An Economic Recovery Program—Theirs vs. Mine

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Above Photo: Prachatai/Flickr

The Coronavirus has been wrecking the US and global economies. While focus has been on addressing the biological devastation wrought by the virus, the economic devastation keeps growing. 

Failure to properly address the deepening economic impact of the coronavirus has been no less shocking to date than the obvious failure of politicians and policymakers to get a handle on the medical-human impact of the virus.

Trump had called the virus a ‘hoax’, said it would be over by April, declared publicly there were millions of test kits being used when there weren’t, and blamed first the Chinese then the Europeans for the obvious spread of the virus, and rising death toll, in the US.  

His answer thus far to the spreading and deepening economic impact of the disease has been to demand US Federal Reserve bank chair, Jay Powell, to drop interest rates further plus advocate a payroll tax cut across the board—the latter a measure that economists almost unanimously say will have no stimulus effect on the economy. Even his own advisers, Steve Mnuchin & Larry Kudlow, reportedly have advised against the payroll tax cut.  The payroll tax cut was first enacted under Obama to try to stimulate consumption in the wake of the last 2008 economic crash.  It is generally acknowledged not to have had much, if any, effect on economic recovery.

How the Virus is Crushing the Economy

There are at least four major ‘channels of contagion’ by which the virus is driving the contraction of the US, and global economy:

1. Global Supply Chain Disruption

This was the easiest to see. Intermediate and final goods exported from China to the US were halted in many industries.  US production began to cut back on final goods delivery in the US economy, already affected by Trump’s trade war with China during 2018-19. Not only goods from China to US directly. But supply chains in which Japan and So. Korea goods, made in China and delivered to those countries, would otherwise be shipped to the US. Or goods shipped to Mexico and then exported as final goods to the US. Or from Asia to Europe, and then to the US. The net effect was a significant drop in US production and therefore sales and the output of the US economy in general. But that channel of contagion is now being dwarfed by another.

2. Collapsing US Consumer Demand

We can see this now spreading and deepening rapidly throughout the US economy. First demand for travel related spending: airlines, cruise & shipping, hotels & leisure, entertainment, etc. were initially impacted. But that’s been spreading to other industries as rapidly as the virus itself. Personal services of all kind are coming to a halt, except for healthcare. Restaurants and bars are shutting down. Education is being driven to an online underground. Malls and stores are virtually deserted. Social entertainment, including sports, is suspended everywhere. Even grocery stores are experiencing empty shelves, and consumption in basic necessities will soon fall off. Then there’s online purchasing, now developing huge backlog and delivery problems.

The consumption sector is coming to a halt in industry after industry, and it’s not over yet. Social distancing required by the virus to slow its spread is, conversely accelerating the spread of the economic impact. 

Consumption was the only sector of the US economy in late 2019 holding it up. And it was slowing in that regard as well by year end. Now it is collapsing.  Nearly 70% of the US GDP and economy, it is now joining the contraction in business investment and trade that was occurring throughout 2019.

The recession is here, as of March 2020, folks. The only real question now is how deep will it go and how long will it last!  And that question depends, in turn, on how quickly and seriously will US politicians respond. And the actions thus far do not portend well for a prompt ‘v-shape’ recovery.

But there is yet a third channel of economic contagion emerging that may dwarf the effect of the supply chain disruption and household consumer demand collapse. It is the condition of the financial system itself.

3. Financial Markets Deflation & Default

Globally and in the US financial markets are churning and fracturing, with a net effect already of having deflated by more than 20% and in some cases 30% or more. Not just stock markets. But oil and commodity futures markets. Foreign exchange currency markets.  Corporate bond markets, which are far more important to capitalist economies than stock markets, are showing signs of great stress, to put it mildly.  Especially unstable are markets for what’s called junk bonds (especially in oil fracking, retail, and travel & leisure).  And what’s called ‘junk loans’—i.e. leveraged loans.  In the US the total at risk is a combined more than $7 trillion. Add to that the fact that banks globally are sitting on $10 trillion in non-performing loans. Should prices collapse further, widespread defaults on paying principal  & interest on debt will take place. That will result in mass layoffs once again, as in 2008-09; a further collapse of business investment; and a yet further acceleration of contraction of the real economy.

It’s not coincidental that the US central bank, the Federal Reserve, last week pumped an extra $1.5 trillion into the banks via what’s called the Repo market, plus more through traditional bond channels, and is planning in a couple days this coming week to drop interest rates to near zero and re-institute special funding once again, as in 2008, to bail out mutual funds and other ‘shadow’ (i.e. unregulated) banks.  Why? Because liquidity is rapidly drying up throughout the economy as businesses drawn down their bank credit lines to zero as well, in order to hoard cash to weather out the storm of consumption and production collapse on the horizon.

The financial markets collapse, the 3rd channel, may prove to have the greatest devastation on the now already recession hitting the US economy. What began as supply chain and household demand problems will be greatly exacerbated by the financial instability.

Is Trump and the politicians preparing for this economic contingency? No, not at all. Here’s what Trump and even the Democrat leadership (Pelosi-Shumer) are proposing:

Trump’s Failed Economic Stimulus ‘Program’

In the middle of last week Trump addressed the nation on TV and proposed the weakest possible response. It was so weak even investors reacted with a 2,200 point fall  in the stock market. There were basically three things Trump proposed:

First, a $50 billion increase in the small business administration loan fund. A hint of some kind of tax deferral extending the normal IRS April 15 deadline. And, third, a payroll tax cut costing the social security trust fund a hit of at least $800 billion.

He then revisited that paltry proposal on Friday, March 14. He proposed an apparent additional $50 billion for the states to spend on emergency measures to address the spreading virus. He clarified the tax deferral would be only for ‘some’, not all. He added a suspension of interest on student debt. But failed to explain if that meant a full waiver of debt for all students, or just a temporary halt to paying interest, which would nonetheless continue to accumulate and for which students would still have to pay later after the suspension was lifted. Trump also added the proposal the US would buy more oil from US producers to fill the US strategic reserve. That was to help oil companies experiencing revenue loss from oil prices falling to the low $30s per barrel.  Trump’s statements to the press indicated he still wanted the payroll tax cut, even as the Democrats were saying ‘no way’, it won’t have any effect except to further destroy social security funding. 

Pelosi & Democrats Blocked Stimulus Program

As Trump was prevaricating and dribbling out minimalist economic responses to the cratering US economy, Pelosi and the Democrats were trying to address the real scope of the problem, even if not as broadly required as well.

Intense discussions were being held behind the scenes between Pelosi and Trump’s Treasury Secretary, Steve Mnuchin. All that came out of that negotiation by Friday, March 14, however, was an agreement to provide free testing of the virus. But how ‘free’ was defined was not all that clear. Did that mean those sick would have to pay out of pocket and then get reimbursed by the government. If so, millions will hold off getting tested. More than half US households have less than $400 for emergencies, according to the Federal Reserve’s own data research. They can’t afford to get tested.

Pelosi and the Democrats had also been proposing paid medical leave of 14 days, tax credits to small business to help pay for the leave, an increase in unemployment benefit payments in anticipation for all those, maybe not sick, who would soon be laid off or asked by their employers to stay home (on unpaid medical leave). Pelosi &company, to their credit, also refused to cut payroll taxes. They know of Trump’s leaked plans to cut social security and medicare after the November elections.

While there are some good provisions in Pelosi’s proposals, the Democrat economic stimulus doesn’t go far enough as well to address the scope and magnitude of the negative economic impact that’s coming to the US economy: as it shuts down in broad industries and should the financial system crack as it did in 2008. 

Furthermore, it appears that both Trump and McConnell in the Senate are intent on doing their worst to refuse to agree on most of the proposals in the Pelosi plan; demanding in particular acceptance of a payroll tax cut in exchange for other proposals. So don’t expect anything big or effective in any agreement coming this week. Trump is determined not to have an effective fiscal stimulus, now that his budget deficit last year exceeded $1 trillion—and that his current budget deficit after only five months is running at a rate of $1.4 trillion for this year.

An economic stimulus must focus on government spending and income restoration. It cannot focus on tax cutting. Nor on interest rate reduction. Neither of those kinds of policies will stimulate investment or consumption. Why? Because there’s a massive shift to hoarding cash underway by business and consumers will not get relief quick enough, or at all if they’re unemployed. 

Businesses is selling its financial assets across the board to gather in as much cash as possible, needed to continue to pay interest and principal on its $10 trillion debt run up since 2008, as its prices, sales and revenue drop precipitously in the meantime. There’s a ‘dash for cash’ underway. And no amount of tax cutting will lead to re-investing in production. The tax cuts will simply be hoarded and not spent. Ditto for households and consumers. Any payroll tax cut will be hoarded, not spent, to ensure households have enough to continue paying mortgages and car loans and student loans—assuming they still have jobs. If no jobs, it will be spent on trying to maintain current consumption, not increase it. 

The same applies to interest rate reductions by the Fed.  Why will businesses borrow even at a lower rate to expand production, when consumers are buying less of their goods or if they can’t get parts from abroad with which to build the goods?  And why would households borrow to take the risk to purchase a new auto or even a new home given the current direction of the economy?  Cutting the costs of business investment is now the least important variable determining the outcome of investment. Expectations of a collapsing economy and thus falling profitability is what’s driving investment now—and the anxiety of being able to continue to pay for debt accumulated in recent years in order to avoid default.

Yet that’s what exactly Trump will propose: more tax cuts, for business especially, and lower interest rates. It will prove throwing money down a rathole.

My Proposal for Economic Stimulus & Recovery

Make no mistake. The US is now in recession. And it will deepen considerably before it is over. Moreover, the great risk is now a spreading crisis of credit, a fracturing of the financial system as in 2008-09, and the potential emergence of another ‘Great Recession’, this time even worse than 2008-09.  All the efforts by the Federal Reserve and other central banks to pump trillions of dollars more into the US and their economies may prove futile this time around.

What’s needed is an immediate restoration of consumer household spending power and a protective floor under incomes that may soon also collapse should mass layoffs emerge once again in another couple months. Here’s some measures, a necessary short list, expanding on some of my earlier proposals, to provide that immediate income effect:

I. Paid Medical Leave

A 14 day paid medical leave until vaccines for the virus are generally available, eligible for:

·       Those tested with virus

·       Those with symptoms

·       All those Parents of K-8 students forced to remain home due to school closures

The 14 day paid leave should be renewable by state legislatures’ decision since the economic impact, nor the recovery from the virus, will not occur evenly across all states

II. Company Reimbursement for Paid Medical Leave 

·       Paid Medical Leave costs should be reimbursed by the federal government to companies with fewer than 500 workers. Reimbursement by tax credits for companies with more than 50 employees; and by means of direct subsidy payments for companies with fewer than 50.

·       50% reimbursement to companies with more than 500 workers by means of tax credits provided the company shows a full restoration of jobs for those laid off within a year of the development of a vaccine for the virus. 

·       Paid leave shall not result in a reduction of paid sick leave provisions already provided by a company or by  union contracts, which shall otherwise remain accrued to workers

III.  Employment Guarantees

·       Employers are required to restore workers on paid medical leave, who return, and to their  former position, pay and benefits.

·       All other benefits shall continue to accrue for workers while on paid medical leave

IV.  Hospital Testing & Related Costs

·       Costs for hospital-clinic-doctor office entry and testing will be billed by the health provider directly to the government, not paid by the worker and then reimbursed

·       Provider costs associated with the visit for testing (i.e. labs, emergency or other room charges, out patient, in patient, etc.) will similarly be billed by provider to the government

·       Return or follow up visits if needed will be billed directly as well

·       Pharmacy and drug costs are waived for patients determined to be infected by the virus, and all their immediate dependents under age 21, or on Medicare, Medicaid, or otherwise uninsured.

V.   Health Insurance Companies Responsibility

If a worker is insured and on medical leave, or if otherwise laid off due to the economic effects of the virus on their company of primary employment, the health insurance provider shall waive the worker’s share of monthly health insurance premium. This shall apply as well as for their immediate dependents covered by the company’s insurance benefits program

·       If a worker is insured, or if otherwise unemployed due to the economic effects of the virus on their company of primary employment, the health benefits insurance provider will waive all deductibles and co-pays for services for those determined infected or on leave due to school shutdowns. This shall apply as well as for their immediate dependents covered by the company’s insurance benefits program

·       Premiums, deductibles, copays and coverage shall remain frozen until the State legislature declares the virus effect is declared over

·       State legislatures shall review all insurance company requests to raise rates after the virus effect is over for the next 3 years. Attempts to recoup costs during the virus period by accelerating price increases or reducing coverage will be denied if greater than the rise in the local consumer price index for the urban region.

VI. Medicare & Medicaid

For those employed while receiving Medicare coverage, the monthly Medicare deductible payment shall be waived until the vaccine for the virus is made available

For those employed while receiving Medicaid, all doctor or hospital costs to the employee or unemployed shall be paid for by the State’s Medicaid authority. All doctors and hospitals shall be required by law to accept Medicaid patients until the vaccine for the virus is made available. 

Refusal by doctors, hospitals or clinics to accept Medicare or Medicaid patients will result in fines levied on the health provider’s annual federal tax payment

VII.  Unemployment Benefits

·     The federal government shall immediately extend unemployment benefits for all layoffs for an additional six months (one year total), effective as of March 1. 2020

·    Companies shall be required to continue to pay unemployment benefits taxes to their states for laid off workers for up to a year, commencing March 1, 2020.

·     There shall be no suspension of the Social Security 6.2% payroll tax or Medicare 1.45% tax by companies.

VIII.   General Company Requirements

·   For the duration of the virus crisis period, companies shall be required to continue to pay their workers’ health insurance monthly premiums if laid off, for a period of six months from date of initial lay off

·   Banks shall be required to provide lending to business customers at interest rates no greater than the original loan, if extended; or for initial loan, no more than the average rate for the local urban area in which the company is located

·   Banks and mortgage companies shall institute immediately a moratorium on mortgage payments for those on paid medical leave, or for those laid off for economic reasons associated with the virus effect on their company for a period of three months or until returning to work, whichever is sooner

·    Auto companies’ financial services, credit unions auto financing, and other sources of financing of vehicles shall introduce a moratorium on monthly auto loan payments for those on medical leave, or for those laid off for economic reasons associated with the virus effect on their company for a period of three months or until returning to work, whichever is sooner

IX. Federal Student Loans & School Districts

·  For college students who work, but are laid off due to economic effects associated with the virus at the company or institution for which they work, student loan principal and interest payments shall be suspended until returning to work. Suspension shall be defined as permanent waiver of all interest charges. Such interest payments shall not further accrue.

School districts that shut down shall continue to receive per pupil reimbursement from their states on the same schedule as when students were attending sessions

X. Food Provisioning & Delivery System

K-8 students who were receiving meals while in attendance at their school, but are not so doing due to school shutdown, shall continue to have meals delivered to their primary residence daily. State programs providing ‘meals on wheels’ for elderly residents or similar programs shall be expanded to cover K-8 students

All former cuts to the SNAP (food stamp) program since January 2017 shall be restored for all those eligible on paid medical leave, leave from work due to school shutdowns, receiving unemployment benefit payments, or on Medicare or Medicaid

Federal & State governments shall undertake whatever measures necessary to ensure the physical delivery of food to local grocery outlets, and to remove bottlenecks to online ordering and delivery of food and necessary household items to residents or local distribution centers, including if necessary mobilization of state national guard units and requisitioning temporarily of private delivery company facilities and equipment

Addendum to Financing My ‘Economic Recovery Program’

By Dr. Jack Rasmus

Some friends have asked how much would my own fiscal-spending based  ‘Economic Recovery Program’ just released earlier today cost? The total cost can’t be quantified exactly, as the impact on working families is spreading rapidly. But here’s some financing, administrating, and implementation principles associated with my proposal:

* First, the amount of financing applied in its first phase should be no less than the same amount that the Federal Reserve bank has already allocated to spend on the banks and investors. That’s $2.2 trillion in just the last week. So if we can spend that on the bankers, why can’t we allocated the same funds to bail out workers and the middle class. Index that $2.2T to whatever further increases the Fed spends on its pre-emptive bailout of bankers and investors already under way. If the Fed can ‘create $2.2 trillion’ out of thin air to give to bankers and investors, why can’t it do the same for Main St. and working families?

*Second, use some of the money to enroll those without health insurance or whose insurance will not cover the costs of health services, apart from the actual tests only, in the Medicare system. Introduce a one page sign up for Medicare online. Create a special ‘temporary’ membership category. Have healthcare providers bill Medicare for the tests costs to workers, and for all other related costs, as well as costs for those on unpaid medical leave or unemployed due to the economic effects of the virus on the economy-i.e. economic layoffs. Immediately enroll the 30 million uninsured. Voluntarily enroll the 87 million who are under-insured with massive deductibles, copays, with no dependents covered, etc. Immediately allocate funds from the $2.2 trillion to bail out Main St. and transfer the allocated funds to the Medicare-Social Security Trust Fund. And hire as many workers in the Medicare administration as needed.

*Third, instead of reimbursing companies for continuing paying wages to workers sent home on unpaid leave, or who are laid off because of the major economic impact that’s coming (there will be mass layoffs starting in May), why not have the government ‘hire’ the laid off for the duration of the crisis–which today Trump admitted will likely continue through August. Adapt the unemployment benefits system to make the payments to those so covered. This would be a 21st century, electronic administered ‘Works Progress Administration’ that provided 8 million government jobs to the unemployed.

The administrative apparatus is there already: Medicare and Unemployment Benefits. Why not use it. And make it clear it is the government that is providing their health care and employment protection–not the private employers or bankers who would otherwise cut them loose to scramble individually to protect them and their families.

*Fourth, immediately create a ‘Public Investment Corporation‘, funded and managed by the government (Federal, State & Local) to invest in alternative energy expansion and other climate crisis mitigation that would hire workers, since the current crisis will mean private business investment will collapse across the board and such much needed investment from the private sector will not be forthcoming for some time.

Let the Federal Reserve pre-emptively bail out its bankers and billionaire private investors! But if they can spend $2.2 trillion, then the government can, and should, pre-emptively bail out Main St. as well for no less!

Further economic measures will be needed to address the current US recession, and the increasing possibility of the recession morphing into another ‘great recession’ (or worse). But the above represents an initial phase of immediate fiscal spending response in the short run to restore incomes being devastated right now

  • voza0db

    Do not worry modern dumb slaves… The SRF & Friends are already doing what they ALWAYS do:

    Just like 2008, the Fed is now doing everything in its power to save its friends and mop up the ocean of red ink that was generated during the 10-year orgy of speculation that has ended in crashing markets…“!

    https://uploads.disquscdn.com/images/17e4033aa5b672963f356c46ae64e2ce511d5ab0973cd92449f915bff0c5813b.jpg

    https://uploads.disquscdn.com/images/81fe397b2311b1e4f806165ffc10ba8b2c9e904ce9a455b642b2028946dcbb0b.jpg

  • jemcgloin

    This is no time to argue over who is most deserving. Here is how to get the most effective and most democratic bailout:

    The Federal Reserve should decide how much it wants to increase demand by, divide that number by 325 million citizens (including children) so We the People can order Our Treasury to give each citizen that amount. For example:

    $1 Trillion divided by 325 million citizens is about $1,000 (or $4,000 for a family of four.) If every family had thousands of new dollars, that would be a lot of demand. Demand clears shelves which creates a need for real investment. It is easy for a business to find investment when the shelves keep emptying.

    Not only would this money bailout people under serious distress, it would bail out the banks and other corporations, indirectly. Those who paid debts would be bailing out the banks and those that bought things would be bailing out service, retail, and manufacturing.
    How would we make sure that the money goes where it is needed? Because We the People know better than anyone where Our money is needed.
    The system moves money from the bottom to the top very efficiently. It is when you try to move money from the top down do you reach resistance. This is why EVERY citizen needs to get the same amount, so no one can say it is not fair. Give the money where it is needed, humans.

    It would not be inflationary because far more than $1 trillion dollars has already evaporated from the economy. The entire Trump Tax cut just went up in smoke, for example.
    (Hoarded products are already inflationary. Rationing to limit hoarding should accompany anti-gouging campaigns. Amazon and other big corporations watched the hoarding happen.)

    It would not be unprecedented for the Federal Reserve to make a trillion dollars out of thin air. Under just one program (QEII), the Fed created $19 trillion over about 10 years. They bought the junk mortgage backed securities that had been used to crash the economy and lent the rest at near zero interests rates. For the banks it is $3 Trillion dollars in NET free money. That was $3,000 per citizen.

    The interests of global corporations are not aligned with the interests of the American People, If you throw money at the mega-rich, they never spend it on the rest of us. They don’t even invest it in the real economy, because the returns are not high enough. They prefer to invest other people’s money in risky exotic financial instruments.

    Our interests are aligned with Our interests.. If EVERY citizen got the same amount of money and put it where they thought was best, it would bail out individuals, families, businesses, farms, banks, global corporations, and even the poor misunderstood billionaire shareholders standing at the door with their hands out.

    If the Left controlled the administrative state, we could actually plan for disasters and put systems into place to deal with them. Instead the Left leaves the government the Right who scoff at the “elite” experts and dismantle Our republic from the inside

    The Right wants the Divided States of Ameriakka with a king Trump so they can terrorize and subjugate the rest of us. They want the nation to be based on identity. White Men vs All. That is the ancient way, they imagine.

    The Enlightenment gave us reason, which after much attack from the Right, got us a Constitution that controls their behavior, but only when we actively oppose them.
    It is not enough to “just vote” as the Centrist Democrats keep saying and it is not enough to just protest. We need to have direct influence on the decisions that are being made, instead of watching centrists sell us out to the right, while they make identity the basis of our law.

    The United States of America is an idea. The idea is that every one of us is equal to the others, and so we have to find consensus to move forward. From the beginning the Right has corrupted the government with things like slavery, but the Left keeps AMENDING the Constitution to reiterate that every citizen is politically equal.

    The only thing that actually keeps us together as one entity is the Constitution and the principles ratified by super-majorities: Equality, Justice, the General welfare, etc.

    Save the Constitution by using it to move governance into the future, instead of letting the primitive Right dismantle all we have built over centuries while they violently attacked us.

    Demand a People’s Bailout. $1,000 for every citizen from Our Treasury, right now.

  • ANTONIO

    $1,000 A YEAR? A MONTH? A SECOND?

  • Nylene13

    All this talk about how to prop up our current economic and social system.

    What we should be doing is talking about how this is an opportunity to create CHANGE for the Better.

    Emptying store shelves to create space for more things -as this article states-should not be the goal.
    The goal should be to create only Necessary and Useful things. That last as long as possible.

    Take say, Dish Soap. It should be organic, and not hurt the environment, and long lasting.
    A few drops should give you a sink full of soapy water.
    This is the ONLY KIND of Dish Soap that should be allowed to be made and sold!

    Or all this concern about Mothers not being able to work, because schools are closed.

    Here is a radical idea-maybe Mothers SHOULD stay home with their kids!
    Working class Mothers who work as Cashiers or Waitress -have more important work to do-at home.

    Pay Moms to stay home. There is plenty Moms at home can do. Such as teach their kids to grow backyard organic vegetable gardens. How to save seeds. How to raise pet chickens for their eggs and manure. How to make manure. This was considered important work back in WW2, and during the Great Depression.

    We don’t need to be creating all this plastic stuff we throw into the oceans!

    This Capitalist Military Industrial System is destroying the world. We need to change the way we live.
    As Bernie says-The Environment must become our Priority.

    Capitalism is the problem. What is the question?
    Profit should not be our primary motive. Perhaps it should not be a motive at all.

  • Howard

    Right. We have a money system that is a private for-profit money system which is in violation of the Constitution and Democracy. 10 centuries before Christ the ancient Greeks recognized the most vital prerogative of democratic self-governance was to issue the money as a permanently circulating asset, not a debt.

  • Howard

    There will be no fixing of the ecology or the economy as long as we have a private for-profit money system. We ignore this at humanities peril.

  • Nylene13

    Isn’t that the Truth.

    But the Rich who own everything are not interested in the Truth.

  • Nylene13

    Greece is an Amazing Place. So glad I was able to visit there.

    Have you been?

    If you go to the old ruins where there is no sign of the modern world, the old Greek spirits come and walk with you.

  • jemcgloin

    $1,000 on Monday, then you see what happens and do it again as necessary.

  • chetdude

    I prefer Bernie Sanders’ $2000 per month…

  • jemcgloin

    $2,000 per month is probably good. It’s not about the exact dollar amount, but aiming it at all citizens, equally.

    (I am taking the worries about small business seriously though, because this is when global corporations swoop in and put them out of business or buy them out cheap. Of course the more each individual gets, the more likely they can save the business themselves.)

  • jemcgloin

    All very correct, but most people are not even thinking about this right now. They are focused on the disaster. I’m even doing it and I know better. Disaster Capitalists feed on disaster. They own stocks in Halliburton and other disaster specialists who know how to turn most of a government contract into profit.
    Pence managed the corporate solutions for Hurricane Katrina, like closing all of the public schools.
    The Trump response to the pandemic is classic Shock Doctrine, just like the entire Trump presidency. Trump is the bull in our 250 year old china shop and we chase him around while his billionaire cabinet empties our cash register.

    Trump has now managed to declare this a national emergency.
    Italy tells us that if the disease spreads quickly we could face a mass shortage in ventilators leading to hundreds of preventable deaths. Trump is not moving on that. He wants the price of ventilators to go up?
    He also wants to drag this thing out so he can cancel elections and suspend the Constitution. Trump says, “I have powers that most people don’t even know about.”
    What does he think those powers are, if not to build some ventilators?

    In fact, I would be surprised if Trump was not purposefully screwing this up to benefit himself both politically and financially. Now he doesn’t have to invade Iran in October. Wars are so difficult to time. Your life matters zero to this ingrate.

    While the “conservative” Right keeps trying to bring us back to government by violent identities with rich white men manipulating poor white men to keep themselves rich, by terrorizing and subjugating the rest of us, the Left has spent hundreds of years using the Constitution to make political equality the basis of democracy.
    The Right can’t ratify amendments to make this a “Christian,” “Capitalist,” or “white” nation, so they corrupt Our public Servants to corrupt the Constitution.
    The 14th and other Amendments prove that this is a Left leaning country. Virginia just passed the ERA! Left is democracy: moderation. Right is political violence: extremism. The center can’t tell the difference.
    The Left MUST LEAD. The Founders were flawed but they moved the world toward the LEFT.

    Trump has thrown all of the balls in the air. We can have a Constitution or no Constitution. The center thinks they can have half. If the LEFT lets Trump win, then Robin Hood dies.

    Only the Constitution can unite ALL of the people that believe in Union, Justice, Tranquility, (small d) defense, the General welfare, Liberty, and leaving a sustainable ecology and economy to our Posterity.

    We need to stop whining about what the Democrats won’t let us do and fix this shit from the inside or Trump will dismantle 900 years of revolution from the inside and make us his subjects. Lord Schumer might be ordering my beheading in the Divided State of NY..

    Then he would say, “Its a perfidy.”

  • jemcgloin

    I’m sorry, but even if you are correct, then where does that get us?

    Most humans like money, and they like markets. They like to take their money to the store and walk out with something that is “theirs.” Their scarf. Their bike. Their jacket.

    I don’t worship capital and those who own it, but markets are going nowhere.

    Is it possible that someday, people will not be emotionally invested in money and markets? I would like to think so. Is everyone going to give up money and markets in the next hundred years? No.
    History proves that if you try to take away money and markets then people invent money and markets, illegally if necessary, even in jails, where the guards become part of the market.
    Look at the drug war. Trying to stop the drug market just directs scarce resources at violent people willing to break the law to make huge profits.
    Smart democracies try to make markets fair and manage bad markets like health insurance.

    How do we fix the ecology and economy now?

    At this point in history, we are trying not to go backwards. We are trying not to lose the last shreds of democracy holding our society together, because if we let (or help) the Right divide the USA, the divisions will be violent. Things will be much more violent than they are now.

    The Constitution of the Untied States is essentially a Left document because it replaces political violence with debate and voting and because the Left passed amendments to make every citizen equal under the law. It also promotes Justice and the General welfare, and requires super-majorities to make changes.

    The Constitution is about building consensus toward a saner future. Letting the Right steal that from us after all of these centuries of defending against their corruption of Our Republic and their political violence (both domestic and state terrorism) would be surrendering just like centrist Democrats.

    The Left doesn’t need a revolution. We just need to steer the evolution of law away from greed, violence, and division. Embrace the Constitution, win some elections and extract “capitalism” and their bizarre “Christianity” from markets and democracy. Order the police to de-escalate instead of escalate. It works in Europe. If Trump has his way we will have escalation squared.

    We have months left to move the country forward or be dragged back into the primordial ooze, not hundreds of years to wait for the land of no money and no markets. Marx never even wrote such a thing. Marx said that repeated crises would eventually lead to a worker run society Its not a plan.

    Democracy is the plan.

  • Howard

    Anger makes you stupid.

  • Howard

    What kind of a democracy does not control its own money? A plutocracy posing as one. Marx didn’t get how money was power even though he recognized “Money plays the largest part in determining the course of history.” Duh! But his acolytes eschew money for some imagined utopia and don’t understand that lack of control of the money is why socialism hasn’t really emerged. They don’t realize that companies are in debt to the bankers. Take over a company and you take over their debt becasue all the money it took to create that company was borrowed from a bank and its operations geared toward paying it back. Otherwise the bank would not have allowed them to create a company. As long as we allow banks to create deposits the people will pay for their own slavery. You cannot have political democracy until you have economic democracy and you can have economic democracy with a private for-profit money system. This government is not our government, its theirs.

  • rgaura

    Takeover the banks. Nationalize them. Public banks can manage the transformation community by community. Write-off or down bad loans. Recoup ill gotten gains from financial criminals, and prosecute them if they complain. Public, online, timely disclosures of all government contracts for maximum transparency. This is all manageable folks. There is no bailing out. Its the bottomless pit of debt. Just turn over the monopoly board and start over, with a framework of economic justice. Visualize a rational civic sphere, then create it!

  • jemcgloin

    You haven’t explained what you mean by “private for-profit money system” so I’m not sure what you think the problem is exactly. I took some guesses, above, are they close?

  • jemcgloin

    huh?

  • Howard

    Yes, and becasue the rich aren’t interested apparently no one else is either….and all are afraid of such a change even when it means saving their lives. But, would love to visit Greece sometime….

  • Nylene13

    I loved Greece.

    Of all the places I visited in Europe, Greece was my favorite. I loved the people, and the Ancient Ruins by the Sea, and the plays at the Acropolis, the Countryside, all the Farmers Markets with handmade things, and the Food. I think the Greek food was my favorite of all Europe.

    To this day I still buy the tangy sharp Goat Milk Cheese like they have in Greece.

  • Howard

    Our money system is dominated by the big wealthy commercial banks who create nearly all our money, under license from government, as interest bearing debt for their own profit. This is the very definition of usury; the abuse of monetary authority for personal gain. This is credit being used for money but money should be created by government, per the Constitution. The government is limited to creating the coins as public money but the paper cash is sold for printing costs to the banks. Public money is issued as a permanently circulating asset whereas bank money is extinguished as loan principles are paid off. Public money is issued for public purpose as its first use, so spent or granted into the economy on physical and social infrastructure to fulfill the purpose of government as articulated in the first sentence of the Constitution. We don’t have public healthcare etc. and all are in debt because we have a for-profit money system instead of a Public Money System. (sovereign money – Greenbacks)

  • chetdude

    Only $680 billion per month — and we can tax back most of that by repealing the $4.5 Trillion Trump Tax Cuts…

  • jemcgloin

    If it was up to me, I wouldn’t do this on budget, I would have the Fed create the money out of thin air, like it does for global banks, regularly. (From what I remember the Fed is actually authorized to give money to citizens by its charter.)
    Normally creating money out of thin air causes inflation, but not when trillions of dollars have just disappeared from the economy.

  • jemcgloin

    What you describe is known as the “fractional money system,” because banks only have a fraction of the money they lend out.
    I agree that this is problematic.

    There was a real historic reason that the Fed was created however. Congress kept reinforcing the peaks an troughs of the economy.
    Before the federal reserve was created, booms and busts were frequent and deep, because Congress was always so late with stimulus (not moving until the pain was too large to ignore) that by the time they reacted, the economy was already booming, Mathematically, government spending should be “counter-cyclical” or out out of phase with the business cycle. Instead they are in phase with the cycle. Its like sticking a microphone into the speaker. The amplitude of the of the wave grows, until the circuit breaker goes off.

    The Fed was a relatively successful solution to the problem, but of course the mega-rich are too greedy to let a good thing work, so they corrupted it to turn it into their private piggy bank.

    I’m not a fan of the Fed, but to me the smart thing to do is to let the Fed react swiftly to the changing economy, but instead of throwing money at global banks, they should decide how much they need to grow the money supply by each month, and divide that money equally among every citizen (including children). Every month each citizen would get an equal share of the new money. Usually it wouldn’t be that much money. But when the economy was cratering like it is now, it would mean large amounts of cash exactly where it is needed, in the pocket of citizens who need to eat and pay rent.

    The Fed is better at anticipating and reacting to changes in the economy than Congress (especially when Congress is dominated by those trying to sell off the government fro parts in an internal hostile takeover. There is no reason why the banks, whose interests are not aligned with Our interests should be involved in this process (anymore). Our interests are aligned with Our interests. We the People know where Our money is most needed.

    A bigger problem is that the Right has fully embraced disaster capitalism and now the the rich Right profits from disasters and uses them to rewrite the rules, while the poor Right blames every problem on the poor and “liberals.” They are now creating disasters because they are so profitable. Trump is a disaster generator, and the Right loves it, because it is profitable.

    The mass theft using the Fed is yet one more reason that the Left needs to stop playing at revolution, and start seriously trying to evolve the system forward by taking control of the political system away from the greedy, violent, divisive Right.
    Young people are moving Left. Organize them to protest AND vote., so we can control the Democratic Party and use it against the Right and fake center. Using centrist Democrats as an excuse to disengage from the actual political system has only helped the worst people turn the worst ideas into the worst government policies.

  • jemcgloin

    Greece is awesome. As soon as we got off the subway in Athens a political march for teachers went by. I had to much luggage to join.
    Delphi was especially beautiful.

  • chetdude

    I agree — I would have used the many trillions of dollars the Fed has created out of thin air to bail out the banksters and Wall Street as direct payments for every human in the U.S.

    And to setup a robust infrastructure to directly deal with Covid as well as put into place a REAL Green New Deal (while we’re at it)…

    (And tax back the part given away to the rich as well as remove subsidies for polluting industries later).