Economy

David Sirota’s Word of the Week: Looting

Published by Anonymous (not verified) on Fri, 29/05/2020 - 5:10am in

We don’t call this “looting” because it is being done quietly in nice marbled office buildings in Washington and New York. We don’t call this “looting” because the looters wear designer suits and are very polite as they eagerly steal everything not nailed down to the floor. Continue reading

The post David Sirota’s Word of the Week: Looting appeared first on BillMoyers.com.

‘Two roads diverged in a yellow wood’. The question is which one will we take?

Man standing in a wood at a fork where paths divergePhoto by Vladislav Babienko on Unsplash

Two roads diverged in a yellow wood’ are the opening words of a poem by the celebrated poet Robert Frost. Whilst he was writing about his own personal life’s journey, they are words that could not be more appropriate to the situation that not just the UK, but the planet, finds itself in. The COVID-19 pandemic which has brought world economies to a standstill and threatens a deep recession is uppermost in our minds, particularly those people who have been directly affected by the disease or by loss of their employment. But those immediate threats, devastating enough as they are proving to be with no immediate solutions and a government anxious to get the economy going again regardless of the potential human consequences, are overshadowed by another peril. Climate change remains the biggest challenge of all, risking as it does the very survival of the planet’s ecosystems and by implication human existence.

Our daily routines have until now imposed a false sense of permanence. The illusion that despite the cyclical economic instability which capitalist societies are prone to, everything always, eventually, returns to ‘normal’. Even when normal has patently shifted. We have accepted this as part and parcel of how things are, even when it hurts people. But the severity of the pandemic is challenging that view. We are finding that in addition to the risky nature of life which COVID-19 has revealed, danger also comes from the fact that our economic system has been built on shaky ground indeed – one might say quicksand. The rolling death toll and the degradation of our public services is a daily reminder.

As the country moves towards a lifting of lockdown and a return to semi-normality, we are seeing more cars on the road, beaches crowded with day-trippers, people travelling hundreds of miles to visit beauty spots, the prospect of schools re-opening amidst huge controversy and airlines proposing to recommence flights, the question hangs in the air about what sort of future lies ahead. Whether we can indeed continue along the perilous path of growth we have been travelling along without some sort of future reckoning. And if not, what should our world look like?

COVID-19 and its associated threats have revealed in the starkest way possible that the economic system which prevailed for the last forty years and more has left the world unable to meet the challenges so cruelly posed by the pandemic. All as a result of a toxic neoliberal ideology which has left our public and social infrastructure in ruins, impoverished people as a direct consequence of a globalised world which has kept wages and living standards down and focused on the primacy of the individual over collective action. Politicians have listened to the so-called economic gurus and put their faith in a mystical market as if somehow it alone can direct the orchestra from the celestial podium. Letting it rip to find that non-existent perfect equilibrium by serving global corporations through legislative means, promoting the lie of trickle-down, and claiming that the public infrastructure depends on so-called ‘wealth creators’.

We have paid a heavy price and we are indeed at a fork in the road. Where we go from here is not clear. And yet the choices we make next will make all the difference.

Earlier this week, the President of the World Bank said that ‘the pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty’. The Chancellor of the Exchequer in the same week warned that Britain was facing a ‘severe recession the likes of which we haven’t seen’ which would cause severe damage to the UK’s economy. He also went back on earlier predictions of an ‘immediate bounce back’ as the lockdown was lifted and said that there would be more hardship to come.

This came as the Treasury confirmed that around eight million UK workers have now been furloughed and two million are expected to receive support from the government. The government’s spending has risen massively to support those affected and keep businesses ticking over until such time as a recovery is underway.

Although there has been some talk of more austerity to pay for this spending, even the most hawkish of commentators from neoliberal institutions like the Adam Smith Institute recognise that the last thing we need now is to worsen the prospect of a full-scale depression, even if those observations are still couched in household budget terms. Borrowing whilst interest rates are low or growing the economy to improve tax revenues are the oft-repeated caveats to that spending. Clearly, this is not closing the door to such false household budget narratives.

It is politically expedient to accept the need for spending to stop the economy from collapsing and causing infinite damage to the business infrastructure and profits much as the Labour government did in 2008 when it bailed out the banks. But in time, those narratives will likely be given a fresh breath of life at least in terms of continuing to deliver a political agenda.

It will likely bring the next instalment of austerity for public services and their employees’ wages and carrying on along the well-trodden path which favours corporations by delivering a legislative framework not just at national level but international level through the pursuit of free trade deals.

The state with its power of the public purse being used, not for the public purpose, but for quite a different estate – the corporations and a few wealthy elites. Indeed, this week the media, economists, politicians and political commentators have been priming the public for the acceptance of more austerity by reinforcing the message that governments have to borrow or that government has to collect money from tax revenue or other charges before it can spend.

Both the Huffington Post and the BBC ran articles this week discussing how governments pay for the government’s increase in spending through bond issuance. Peter Hitchens tweeted that Rishi Sunak’s furlough billions were just giant payday loan that the country will have to pay back with interest (at some future date). And Boris Johnson when challenged about the decision to continue charging health and care workers to use the NHS (before the decision to rescind the charge) suggested that the money was needed to run the NHS. Indeed, Captain Tom has been knighted for his work in raising money for the NHS as if the institution was a charity and not a publicly funded organisation which does not require tax or other contributions to fund it.

The narrative being reinforced in in the public’s mind is that at some time down the track it will all have to be paid for through more austerity or increased tax. It is worth repeating here that a sovereign currency-issuing government does not need to borrow in order to spend. Indeed, logically speaking how could it borrow money unless it had been spent by the government first? What looks like borrowing isn’t and bond issuance has quite another role. It is instead a smoke and mirrors exercise designed to give the appearance of borrowing and continue the narrative that governments are beholden to money lenders in private markets or that the markets call the tunes.

Dispelling the myths about how governments spend is a priority if we are to give ourselves half a chance to make a different and better world. As was indicated at the beginning of this blog COVID-19 and recession are just part of this picture. The talk about ‘getting back to normal’ overshadows the biggest threat that we still face – climate change and what our response should be. The false narrative of the burden of debt and paying it back will, if allowed to persist, persuade people that action to deal with any of those threats whether unemployment caused by a COVID-19 induced recession or climate change is unaffordable in the long term. That there is always a financial price to pay.

The reality is that the price will not be monetary, it will be in the lives of people who are unemployed, and a trashed planet not fit to live on. We will be rulers of a dead planet, poisoned by our own hand.

There is an alternative. It starts with knowing about how money works and being able to challenge the current narrative that success is to be judged by how well our politicians managed the public accounts.

Contrary to Mrs Thatcher’s oft-repeated slogan ‘there is no alternative’; there is one.

This is the moment to think about a permanent Job Guarantee to manage both the catastrophic effects of COVID-19 on people’s lives and the economy in terms of stabilising it through ending involuntary unemployment and facilitating the transition towards a green and sustainable world. So much potential but will our government act?

Maybe that time is coming; only time will tell. The political discourse has so far been dedicated to a return to normality, growth and rising GDP.

Fiona Harvey, the environment correspondent in the Guardian began an article this week with a stark warning:

‘Global leaders must heed the lessons of the financial crisis of 2008 when they look to repair the damage from the coronavirus pandemic, leading experts have warned, to avoid entrenching disastrous social, health and environmental inequalities and hastening climate breakdown.

The stakes are high.

Earlier this month the Oxford Smith School of Enterprise and the Environment published its paper ‘Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?

In its introduction, it noted that the crisis had demonstrated that governments can intervene decisively once the scale of an emergency is clear and public support is present. It went on to say that:

‘The climate emergency is like the COVID-19 emergency, just in slow motion and much graver. Both involve market failures, externalities, international cooperation, complex science, questions of system resilience, political leadership, and action that hinges on public support. Decisive state interventions are also required to stabilise the climate, by tipping energy and industrial systems towards newer, cleaner, and ultimately cheaper modes of production that become impossible to outcompete’

Its recommendations for contributing to achieving economic and climate goals were:

  • clean physical infrastructure investment
  • building efficiency retrofits
  • investment in education and training to address immediate unemployment from COVID-19 and structural unemployment from decarbonisation, — natural capital investment for ecosystem resilience and regeneration
  • clean R&D investment.

A state-run Job Guarantee implemented to serve both national and local community objectives offers the perfect vehicle to deliver a green-led recovery and reduce the inequality of past decades. Retrofitting existing buildings, creating cities which are cyclist and pedestrian-friendly, digging trenches for broadband connections, planting trees or putting in networks for charging electric-powered vehicles are just a few examples of the work that Job Guarantee participants could accomplish. Our imagination can determine the rest. Serving the public purpose must be the quest.

A Job Guarantee provides an immediate solution to the problem of rising unemployment to stabilise the economy, an opportunity for training the workforce and, out of the catastrophe of pandemic, also provides the perfect opportunity to start along the path towards a more equitable, greener and sustainable world.

We as a nation may also want to consider what sort of future we want in terms of public infrastructure to serve the public purpose. Do we want more state provision – a publicly provided and paid for infrastructure and employment to ensure that we can meet whatever the future holds? If the current situation is anything to go by, there are lessons to be learnt. Or do we prefer to continue as we are and move into a Mad Max dystopian type world where corporate profit is the guiding light and government is its servant?

Brian O’Callaghan, a co-author of the paper said that it was ‘this is the single biggest opportunity for the government to shape the future decade…’ which indeed it is.

Robert Frost ended his poem:

‘Two roads diverged in a wood, and I —

I took the one less traveled by,

And that has made all the difference.’

Therein lies the challenge. Not directly a personal one in this case but one which involves us all. Do we continue as we are or choose another path for the sake of the future and those that will inherit it?

 

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The post ‘Two roads diverged in a yellow wood’. The question is which one will we take? appeared first on The Gower Initiative for Modern Money Studies.

The Dem’s $3 Trillion Dollar HEROES Act Can Not Brace Us for the Coming Shock

Published by Anonymous (not verified) on Tue, 19/05/2020 - 4:57am in

Tags 

News, Economy, stimulus

The actual number of people who stand to benefit the most from last month’s CARES Act could fit into Dodger Stadium and still have plenty of elbow room to catch any foul balls that might come their way. Just 43,000 of the richest Americans, those making at least $1 million a year, were handed a $1.6 million-dollar average “windfall” by provisions included in the bipartisan bill by Republicans.

Sections 2303 and 2304 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily suspends a limitation on tax deductions for capital gains and other “nonbusiness income,” effectively handing hundreds of billions of dollars in tax breaks to the wealthiest Americans worth an estimated $80 billion in 2020 alone.

On Friday, Nancy Pelosi and the Democrats introduced a massive $3 trillion-dollar stimulus package called “The Heroes Act,” named in honor of the monies allotted to front-line emergency workers. The new bill also seeks to repeal the egregious provisions included in the CARES Act, which allow hedge fund managers, real estate speculators, and business owners to apply them retroactively all the way back to 2017.

According to a study commissioned by Senator Sheldon Whitehouse (D-RI) from the Joint Committee on Taxation (JCT) at the end of April, less than three percent of the tax-relief benefits included in the CARES Act will go to people earning $100,000 a year. “Relief legislation ought to address the needs of small businesses and workers,” said Whitehouse, “not fleece taxpayers to benefit real estate moguls and hedge fund billionaires.” The Senator introduced a bicameral piece of legislation with Congressman Lloyd Doggett (D-TX) to “unwind” the tax-liability reductions and is part of the Heroes Act.

 

Austerity politics

Despite the clear political advantages of attacking such a grossly unfair gift to the most well-off at the expense of the most vulnerable, the Democrats’ HEROES act actually goes further in undermining the help offered to small business owners by excluding the Paycheck Guarantee Act, which would have assured 100 percent coverage of workers’ wages up to $90,000 a year.

A “mini-rebellion” reportedly ensued among progressives in the House over its exclusion but was eventually squelched by Pelosi, leading to the passing of the controversial bill in a 208-199 vote. In addition, the legislation stamped out efforts to provide monthly recurring relief checks of $2,000 per household, opting instead for a one-time payment in a second round of the $1,200 stimulus checks. Other measures aiming to correct some of the shortcomings of the CARES Act were also rebuffed by the Democratic leadership, such as automatic stabilizers to tie federal aid to economic conditions and logistical improvements for the delivery of funds to individuals.

While the Heroes Act was immediately pounced on by Senate Majority Leader, Mitch McConnell, and other Republicans, who derided it as an election-year ploy with “no chance at becoming law,” the implications of their political infighting for millions of Americans could prove very costly in both the short and the long term.

 

Raiding the castle

The disconnect between reality on the ground and Capitol Hill is staggering. As the Trump show continues and each side of the political aisle takes aim at each other, the economy’s freefall is quickly reaching catastrophic levels.

A recent University of Chicago poll found that 37 percent of unemployed Americans ran out of food in April. Kate Maehr, executive director of the Greater Chicago Food Depository, has “never seen anything like it,” referring to the 60 percent increase in the number of people visiting food pantries that are part of her organization.

Meanwhile, 46 percent of those surveyed confessed to worrying that they, too, might run out of food in the near future if they didn’t find employment soon. Their prospects depend heavily “on whether states can restart their economies without creating new surges in COVID-19 infections,” according to Gabriel Ehrlich of the University of Michigan. His assessment was echoed by the Federal Reserves’ Financial Stability Report last Thursday, which noted the “sharp economic contraction” resulting from the economic shutdowns would “create fragilities that last for some time.”

Fed chairman, Jerome Powell, stated last week that “Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage,” calling out the GOP for “pumping the brakes” on Pelosi’s $3 trillion stimulus bill. Senate Majority Leader, Mitch McConnell said the government should “take a pause here” and evaluate what has been done to this point.

Other Republicans voiced their opposition to the Heroes Act calling it “bloated” and “nothing more than the Democratic policy agenda masquerading as a response to the coronavirus crisis,” according to Rep. Tom Cole of Oklahoma. Only one Republican House member voted against his party and for the Democrat-led bill. Soon-to-retire Rep. Peter King of New York, who has served 14 terms in the U.S. Congress, told Fox News that he “had no choice,” asserting that “New York will absolutely collapse if that aid money is not there,” and adding that this wasn’t a time for politics.

 

Canary in the coal mine

New York City, in fact, provides a clear picture of what is in store for the country as a whole as the crisis motivates the wealthy to escape to safety and the less fortunate are left behind to deal with increasingly deteriorating circumstances. A recent article published by the New York Times delves into data provided by Descartes Labs and others, which analyzed smart-phone data to determine where New York residents had been over a two-week period in February when the pandemic began to unfold in the United States.

Notwithstanding the broader implications of smart-phone data surveillance, the results of the analysis determined that the city’s population declined by almost 5 percent as people with the means to do so fled to second homes out in the country or elsewhere. Peter Bearman, a sociologist from Columbia University, highlighted the contrast in inequality this phenomenon makes clear, stating that “everybody is really aware of the uneven distribution of risk, and the unfairness of having to work to provide services to people who are wealthy enough to avoid providing services for themselves”.

As the crisis deepens and those who don’t have the luxury of riding it out in the Hamptons or some other place are forced to stay behind in an economy in free fall, where unemployment is projected to reach unprecedented levels of 40-45 percent, the pussyfooting and pettiness that has become endemic in the American political system – run by the same class of people running for the hills with their million-dollar tax breaks – will inevitably give way to a mass insurrection by those most affected by their contempt, that not even a pandemic can hold back.

Feature photo | House Speaker Nancy Pelosi of Calif., speaks about the so-called Heroes Act, May 12, 2020 on Capitol Hill in Washington. Saul Loeb | Pool via AP

Raul Diego is a MintPress News Staff Writer, independent photojournalist, researcher, writer and documentary filmmaker.

The post The Dem’s $3 Trillion Dollar HEROES Act Can Not Brace Us for the Coming Shock appeared first on MintPress News.

As Corporations Adapt to a COVID-19 Economy, the Working-Class Prepares for a Paradigm Shift

Published by Anonymous (not verified) on Sat, 16/05/2020 - 5:42am in

Tags 

Economy

In a disturbing trend foreshadowed by suddenly ubiquitous multi-screen video chatting applications like Zoom and now Google Meet, a soup-to-nuts restructuring of corporate policies and procedures designed around a “new normal” where people are conditioned to avoid social contact and remain in their homes or cars, is being pushed by global consulting giants like McKinsey & Company, which yesterday published a “90-day plan” to initiate “rapid migration to digital technologies driven by the pandemic.”

McKinsey, an American management consulting firm founded in 1926 with over 120 offices worldwide, has cultivated great influence in both the public and private sectors with alumni staffing the C-level offices of massive concerns like Boeing, Google, Facebook, and IBM. McKinsey has been described as the Jesuits of capitalism as a result of their penchant for secrecy but also widespread influence at the highest levels of power.

 

The 90-day plan

In the 90-day plan, McKinsey expounds on four basic initiatives that they say must underpin the new reality for corporations in a post-COVID-19 universe, assuring us that we are at the threshold of a “historic deployment of remote work and digital access to services across every domain.” 

Divided into 30-day tranches, the firm recommends overhauling “customer expectations” and moving to a remote-first corporate structure, accelerating digital channel adoption across sectors. In layman’s terms, corporations are being advised to leave the familiar concept of office space behind and move towards a work-from-home model, creating a remote-work support staff to make the transition and management of the new digital paradigm as seamless as possible.

Other recommendations include “selective modernization of technology capabilities”, meaning ad hoc implementation of cloud-based computing technology guided by assessments of the “cyber risks” associated with a fully-digital operation. Artificial Intelligence is another component in the avalanche of structural changes that are in store for Americans in a reopened economy.

 

Assessing the Implications

Should this or similar plans move forward – and there is no indication they won’t – the implications for regular people are significant and life-altering. McKinsey claims that the measures taken to stem the spread of the novel coronavirus have catapulted us “five years forward in consumer and business digital adoption in a matter of around eight weeks.” Their gleeful assertion is followed by a list of all the different kinds of changes we can expect to see in the sectors of banking, schooling, healthcare, and the service industry as they all move towards a digitized economy.

The consulting firm warns that “consumption patterns” are unlikely to return to pre-COVID-19 levels for some time, if ever, and suggests that companies prepare to deal with endemic “structural overcapacity” as they navigate the “new normal”. Overcapacity, a term that simply denotes when industrial capacity exceeds production levels, is a symptom of instability that is usually resolved in the normal course of regular business cycles. However, by referring to structural overcapacity, McKinsey is alerting businesses to the fact that a digitized economy will take some time to establish and that they better be ready to batten down the hatches.

Many businesses, of course, do not have the necessary resources to survive endemic overcapacity and even McKinsey concedes that it will take at least 12 to 18 months to completely switch over. Most companies will also be hard-pressed to carry out the complete rebuild of their “analytical models… to steer operational decisions”, which McKinsey considers essential for a business’ success in this brave new world.

 

They don’t really care about us

For the vast majority of us, the move to a completely digital economy represents an even more unfair deal than we already have as low-level participants in a billionaires’ economy. When Elon Musk tweeted that he was going to sell off “most” of his earthly possessions, many cheered the Tesla CEO for taking what appeared to be such an ‘enlightened’ step. But, what isn’t readily apparent to most people is that in this post-COVID-19 economy that McKinsey is promoting, Elon and all his friends will be moving into your house.

With the so-called “remote-first” organizational model for corporations, our homes will become their new office space. Companies all over the United States can then enrich themselves further by selling off or renting out their real estate assets, while your living room becomes your boss’ new conference room. Some employees are even already making the calculation and looking for cheaper rent to subsidize their employer’s office space.

The “reopening” of the economy is beginning to look more and more like a closure of society as we are forced indoors over fears of contagion and access to food becomes conditioned on adherence to top-down policies. With a large part of American society tacitly accepting of digital forms of social interaction, further steps taken in that direction like fan-less sporting events and worse are not far off.

Feature photo | Francy Sandoval looks outside from her home in Melrose Park, Ill., April 23, 2020. Nam Y. Huh | AP

Raul Diego is a MintPress News Staff Writer, independent photojournalist, researcher, writer and documentary filmmaker.

The post As Corporations Adapt to a COVID-19 Economy, the Working-Class Prepares for a Paradigm Shift appeared first on MintPress News.

Do Not Presume a Fair Election

Published by Anonymous (not verified) on Fri, 15/05/2020 - 9:00pm in

Trump supporters in New York City, 2019. Photo credit: SCOOTERCASTER / Shutterstock.com The president and his confederates in the United States...

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Unemployment rises to 6.2%. But less than expected.

Published by Anonymous (not verified) on Fri, 15/05/2020 - 8:30am in

The ABS releases Labour Force data every month, from its largest ongoing survey, of around 25,000 households each month. The April 2020 release, on May 14th, 2020 was the most closely watched for some time, as it was expected to show the impacts of the COVID-19 economic shutdown which took effect in the second half of March, after the March survey was run. The March data only showed a 0.1% increase in unemployment, and this was one was widely tipped to be in the 7-8% range, on its way to around 10% in the coming months.

In fact, the unemployment rate for Australia was 6.2%,  up by a full 1.0%, a big increase, but not as large as was expected.

Why would this be? Everyone knows about the huge job losses that have been experienced recently, due to the virus shutdown.

The answer is in the other figure, less quoted, but equally important, from every Labour Force survey – the participation rate. This fell substantially, from 65.9% to 63.5%.

Measure
Definition
Comments

Unemployment rate
(Number of people without a job and actively looking for work) / (Number of people in the labour force)
To be unemployed, you have to not only not have a job, but you must be looking for work actively and available to start work within the next week.

Labour force
Employed + Unemployed
Everyone aged 15+ who is either employed or looking for work is in the labour force

Not in the labour force
All other population over 15
The largest group within “Not in the Labour Force” is retirees, but it can include stay at home parents, full-time students, and discouraged jobseekers, or really anyone who is not employed but not looking for work.

Participation rate
(Labour force) / (Population over 15)

Source: ABS 6102.0.55.001 – Labour Statistics: Concepts, Sources and Methods

Remember that unemployment does not necessarily include everyone who is receiving a JobSeeker payment, and it may also include people who are not on JobSeeker at all. It’s an interview based survey (now 100% phone interviews), so it depends on how the respondent answers the questions. Households are normally in the Labour Force Survey for 8 months, with 1/8th of the sample rotated in and out each month. A lot of people think the unemployment data comes from Centrelink, but it’s not directly associated with any government payments.

So, while the survey found a decline of 594,000 jobs (4.6%) in a month, the number of unemployed “only” increased by 104,500, because many of those who lost jobs weren’t actively seeking more work. This resulted in a large drop in the participation rate.

This doesn’t include JobKeeper – those employed by a business receiving this payment are still classified as employed because they are being paid via their employer, and the government pays the employer.

The survey also records “underemployment” which is a measure of those who were working less hours than they would like to, and this showed a large increase, to 13.7% of the labour force, up by over 600,000 people, and the highest ever recorded. This will include many of those on JobKeeper, who may be working less hours, but whose wages are supplemented by this program.

This is a really important distinction – JobKeeper recipients  aren’t part of the unemployment rate, but they may be included in underemployment, if they’re working less hours. This difference is shown clearly in .id and NIEIR’s new COVID-19 pages on economy.id, which outline the expected effects over the June 2020 quarter of the current economic shutdowns and stimulus, in your local and regional economy. In the chart, we clearly differentiate between expected job losses and jobs supported by JobKeeper, modelled via hours worked impacts. These are now available for every subscriber to economy.id.

So the unemployment rate, though it’s the most quoted headline figure, omits a lot of detail.

At .id, we know that employment data is a really important indicator of what’s going on in your community. As well as the new updated COVID-19 forecasts on economy.id, we have the quarterly updated unemployment rate for your local area on the site (under economic indicators at the top of the page). This is current to December 2019 at the moment, so it won’t show Covid-19 impacts just yet, but updates will be rolled out as soon as they’re available.

And in profile.id, you can see Census-derived estimates of unemployment and participation rates. While these are updated only every 5 years, and should not be seen as indicative of current conditions, they are fantastic for comparing across areas, so you can see the relative rates of unemployment as indicators of advantaged and disadvantaged areas, and these can also be mapped in the atlas (alongside youth and seniors unemployment).

Note that the participation rate shown in profile (derived from Census) will generally be a bit lower than the one shown in the Labour Force survey – that’s because about 7% of the population don’t answer the question on the Census form, so they appear in “Not Stated”. But it’s quite comparable across areas.

Also on profile and atlas, we include “Disengagement” – this is a measure of the proportion of each age group who are not employed or in education. This will be one to watch in future as the economic effects filter through the population, as it’s strongly correlated with social disadvantage.

There is more information on the Labour Force Survey and how it’s being conducted during the Covid-19 crisis at the ABS website. Eg. They have moved to entirely phone-based surveying, and as previously reported, have dropped the “trend” series as current events are altering the trend dramatically.

If you need further analysis of these results, we’re always there to help. Contact .id via our website, or email info@id.com.au.

 

 

American Weapons Manufacturers Are Thriving Even as the US Economy Suffers

Published by Anonymous (not verified) on Thu, 14/05/2020 - 5:16am in

Tags 

News, Economy, military

The economy has crashed. A nationwide pandemic that has (officially) claimed some 84,000 Americans has also resulted in an estimated 36 million filing for unemployment insurance and millions frequenting food banks for the first time. Yet business is booming for one unlikely industry; weapons manufacturers are busier than ever and are even advertising for tens of thousands of more workers. 

Northrop Grumman announced that it was planning to hire up to 10,000 more employees this year. Airlines are being hit particularly hard, as the number of people flying on commercial planes has cratered. Raytheon, who supplies parts to civilian aircraft manufacturers, has lost a great deal of business. Yet it is still advertising 2,000 new jobs in the military wing of its business. Boeing, who endured a torrid 2019, with multiple high-profile crashes of its 737 MAX-8 airliner, is preparing to lay off ten percent of its staff as airlines predict a long and sustained drop in air travel. Nevertheless, it is looking to add hundreds of new workers in its defense, intelligence, and cybersecurity departments. 

Meanwhile, Lockheed Martin announced on Friday that it is “actively recruiting for over 4,600 roles,” in addition to the 2,365 new employees it has taken on since the lockdown started. The world’s largest arms dealer describes itself merely as “principally engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services,” with words like “weapons,” “war,” or “bomb” not appearing on their website.  

Why is the military industrial complex booming, even as America suffers? Because Washington has made it a priority to radically overhaul the military in double quick time, designating weapons manufacturers as “essential” services during a pandemic, ensuring they all have enough boots on the ground to continue working through the outbreak. 

In February, the Pentagon released its $705 billion budget request for 2021, where it revealed that it would be ramping up for war with China and Russia in the near future. In its own words, there would be a “shifting focus from the wars in Iraq and Afghanistan and a greater emphasis on the types of weapons that could be used to confront nuclear giants like Russia and China.” It also stated that it was going to acquire “more advanced high-end weapon systems, which provide increased standoff, enhanced lethality, and autonomous targeting for employment against near-peer threats in a more contested environment.” Last month, the Air Force commissioned Raytheon to develop and build a new nuclear cruise missile.

On a diplomatic level, the Trump administration is also dangerously escalating the possibility of nuclear war by pulling out of a number of international treaties designed to limit the possibility of a terminal conflict. The president has signaled his intention to remove the United States from the New START Treaty, the final remaining arms control agreement that binds it, something even the American ex-Deputy Secretary General of NATO condemned as “a chilling sign of how dangerous the world has become.” The U.S. is also increasing tensions with China and ramping up sanctions and regime change operations in Iran and Venezuela. 

The United States spends almost as much on war as the rest of the world combined. It also has suffered by far the highest death toll from COVID-19. These two facts are not unrelated. As Trump was increasing the military budget, he also slashed funding for the Center for Disease Control and for the World Health Organization, perhaps the only international body capable of limiting the spread of the virus. In contrast to other countries that have handled the pandemic well, the rhetoric emanating from the White House treats the virus as an enemy to be fought, rather than a collective effort that everyone in society must engage in. Instead of purchasing protective equipment and developing test kits like other nations, the government is ordering military flyovers. 

The pandemic has led many to question whether the enormous military budget is really making the country safer and whether it be better spent on healthcare, education, and other programs that would have combated the pandemic more effectively. However, that question appears not to have been debated within the walls of the White House, where it is full steam ahead with weapons production. 

Feature photo | President Donald Trump sits in the driver’s seat of Lockeed Martin’s Terminal High Altitude Area Defense (THAAD) anti-ballistic missile defense system with Marillyn Hewson, chairman, president and chief executive officer of Lockheed Martin at far left, during a Made in America showcase on the South Lawn of the White House, Monday, July 15, 2019. Alex Brandon | AP

Alan MacLeod is a Staff Writer for MintPress News. After completing his PhD in 2017 he published two books: Bad News From Venezuela: Twenty Years of Fake News and Misreporting and Propaganda in the Information Age: Still Manufacturing Consent. He has also contributed to Fairness and Accuracy in ReportingThe GuardianSalonThe GrayzoneJacobin MagazineCommon Dreams the American Herald Tribune and The Canary.

The post American Weapons Manufacturers Are Thriving Even as the US Economy Suffers appeared first on MintPress News.

Wall Street Will Likely Be the Only Winners in the Pandemic Housing Crisis

Published by Anonymous (not verified) on Thu, 14/05/2020 - 3:42am in

The coronavirus pandemic and the shutdown it has precipitated is having a profound effect on the economy of the United States and the rest of the world. Roberto Azevedo, Director-General of the World Trade Organization warned that his projections predict an economic downturn and job losses more severe than those of the great financial crash of 2008. Renters, those with mortgages, and even many landlords face ruin in this unprecedented catastrophe. An estimated 36 million Americans have filed for unemployment insurance in the previous few months, with millions more losing their employer-based healthcare as a result. Food banks across the country have seen record levels of users and are struggling to keep up with demand, even as fresh produce rots in farmyards as supply lines have been cut. 

The Trump administration lept into action to shore up the liabilities of the super-wealthy, pumping $1.5 trillion into the stock market, resulting in only a 15-minute rally. Meanwhile, a recent study of the CARES Act found that 82 percent of the financial benefits from the bill go to the 43,000 Americans who earn over $1 million per year, with less than three percent going to those making less than $100,000. 

Unlike in other countries, renters in the United States have been offered precious little government assistance. The median rent in the U.S. is $1,000, meaning that most of the country’s one-time $1,200 check was theoretically spent before it was even received. However, around a third of American renters did not pay rent at the beginning of the month, meaning there is an ongoing, de facto rent strike taking place. This leaves tenants on shaky legal ground as all 50 states have differing laws on the matter. Eviction Lab, a team of researchers on housing, has produced a scorecard for every state with regards to how well or poorly it treats its tenants, based on dozens of laws and indicators. Six states: Oklahoma, Arkansas, Idaho, Missouri, North and South Dakota, and Wyoming scored zero. 

Eviction Lab also found that landlords in poor neighborhoods make considerably more profit than those in middle class or even affluent ones, with many not needing rent to pay off mortgages. Nevertheless, smaller landlords, those with only one or two properties, will likely be the worst affected by the drought in income. 

Online renting site Airbnb is facing a crisis as the flow of vacation rentals dwindled to a trickle. Last week the company announced it was laying off nearly 1,900 employees – around 25 percent of its staff. The result, if nothing changes, could be that many less well-off landlords will default on their mortgages. Thus, just as the poorest and most vulnerable people in society are disproportionately affected by COVID-19, it will be that smaller businesses of all kinds will go under first, leaving the larger ones to profit. While few renters will shed tears for their landlords’ losses, the upshot of the virus will be that the rich will get richer, the poor poorer and the middle will be squeezed, with Wall Street banks retaking possession of houses and businesses, something that is unlikely to help renters in the long run.

A similar phenomenon occurred during the 2008 financial crash, where millions of Americans lost their homes, unable to continue paying their sub-prime mortgages. Americans were told to suck it up and cope, bearing the brunt of the crisis. At the same time, Wall Street, who was in no small part responsible for the crisis in the first place, was given bailouts of historic proportions, leading to a situation where they are even bigger now than they were before the collapse. 

The enforced shutdown essentially allows the government to pick and choose who will be rescued and who will go under, allowing them to reshape both the economy and society to their preferences. Wall Street, which funds both parties to the tune of millions every year, appears to likely come out of this crisis stronger than ever. They will be laughing all the way to (their own) bank.

As of today, 1,417,398 Americans have tested positive for COVID-19, and there have been 83,980 confirmed deaths.

Feature photo | A pedestrian walks past graffiti that reads “Rent Strike,” April 1, 2020, in Seattle’s Capitol Hill neighborhood. With millions of people suddenly out of work and rent due at the first of the month, some tenants in the U.S. are vowing to go on a rent strike until the new coronavirus pandemic subsides. Ted S. Warren | AP

Alan MacLeod is a Staff Writer for MintPress News. After completing his PhD in 2017 he published two books: Bad News From Venezuela: Twenty Years of Fake News and Misreporting and Propaganda in the Information Age: Still Manufacturing Consent. He has also contributed to Fairness and Accuracy in ReportingThe GuardianSalonThe GrayzoneJacobin MagazineCommon Dreams the American Herald Tribune and The Canary.

The post Wall Street Will Likely Be the Only Winners in the Pandemic Housing Crisis appeared first on MintPress News.

No Stimulus for the Weary: The US is Now Sitting on an Inflation Time Bomb

Published by Anonymous (not verified) on Wed, 13/05/2020 - 12:28am in

The consequences of the $2.2 trillion stimulus package are being ignored, even by the White House budget office that put it together, admitting that the package had “come together so quickly,” that they had no time “to do the customary modeling of its fiscal impact.” What does appear to have consensus in financial circles is that after this is over central banks will effectively own the governments of the world, including the United States.

When it is all said and done, President Trump’s stimulus checks will carry an inflationary cost many multiples more than their original $1,200 value in the pre-coronavirus economic reality, a reality that probably won’t become apparent until after the election in November. By then the checks will have served their purpose as a political move, not an economic one. When understood from the vantage point of what is in store for the American working classes as we emerge from this red light on main street, Trump’s checks will only add fuel to the inflationary fire just ahead, according to Neal Kimberley, a macroeconomics analyst for the South China Morning Post.

An economic realignment is unfolding in the wake of the shutdowns prescribed by pandemic response protocols. The coordinated effort to restrict individual participation in the economy spans the globe but is an inherently local matter. While corporations around the world “ride it out” by hoarding their government bailout money in the bond market, regular working people are bearing the brunt of the risk and facing a brave new world on the other side of the COVID Spring, where the distance between them and the richest 0.01 percent will have grown light years further than the recommended six feet.

Shocks to demand elicit certain reactions from the market, whereas shocks to the supply-side call on others. It is exceedingly rare for an economy to suffer shocks on both ends simultaneously, as is occurring at this very moment when both consumers and suppliers are in stasis. 

While governments slash interest rates to keep their borrowing costs low, the unprecedented flood of new money is accumulating in the hands of the wealthiest and most powerful people and corporations, who have parked all of it in bond instruments like a horse at the gate of the Kentucky Derby. As soon as the trumpet is blown and the economy restarts itself, those same trillions of dollars will come rushing out and cause massive inflation, which will only be exacerbated by low-interest rates. In other words, we’re sitting on a time bomb, and it is counting down the last seconds.

 

Expanding the debt pool

The same will hold true for recipients the SBA CARE Act loans, which has expanded the availability of government debt beyond traditional for-profit businesses and brought faith-based organizations into the public money sweepstakes. 

Beginning in 2001, when Geroge W. Bush first proposed a Faith-based and Community Initiative as part of his Presidential Management Agenda, the gradual inclusion of non-profits like churches and synagogues, but also a myriad other religious organization, into direct government assistance programs has continued unabated and the increasingly blurred line between church and state all but vanished once Trump’s Treasury department issued an “Interim Final Rule” for the CARES Act, making payroll protection loans accessible to faith-based organizations.

To put the $2.2 trillion CARES Act in perspective, the bill allocated a paltry 10 percent of the total ($250 billion) for direct individual assistance in a pie that was divided into hundreds of millions of recipients. $500 billion was allotted to SBA-related loans and the rest, or $1.7 trillion, went directly into the pockets of a comparatively minuscule portion of the population. 

From a macroeconomic perspective, the CARES Act only spread the government’s insurmountable debt further out into the economy, which is already more than “twice what it was before the Great Recession” and is set to increase exponentially in the relatively near future.

 

Sooner or Later

The dynamics put in play by the COVID Spring mirrors the conditions that led to the 2008 financial crash and its aftermath, in that a giant ball of financial poison had been festering behind the scenes and then metastasized around the world, ruining anyone in close proximity to a toxic derivative and no access to the FED window.

The toxic asset right now is the piles and piles of U.S. dollars and dollar-denominated assets and instruments saturating the global economy, which is tied to a nation – the U.S. – on a completely unsustainable economic path.

The degree to which inflation hits us is still a matter of debate among economists but many are expecting it will happen sooner or later. They concede that it is not out of the realm of possibility that “persistent” inflation is on the horizon. “We think the trade war has set this very real possibility in motion,” advised RBC economists to their clients. “Covid-19,” they continued, “is likely just pushing it further upfield.”

Ultimately, the pressures of a hopelessly indebted nation populated by a hopelessly indebted citizenry who are being told interacting directly with each other is dangerous sets us up for an Orwellian nightmare that no amount of Trump checks can justify.

Feature photo | Phu Dang, left, the owner of i5 Pho restaurant, gets help from a contractor as he boards up his business in Seattle’s downtown Pioneer Square neighborhood, March 30, 2020. Ted S. Warren | AP

Raul Diego is a MintPress News Staff Writer, independent photojournalist, researcher, writer and documentary filmmaker.

The post No Stimulus for the Weary: The US is Now Sitting on an Inflation Time Bomb appeared first on MintPress News.

Change is not a pleasant process, but we must not shy away from it. There is an alternative. It’s time to engage. It’s time to make the world anew.

Published by Anonymous (not verified) on Mon, 11/05/2020 - 1:47am in

World in handsImage by Mariana Anatoneag from Pixabay

All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.

Martin Luther King, Jr.

 

While the scale of the real human tragedy of austerity and lack of strategic planning continues to be revealed in our hospitals, care homes and community settings, this week the Bank of England warned that the UK was facing an historic recession. UK demand has plummeted, and consumer confidence has declined sharply as the unemployment rate has risen and people’s concerns are reduced to the daily task of just living in lockdown.

At the same time, in response to the government’s fiscal injection to mitigate the dire consequences of the economic slide that is unrolling before us, the debt sirens are predictably rising from the icy waters in an attempt to lure, yet again, an unsuspecting public into believing that there will be a future financial price to pay, when the human cost is the real issue. Given ten years of cutting vital public infrastructure, the consequences of which we are currently living through, the prospect of a deep recession which will last well beyond the end of the pandemic and the challenges we face from climate change are what we should worry about rather than the government deficit.

If we are to believe politicians and think tanks, there will be no option but to cut public spending to reduce public debt once the pandemic is over. Indeed, that message is being reseeded in the public consciousness by past and present Tory Chancellors of the Exchequer. With George Osborne calling for more austerity only a few weeks ago, Rishi Sunak waded in this week with the suggestion that he was preparing to ‘wean’ businesses and workers off the government’s furlough scheme by cutting wage subsidies as part of an attempt to get people back to work as and when the lockdown is eased in the future. The flaw in his plan is that is difficult to see at this precise moment in time where these ‘alternative’ jobs will come from – at least in the short to medium term.

He also claimed that the nation might become ‘addicted’ to state generosity. Apart from the offensive nature of this statement (which suggests that working people are living the high life and lazing their lives away behind the curtains on public money when in reality they are trying to make ends meet on 80% of their pay, or still waiting as self-employed to get any money at all), the idea that anyone would choose to remain out of work tells us two things; firstly that the government is not beyond using scare tactics to bully people back to work when they are already fearful for their financial security and secondly that the government’s fiscal injection, which was initially hailed as a positive step forward, comes with conditions that are still being framed in household budget terms. The narrative is being cynically being shaped for a new normal. The government, instead of serving the nation, is once again and predictably intending to serve only a small section of it while punishing the rest.

It would seem that under the radar the groundwork is being laid for an economic reset to complete the already skewed distribution of resources into ever fewer hands. More austerity, more cuts to our public and social infrastructure which is already on its knees and then the final ‘coup de grace’ or end game the privatisation of the remaining parts of the public infrastructure including the NHS. As we are already seeing, the government is using the pandemic to transfer even more key public health duties into the private sector. Government contracts are already being awarded centrally to the private sector under the emergency measures with no public scrutiny. Deloitte, KPMG, Serco, Sodexo and Boots are just some of the companies which have secured public funding to manage drive-in testing centres, purchasing of PPE and other vital equipment. This is disaster capitalism at work and the alarm bells should be ringing loudly. Allyson Pollock, who is director of the Newcastle University Centre for Excellence in Regulatory Science, co-author of the NHS Reinstatement Bill and NHS campaigner said ‘We are beginning to see the construction of parallel structures, having eviscerated the old ones. These structures are completely divorced from local residents, local health services and local communities.’

Democracy, both local and central, has over decades been undermined. Now, under cover of COVID-19, we are seeing the State using it to ally with big business to suit the continuing ideological interests of the former and the profit motives of the latter. Trade deals currently being negotiated with the US by the UK government are part of this growing globalised structure aiming to reinforce the power of corporations with state support and dictate the terms by which citizens live their lives.

In 2010 people accepted Tory austerity because they believed the narrative that Labour had overspent, and they had to get the public finances under control. They understood their own personal finances and thought, understandably, that the state’s must be the same. Even now, despite the growing number of people that know that the State’s finances cannot be likened to their own household budget, the government is trying to re-forge the worn-out austerity record anew.

Will the public be taken in yet again by this false narrative? The economist Danny Blanchflower said recently that he thought that people would not accept more austerity. If that were true, then at this moment of national crisis it should be a public wake up call. We don’t have to be economists to understand what the consequences are. Every afternoon at 5pm with the government’s daily briefing, the evidence is increasingly being revealed of the very real human costs as financial hardship bites and the death toll increases.

We need to learn that economics is then not the dry, boring subject that we have patronisingly been told should be left to the experts. Quite simply, it determines what happens to each and every one of us as a result of the ideologically driven political decisions made by our elected politicians. Although distrust, quite rightly, has grown about our political institutions, the truth remains that whilst we still have an important role to play in holding them to account for their policy decisions we can only do so from a position of knowledge and the willingness to challenge the status quo.

Over decades, we have been primed by politicians, institutions and the media to accept the economic narrative. We have stood by as our health and welfare systems have been cut to the bone. We have accepted that cuts were necessary rather than questioning the economic orthodoxy which spawned them. We have accepted the flawed, politically pushed narratives that deficit reduction or balanced public accounts were more important objectives than serving the interests of citizens. Those who have borne the consequences in terms of hidden poverty and inequality, attributed by pernicious ideology to their own failings, are now slowly waking up to the economic realities of their lives. Insecure employment and low wages, hunger and food banks and homelessness have all arisen from the pursuit of a damaging ideology whereby government has relinquished its responsibility to serve the best interests of its citizens and placed the blame on those citizens themselves. All the while also sowing division to serve its smoke-and-mirrors agenda – the expropriation of public wealth into a few private hands.

We have been persuaded by a false narrative that government deficits are a burden rather than an essential and normal mechanism to serve the national interest. While the government focuses on getting the ‘economy’ back to normal, as if it were an unidentified object out there in space, it has ignored that, fundamentally, the economy is its people. After decades of living in a financialised world of rentiers, hedge funders and money men we have lost sight of the real wealth – which consists of people and the natural and other resources which sustain life on our planet.

The economy is nothing without the people, or indeed those resources. Health and social care workers, teachers, local council employees delivering vital services, police officers keeping the peace, farmers producing the food we eat, factories processing it or lorry drivers delivering it to supermarkets and stores, those who collect our rubbish, clean the streets and provide all sorts of other services to the public, the list is long of essential workers whose value during this extraordinary event we are only just beginning to appreciate having taken them for granted for too long. It is not the billionaires that create the wealth of the country, it is the people. We make our contributions to societal and economic wellbeing, not through the tax we pay (which whilst essential is not required to fund government spending as we are led to believe) but through the vital work we do to keep society functioning.

It defies belief that whilst politicians and others are already preparing the public for more austerity, the Bank of England is warning that the COVID-19 crisis will most likely push the UK economy into the deepest recession for 300 years. At a time when the worst effects of a global economic crisis are yet to unfold (despite the Bank of England’s laughable and misplaced confidence that there will be ‘only limited scarring of the economy’ and it will ‘bounce back […]much more rapidly than the pull back from the global financial crisis’) a government of any political shade should be proposing targeted fiscal spending aiming at four objectives:

  • To ensure in the immediate future sufficient spending to keep people safe, fed and sheltered until the immediate threats of COVID-19 are under control and that strategic services such as health and social care, energy and food production and transport and communications can operate as effectively as possible with the least risk to their future stability. This might involve more state intervention, price controls and rationing if necessary.
  • To take back public services into the public domain and reinvest in our public and social infrastructure to secure the vital foundations for a healthy economy for today’s and future generations. It won’t be enough for Boris and his ministers – or indeed the public – to clap for our public sector workers. We need a commitment to changing the ideological narratives which have done so much damage and to reward those who make the real contributions to economic stability and social well-being.
  • To offer a permanent Job Guarantee programme to provide the necessary counter-cyclical mechanism to support people whose livelihoods are likely to be disrupted for some time in the future as unemployment continues to rise as a direct result of both the domestic and global economic slowdown. Unemployment is a political choice, not an economic necessity.
  • To develop a workable and just pathway towards a greener and more sustainable economy without which the future of the planet is in jeopardy.

Whilst this is what should happen, whether it does is yet another question. It is regrettable that government, whilst having seemingly recognised its sovereign currency-issuing powers to avert economic disaster, now seems to be rowing backwards at a time when government intervention is vital if we are to secure a future at all. The entire economic system has been built on sand. The 2008 Financial Crash was practice for what might come and yet our elected politicians failed to grasp the nettle in any meaningful way, tweaking here and there but leaving the status quo in place.

Without putting too fine a point on it, globally we are at a planetary crossroads and COVID-19 is just one issue of many which will necessarily have to drive a reset in how we do things. We certainly need an economic recovery, but the question is what values will it be based on, what will it consist of and finally and very importantly who will benefit? The big questions of our time remain unanswered for the moment and given this government’s ideological agenda it is difficult to see exactly where we may be going. Although one might make some educated guesses. However, with increasing public recognition of the mess we are in and how we got here, combined with a better understanding of how government spends and what the real limitations to spending are, we could take a first step towards that better world we aspire to create for our children. Change is not a pleasant process, but we must not shy away from it. So much depends on what we do next. There is an alternative – so let’s make sure we are part of it. Ignoring it won’t make it go away.

 

 

A Job Guarantee is fundamental to any healthy economy. To find out more follow the link for an in-depth look at what it is and how it works.

https://gimms.org.uk/job-guarantee/

 

 

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The post Change is not a pleasant process, but we must not shy away from it. There is an alternative. It’s time to engage. It’s time to make the world anew. appeared first on The Gower Initiative for Modern Money Studies.

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