America’s bailout package to overcome the coronavirus
‘recession’ is twofold:
One part is printing
money for employees and consumers, so that they won’t be thrown out onto the
streets for non-payment of debts such as mortgages, car-loans, credit cards,
and student loans.
Another part is printing
money for bondholders and stockholders, so that their investments will still
have value and there won’t be panicked selling of them as corporations
accumulate soaring losses because consumers are staying home and are cutting
way back on expenses.
The top-down part of the bailout (the part for investors) will
merely add to the wealth of the already-wealthy, while everybody else sinks
financially into oblivion. (On April 9th, the Zero Hedge financial
site explained in detail why
even bailing out the airlines would hurt the economy more than help the
economy.) The top-down part supplies the
money to the corporations instead of to their employees and consumers, and is
therefore supply-boosting instead of demand-boosting. Supplying money to the
corporations that the Government selects to protect will enable those
corporations to buy up assets and corporations which during the crisis are
being auctioned off by the ones that go out of business, and this will leave
the nation’s wealth in even fewer hands than before the epidemic struck.
The bottom-up part (the
part for workers and consumers) will be exactly the opposite of that: it will
help prevent another Great Depression. By boosting purchases, instead of
bailing-out billionaires and such, it will enable the economy to keep functioning,
and it will not increase the concentration of wealth.
However, employees and
consumers don’t have many lobbyists, but billionaires do, and billionaires also
own (through political donations and lobbyists) almost all members of Congress
(and also the mainstream press), and they not only own, but are represented by,
one inside the White House, who is surrounded there by others, and by
representatives of others, so that the concerns of the wealthiest will be very
well represented by America’s Government, and will end up dominating the
bailouts, so that only the insiders, who are well-connected in Washington, will
be protected. (And Joe Biden would be no improvement over Donald Trump,
though his rhetoric is
different.)
Already, we see, in the ‘news’-reports, that there is ‘chaos’ etc.
in the U.S. Government’s response to the crisis, but what’s not being reported
in the mainstream ‘news’-media is that there very much is method to this
seeming madness, and it is the method of the well-practiced
and well-funded takers, definitely not of their victims, from whom
they (and their Government) have been, and now increasingly are, taking. The
takers own the Deep State, and are protected by it.
The vast bulk of the bailouts will go to them. The vast bulk of the
bailouts will go to suppliers (investors), not to their workers and consumers.
Printing money for bondholders and stockholders will
predominate. It won’t be like Franklin Delano Roosevelt (FDR) did during the
first Great Depression, when the federal money went to the public instead of to
the megacorporations; it will be the opposite. This will be a supercharged concentration of wealth. Money
is power, and the power of billionaires will thus be enormously increased; the
power of the public will go to zero.
The inevitable result of this will be enormous spreading poverty,
and, ultimately, so many dollars being owned by the billionaires, so that
hyperinflation will result if this continues for more than a few months, and it
will not be able to be overcome by any form of monetary response, because it
will instead be a problem about the distribution of actual wealth (not mere
money); and, as Raoul Pal phrased this problem, “Money printing does not make the
dollars available. They get stuck in the financial system and hoarded” (by
the wealthy), at a time like this. So: there still will be wealth, but
increasing percentages of it will be owned by the super-rich; and, so, their
corporations will experience plunging sales. Everything (except, perhaps, gold,
etc.) will actually be worth less than it was before, even though inflation
will be soaring. More dollars will be chasing fewer goods and services that are
actually being purchased. The stock and bond markets will then crash. The
result will be like Germany during the Weimar Republic. But the cause of it
will be different; it won’t be war-reparations payments; it will instead
be the almost unimaginable corruption at
the very top of the U.S. Government and economy. Whereas Germany had a deeply
rooted social-welfare system, America does not, and most of America’s billionaires are Republicans
(unapologetically elitist psychopaths), which means they want there to be even
less of that: simply dog-eat-dog (survival of the ‘fittest’) amongst everybody
else — not their own class. Although Democratic politicians will probably sweep
the November elections, those individuals are deeply indebted to Democratic Party
billionaires, for their very careers. These billionaires must be served first —
it’s the American way, “Greed is good” (at least after 1980).
One of the reasons why Weimar-era Germans gravitated politically
rightward was that Germany at that time did not have a right-wing-populist
Government; and, so, right-wing-populist politicians didn’t get the blame.
Hitler came to power then. America now does have a
right-wing-populist Government. Right-wing populism will therefore get the
blame. If the leftwing-populist, democratic socialist, Bernie Sanders had been
chosen by Democratic Party voters, then America would not be facing its present
very dire prospects, and congressional Democrats (because their Presidential
candidate would then be leading them) would now be blocking — instead of
passing into law — the bailouts for millionaires and
billionaires; but there is no such leadership, at this crucial time. (As a
leader, Joe Biden is already a failure.) This is why America now faces a near
certainty of another Great Depression. It comes from the leadership, and the
leadership don’t represent the public.
The result when a right-wing-populist country faces collapse is
a police-state, facing a revolution: military guns and tanks, facing the
public. If Democrats win the November elections, then Democratic Party
billionaires, and not Republican Party ones, will be making the
decisions. Biden is no FDR.
Perhaps there exists no close historical precedent for
understanding what the outcome of that would be. If there instead turn out to
be Republican billionaires continuing to make the decisions, then there will be
massive bloodshed, and increasing defections from the Government, and an
increasingly unmanageable revolution, which will be a hell for any predictions.
But with Democratic Party billionaires taking charge, there will be at least a
possibility of fundamental reform. Perhaps someone like FDR will arise after
Joe Biden’s corruption and
incompetency (he won the nomination by cheating) will have been
sufficiently displayed for a few years. Therefore, maybe, starting in 2024
(after Biden’s failure), things will be able to start to turn around, for the
better, by means of a new set of primaries for the Democratic Party’s
nomination (or else by a Constitutional Amendment doing away
with political parties and the Electoral College).
The fundamental problem, right now, is that the sheer corruption at
the very top of the U.S. Government will cause trillions of dollars of federal
bailouts to go to the very wealthiest Americans, at a time when there is
soaring need by the public. The idea that America will be able to succeed no
matter how corrupt its Government is, is now being tested, and I don’t see any
way that such an idea will be able to pass such a test. But only time will
tell. We’re now in an enormous experiment — that’s for sure.
There is one reason to hope that the bleak scenario described
here might be averted. The most advanced software for predicting Covid-19 cases
and fatalities in the United States provides projections at the “Health Data” site, which started
on April 7th, by projecting that the peak in
cases will be on April 15th and that by May 21st there will have been 81,000
deaths, and that by August 4th the final death will be recorded, at 81,766.
Three days later, on April 10th, the projections were instead that
the peak will be on April 11th and that by May 22nd there will have been 60,000
deaths, and that the final death will be recorded on August 4th, at 60,415.
This 26% reduction in the ultimate total death estimate, within only 3 days,
indicates that probably the outlook is considerably less dire than has
generally been thought to be the case. However, if this projection turns out to
be true, so that almost no Americans will die from Covid-19 after May 22nd,
then the question still remains: With tens of millions of Americans having gone
for so long without income, what will be the consequence to the American
economy? It will still be another Great Depression. In fact, on April 9th CNBC
headlined “JPMorgan now sees economy
contracting by 40% in second quarter, and unemployment reaching 20%”.
(Total GDP-contraction during the Great Depression was a
decline of 46% during 1929-1933, the steepest such plunge in U.S.
history. Peak unemployment that was reached during the Great Depression — also
a U.S. record — was 19%, in 1938.) But maybe it won’t last as long as the first
one did. Furthermore, if the Government’s response to the crisis will be the
opposite of what FDR’s was and will bail out the megacorporations instead of
bail out only the public, what type of country will there be afterwards?
That’s the problem — the
insatiable and enormous grabbing by America’s super-rich, by means of their (not our)
Government. As the liberal
billionaire Warren Buffett observed in
November 2006, “There’s class warfare, all right, but it’s my class, the rich
class, that’s making war, and we’re winning.” Now, nearly 14 years later (and especially
after the current round of bailouts), we can say,
simply: they won. America is
a dictatorship by the rich; no longer a
government “of the people, by the people, for the people.” Not only do
Republican voters want to retain this dictatorship by the rich, but Joe Biden’s
victory against Bernie Sanders proves that many Democratic voters also want it to continue.
Sanders was the only candidate calling for “revolution,” and that call by him
was spurned. That decision by the voters, which was guided by the lobbyists and
news-media, which were guided by the billionaires, shapes America’s future.