,’ said Gerald Posner, author of ‘Pharma: Greed, Lies, and the Poisoning of America.’ The world needs pharmaceutical products, of course. For the new coronavirus outbreak, in particular, we need treatments and vaccines and, in the U.S., tests. Dozens of companies are now vying to make them.

“’They’re all in that race,’ said Posner, who described the potential payoffs for winning the race as huge. The global crisis ‘will potentially be a blockbuster for the industry in terms of sales and profits,’ he said, adding that ‘the worse the pandemic gets, the higher their eventual profit.’

“The ability to make money off of pharmaceuticals is already uniquely large in the U.S., which lacks the basic price controls other countries have, giving drug companies more freedom over setting prices for their products than anywhere else in the world. During the current crisis, pharmaceutical makers may have even more leeway than usual because of language industry lobbyists inserted into an $8.3 billion coronavirus spending package, passed last week, to maximize their profits from the pandemic.

“Initially, some lawmakers had tried to ensure that the federal government would limit how much pharmaceutical companies could reap from vaccines and treatments for the new coronavirus that they developed with the use of public funding. In February, Rep. Jan Schakowsky, D-Ill., and other House members wrote to Trump pleading that he ‘ensure that any vaccine or treatment developed with U.S. taxpayer dollars be accessible, available and affordable,’ a goal they said couldn’t be met ‘if pharmaceutical corporations are given authority to set prices and determine distribution, putting profit-making interests ahead of health priorities.’

“When the coronavirus funding was being negotiated, Schakowsky tried again, writing to Health and Human Services Secretary Alex Azar on March 2 that it would be ‘unacceptable if the rights to produce and market that vaccine were subsequently handed over to a pharmaceutical manufacturer through an exclusive license with no conditions on pricing or access, allowing the company to charge whatever it would like and essentially selling the vaccine back to the public who paid for its development.’

“But many Republicans opposed adding language to the bill that would restrict the industry’s ability to profit . . .

“The truth is that profiting off public investment is also business as usual for the pharmaceutical industry. Since the 1930s, the National Institutes of Health has put some $900 billion into research that drug companies then used to patent brand-name medications, according to Posner’s calculations. Every single drug approved by the Food and Drug Administration between 2010 and 2016 involved science funded with tax dollars through the NIH, according to the advocacy group Patients for Affordable Drugs. Taxpayers spent more than $100 billion on that research.”

Read the entire article here.

 

“A Total System Failure”

Matt Stoller is the Director of Research at the American Economic Liberties Project. He is the author of the Simon and Schuster book Goliath: The Hundred Year War Between Monopoly Power and Democracy, which Business Insider called “one of the year’s best books on how to rethink capitalism and improve the economy.” He also worked for a member of the Financial Services Committee in the U.S. House of Representatives during the 2008 financial crisis. (See his full C.V. at the American Economic Liberties Project).

Mr. Stoller was recently interviewed by Democracy Now where he critiqued the Congressional Pandemic Relief Bill. He describes not only the American pandemic response under Trump, but the formulation of this “relief” bill a “total system failure.”

Here are a few excerpts from that interview. You can watch or read the entire interview here.

“Well, I mean, it’s not really a $2 trillion bill. It’s more like a $6 trillion to $10 trillion bill. So, one of the reasons you can tell that the bill is packed with corporate goodies is that, you know, Congress is debating and trying to figure out, oh, you know, is it $2 trillion, a bunch of money for hospitals or money for cities, and meanwhile, a couple days ago, Larry Kudlow is on a press conference and says, “Actually, this is a $6 trillion bill.” And it’s like, how does a bill go from $2 trillion to $6 trillion without anyone really noticing? And the answer is, there’s a bunch of stuff in there — and, you know, there are people on Wall Street chattering about how it’s actually going to be $10 trillion, because, you know, what’s another four? And that’s how you know that the bill is just packed with stuff for Wall Street, for large monopolists.

“And it’s done through a variety of opaque slush funds — the Federal Reserve, the FDIC guarantees a bank debt. There’s a whole bunch of stuff that, you know, some of us who worked in the financial crisis noticed, paid attention to, said, “Oh, that’s where they’re stealing all the money.” And so there’s a bunch of stuff in there that’s going to get to Boeing and airlines, that we know about, has been reported. There’s also a bunch of stuff that’s going to get to the hedge fund guys that are bunkering down in their underground wine caves or whatever. And meanwhile, the stuff that we need, for normal people — the ventilators, the unemployment — you know, that’s going to dribble out. Small business is going to dribble out.

“And so, what you’re going to see is the $4 trillion to $6 trillion to $8 trillion of basically no-cost or low-cost guaranteed credit is going to be used by Citibank, JPMorgan, and then any big monopolist or large company that can get access to it, to buy up their competitors and buy up small business, who are obviously now in a really distressed state because they don’t have any revenue. So that’s what’s going to happen.

“And all of this stuff that’s happening, the handover of power to Wall Street, is happening under the really cynical guise of helping people in a pandemic. A lot of this money is going to go to — some of the money is going to go to hospitals. Some of the money is going to go to help people in the pandemic. So there’s some good stuff here. That, of course, is going to dribble out on the rickety infrastructure of the Small Business Administration and unemployment insurance. Our government has been hollowed out, so this stuff isn’t going to get out quickly.

“If you have — basically, if you have an account at a large bank, if you’re a wealthy investor like Goldman Sachs, there’s a whole set of programs that you can get access to at the Federal Reserve — at least this was the case in 2008, and the Fed says they’re setting up similar structures — where you can borrow from the Fed, and you can gamble with it. And then, if you lose — right? — in your gambling, then the Fed will — you don’t have to pay the loan back to the Fed. So, that’s one of the — you know, and this is one of the programs they say, “Oh, we need to provide liquidity in the markets,” or various other really super boring things that sound like — you kind of go to sleep when you’re like, “Oh, all these alphabet soup programs and all this kind of jargon.” But that’s really what it is. It’s just, you know, “heads, I win; tails, you lose.” And that’s a lot of what these programs are.

“I mean, the Fed has already hired BlackRock, which is one of the world’s largest asset managers, to manage this multitrillion-dollar bailout, and they’ve said that BlackRock is going to be allowed to participate in the bailout. So they’re running the bailout, and they’re participating in the bailout. They’re already stealing, before the vote, the bill has even passed the House.”

“The Strong Do What They Can While the Weak Suffer What They Must.” (Thucydides)

David Dayen is executive editor at The American Prospect. Read his article

David Dayen

from yesterday explaining the hidden — and horrendous — details in the pending Congressional “relief” bill slithering its way through Congress.

This bill is a good example of the malicious ways in which corporate capitalists exploit moments of national crisis. Naomi Klein’s important book, The Shock Doctrine: The Rise of Disaster Capitalism, is now essential reading for anyone hoping to understand the economic times in which we live.

Dayen details some of the ways that Disaster Capitalists, corporate vultures haunting the halls of power, eager to pick over the bones of America’s corona victims, are exploiting the current pandemic to further enrich themselves, just as they did in 2018.

Human nature never changes. As in ancient Greece, the haves are doing what they can for themselves, while the have-nots are suffering as they always do.

Below is an excerpt from the article “Unsanitized: Bailouts, A Tradition Unlike Any Other.”

“This is a robbery in progress. And it’s not a bailout for the coronavirus. It’s a bailout for twelve years of corporate irresponsibility that made these companies so fragile that a few weeks of disruption would destroy them. The short-termism and lack of capital reserves funneled record profits into a bathtub of cash for investors. That’s who’s being made whole, financiers and the small slice of the public that owns more than a trivial amount of stocks. In fact they’ve already been made whole; yesterday Wall Street got the word that they’d be saved and stocks and bonds went wild. BlackRock, the world’s largest asset manager, is running these bailout programs for the Fed, and could explicitly profit if the Fed buys its funds, which it probably will.

“This is a rubber-stamp on an unequal system that has brought terrible hardship to the majority of America. The people get a $1,200 means-tested payment and a little wage insurance for four months. Corporations get a transformative amount of play money to sustain their system and wipe out the competition…

“This bill is an outrageous betrayal, a testament to how power works and saves itself. And Congress is about to put itself on the hook for it. Schumer has the Senate under his thumb, and he praised this bill at 2am this morning, so that’s a done deal. Any House member could deny unanimous consent and stop this, but that would require getting to Washington, forcing everyone else back to Washington in the middle of a pandemic, and delay what is needed (if temporary) relief for everyday people. I doubt anyone will do it. Pelosi purposefully put this in place before turning to remote voting to make such an action toxic…”

Read the entire piece here.