Focus on financial issues
While the nation focuses on race, police, pandemic and culture wars, our future is being quietly robbed blind by the predators of Wall Street and their allies in the White House and Senate. The, so-called Commercial Paper Funding Facility and other emergency measures enacted by the Federal Reserve Board has the mandate to buy up bad corporate debt, municipal bonds and other bonds. By law, and for obvious good reasons, the Federal Reserve isn’t allowed to buy unsecured corporate debt, but they are getting away with it, citing an emergency clause in the Federal Reserve Act of 1913.
The result is big investors are selling their bad debt to The Fed, whose debt has therefore increased around $4 trillion in the few short months of the pandemic. There are no limitations on how much “bad paper” the Fed will buy and predictions are it could go to $10 trillion. This unlegislated give-away is socialism for the rich; Senate republicans who cry bloody murder about, and derail, pandemic aid to state and local municipalities, are on bored and quiet about this astronomic handout.
The outcome is, while 40 million workers have lost their jobs, since mid-March, America’s billionaires have increased their combined worth by $434 billion. With record low consumer spending, oil prices sometimes below zero and unemployment at record level the stock market should be way down. Instead it behaves like a leaky air mattress, the fed pumps dollars in, the Dow rises. Big investors, equipped to do heavy trading, reap their profits, the market sinks. Last week we saw a bizarre expression of this game when several companies that had filed for bankruptcy saw their stocks go sky high. This was unheard of, why on earth would anyone invest in a bankrupt company? Because the government will buy their bad debt?
It appears the Republicans hope to keep the market from crashing until the election at the cost of unknown trillions. There is not room here to mention the other ways the president, his billionaire cabinet and the Senate are treating America’s financial emergency like a broken pinata for the rich to scoop up treasures. For instance: the Paycheck Protection Program, intended to help small businesses, in which the richest were often sent to the front of the line such that more than 200 publicly traded companies received more than $750 million in bailout loans, an average of almost $4 million each.
If the trillions were spent instead on creating jobs, such as: by repairing the infrastructure, boosting health and tracing services and on education (keeping 300,000 teachers from losing their jobs) we would create an economy that could transition us safely through the crises. As for the investor class, (as they used to proclaim) , let’s have no government interference. My opinion is we need to be focused on financial, not social, issues. Be it abortion, civil rights or even the climate. It’s not going to matter much if you and your family can’t eat, pay your bills or go to the doctor when you’re sick.