The US looks a lot like… Communist China

The US looks a lot like… Communist China

China sent a fresh batch of troops into Hong Kong on Thursday, and its military issued a statement saying its Hong Kong Garrison will “resolutely follow” the central government’s instructions.

-      China sends fresh troops into Hong Kong as military pledges to protect ‘national sovereignty” – CNBC

WASHINGTON — The Pentagon said Saturday it was ready to provide military help to authorities scrambling to contain unrest in Minneapolis, where George Floyd's death has sparked widespread protests, but Gov. Tim Walz has not requested federal troops.

-      Pentagon Ready to Send US Troops to Minneapolis if State Asks – NY Times

By JM Hamilton (5-31-2020)

Quite possibly one of the few positive notes – in an otherwise catastrophic & dystopian week, here in America - was seeing the US, and many allies, finally begin to stand up to Communist China. It was long overdue; it was necessary for economic & national security reasons and for moral reasons.  China has gotten away w/ mercantilism for decades… reaping the rewards of a first world power, while not being held accountable for human rights and trade abuses. Stealing technology from Western multinationals… while insisting that Western businesses operating on China’s soil play, exclusively, by their rules has for too long been tolerated.

Moreover, China is continually cracking down on its citizens and minorities.  Faced w/ a nasty pandemic & trade tensions, we are seeing China’s communist leadership’s ugly side. 

Could it get worse?  We are still in the early innings of the pandemic, if not the bottom of the first, and China’s communists will want to do everything possible to distract its citizens from a viral economic, financial, and political crisis.  And so it is with Mr. Trump… our POTUS has talked smack about China for many years.  But notably, it wasn’t until his own administration’s poll numbers began to drop – as a result of its handling of the pandemic – that Trump decided to, finally, turn up the heat against China.

Was it warranted…?  Yes.

Is the timing suspect…?  Yes.

Did Trump go far enough… Not by a long shot.

While Trump and Pompeo are about to tee off on Hong Kong, which arguably will penalize China, the trade sanctions against mainland China appear to have gone missing.  In regards the primary advocates of globalism and the Chinese government … the wishes of the US Chamber and the preeminence of the stock market – at least in Trump’s eyes - appear to have influenced the administration’s decision making (not to mention, major US donors in bed w/ the communist government).

This provides a quick overview for my central point, which is the remarkable similarities that exist between the two nations, China & the United States.  It came to me as I was watching military forces – indeed, a police state - beat on peaceful protestors in Hong Kong and on the citizens of Minneapolis, Minnesota. Which got me thinking about other areas of commonality the two superpowers share.

Here’s what I came up with.

Both nations are run by oligarchy.  It’s no accident that many of China’s ruling party, that operate w/in the National People’s Congress, are very wealthy… just as it is no accident that many of the members of the US Congress are millionaires.  Communist China’s legislative body has, at least, 100 billionaires (in US dollars), as of 2017.  The US congress has no billionaires but lots and lots of multi-millionaires. 

China and the US are both governed, for all intents & purposes, by one party rule.  China is run by the Communist Party of China.  In the US, we have the political duopoly, which - despite fighting over social issues (this keeps citizens at each other’s throats, the MSM happy, and the illusion of choice alive) – often vote in lockstep.  The Dems & the GOP are virtually indistinguishable when voting upon the economic & foreign policy interests of their mutual donors: billionaires; multinationals; and of course, the military industrial complex. For reference, see the latest round of plutocratic bailouts under the CARES Act and via the FED.

Both nations, China and the US, have their share of zombie enterprises.  In China, we see state run enterprises, w/ financial statements that are mysterious and opaque.  Here in the states, many corporations are deep in debt and highly dependent upon government largesse to stay afloat, or rely upon the interest rate crushing polices of the FED to provide them w/ cheap debt or equity w/in the markets.  These zombie enterprises, in turn, kickback to the ruling elite/politicians. 

To fuel these two economies, both the US and China rely upon a pool of slave labor.  The average income of a Chinese laborer is less than $15,000 (using today’s exchange rate).  The average income of American labor is $48,000, but this figure is deceptive when we consider the Gig Economy, the for-profit US healthcare system, and that 40% to 50% of Americans can’t meet a $400 emergency obligation (and one in five US children living in poverty). Factor in regional differences & expense… and yes, please try making it in New York on $48,000 a year. 

China and the US, both, have a nasty history of crushing and oppressing minorities, political dissent, and engaging in rampant sexism and pay disparity.  China has its gulags and slave labor camps, and the US has the largest prison system in the world (followed by China), which also may house slave labor installations. 

Both countries operate police & surveillance states, so as to protect billionaires, corporations, and government officials at the top of the food chain. On foreign policy, does China bully its neighbors?  Does America push around its allies?  The answer, yes to both. 

And the list of similarities goes on and on.  Looks like China’s and the United States’ pool of ruling elite have a great deal in common.  Perhaps that’s why Trump, pre-pandemic, found Chairman Xi so intoxicating?

Perhaps the key, remaining, difference is freedom of speech.  The very same First Amendment that the present US administration has threatened, with: litigation against reporters; its own campaign of disinformation & lies; and with threats of stronger libel laws and draconian punishment of whistleblowers.  To be fair, prior administrations also have had their run ins w/ the First Amendment, the fourth estate, and whistleblowers. 

Where am I going with this?  

It seems very odd -- contrary to the diet of apple pie, exceptionalism, and mom we are fed daily -- that the US, increasingly, resembles totalitarian China. 

Which brings us to another point of difference:  The Sino – government actually fears its people.  There’s a reason why the state, and Communist Party, stifles dissent and its citizens.  Clearly, it is frightened.  US leadership, on the other hand, appears unworried about the chaos their policies of globalism, neoliberalism, and the US empire (not to mention, the persecution of American minorities) have wrought… and whether or not it will eventually blowback?  Then again, given the size of the US police & surveillance state, and the DOD budget, perhaps I’ve missed the boat, entirely.  

In fact, the US oligarchy appears afraid… very afraid.

Perhaps, while the US government is blowing trillions on a country under viral siege, an economy in free fall, and Wall Street billionaires…  it might be time to look at structural reforms, based upon: an economic bill of rights; human rights; Medicare for All; a Green New Deal; dismantling the largest prison system the world has ever seen, along w/ the police & surveillance state; ending trillions in welfare for Wall Street & monopolies; and pulling out of America’s endless wars?   

Just for starters.

In this manner, the US would look a lot less like a, frightened, totalitarian state; and, above all, leadership would renew its commitment to the American people and the nation. 

Copyright JM Hamilton Publishing 2020

COBRA

COBRA

Why so expensive? It’s because US doctors prescribe more treatments, and those treatments cost much more than they do elsewhere. Most governments limit the price of treatments, freeriding on the US market to stimulate investment in medicine. American hospitals and drug companies have enormous leeway to raise prices — insurers have limited bargaining power, and uninsured patients even less.

 

Nor is all this money bringing any obvious reward. Compared with other rich countries, the US ranks at or near the bottom on life expectancy, infant mortality, adolescent pregnancy, sexually transmitted infections, drug-related mortality, obesity, diabetes, heart disease, lung disease and arthritis. No, the healthcare system can’t be blamed for all that — but it is hardly covering itself with glory.

 

-       US Healthcare is literally killing people – Financial Times

 

“When we look back, we will see this as a moment that laid bare some of the dysfunctions and inequalities in the American healthcare system,” says Adam Gaffney, an instructor of medicine at Harvard Medical School, and a pulmonary and critical care doctor. “We have a completely fragmented, privatized health system that continues to fail us.”

 

-       How coronavirus broke America’s Healthcare System – Financial Times

 

By JM Hamilton (5-17-2020)

 

One of the more revealing aspects of the 2008 financial crisis was how quickly Congress was corralled into bailing out the wealthy and the financial elite, under the TARP program, while America’s middle class & poor were quickly forgotten. Despite catastrophic national debt and no matter the year, the money is always there for another round of donor bailouts & welfare, while everybody else is expected to enjoy austerity & raw capitalism.

 

Since the pandemic’s beginning, the 2008 playbook is being utilized again, albeit w/ some minor assistance for labor.  Remember: Moral hazard, concerning state aid, per the establishment, only applies to the 99%... the elites would never get hooked on a free government assistance (all evidence notwithstanding). 

 

A quick recap: Faced w/ the coronavirus, the US Congress passed the CARES Act. The CARES Act, among other things, afforded $1200 to America’s working women & men (except for undocumented immigrants, who do most of the backbreaking labor), plus $600 in supplementary unemployment benefits through July.  Of equal importance, and for purposes of comparison, the CARES Act also authorized the Federal Reserve to create $4 trillion to bailout a debt-ridden Wall Street economy, the billionaire class, and debt markets.

 

And, as we were reminded again, last week, both the House and the Senate were too busy rearranging their stock portfolios -while the pandemic attacked the nation - to bother notifying the public.

 

Under the CARES Act, Congress attempted to offer assistance to labor, by providing small business w/ loans, so as to incent the maintenance of full payroll … but who was the House & Senate really helping?  Part of the US labor relief effort was to be administered through Small Business Administration (SBA) lending, under the CARES Act, which has proven singular by its complete ineptness in execution. 

 

Among the kaleidoscope of errors in administering PPP (or Paycheck Protection Program): large businesses, w/ access to public debt markets, availed themselves to millions, if not billions in the aggregate, for a program designed for small & medium sized business (many of these leviathans were connected to the Trump Admin); oversight of the SBA’s PPP program was an afterthought and Congress – despite protests after the fact - basically turned loose the Trump administration, SBA, Treasury, and Wall St. banks to administer the program (we can see how that turned out); the small business program is known for changing and fluctuating rules, particularly on the debt forgiveness, which was to occur as long as 75% of the loan went to worker payroll… it’s become such a problem that many businesses have begun returning their loans, which means employees lose out; and finally, a large number of these businesses – most unfortunately – will never see the light of day when the economy reopens.  They’ll end up closed or in bankruptcy.  

 

As with many US Federal programs – the key feature appears to be throwing money at the problem, rather than addressing structural defects w/in the US economy – the rank smell of fraud is in the air.  Rather than helping labor, as it was, allegedly, intended… PPP has turned into free-for-all financial buffet for the connected & wealthy.

 

 

 

 

 

 

 

 

As with 2008, and during the present crisis, the central idea is for a captured & controlled US Congress to do everything w/in its power to maintain the failed status quo.  Hence, the exceptionally nasty optics of trillions in welfare going to Wall Street, while ordinary Americans are not receiving enough to survive on (especially when we factor in the death dealing US healthcare system).  Then again, 40 to 50% of Americans were barely surviving before the pandemic. Many were working for less than a living wage and receiving government assistance. Now, imagine the financial wrinkle this virus has weighed upon their lives, during a time of catastrophic unemployment & another Great Depression. Imagine the one in five US children living in poverty? 

 

To come to the point: Even when Congress attempts to help America’s working women & men – many of whom serve on the front lines of this crisis – the end result often is little more than cover for bailing out ultra-wealthy special interests.

 

Consider House legislation passed last Friday… the so-called HEROES Act, which is DOA.  The cornerstone of the healthcare effort & assistance – passed by the House - is not aimed at American labor, but in propping up America’s patchwork of failed healthcare profiteering. 

 

In these United States, when a worker is terminated, they are offered something called COBRA, which allows the former employee to continue their employer’s miserable healthcare package, but, solely, at the employee’s expense. (If the employer doesn’t provide healthcare, or it’s a Gig job, there’s always the failed ACA or Medicaid.)  As the US healthcare system is largely employer driven, a layoff means most US workers will blow their severance pay, if they receive severance pay, on COBRA.  You know, so that an employee’s children and/or significant other can maintain healthcare coverage.  Food and rent becomes secondary, w/ healthcare becoming primary, particularly during a pandemic.  Any meager savings, an employee has accumulated, will likely quickly evaporate.  And this issue, COBRA, is huge considering record unemployment filings for the months of April and May, and particularly, w/ many white collar jobs now on the chopping block.

 

So with cascading layoffs, what does Congress do… they graciously agree to bailout the Healthcare insurance cartel w/ COBRA.  Basically saddling US workers – newly laid off, many not paid a living wage to begin with – with a dizzying array of deductibles, copays, and annual deductibles (please be sure and read the fine print).  

 

By the way, hats off to The Intercept for bringing another Insurance Industry welfare scam to light: COBRA.  

 

The bottom line: US healthcare is little more than an assembly line, where the profit making model is not based upon health or healthcare outcomes, but how much can the healthcare industry generate in fees, and resulting debt, with which to soak the already drowning American workforce.  Employees get laid off, and employers and employees can no longer afford medical insurance, due to the viral crisis and/or C-Suite mismanagement… zero worries, the US Congress is there to bailout US Health insurers with COBRA benefits, allegedly, or under the pretense of, helping labor.

 

See in Washington… even when America’s middle class and poor get assistance, or the lack thereof, America’s wealthy are the true bailout beneficiaries.  We’ve seen this w/ PPP under the CARES Act, and we may see it, again, w/ COBRA under the HEROES Act or some derivative legislation to come.  Americans also see it in backdoor subsidies to multinational income & profit statements, when corporations - reporting out billions in earnings - use state aid to backstop their labor force, who are not paid a living wage.  And on and on... 

 

Did Congress show any imagination or initiative… like agreeing to cover all Americans for their medical costs, during the pandemic, by bypassing the insurance cartel middlemen or pharmacy benefit managers altogether… absolutely not.  Imagination and initiative are beyond the House’s pay grade.  The Congress isn’t there to lead.  The Congress is there to take orders from wealthy insurance companies, trade associations, and lobbyist.

 

Meanwhile, the national debt spirals out of control, but not so high that Congress can't waste hundreds of billions on corporate/donor welfare. Per the Financial Times, even the AMA (hardly a disinterested party) says the US spends 760 billion in wasted dollars on the most expensive healthcare program the world has ever seen (w/ consistently worse healthcare outcomes among any other developed nation). My guess, if the AMA says we are wasting $760 billion, the number the United States is actually wasting is closer to $1.5 to $1.8 trillion dollars. 

 

How do I know?  Because most Western democracies spend half of what the US does on medical care, as a percent of GDP, again, w/ vastly better results. And those countries, and their citizens, see what’s happening in the US and they want no part of America’s healthcare model.  So if the US is spending 18% of GDP or $3.7 trillion on healthcare, then half that figure provides close to $1.8 trillion in savings. But if the US is to have any hope of achieving that savings, then America has to eliminate the middlemen, it has to step on the toes of special interests, and price gouging from Big Pharma must end.  In short, the Congress has to do its job.

 

But don’t look for this Congress, run by a corrupt political duopoly, to step up… the bailouts for the wealthy – and for the murderous enterprise that is for-profit US healthcare – will continue.  Americans will continue to enter bankruptcy, w/ healthcare bills being the primary reason.  And all you need to remember about COBRA, it’s just another component, or layer, of the failed for-profit US healthcare system designed to enrich a privileged few, and another means to subjugate American labor.

 

Copyright JM Hamilton Publishing 2020

 

Group Think in a Banana Republic?

Group Think in a Banana Republic?

Across the globe a backlash is building against China for its initial mishandling of the crisis that helped loose the coronavirus on the world, creating a deeply polarizing battle of narratives and setting back China’s ambition to fill the leadership vacuum left by the United States.

- Global Backlash Builds Against China Over Coronavirus – NY Times.

By J.M. Hamilton (5-3-2020)

Trump is such a polarizing president, that either side of the centrist political spectrum often comes down hard as pro-Trump or anti-Trump.  For establishment Dems & voters, if Trump says it, surely, it must be wrong; conversely, for Trump’s base, if the POTUS says it, then it must be right.  Additionally, for many Americans & journalists - attempting the herculean feat of survival, during a time of pandemic - it’s easier to defer to the respective establishment political party’s talking points.

The reality, however, often a slightly more nuanced response is called for by mainstream media, politicians, and voters.  

Take Trump’s recent attacks on China.  Dem leadership has struggled with this issue and have a long history of supporting globalism and trade with China (as did many establishment republicans, up until a few short months ago).  Remember Obama’s & Biden’s support for the TPP trade agreement, US labor be damned?

We can see that Trump hasn’t forgotten and will be attacking Biden w/ ads arriving this Fall, if not sooner.  A slightly more nuanced analysis of the GOP’s & Trump’s sudden Neo-Cold War rhetoric might reveal the following.

One, is Trump attempting to deflect blame from his administration’s – and congress’ - own failings and responsibility for rising US pandemic deaths, by attacking China?  Absolutely.

Two, are Chinese & Asian Americans, at the risk of generalization, excellent citizens, in terms of being hard working, loyal, smart, entrepreneurial, diligent.  Well, generally, yes again.

Three, should America kowtow to communist China’s dictator… and adhere to their demands that the US, and US multinationals, not recognize Taiwan as a sovereign nation?  Should the US refrain from voicing loud support for the brave citizens of Hong Kong, who have taken to the streets to fight for freedom and democracy, as desired by communist China leadership?  The answer, here, is the US should always support freedom and democracy, and not bow to communist party wishes.  (And if US multinationals are booted off mainland China, so be it.  Allowing US billionaires and multinationals to dictate US domestic, foreign, and trade policy has been a complete disaster.)

Four, should America fully investigate China’s, the US’, and the WHO’s role in the coronavirus outbreak and its spread?  Here again, unequivocally, the answer is yes.  And let the chips fall where they may… based upon the timeline so far, it appears that communist leadership, the WHO, and American leadership (Congress and the POTUS) badly botched the initial response to the viral outbreak.

The point JMH is attempting to make is the answer is not as pat, nor as binary, in response to the POTUS’s attack upon China, as the donor class, DNC and RNC leadership, and the MSM would often have us believe.  Few, if any, Americans would support totalitarian China’s gulags & slave labor colonies, anymore than the same Americans should support the US criminal justice industrial complex and mass incarceration.  Both are equally repugnant.  (Excepting, of course, cloying American multinational C-Suites, who always seem to find an excuse to bow down to their communist master). 

There are many more examples of group think - or sheer intellectual laziness - but I’ll provide you with one more. Senate majority leader, Mitch McConnell, recently came down hard on state bailouts, after years of federal & state budgetary malpractice.  Here again, rather than the polarizing response this received in the MSM, and from Dem and GOP leadership, a more discerning response is called for. 

One, is Mr. McConnell one of the most reactionary leaders of our day, nearly always siding w/ billionaires and multinationals against the American economy, labor, and the consumer?  Responsible for stacking the SCOTUS, and federal judiciary, w/ right-wing ideologues and politicians?  Of that, there is zero doubt.

Two, was Leader McConnell one hundred percent correct in identifying state debt (and indirectly, national debt) as one of the key problems of our times?  Absolutely.  However, it’s worth noting, Mr. McConnell did announce his opposition to state debt bailouts, after trillions in pandemic welfare for Wall St, US multinationals, and billionaires (provided by congress and the federal reserve) had already sailed through the senate. 

Three, and what of the Dem reaction?  Which was the idea that catastrophic state debt must be sacrosanct, back stopped, and supported with more debt or more grants, backed by still more national debt?  To be clear, the Dem establishment came down in favor of yet more catastrophic debt.  In the US, public debt has been allowed to accrue to unacceptable levels through an endless series of tax cuts for the wealthy, freebies and corporate welfare for multinationals, and at the federal level, the financing of endless credit card wars.  Moreover, and this is crucial, government debt is used as an excuse to forego childcare & education for our children, to prevent a UBI and Medicare for All for our citizens, and to ensure that student debt is never cancelled.  Infrastructure in the US?  Forget about it, too much government debt. (Note: Nearly nobody asks how do we pay for tax cuts for the rich, corporate welfare, and endless war?)  So the Dem response, Mr. Cuomo’s response, was disingenuous at best.  

That is, Dems & GOP should both be leading the crusade against catastrophic federal & state debt, and how best to appropriately deal with it, w/out screwing over the American people. (And if both parties want to escape humiliation, they should put the federal reserve to work on that project… it’s called debt forgiveness.)

Four, and finally, who profits off all this federal and state debt?  Well, that would be a major donor to both establishment political parties: Wall Street.  Wall Street makes money off the interest income, the debt issuance, the advisory fees, as well as, the derivatives & swaps used to insure and speculate on public debt.  Ironically, much of this debt was accumulated bailing out Wall Street executives for their actions, as well as, the fallout from their actions, repeatedly (see 2008 and our present financial crisis). Would Wall Street survive w/out all this interest income, if public debt was gradually & methodically written down?  The answer is yes. The banks and financial services would have to charge higher fees and premiums, rather than rely upon the crutch/free ride of national & state debt.  Additionally, w/ interest rates headed to zero bound, if not negative, that interest income will likely soon evaporate or be significantly mitigated.

Here again, the political response – the group think response – in either situation was not as binary, nor should it be as polarized, as the two establishment political parties and the MSM would have us believe.  We may not like Messrs. McConnell’s & Trump’s (nor Mr. Cuomo's) motives or politics, but they are correct to bring up the twin threats of communist China and unsustainable public debt.

In fact, in both examples, China and government debt, the answer should be a little more thoughtful but also universally accepted across the political spectrum.  It goes back to first principles.  Doesn’t it?  

Democracy good.  Freedom good.  Authoritarian & totalitarian hegemony & rule – and oppression - are bad.  Public debt used to bailout and reward C-Suites & Wall Street for failure, repeatedly, and to provide tax cuts for multinational predators, ad nauseam – while the American people suffer – is bad.  Debt or MMT used, responsibly, to finance infrastructure projects, a Green New deal, and a student debt amnesty is good. 

If the US wants to escape the fate of banana republics, it must eliminate some of the polarized thinking that has been allowed to divide the nation, so that nothing is ever accomplished, and problems are never solved.  

Indeed, it appears to be the defining feature of the present Washington establishment: bicker endlessly; maintain a good show of disagreement – backed by MSM talking heads; do nothing; and ultimately, preserve a failed status quo that serves a predatory few. 

In banana republics, the elite divide and conquer a nation, while looting the Treasury and the people suffer grinding poverty.  

Sound familiar?  

Profits are privatized, and losses are nationalized.  In a banana republic, the currency is stretched eight different ways, so that cronyism and corruption – between the state and the multinationals & oligarchy that own the state - are essentially monetized, until the currency falls.  

It’s time to end the political duopoly’s group think, if the US has any hope of escaping the fate of emerging market countries.  America’s exorbitant privilege may not last forever.  And if the two centrist parties won’t respond, it is the responsibility of Americans to support third parties that will take appropriate action. 

Copyright JM Hamilton Publishing 2020