Policymakers and the media are paying too much attention to how quickly the U.S. economy will emerge from the pandemic-induced recession, and not nearly enough to the nation’s deeper structural problem – the increasing imbalance of wealth that could enfeeble the economy for years.
Seventy percent of the US economy depends on consumer spending. But wealthy people, who now own more of the economy than at any time since the 1920s, spend only a small percentage of their incomes. Lower-income people, who were in trouble even before the pandemic, spend whatever they have – which has become very little.
In a very practical sense, the U.S. economy depends on the spending of most Americans who don’t have much to spend. That spells trouble ahead.
It’s not simply a matter of an adequate “stimulus.” The $2,000 checks contained in the American Rescue Plan have already been distributed and extra unemployment benefits will soon expire. Consumer spending will be propped up as employers add to their payrolls. Biden’s spending plans, if enacted, will also help keep consumers afloat for a time.
But the underlying imbalance will remain. Most peoples’ wages will still be too low and too much of the economy’s gains will continue to accumulate at the top, for total consumer demand to be adequate.
Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of Americans fell far short of what the economy could produce. He blamed the increasing concentration of wealth at the top. In his words:
“A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”
The wealthy of the 1920s didn’t know what to do with all their money, while most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy sunk.
History is repeating itself. The typical Americans’ wages have hardly increased for decades, adjusted for inflation. Most economic gains have gone to the top, just as Eccles’s “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.
The result has been consumer spending financed by borrowing, creating chronic fragility. After the housing and financial bubbles burst in 2008, we avoided another Great Depression only because the government pumped enough money into the system to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.
The wealth imbalance is now more extreme than it’s been in over a century. There’s so much wealth at the top that the prices of luxury items of all kinds are soaring; so-called “non-fungible tokens,” ranging from art and music to tacos and toilet paper, are selling like 17th-century exotic Dutch tulips; cryptocurrencies have taken off; and stock market values have continued to rise even through the pandemic.
Corporations don’t know what to do with all their cash. Trillions of dollars are sitting idle on their balance sheets. The biggest firms have been feasting off the Fed’s corporate welfare, as the central bank obligingly holds corporate bonds that the firms issued before the recession in order finance stock buybacks.
But most people have few if any assets. Even by 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.
The heart of the imbalance is America’s wealthy and the corporations they own have huge bargaining power – both market power in the form of monopolies, and political power in the form of lobbyists and campaign contributions.
Most workers have little or no bargaining power – neither inside their firms because of the near-disappearance of labor unions, nor in politics because political parties have devolved from giant membership organizations to fundraising machines.
Biden’s “stimulus” programs are fine but temporary. The most important economic reform would be to correct this structural imbalance by reducing monopoly power, strengthening unions, and getting big money out of politics.
Until the structural imbalance is remedied, the American economy will remain perilously fragile. It will also be vulnerable to the next demagogue wielding anger and resentment as substitutes for real reform.
"This is hardly the first time that Republicans have latched onto deliberately amorphous terms to convey a sense of outrage while evading responsibility to define what exactly the hell they are on about. "Marxism," "socialism," "political correctness," "demonic," "sexualization": The world of right wing propaganda is rife with terms that mean nothing, and so can be applied to everything. A Republican loves an empty signifier. Specificity invites rational discourse. Rationality is the death of reactionary politics."
Let’s go back to the year 2000 and the Bush versus Gore presidential contest. The hyper-close election came down to Florida where, at a key moment with a recount underway, Bush enjoyed a threadbare lead of 537 votes out of 5.8 million cast. Bush’s margin had been shrinking as the recount progressed, and Democrats were hopeful it would disappear. Enter the right-wing Supreme Court. In a startling 5-4 decision, the court halted the recount, handing the presidency to Bush. The decision was roundly condemned by nearly 700 law professors of different political views, who warned: “By stopping the vote count in Florida, the U.S. Supreme Court used its power to act as political partisans, not judges of a court of law. By taking power from the voters, the Supreme Court has tarnished its own legitimacy.” (Disclosure: I drafted the statement!) Why did the court perpetrate this judicial coup d’etat on behalf of a candidate who’d lost the national popular vote by over a half million ballots? Because it was necessary to secure the succession. In 2000, the right wing dominated the Supreme Court, but just barely. With two justices in their 70s, the five conservatives feared a Democratic president would be able to shift the balance to the liberal justices. So the conservatives installed an illegitimate president and in return received two illegitimate right-wing justices, John Roberts and Samuel Alito. The right-wingers used their continued ascendancy to enact the GOP’s political agenda. Defying long precedent, they invented a personal right to own firearms in the 5-4 D.C. v. Heller case, enabling a seemingly unstoppable epidemic of gun violence. In the 5-4 Citizens United decision, they emboldened corporations and the rich to corrupt our politics with floods of money. And in the 5-4 Shelby County case, they unleashed a war on democracy by crippling the Voting Rights Act. Now add Justice Neil Gorsuch. In February 2016, conservative Justice Antonin Scalia died. Under the Constitution, President Obama had the right and obligation to fill the vacancy — and the Senate had the duty to consider his nominee, Merrick Garland. Instead, the GOP-controlled Senate spurned its constitutional obligations, refusing to even hold a vote on Garland’s confirmation. Over a year later, Donald Trump — another Republican president who took office after losing the popular vote — gained the presidency and appointed Gorsuch, who stole the seat that was Obama’s to fill under the Constitution. If these three had not been placed on the court through chicanery, we’d have a liberal majority instead of a right-wing supermajority — and we’d see major differences in our lives. We’d get better solutions to school shootings than putting bullet-proof backpacks on our children. The crushing burden of student loans would be lightened for millions. Our democracy would be less at risk, with voting rights protected and gerrymandering reined in.
9/11 happened 20 years ago today. I remember being confused about why they were sending us home early from kindergarten, I remember seeing the man I was told was President Bush speaking on TV, and I remember for the first time in my life seeing teachers and adult strangers who truly looked scared. I was 5 then, and I am 25 now.
About 3,000 people died in the 9/11 attacks. Well over 100 times that many people have died as a result of the US response.
Our government’s response could have been simple, a narrow mission aimed at capturing or killing the architects of 9/11. We eventually achieved that objective, but only as part of a massive, world-changing Global War on Terror which has made us all both less safe and less free. The tragedy of 9/11 was used to justify a campaign that likely ended over a million lives altogether, including:
Brutal invasions and occupations of Iraq and Afghanistan, which were some of the longest wars in US history. Along with the damage caused directly by these wars, they also prompted the creation of ISIS and the complete Taliban takeover of Afghanistan.
Drone warfare in Afghanistan, Iraq, Libya, Niger, Pakistan, Somalia, Syria, Yemen, and other places we don’t even know about.
The use of internationally banned and discouraged weapons in our wars, including cluster bombs, depleted uranium shells, Mark 77 firebombs, incendiary white phosphorus munitions, and anti-personnel landmines.
Torture, both in US military detention and illegal “black sites” run by the CIA and others in numerous different countries. This includes the illegal, unaccountable, and sadistic activities at Guantanamo Bay, stolen territory which is used to commit blatant human rights violations. This came alongside a rise in the US use of extraordinary rendition, a form of kidnapping which is a violation of international law.
The empowerment of the Saudi government (which had actual ties to Osama bin Laden), and the aggressive provocation of the Iranian government (which reached out to help the US in the immediate aftermath of 9/11).
Massive spending on “counter-terrorism” training for governments around the world, often strengthening the grip of corrupt and violent police forces on local populations.
An expansion of secret US Special Operations missions in countries around the world. In the mid-2010′s, journalist Nick Turse revealed that US SpecOp soldiers are deployed in the majority of the world’s countries each year.
A massive reduction in civil liberties and privacy rights in the US, including the PATRIOT Act, the 2008 FISA Amendments, the 2012 NDAA, the rapid growth of the NSA and the surveillance state, and more.
The creation of the Department of Homeland Security, which is today one of the most scandal-ridden departments in the federal government. This includes the 2003 creation of ICE, who have been responsible for the creation of prison camps for immigrants.
A rise in Islamophobic discrimination and government policies, with the US government approach to surveilling Muslims serving as an inspiration for policies which oppress Muslims around the world today, from France to China.
Accelerated militarization of US police, as surplus military equipment from our foreign wars flowed straight into local police departments.
Trillions of dollars wasted on enriching private military contractors and weapons companies, money which is then funneled into lobbying for even more war.
Large, untold counts of lives lost as an indirect result of all the above. These deaths have mostly been imposed on the countries where we’ve intervened, but I would argue for the inclusion of many of the 30,000 suicides of US veterans since 9/11.
Growing up against this political background was hugely influential for how I came to view the world, and the War on Terror was ultimately one of the things which got me interested in politics in the first place. With time, I learned that we were not obligated to do all of this by the loss of life that occurred on 9/11. We are not honoring the memories of the dead when we create more dead.
The War on Terror has been a global disaster of gargantuan proportions. All of its architects have blood on their hands, and we will suffer from the consequences of their actions for decades to come.
Today, 20 years later, I will not be honoring 9/11 by giving a speech about the bravery of our military generals. I will not be cashing a check for writing the exact same 9/11 anniversary essay that gets written every year. I will not be announcing a special 20% discount on inventory, nor will I be giving a lecture about the dangers of foreigners.
This September 11th, I am going to go on a hike, to sit in a bookstore, and to eat a meal outside in the cool breeze of a warm evening. Doing this- living my life normally- is the only reasonable response to two decades of attempts at using this day to stir up fear and hatred. As for the future, I look forward to continuing to fight with others for true peace and security: an end to war, military aggression, and imperialism.
New Crow Time 🐦⬛🦊🌟
Remember when Jeff Bezos was showered with praise for donating $100 million to food banks last year? That may seem like a lot, and it is. But once you consider all that Bezos has raked in during the pandemic – including making $13 billion in a single day in 2020 – it’s a few hours of his earnings. It’s not just Bezos. Billionaires like Bill Gates and Warren Buffet also receive lots of praise for their “generous” charitable giving. The truth about billionaire philanthropy is it isn’t charity. Its public relations, often used to cover up their exploitative business practices, shield their wealth, and deflect attention from all they money they pour into lobbying and campaign contributions to assure that their taxes remain historically low.
These so-called “charitable contributions” are also tax-deductible, meaning you and I are subsidizing them. I don’t know about you, but I believe taxpayers should be deciding where their tax dollars ultimately go.
America doesn’t need their charity. We need them to pay their fair share in taxes
Edward Snowden is hounded for the same crime of truth-telling.
The US is trying to extradite Julian Assange who is not a US citizen nor in the US when he published- for revealing the truth of US crimes deemed secret because revealing them would jeopardize ‘National Security’.
By contrast the politicians who lied and lied and perjured themselves in open court about non-existent US election fraud are not being tried for their demonstrable insurrectionist threat to ‘National Security’. They are being charged with lesser offenses.
The attorneys who enabled the fraud are being civilly sanctioned; not criminally
Some political and legal liars are being sued in civil courts for the impact of the falsehoods on corporate profits.
Actual January 6th insurrectionist aren’t being charged with insurrection or treason. But for trespassing, assault, vandalism, rioting - Federal offenses solely because they occurred on federal land.
None of those in Congress involved in inciting the ‘riot’ or conducting pre-lynching walkthroughs out weak points for entry, or texting the locations of political targets have been inconvenienced by any legal consequences.
None of those in the Administratiion or on the Pentagon who blocked rescue or reinforcements for four hours have been inconvenienced.
Assuming the term ‘democracy’ applies to this oligarchical kleptocracy.
China’s increasingly aggressive geopolitical and economic stance in the world is unleashing a fierce bipartisan backlash in America. That’s fine if it leads to more public investment in basic research, education, and infrastructure – as did the Sputnik shock of the late 1950s. But it poses dangers as well.
More than 60 years ago, the sudden and palpable fear that the Soviet Union was lurching ahead of us shook America out of a postwar complacency and caused the nation to do what it should have been doing for many years. Even though we did it under the pretext of national defense – we called it the National Defense Education Act and the National Defense Highway Act and relied on the Defense Advanced Research Projects Administration for basic research leading to semiconductors, satellite technology, and the Internet – the result was to boost US productivity and American wages for a generation. When the Soviet Union began to implode, America found its next foil in Japan. Japanese-made cars were taking market share away from the Big Three automakers. Meanwhile, Mitsubishi bought a substantial interest in the Rockefeller Center, Sony purchased Columbia Pictures, and Nintendo considered buying the Seattle Mariners. By the late 1980s and start of the 1990s, countless congressional hearings were held on the Japanese “challenge” to American competitiveness and the Japanese “threat” to American jobs.
A tide of books demonized Japan – Pat Choate’s Agents of Influence alleged Tokyo’s alleged payoffs to influential Americans were designed to achieve “effective political domination over the United States.“ Clyde Prestowitz’s Trading Places argued that because of our failure to respond adequately to the Japanese challenge “the power of the United States and the quality of American life is diminishing rapidly in every respect.” William S Dietrich’s In the Shadow of the Rising Sun claimed Japan “threatens our way of life and ultimately our freedoms as much as past dangers from Nazi Germany and the Soviet Union.“ Robert Zielinski and Nigel Holloway’s Unequal Equities argued that Japan rigged its capital markets to undermine American corporations. Daniel Burstein’s Yen! Japan’s New Financial Empire and Its Threat to America asserted that Japan’s growing power put the United States at risk of falling prey to a “hostile Japanese … world order.” And on it went: The Japanese Power Game,The Coming War with Japan, Zaibatsu America: How Japanese Firms are Colonizing Vital US Industries, The Silent War, Trade Wars. But there was no vicious plot. We failed to notice that Japan had invested heavily in its own education and infrastructure – which enabled it to make high-quality products that American consumers wanted to buy. We didn’t see that our own financial system resembled a casino and demanded immediate profits. We overlooked that our educational system left almost 80% of our young people unable to comprehend a news magazine and many others unprepared for work. And our infrastructure of unsafe bridges and potholed roads were draining our productivity. In the present case of China, the geopolitical rivalry is palpable. Yet at the same time, American corporations and investors are quietly making bundles by running low-wage factories there and selling technology to their Chinese “partners.” And American banks and venture capitalists are busily underwriting deals in China. I don’t mean to downplay the challenge China represents to the United States. But throughout America’s postwar history it has been easier to blame others than to blame ourselves. The greatest danger we face today is not coming from China. It is our drift toward proto-fascism. We must be careful not to demonize China so much that we encourage a new paranoia that further distorts our priorities, encourages nativism and xenophobia, and leads to larger military outlays rather than public investments in education, infrastructure, and basic research on which America’s future prosperity and security critically depend. The central question for America – an ever more diverse America, whose economy and culture are rapidly fusing with the economies and cultures of the rest of the globe – is whether it is possible to rediscover our identity and our mutual responsibility without creating another enemy.
Something to remember.
"When they say I cannot
hear you, sing me lullabies
and folk songs, the ones
I sang to you. I will hear them
as an unborn child can hear
its mother's music through
the waters of the womb.
When they say I can feel
nothing, press your face
against my forehead, rest your
hand against my cheek. I
will feel them as the woman
at the window feels the wind
outside the glass.
When they say I'm past
all caring, brush my hair
and braid in ribbons. I will
know it as the seashells
on my table know the
rhythms of the sea.
When they tell you
to go home, stay with me
if you can. Deep
inside I will be
weeping."
— Naomi Halperin Spigle