STRIKE

STRIKE 

 

US consumer prices were resurgent last month, dashing hopes of a nascent slowdown and likely assuring another historically large interest-rate hike from the Federal Reserve.  From a year earlier, prices climbed 8.3%, a slight deceleration, largely due to recent declines in gasoline prices. Shelter, food and medical care were among the largest contributors to price growth.

 

-       US Inflation Tops Forecasts, Cementing Odds of Big Fed Hike, Bloomberg

 

For an administration touting itself as the most pro-union in history, negotiating a deal with no paid sick time (and allowing workers to still be disciplined if they are sick four of the seven days in a week), with a pharmaceutical deal with no limits on costs to the workers, with health insurance demanding absurdly high premiums (slightly improved, but likely paired with increases in health care costs) is not even close to enough. Nor is it what we should expect from the leadership in national unions who could use the real power of their members to make industry and government understand the importance of their working lives.

 

-       Rail Workers, Nurses, Teachers Are Fighting From the Bottom Up, The Nation

 

By Gregg Wall (9-17-2022)

 

Another week goes by and somehow the American experiment –- despite the most disgusting & repugnant efforts of our economic & political leadership -– survives and staggers forward, propelled onward on the backs of tens of millions of hard-working, honest Americans.  Roughly sixty to seventy percent of Americans live paycheck to paycheck.  Thirty-three percent of Americans don’t make a living wage and the minimum wage remains a hideous joke, at $7.25 an hour.  As told by Senator Sanders, while standing up for workers on the floor of the Senate this week, seventy million Americans are either underinsured or uninsured for health care, and America still doesn’t have mandatory paid family and medical leave. 

 

It might be one thing if the United States was in sync with other nations.  But no, billionaires and bought off, day trading political leadership stand alone … head and shoulders above all other leading nations… in how gratuitously evil America treats its labor force.  And then, corporations and multinationals have the unmitigated gall to whine how they can’t find workers anymore.  Perhaps, that’s because America’ for-profit health care system – and parsimonious employers – killed off, or waylaid, hundreds of thousands of workers during the pandemic?   You know, the pandemic that is alive and well and with Fall just around the corner.

 

Meanwhile, America has not seen wage & wealth inequality on this scale since the last Gilded Age.   With Business Insider reporting that CEOs make 670X the lowest paid workers.   And we heard this week, from railroad management, that they… and they alone… are responsible for the unseemly profits made last year (some $20 billion in 2021).  To say Americans are ‘living to work’ no longer applies.  Instead, Americans are literally working to fight off death, homelessness, humility, and starvation.  As the diseased minds of robber barons grow more contaminated and polluted, the more rigged the system becomes … their minds crippled & infected by that greatest of mental & social disease: greed.  As if crushing consumers, destroying democracy, harming labor and small business owners is something to be proud of.  

 

Take a good look America.  Examine closely our boardrooms and C-suites, take a close look at McKinsey and other consulting firms.  Because it is here – amidst the ever-growing ranks of billionaires, and especially, including the billionaires – that you will find the lowest form of humanity the world has ever witnessed.  Perhaps rivalling the U.S. congress, itself, in its greed and mendacity. 

 

It's with this as a backdrop, I would recommend to American workers … nurses, doctors, railroad workers, teachers, auto workers, delivery drivers…  the indispensable, and yet, the entirely disenfranchised … STRIKE.  Bring the powerful to their knees, let them flounder in the mercilessness of the system they created and that has brought them untold wealth.  STRIKE, rip off the band-aid, and expose the septic shock that is the American -neoliberal- economy, as it lies flatlining on the operating table.  

 

It’s the only thing the oligarchy answers to… the loss of profits.  More precious than their own children: capital gains and greed. 

 

 

 

 

 

 

 

 

Switching gears, inflation – what in reality is all too often consumer price gouging – continues to soar.  As reported this week, year over year, price gouging is up 8.3%.  And the war Biden and Larry Summers are waging against American workers continues unabated.  Instead of attacking billionaires and multinational donors for gouging consumers, workers, children & moms… the supply side of the equation…. Team Failure, at the White House, continues to wage economic warfare against the American people with a higher interest rate regime and endless austerity (anyone see where BBB went to?).  In essence, economic trench warfare against the demand side of the ledger, the American people.  And you thought the fascist GOP were ruthless? 

 

The problem with cutting the legs out from under the consumers & labor, aside from the obvious, is that it leaves all those billionaires, cartels, monopolies, and Wall St commodities speculators unhindered and unimpeded to gouge and gouge some more.  Recession is no longer in doubt anymore and all hopes of a so-called soft landing are all but dead and buried. 

 

Big Oil, food monopolies, for-profit health care, and rents are exacting a very heavy toll upon the American people… and our, allegedly, pro-labor President, the US congress, and the two-party system, along with the oligarchy they all report into, are entirely responsible.  Relying upon the Federal Reserve to bailout America, and the congress, out of self-inflicted crisis after self-inflicted crisis – by printing trillions and trillions of dollars – has brought us to this place.  And given thirty trillion plus in national debt, eleven to twelve trillion in corporate debt, and everyday Americans maxing out their plastic to stay alive… it’s doubtful that the Federal Reserve is going to be able to reverse the concentration of economic power its printing presses have wrought.  Meanwhile, as tweeted by Bob Burgess over at Bloomberg, the debt service load on the national debt is climbing higher and higher… as the FED jacks ups rates to fight consumer price gouging.   Roughly $700 billion in interest expense… and if rates climb higher and higher, one trillion in annual interest expense is not out of the question. 

 

Relying upon the kindness of billionaires, monopolists, and the FED isn't going to get the job done.  Higher wages won't tame inflation, if utilities are just going to pass the cost along to the consumer, while keeping profit margins catastrophic.  At some point, if America is to survive as some semblance of a democracy, the congress is going to have to actually earn its pay, do its job…  and enforce antitrust, begin intervening in commodities markets, regulating utilities & monopolies, and tax extraordinary wealth (and much of that begins by funding regulatory agencies with a vengeance & jamming the revolving door).  At least in the same measure and with the same brio… that billionaires and robber barons attack Americans, democracy, and freedom 24/7/365. 

 

 

Copyright JM Hamilton Publishing 2022

 

Free Money may Finally be Coming to an End...

MONETARY TRICKLE-DOWN – A/K/A FREE MONEY – MAY FINALLY BE COMING TO AN END

 

 

“That indignity of inflation is what’s really cruel about inflation -- it hurts people who have less, it hurts them more,” Daly said. “And it has that sense that you’re trying as hard as you can and you still can’t make it.” 

 

-       FED, Bank of San Francisco President Mary Daly

 

“The electricity market is no more a functioning market because there’s one actor -- Putin -- who’s systematically trying to destroy it and to manipulate it so we really have to react to that and that’s why we’re addressing now the composition of the electricity market,” she told a press conference in Denmark on Tuesday.

 

-      EU, President Ursula von der Leyen

 

By Gregg Wall (9-3-2022)

 

Citizens around the globe maybe witnessing the end of an era… the end of ultra-accommodative monetary policies that have fed some of the greatest egos and excesses the world has ever seen (and hopefully, will never see again).  

 

Ultra-accommodative monetary policies – with Japan as an early test pilot – have been used to bailout billionaires, markets, and failed laissez-faire/libertarian industrial policies for decades.  In the U.S., these central bank policies – namely, interest rate suppression and quantitative easing - came into vogue after the 2008 crash, when billionaires and Wall St. were bailed out with trillions in dollar printing.  Moreover, these billionaires and Wall St were not only bailed out, but made obscenely wealthy (in the greatest transfer of wealth, the world has ever witnessed).

 

Now, multiple crises of a catastrophic nature have brought into clear focus the problems ultra-accommodative monetary policies have created or helped to create.  Included in the list of crises, with many of these serious problems perniciously feeding upon one another: extraordinary national & private sector debts; energy policies (the lack thereof); failing globalization & neoliberalism; a pandemic; over reliance on markets and the private sector; collapsing ethics within Western governments – which have, often, become little more than patronage and spoils systems; in the U.S. in particular, the moral hazard surrounding endless war and debt racked up to finance same; and incessant consumer price gouging (commonly referred to in the MSM as “inflation”).

 

And it is this last crisis… excessive profit taking, at the expense of the economy, the nation, and America’s citizens…  that the Federal Reserve’s policies are largely & uniquely responsible.  Let’s take a quick look, specifically, at what free money & QE have wrought: 

The private equity (PE) and financial engineering business models have thrived.  The industry thrives on cheap debt and leverage and here the Federal Reserve’s policies have been highly rewarding to PE.  A PE industry that with great consistency loads businesses up with debt, rewards management & ownership with billions and billions (in the aggregate, trillions), and destroys jobs, opportunity, future investment, and innovation.  By the way, our current FED chair came from a private equity firm, the Carlyle Group.  As a result of PE destroying businesses, the model ensures greater market concentration and aids and abets cartel & monopoly formation. 

 

M&A and industry consolidation have thrived under the FED’s free money policies.  Thanks to FED and central bank policies…. cheap money has made consolidation, leveraged buyouts, cartel and monopoly formation all that much easier.  Many American industries are now dominated by a handful of actors that are too big to fail.  This gives these industries extraordinary power over consumers, labor, suppliers, smaller businesses, and indeed, over U.S. and, in some instances, global governments. 

 

As I mentioned recently, in another write up, the number of billionaires has soared to catastrophic levels.  The majority of these individuals did not earn their way to billionaire status, by the sweat of their brow; but instead, merely road successive tidal waves of free money, as the US national debt soared from less than $2 trillion in the early eighties to in excess of $30 trillion today.  But try telling these plutocrats - many of them far-right libertarians - that they didn’t earn it.  But instead, happened to be at the right place and time, by accident of birth, and are - for the most part - products of exceptionally lousy monetary policy (fiscal, regulatory, & tax policies, as well) gone horribly, horribly wrong.  And now, these individuals own the U.S. government and our elected representatives. 

 

Thank you, Federal Reserve.  But it would be unfair to blame the FED entirely for these problems… the central bank certainly had a lot of encouragement from America’s elites. 

 

 

 

 

 

 

 

To be sure the FED is not all bad and remarkably, shows great potential. 

 

Overreliance upon the FED to solve the nation’s problems… from cleaning up after billionaire and Wall St excess to tackling consumer price gouging… has really drilled home just how corrupt and incompetent the U.S. congress has become.  The fact that congress consistently abdicates to the Federal Reserve on more serious matters drives the point home. 

 

Clearly, major structural reforms and personnel changes are needed & required. 

 

And my personal favorite, all the above merely shows that MMT works.  After all, if FED chairs can conjure trillions out of thin air for billionaires, markets, and Wall St…. just imagine what honest actors at the FED and within the congress could do for the American people and the nation.  Particularly, if the national debt was in whole, or in part, wiped clean.    

 

The FED reminds us that finance is the art of doing the impossible and making the impossible a reality; the FED reminds us that the creation of debt also requires great ethics and moral responsibility.  Ideally, that power should be shared with the American people, and not remain the exclusive domain of unaccountable and unelected central bankers. 

 

The greatest tragedy of it all -- the era of monetary trickle-down -- was that trillions were printed, and wealth transferred, to some of the worst people and in support of truly malign endeavors.  That is to say, monetary policy wrongly used in the creation of billionaires, cartels, monopolies, and wars. 

 

Let’s hope central banks have learned their lesson and free money is over, at least for nefarious actors and business interests.  It’s going to take a lot of effort and work on the part of central banks, in concert with governments and legislative bodies, to unwind the crises free money has created.  And that process is likely to see even more crises arise.

 

Is free money truly over?  Once inflation is subdued, the pressure to return ultra-accommodative monetary policies will be tremendous and per the usual, for all the wrong reasons.  Congress has a key role to play in protecting consumers, labor, and Americans from a higher rate regime and predatory lending.

Copyright JM Hamilton Publishing 2022