Globalization takes a big hit…

Globalization takes a big hit… 

 

European Central Bank President Christine Lagarde warned that the globalized nature of the euro area’s economy makes it highly vulnerable to systemic shocks from supply chain disruptions. 

 

“There are signs that the global economy could increasingly be a source of shocks for Europe rather than a stabilizer against volatility,”  Lagarde said. 

 

-       Just-in-Time Economy Becoming a Problem for Europe, Lagarde Says – Bloomberg

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By Gregg Wall (10-16-2021)

 

This was the week when many of neoliberalism’s problems, and its twin's, globalization, came home to roost. 

 

Neoliberalism is little more than laissez-faire, that is to say libertarianism in the extreme… where untrammeled markets rule, banks use free central bank money – not to lend – but create monopolies & cartels, and where billionaires are free to buy and purchase Western governments.  As for globalization, it’s the apex of neoliberalism applied to the global economy… where billionaires and monopolists use the global stage to conduct labor, regulatory, and tax arbitrage (essentially pitting nation state against nation state, in a race to the bottom).   Outsourcing, consolidations, crushing labor, the soulless commodification of all human endeavor, foreign supply chains, and just-in-time delivery are some of globalization’s hallmarks. 

 

While animal spirits and markets may have their place in individual sectors of the economy (especially in well-regulated businesses, with plenty of competition), as JMH has written on more than one occasion, the greed that defines neoliberalism and globalization is no way to run a democracy or a national economy. 

 

That became abundantly clear, again, this week, as supply-side inflation skyrocketed, and global supply chains continue to fall apart and are threatening economic recovery.   As Madame Legarde pointed out, I paraphrase, so much of human endeavor is now dependent upon monopolies and just-in-time delivery that if one or more points along the supply chain collapses, the entire system or economy has a very big problem.  Further aggravating inflation, tearing into consumer pockets, labor’s wages, and pushing the economy into recession? 

 

And the ECB’s head banker isn’t the only person who has noted the problem… President Biden also sounded off loudly this week on supply chains, bottlenecks to economic recovery, shortages, and inflation that, well, directly threatens his second term.  It appears that POTUS Biden and establishment Dems were counting on massive vaccine uptake and a reinvigorated U.S. economy to get them off the hook from fulfilling the president’s progressive campaign promises.  That’s speculation on my part (although it would explain endless delays in passing Biden's two-track infrastructure bills), but what isn’t in doubt is that globalization and neoliberalism – as means to rule an economy and government – are, again, an unmitigated disaster.  

Now, with the US recovery under threat, pictures of empty store shelves … just-in-time for the holidays…  and the economy struggling to create well-paying jobs, it’s all looking like a photo-op, and a massive Christmas gift, for the GOP. 

Here’s POTUS Biden:

 

Never again should our country and our economy be unable to make critical products we need because we don’t have access to materials to make that product.

Never again should we have to rely too heavily on one company or one country or one person in the world, particularly when countries don’t share our values when it comes to labor and environmental standards.

I’ve said before: We’re in comp- — we’re in the competition for the 21st century.  We are America.  We still have the most productive workers and the most innovative minds in the world.  But the rest of the world is closing in, and we risk losing our edge if we don’t step up.

 

 

 

 

 

 

Well, Mr. Biden and his Senate colleagues would certainly know… many of the senate gerontocracy were around for much of the last forty years: letting Wall St blow up, not once but twice; allowed the US economy to metastasize into cartels and monopolies; authorized the export of the US economy and middle class offshore; and kowtowed to billionaires and corporate power with lickspittle adulation and blind devotion.  Ah, neoliberalism and globalization at its zenith. 

 

And after crushing U.S. labor all these many years, American workers are having a moment.  Walking off jobs, going on strike, and demanding better working conditions, benefits, and pay.  Long scorned and looked down upon with condescension -- by boardrooms, congress, and C-suites -- it turns out that the vast majority of American workers truly are essential.  But not so much billionaires, who now busy themselves with ego gratification and space races with Captain Kirk.  Thanks to the FED’s easy money policies – minting the exceptionally wealthy out of thin air, along with trillions in dollars – billionaires are a dime a dozen and entirely, nonessential.  Many no longer create anything, certainly not jobs or opportunity; but instead ride a speculative wave as the FED prints money, because the very same rich refuse to pay taxes (despite holding obscene amounts of wealth).  

 

My guess… the fun is just getting started.  Greed, globalization, neoliberalism – and the resulting corruption of the US government – will mean continued economic shocks.  Per the usual, the disenfranchised and the poor - nearly fifty percent of society - will pay the price.  Sadly, the Dems continue to burn up the legislative clock and do absolutely nothing to address fundamental structural defects, both economic & political…  let alone address and meet Biden’s commitments & obligations to the American people. 

 

All too common, America’s politicians make a great show of addressing the symptoms of the problem -- contrived, foreseeable, & manipulated shortages in supply -- instead of the disease itself: greed, globalization, & neoliberalism. 

 

Copyright JM Hamilton Publishing 2021

Progressive Power Learns & Grows

Progressive Power Learns & Grows 

 

This isn’t some radical agenda — progressives are fighting for the President’s agenda, the Democratic agenda, the agenda people voted for. And we will deliver on it.

 

-       Rep. Pramila Jayapal, Twitter, October 2, 2021

 

By Gregg Wall (10-2-2020)

 

This might not have been as dramatic as the Women’s March on Versailles, but when the history books are written, the House Progressive Caucus’ rebellion against highly corrupt centrist Dems – this week – may prove to be a key turning point. 

 

On October 5, 1789, Parisian women -- faced with food scarcity, starving children, and escalating inflation over bread -- decided they had enough and marched upon Versailles.  This key event helped kickoff the French Revolution, and King Louis XVI and the Queen Consort of France, Marie Antionette, were marched back to Paris, never to return to their Pleasuredome. 

 

This week in America, the House Progressive Caucus, led by Representative Jayapal, decided that they had enough, and, w/ the nation facing food and fuel inflation, held their own rebellion.  The Progressive Caucus told House Speaker Pelosi they would not pass the corporate welfare package (aka the Senate’s bipartisan infrastructure bill), without first passing POTUS Biden’s New Deal legislation (the $3.5 trillion Human Infrastructure bill).  The Progressive Caucus has not always been politically adroit, but having been burned many times before, finally took a hard line.

 

To be sure, the bipartisan infrastructure bill is not entirely bad; but the problem – as with all things bipartisan – is that it is corrupt, leans far more upon propping up a failed status quo, particularly in regards oil & gas energy, and is entirely inadequate for the times.  That is to say, the bipartisan bill doesn’t hold a candle to the real deal, the New Deal package President Biden ran and won upon (specifically, the aforementioned $3.5 trillion Human Infrastructure, reconciliation bill). 

 

With defeat at hand, POTUS Biden showed up on Capitol Hill and attempted to calm roiled legislative waters.  Biden reversed the House Speaker -- who attempted to shaft the American people, progressives, and the Biden agenda, by pushing through the bipartisan bill -- and the President made clear, the Human Infrastructure bill must be a part of the overall package. 

 

 

 

And speaking of history, this is the first President, since LBJ, that has attempted something on this order of magnitude.  Finally, stepping up for the American people, who have long faced: the tyranny of a very ugly oligarchy, billionaire rule, a highly corrupt congress, and neoliberalism & globalism that has completely annihilated the American middle class & worker.  Biden, indeed, knows his presidency is on the line; but more importantly, the pretense of American democracy, itself, is on the line (destitute as the institution is under a failed/purchased two-party system). 

 

In short, the defects and decay of a highly corrupt – corporate – political centrism lie smoldering upon the ash heap of history throughout the West.  See Germany’s defeat of the conservative, centrist CDU in Germany… and now, Greens are the kingmaker.  In Canada, progressive Liberals - and Mr. Trudeau - just won re-election, but only with the help of the leftist, progressive NDP.  And now, Progressives are flexing their muscle in the U.S. ... a direct reflection of neoliberalism's failure. 

 

But I digress.  Within America, the parallels to pre-revolutionary France don’t end with the Women’s March…  rising inflation and ever-increasing food costs were just part of the picture.  King Louis XVI had also deregulated bread and the profiteers & speculators made a killing, on the heels of poor harvests, at the expense of French citizens and economic stability.  Gee, sound familiar?  The monarch and his court were corrupt, completely full of themselves, and bumbling.  Not unlike the Congress, the Federal Reserve, and the U.S. Supreme Court?  Mr. Louis had also driven his country deeply into debt, ironically enough, financing the American Revolution - just to stick it to the British. Today, America is deeply in debt, funding & financing empire, failed nation building, and endless war. 

 

History doesn’t always match up, entirely, with the present, but it is said to often rhyme. 

 

Vive la revolution !!!

 

Copyright JM Hamilton Publishing 2021

Chairman Powell needs to go…

Chairman Powell needs to go… 

 

If the Fed doesn't slow the pace of its monthly bond purchases in the next few months, its balance sheet will be close to $9 trillion by yearend. In the past three months alone, its holdings have expanded by $384 billion, to $8.45 trillion.

 

-       Lisa Abramowicz, Twitter, September 16, 2021

 

By Gregg Wall (9-18-2021)

 

One of the more fascinating late summer stories was congressional house members called upon the Federal Reserve (FED) Chair, J. Powell, to be replaced by the Biden Administration.  The members all hail from the progressive wing of the Democratic party - Reps. Alexandria Ocasio-Cortez, Rashida Tlaib and Ayanna Pressley (often referred to as the Squad).  In particular, these members of congress are deeply concerned the FED chair hasn’t used his tremendous power to rein in Wall Street banks and their funding & investment in the fossil fuels industry.  Moreover, the Federal Reserve -- unlike key central banks, globally -- hasn’t utilized monetary policy and regulatory authority to advance Green initiatives. 

 

The fallout was immediate: with many neoliberal economists, disingenuously, claiming that it’s the role of the US congress to pass legislation to rein in banks and financial institutions, in regards climate change… knowing full well that the bickering & incompetent day traders in the congress will be lucky enough to pass Biden’s infrastructure bills before the 2022 campaign season heats up in earnest.  There’s little doubt congress should play a role in this; but there’s also little doubt the U.S. central bank has a crucial role to play as well, since Wall St. banks & investments play a key role in the perpetuation of an industry that is killing the Earth. 

 

The FED’s mandate, of course, includes price stability and full employment … and if there’s anything that has proven highly unstable - indeed, inflationary – it is the price of oil and energy.  The other commodity that has shot through the roof for all Americans is the price of food, and here again, climate change plays no small role in diminishing crop yields and distressed livestock.  In short, the Squad would appear to be one hundred percent correct in calling for a new FED chair, and perfectly within their right to pitch new legislation, Fossil Free Finance Act, mandating that U.S. banks get in line with the Paris Agreement. 

 

 

 

 

 

 

 

Green initiatives are near and dear to my heart, but the other reason why I like this story so much is because the Federal Reserve basically operates in the shadows.  It gets very little scrutiny from the MSM and the vast majority Americans have very little idea of what the FED does… or the outsized, undemocratic, and thoroughly unaccountable role it plays in their lives. 

 

In short, the Squad has done all Americans a tremendous favor by calling attention, and perhaps, beginning a long overdue education of this most powerful branch of government. 

 

Let’s take a quick look at the damage the hyperactive Federal Reserve has done the United States and the American people over the last couple of decades: 

 

It has continuously bailed out Wall Street… and because of this, badly needed reforms in our financially engineered economy, and the catastrophic structural defects emanating from Wall St., are never addressed. 

 

The Federal Reserve’s easy money policies have fueled M&A, industry consolidation, monopoly, monopsony, cartel, and financial engineering.  As JMH has written on more than one occasion, all known killers of jobs, opportunity, innovations, and the economy itself. 

 

The FED has created huge distortions in the economy, incenting speculation via a grossly overinflated stock market… instead of business creation, entrepreneurship, and jobs.  Moreover, the FED’s easy money policies are responsible for disastrous wage and wealth inequality.

 

The FED, and three prior chairs (Greenspan, Bernanke, & Yellen), all funded endless – credit card – wars; and played no small part in the moral hazard surrounding those wars. The FED plays a key role in keeping asset prices and stock prices, in particular, elevated.  Our stock trading Congress eats it up… hence, the perverse incentive to keep America’s finest – her soldiers – tied down in forever wars and engaged in failed nation building.

 

To say the Federal Reserve is the locus of all evil maybe an understatement.  As mentioned, the American central bank is thoroughly unaccountable, elitist, undemocratic, and has entirely become a crutch for the failed U.S. congress and a morally bankrupt two-party system.  The FED’s unwritten mandate appears to be to keep the whole house of cards afloat by printing more money and to apply jet fuel, easy money, to the stock market.  Here, please notice, in particular, Ms. Abramowicz’s quote above and the FED’s ever expanding balance sheet. 

 

I have no objection to the FED printing money to help everyday Americans…  what I object to is the manner, in which, the Federal Reserve’s policies mint billionaires and catastrophic wealth out of thin air, which is a direct threat to democracy and sound government.  Indeed, the future of the nation. 

 

Moreover, the FED, and its chairs, should know better… They’ve been repeating the same Japanification/ultra-accommodative monetary policies for over two decades and with the same highly damaging consequences & effects.  It’s not getting better; it’s getting worse. 

 

But perhaps what is most dangerous about the FED is that it allows Congress to continuously escape accountability for domestic policy, budgeting, foreign policy, long overdue economic & political structural reforms (and this in turn is tearing the country asunder) … especially, perpetual Wall Street bailouts and the financing of endless wars.  The FED enables the House & the Senate, forecloses upon very important conversations the Congress needs to be holding with the American people, like who we are as nation and what do we, and do we not, need & want to fund.  Instead, Congress waves its wand, passes omnibus spending measures - perpetuating a failed status quo, tax cuts for the rich, and never has to account for where the money comes from (not with the ultimate sugar daddy, the FED, standing by).  And as long as it’s welfare the rich, it’s all good.  

 

Right now, presently, when POTUS Biden’s New Deal legislation is needed most, is not the time to rein in the FED… finally, when congress is on the verge of helping the American people, now is when we need the FED’s money printing capabilities as never before. 

 

But the day is coming… a great reckoning is coming.  The national debt is unsustainable, and despite elitist lies, it will never be repaid, not by this or future generations.  Nor should current & future generations pay for a national debt accumulated, funding: bailouts for billionaires & Wall St; tax cuts for the rich; transferring wealth from the many to the few, via the debt & stock markets; nor financing credit card wars or endless corporate welfare (in brief, the FED has funded a massive billionaire welfare state, while elites & lackeys have crammed austerity down the American people’s collective throat).  

 

Not a dime. 

 

Bottom line: Kudos & accolades to the Squad for kicking off a long overdue - preliminary - education on the Federal Reserve and its chairs.  Let’s hope these members of congress continue to use their voices, & power, to educate the American people. 

 

This is an education that is long, long overdue. 

 

Copyright JM Hamilton Publishing 2021