The coming pandemic economic crisis

Joe Biden will be sworn in as President of a nation in which millions are unable to pay their bills and most of the programs to help them will have expired.

There will be much that he can do, with or without the cooperation of the Senate.  But what he will do is another question.

Here’s the deal.  The Center on Budget and Policy Priorities reported that—

1. Nearly 26 million American adults—12 percent of all adults—reported they sometimes or often had difficulty in putting enough food on the table during the first week in November.  That’s triple the pre-pandemic percentage.
2. An estimated 13.5 million adult renters—about one in five renters—were behind in their rent.
3. Nearly 81 million adults—one in three—reported it was somewhat or very difficult to pay their usual bills.
4. In September, some 31 million Americans met the official definition of “unemployed” or were part of a household of an unemployed person.

Bankruptcy filings are mounting, and that is just the tip of the iceberg.  Many owners of failed small businesses can’t even afford to file for bankruptcy.  State and local governments, meanwhile, are running out of money.

Most of the federal emergency programs to alleviate the crisis will expire at the end of the year.  The $600-a-week supplement to state unemployment insurance expired July 31.  The rest of the unemployment insurance supplement will expire at the end of the year.  An estimated 13.5 million Americans benefit from pandemic-related unemployment relief.

The Senate and House of Representatives are deadlocked  on how to extend emergency programs.

So will the moratorium on evictions decreed by the Centers for Disease Control.  That wasn’t sustainable as a permanent policy anyway.  Property owners who make a living from rental income need that income to maintain the properties and usually to pay for utilities.

And the moratorium on student debt payments decreed by President Trump also expires at the end of the year.  About 32 million Americans had loans eligible for suspended payments. 

Both the renters nor the student debtors still owe the full amount.  They got a temporary suspension of payments, not relief.

∞∞

Joe Biden is the first President to be take office in the middle of a national crisis in which one house of Congress is controlled by the opposition political party.  This limits his freedom of action, but progressives say existing law gives him a great deal of power.

The Higher Education Act gives the Secretary of Education authority to settle all publicly-held student debt and cancel all or part of it.  David Dayan of The American Prospect says that covers 95 percent of American student debt, which is up to $1.5 trillion.  This would help stimulate the economy by making it easier to get a home mortgage or an auto loan.

Biden also would have the authority to forgive up to $50,000 of student debt by executive order.

The Affordable Care Act authorizes the Secretary of Health and Human Services to create a pilot program to cover medical expenses of anyone who suffers from an environmental health problem.   The coronavirus, Dayan said, is an environmental health problem.

Snapshots of the pandemic recession

.

.

.

.

Source: Center on Budget and Policy Priorities.

It’s still the economy, stupid

Bill Clinton and Barack Obama were elected President primarily because of the economic failures of their predecessors.  Each of them faced a backlash in the midterm elections following their victories, at least partly because of their economic policies.

The same thing will happen to Joe Biden unless he can act decisively and quickly to meet the impeding economic and pandemic crises, according to political scientist Thomas Ferguson in an interview with podcaster Paul Jay. 

Clinton ran in 1992 on the slogan, “It’s the economy, stupid.”  But during his two years, he did little to improve the economy.  He pushed through the North American Free Trade Agreement, which had been part of the Reagan agenda and was opposed by organized labor.  He failed to get Congress to even consider a health insurance reform bill.  Republicans won control of both houses of Congress in 1994

Obama was elected during the 2008 recession.  His administration rescued failed banks, but did not fully implement a law to rescue victims of foreclosures.  Republicans won control of the House of Representatives in 2010.

The decisive factor in the 2016 election was the voters, of all races, who supported Obama in 2008 and 2012, but either voted for Trump and declined to vote at all in 2016. 

The notion that racism and sexism were the primary factors driving the Trump vote is not borne out by the data, he said.  Economics was very important too.  Trump’s promise to revitalize manufacturing and impose tariffs on imports gave him just enough votes to squeeze out a majority in key industrial states.

The rural working-class found their lives a little better under Trump and don’t believe the Democrats care about them.  Some of this was the momentum of the economic recovery that had begun under Obama.  Much of it, according to Ferguson, was due to the Federal Reserve System artificially pumping up the economy by holding down interest rates.

He said polls indicate Biden’s margin of victory came from voters in the income brackets between $100,000 and $200,000—not the ultra-rich, but not the wage-earning class, either—who are uncertain about their economic future.  Biden’s message was reassurance and a promise of economic stability.

Trump’s gains among Mexican-American voters along the Texas border were due to so many of them working in the oil and gas industry, he said; some of them found construction work in building Trump’s border wall.

The received wisdom is that big business leaders supported Biden over Trump because they thought Trump is too erratic.  Biden did get a lot of campaign contributions from Wall Street, but much of corporate America supported Trump—the oil and gas industry, the pharmaceutical industry and pollution-heavy industries such as pulp and paper making.

The Democratic Party never was a labor party

Political scientist Thomas Ferguson is the leading U.S. expert on money in politics.  In his book, Golden Rule: the Investment Theory of Party Competition and the Logic of Money-Driven Political Systems, he argued that national elections are always about conflicts between different economic interests, never about conflicts between working people and business in general.

There has never been a strong U.S. labor party along the lines of the British Labor Party or French Communist Party, which is explicitly anti-capitalist and pro-labor.

Political campaigning in the United State is expensive and, paradoxically, democratic reforms such as direct election of Senators and nomination of candidates through political primaries, have made it more expensive. 

Senator Bernie Sanders tried to create an alternative financing plan based on small donors.  It was remarkable that he got as far as he did, but he was crushed in the end.

This does not mean that issues on national elections are meaningless.  Rank-and-file voters have a stake in issues such as loose money vs. tight money, public works projects vs. budget austerity, free trade vs. protectionism, monopoly vs. anti-trust policy, etc.  It is just that none of these issues get traction unless there is a business interest behind it.

Even the Populist Party of the 1890s, which sought to unite farmers, wage-earners and small-business owners against corporate monopoly, got the support of silver mining interests, based on its plan to increase silver money, and it got its strongest support in mining states.

Franklin D. Roosevelt’s New Deal never was anti-business, Ferguson said.  Organized labor did have a seat at the table of power during FDR’s administration, which is more than it had before or since, but it was never the dominant power.

Roosevelt took power in 1933 when the U.S. economy was in a state of collapse.  Many Americans, including representatives of big business, were willing to grant him the powers of a dictator.

He pushed through the National Recovery Act, aka “the first New Deal,” which attempted to stabilize the economy by organizing it as government-regulated monopolies, which prices and wages fixed by government.  The NRA failed, and also was rejected as unconstitutional.

FDR also pushed legislation for public welfare and to empower labor unions, such as the new CIO (Committee for Industrial Organization, then Congress of Industrial Organizations).  Business interests were split on this program.  They didn’t want to give high wages to their employees, but they did want their customers to have high disposable incomes.

In general, Ferguson said, labor-intensive business interests opposed the New Deal and capital-intensive industries, including the domestic oil industry, supported it.

The business community also split over free trade and protectionism.  One of FDR’s first actions was to take the U.S. off the gold standard, which meant a fall in the exchange rate for the U.S. dollar against foreign currencies.  That was bad for banks and other lenders, but good for exporters, again including the oil industry.

Roosevelt got authority to negotiate reciprocal trade agreements with individual foreign countries.  The U.S. lowered its tariffs in exchange for foreign countries lowering theirs.  Ferguson said this was highly popular among businesses that sold abroad.

The comeback of the bald eagle

Writers for Bored Panda say this map represents nesting places of bald eagles in Wisconsin in 1974 and 2019.  They attribute the 45-year comeback to the Clean Water Act.

The flight paths of an eagle who got around

Writers for Bored Panda say this represents the tracked flights of one eagle over 20 years.

Julian Assange and journalistic hypocrisy

A utopian novel of climate change

Kim Stanley Robinson is an award-winning science fiction writer whose novels have appeared on the New York Times best-seller list.

His newest novel, THE MINISTRY FOR THE FUTURE, is about the effects of climate change and environmental devastation, but is different from most SF novels on this theme.

Such novels typically are set in a future in which all the bad things we’re being warned about have come true.  In contrast, Robinson’s novel is utopian, not dystopian.  It is about disparate people struggling for decades to achieve a better world and eventually making headway.

It belongs on the same shelf as H.G. Wells’ The Shape of Things to Come or Edward Bellamy’s Looking Backward, 2000-1887.

The novel begins in the near future, where an American named Frank May is doing humanitarian aid word in a village in India. A heat wave strikes in the start of the monsoon, combined with a failure of the electrical grid across India.

Robinson tells in grim detail what it would be like to die of inescapable heat and humidity—the humidity preventing sweat from evaporating and cooling you off.

The catastrophe causes the Paris Climate Agreement signatories to meet and consider what to do.  Their only action is to create a subsidiary body with ample funding, but no powers, to advocate for future generations, children and those who have no voice.

The new organization, nicknamed the Ministry for the Future, is headed by an idealistic, middle-aged Irish politician named Mary Murphy, who becomes one of the main viewpoint characters of the novel.

Her team comes to the conclusion that the main barriers to action on climate change are the legal system and perverse economic incentives. 

For example, one principle of economics is the discount rate—the idea that a dollar next year is worth less than a dollar today.  Even a modest discount rate, that $100 next year is only worth $99 now, effectively makes it uneconomic to invest in anything with a payoff more than a few decades away.

The Ministry comes up with ideas for changing this.  The most important one is the “carbon coin.”  It is a currency to be paid to anyone who sequesters a ton of carbon, either by removing it from the atmosphere or preventing it from being burned.  Its value is guaranteed by making it legal tender for payment of carbon taxes.

The world’s bankers aren’t interested.  Not their job, they say.

A terrorist organization called the Children of Kali emerges.  Like the Thugs of old-time India, they worship the goddess of death.  Their program is to kill plutocrats and politicians responsible for heating up the world. 

From that they move on to downing aircraft and sinking ships that burn diesel fuel.  Their weapon of choice is flocks of bird-sized flying killer drones, guided by artificial intelligence.  They are widely dispersed until they converge on their targets, and cannot be defended against.

Ocean and air travel by fossil fuel becomes uneconomic.  A worldwide economic depression results.  But then high-tech dirigibles and sailing ships emerge.  They have battery-powered electric motors, which are charged by photo-electric and piezoelectric materials that cover all surfaces.

So progress comes about, as one character remarks, through a combination of “arbitrage and sabotage.”   Mary Murphy gets her carbon coin, which is a form of block-chained BItcoin, which can be deposited with a guaranteed rate of interest.

There are all kinds of ways to make a living

The Bedbug Whisperer of Brooklyn by Laura Entis for The Outline. Hat tip to Steve from Texas.

‘Coffin confessor’ Bill Edgar paid to gatecrash Queensland funerals and speak up for the dead by Annie Gaffney and Sallie Rafferty for ABC News.

Does Trump want peace or war? Does he know?

End Three Wars, Then Blow Up Iran? by Matt Purple for The American Conservative. What exactly is going on in the mind of Donald Trump?

Dem war coalition prepares to assume power

The New Ruling Coalition Opposition to Afghanistan Withdrawal Shows Its Key Factions by Glenn Greenwald. “An unholy union of the national security state and the neocon-backed and corporate-funded Democratic Party are about to assume power with media-supported Internet censorship a key weapon.”

An alternative to call-out culture

What if, Instead of Calling People Out, We Called Them In? by Jessica Bennett for The New York Times. A report on how Professor Loretta J. Ross is combating call-out culture with a popular course at Smith College.  [Hat tip to Steve from Texas]

Teaching racial justice isn’t racial justice

Teaching Racial Justice Isn’t Racial Justice by Benjamin Y. Fong for The New York Times. There is a place for education in the fight against racism, Fong wrote, but we shouldn’t confuse it with the fight itself. [Hat tip to Steve from Texas]

Rod Dreher on the coming soft totalitarianism

Communism and Naziism were different from plain old run-of-the-mill tyrannies.  They were totalitarian, not merely authoritarian.

An authoritarian ruler is content with passive obedience.  Silence is enough to buy safety under authoritarian rule.

A totalitarian regime demands active and sincere support, without mental reservations.  Totalitarianism aspires to control not only your outward actions, but your inner thoughts.

The rise of totalitarianism in the 1930s and 1940s was new and frightening.  But after the defeat of the Axis powers in World War Two and the breakup of the Soviet Union following the Cold War, totalitarianism was seemingly defeated for good.

But the conservative Christian writer Rod Dreher, in his new book, LIVE NOT BY LIES: a Manual for Christian Dissidents, warns of the danger of a new form of totalitarianism.

The danger, in his view, consists of two converging forces: (1) the rise of what’s called “cancel culture” or “political correctness,” which seeks to punish people for unorthodox words and thoughts, and (2) the rise of surveillance technology, which gives the powers that be new tools for tracking down what you’ve said and thought.

You might say both fears are exaggerated.  Where is the equivalent of the Soviet Gulag or the Nazi concentration camps?

Dreher interviewed Christian dissidents who suffered under Communist rule, and they in fact see the seeds of a new totalitarianism in the USA and other Western countries.

It would be a “soft” totalitarianism, enforced by economic pressure and the pressure of public opinion.

People really do fear for their careers if they go on record as saying something unacceptable, even with the best of intentions.  It’s not just Christians or conservatives who suffer.  So do liberals or progressives who make a misstep.

It’s customary nowadays to search social media for things people may have said in the past that’s unacceptable now. 

Meanwhile high-tech companies such as Amazon offer services based on connecting everything in your life to the Internet.  This of course creates a record of everything you do. 

This information is sold to advertisers, marketers, bill collectors, insurance companies, credit rating agencies and anybody else with an interest in knowing about you, and also used to manipulate your mind.

It would be naive to think that your political and religious opinions are excluded from this, or that police and intelligence agencies don’t have access to this information.  We see a preview of what might happen in China’s social credit system.

I recommend Dreher’s book.  His fears are not exaggerated.  In fact, it is even broader than he makes out.  It is not just religious people and conservatives who are targeted.  Anybody of influence who is anti-war or anti-corporate is a target for cancellation.

And this is against a background in which the federal government asserts new powers to start wars, imprison whistleblowers, order assassinations and pressure social media companies to censor all those who depart from the official view.

I do not argue that you should be concerned about these issues rather than Dreher’s issues.  All these things are forces converging on the same outcome.

The rise of a multi-racial extreme right

Culture and Belonging in the USA: Multiracial Organizing on the Contemporary Far Right by Cloee Cooper and Daryle Lamont Jenkins for The Public Eye.

It’s past time to get out of Afghanistan

If President Donald Trump could get U.S. troops out of Afghanistan before he leaves office, this would be a good thing, not a bad thing.

The only reason for keeping them there is so the military can avoid admitting defeat.

I doubt if he can bring it off.  Even if he could, future President Joe Biden would almost certainly send the troops back.

LINKS

Get Out of Afghanistan Now by Doug Bandow for Antiwar.com.

‘Decapitations’ at DOD: A Purge, a Coup or Something Else by Barbara Boland for The American Conservative.

Unelected Officials Overrride the President to Continue Wars, But Only Kooks Believe in the Deep State by Caitlin Johnstone.

Three Cheers for Leaving Afghanistan, No Matter Who Does It by Kevin Drum for Mother Jones [Added 11/18/2020]

Something else I never would have believed

Sex Abuse Claims Against Boy Scouts Now Surpass 82,000 by Mike Baker for The New York Times.  The deluge of sex-abuse filings, coming ahead of a bankruptcy deadline, far surpasses the number of claims in Catholic Church cases.  (Hat tip to Steve from Texas)

There’s no such thing as ‘the Hispanic vote’

LatinX-plaining the election by Antonio Garcia-Martinez for The Pull Request.

D.H. Lawrence on showing your feelings

The feelings I don’t have, I don’t have.
The feelings I don’t have, I won’t say I have.
The feelings you say you have, you don’t have.
The feelings you would like both of us to have, we neither of us have.
The feelings people ought to have, they never have.
If people say they’ve got feelings, you may be pretty sure they haven’t got them.
So if you want either of us to feel anything at all, you’d better abandon all ideas of feelings altogether.
==D.H. Lawrence

The perils of being a cartoon character

The case against race reductionism

Why is there still such a big gap in income, wealth and status between white and black Americans?T

There are two prevailing schools of thought.  One holds that this is because whites are the way they are.  Another holds that this is because blacks are the way they are.

The first says that nothing will change until whites get rid of their prejudices.  The other holds that nothing will change until blacks get rid of their self-destructive behavior.

Historian Touré F. Reed, in his new book, TOWARD FREEDOM: The Case Against Race Reductionism, said this kind of thinking is guaranteed to keep things the way they are.

He said we Americans as a nation need to look at other reasons black Americans are lagging behind.  They include:

• De-industrialization, financialization and offshoring of manufacturing jobs.
• Factory automation.
• The decline of labor unions.
• Cutbacks in public service employment.

These things hurt a majority of Americans, but, for historical reasons, they hurt black Americans the most, Reed wrote.

None of this is changed by scolding liberal white people for their alleged racism or unemployed young black men for their alleged laziness, Reed said.

But why would anybody think differently?  That  is the topic of his book.  It is structured around the thinking of notable activists and thinkers, much like my friend Michael Brown’s new book on intellectuals.  It would make a good companion volume to Brown’s Hope & Scorn.  Whatever you think about the status of intellectuals, ideas do have consequences.

A. Phllip Randolph

Reed begins with A. Philip Randolph, the president of the Brotherhood of Sleeping Car Porters, and his protege, Bayard Rustin, a pacifist and civil rights activist affiliated with the Fellowship of Reconciliation.

These two black men are a bridge between the 1930s and the 1960s.  They advocated civil rights for African-Americans and economic justice for the multi-racial working class for many decades.

They were supporters of the New Deal, even though many members of the Roosevelt administration were racists, and black Americans did not receive the full benefits to which they were entitled, especially in housing.                                             .

So did a substantial majority of African-American voters, because large numbers did benefit from the Wagner Act, the Works Progress Administration, the Civilian Conservation Corps, the Social Security Act, the GI Bill and so on.

And the New Deal cleared the way for the civil rights revolution that was yet to come.

Bayard Rustin

The Committee for Industrial Organization – later the Congress of Industrial Organizations – organized low-wage workers, both black and white.  Many of its tactics, such as the sit-down strike and mass demonstrations, were later adopted by the civil rights movement.

Randolph, by the threat of a mass march on Washington, pressured President Roosevelt into adopting a Fair Employment Practices Code for war industry.  Although the federal FEPC was not enforced, many state governments adopted their own versions after the war and carried out its intent.

If there had not been a National Labor Relations Act, which set a precedent for regulating employer-employee relations, an FEPC might have been dismissed as unconstitutional, Reed noted.

Randolph and Rustin lived long enough to become mentors and supporters of the Rev. Martin Luther King Jr.  Like them, Rev. King regarded civil rights and labor rights as inseparable.  He spoke in union halls almost as often as he did in churches.   When Dr. King was imprisoned in the Birmingham jail, the United Auto Workers bailed him out.

The 1963 March on Washington was a march for both “jobs and justice.”  When King was murdered, he was in Memphis, Tenn., to support a strike of sanitation workers.  He was working on another protest demonstration, a Poor People’s Campaign—a “poor people’s,” not “black people’s,” campaign.

Reed thinks Randolph and Rustin got things right, and so do I.

A foreign view of U.S. political parties

“Lambert Strether” on U.S. politics, 2016-2020

“Lambert Strether” is a contributor to the Naked Capitalism web log. Here’s his idea of how U.S. politics has changed in the past four years.  I think he’s right, and my bet is that politics will change even more in the next four years.

• The Professional Managerial Class (PMC) attained class consciousness.
• The PMC was and is embubbled by a domestic psyop.
• The press replaced reporting with advocacy.
• Election legitimacy is determined by extra-Constitutional actors.
• “Fascism” became an empty signifier, not an analytical tool.

Read his full post to see what he means. The comment thread is good, too.

LINK

“What It Took”: The Price of Democrat Victory in 2020 by “Lambert Strether” for Naked Capitalism.  A brilliant analysis and an interesting comment thread.

Nine reasons for the GOP to be happy about 2020

If I was a partisan Republican, I would be happy with the 2020 election results as reported so far.

1.   The GOP no longer has to make excuses for the antics of Donald Trump.
2.   Democrats have to explain away the apparent cognitive decline of Joe Biden.
3.   As the incumbent, Joe Biden will get the blame for the looming interconnected economic, medical, climate, political and international crises.
4.   Biden’s likely Democratic successor will be the unpopular Kamala Harris.
5.   The GOP continues to increase its share of the Hispanic vote, the fastest-growing U.S. demographic category.
6.   The GOP has a chance to keep its majority in the U.S. Senate.
7.   The GOP gained seats in the U.S. House of Representatives.
8.   Six of the nine Supreme Court justices are conservatives appointed by Republicans.
9.   The GOP increased its representation in state legislatures in time for the post-2020 redistricting.

Populism, politics and the future

How Trump Lost by Peter Beinart for the New York Review of Books.  “If he governed as he ran in 2016, as an economic populist, he would likely have been re-elected.  Instead he reverted to the same old Republican playbook.”

Is There a Trumpism After Trump? by Ross Douthat for The New York Times.  “His presidency showed the way to a presidency that’s multi-ethnic, middle class and populist.  But soon he may stand in its way.”

Ding-dong, the jerk is dead – But read this before you join the Hallelujah Chorus by Thomas Frank for The Guardian.  “Trump’s defeat is a time for celebrating – let us praise God for victory.  But let us also show some humility in our triumph, and think a bit about how we got here.”

Trump Proved That Authoritarians Can Get Elected in America by Zeynep Tufekci for The Atlantic.  “Trump was ineffective and easily beaten.  A future strongman won’t be.”

They Are Trying to Silence Progressives, Because Money Never Sleeps by David Sirota for The Daily Poster.  “We’re all exhausted, but in the 24 hours since the election was called, corporate interests and their allies have already started their war on progressives.  There’s no rest for the weary.”

There Was Actually a Lot of Good News for the Left on Election Day by Liza Featherstone for Jacobin.