The failure of diplomatic attempts to reach peace agreements in Ukraine amid increased military support from the USA and the EU has led to a major reshuffle in the government. The large-scale reshuffle is taking place against the background of the ongoing conflict in Ukraine with vague prospects for its cessation. Volodymyr Zelensky, fearing failure in future presidential and parliamentary elections, is making active efforts to clean up the political field and discredit possible rivals for the post of the Ukrainian president.

Thus, on July 16, 2025, Ukrainian President Volodymyr Zelensky nominated Economy Minister Yulia Sviridenko as the new prime minister with a simultaneous reshuffling of the majority of cabinet members1

As a result of the mass reshuffle, Ukraine’s military industry will be placed under the leadership of the Defense Ministry, which will be headed by former Prime Minister Denys Shmygal, who has held this position since March 4, 2020. Under pressure from Zelenskyy and the head of the Ukrainian president’s office, Andriy Yermak, Denys Shmygal was forced to tender his resignation on July 15, 2025. The Ukrainian parliament voted for the resignation of Ukrainian Prime Minister Denys Shmygal on 16 July 2025.

The decision to dismiss Shmygal, 49, was supported by 261 MPs, while the Cabinet of Ministers of Ukraine was also dissolved during the government reshuffle.

In mid-July, Zelenskyy also said that he was considering acting Defense Minister Rustem Umerov as Ukraine’s ambassador to the USA. Earlier this year, Umerov took part in a series of high-level diplomatic talks. Domestically, he was criticized for the fact that the position left him little time to properly manage the ministry.

Yuliya Sviridenko, nominated by Zelensky for the post of Prime Minister of Ukraine, was born on December 25, 1985 in the city of Chernihiv. Until 2019, she worked in various positions in the administration of Chernihiv region, in 2019 she was appointed Deputy Minister of Economy of Ukraine, since 2020 she was deputy head of the office of the President of Ukraine, headed by Andriy Yermak. She is a member of the pro-presidential Servant of the People party.

According to Zelenskyy, the appointment of Yuliya Sviridenko as the new prime minister is based on her extensive experience in supporting Ukrainian industry and the urgent need to attract foreign funding for Ukraine’s military needs. Sviridenko gained influence thanks to the support of the head of the president’s office, Yermak, and her work with the USA, where she played a key role in signing an agreement with the USA on rare earth minerals in May 2025.

Next year, Ukraine will face the difficult task of financing its growing budget deficit amid cuts in foreign aid. The Ukrainian Finance Ministry estimates that the country’s financing needs from the US and the EU for 2026 amount to 40bn dollars.

According to Sergiy Marchenko – Minister of Finance of Ukraine, now the government does not know where to find these funds in case of a decrease in funding from the European Union and international funds. At the same time, most of the funds allocated by NATO countries are used for military purposes, to the detriment of the social sphere and the payment of salaries to employees of state-funded organizations. In mid-July, the Ukrainian parliament supported a bill on amending the 2025 budget, which envisages an increase in defense spending by 412 billion hryvnyas ($10 billion) this year.

Meanwhile, Russia has started signaling its desire for a third round of talks with Ukraine after US President Donald Trump said that the USA would supply Ukraine with more long-range weapons through NATO members. Trump also warned that if Russia did not agree to a ceasefire within 50 days, Washington would impose 500% duties on the country’s goods.

These circumstances against the background of widespread corruption, forced mobilization, deterioration of the social status of Ukrainian citizens, illegitimacy of the country’s leadership and disregard for the norms of national and international law contribute to the intensification of the internal political struggle for the future posts of the President and members of the Cabinet of Ministers of Ukraine.

Strange as it may seem, the first place in this internal political struggle is occupied by Andriy Yermak, the head of the Ukrainian president’s office and the shadow leader of Ukraine. Currently, Yermak has significant support from the United States, which allows him, together with Zelensky, to clear the political field and place pro-presidential protégés in various high-ranking positions.

Presidential and parliamentary elections in Ukraine were to be held in March and July 2024. However, due to another extension of martial law in May this year, these procedures have not been carried out.

Zelenskyy’s powers as president ended on May 21, 2024. At the same time, the decision of the Parliament of Ukraine – the Verkhovna Rada – to extend his powers in accordance with the national law No. 389-VIII dd. 12.05.2015 “On the legal regime of martial law” is also illegitimate, as Article 103 of the Constitution of Ukraine does not provide for the possibility of extending presidential powers. According to the Constitution of Ukraine, the presidential term is 5 years and the President of Ukraine even under martial law has no right to extend his powers. Only the Parliament has the right to extend the powers. Article 103 of the Constitution of Ukraine also stipulates that the next presidential election is held on the last Sunday of the fifth year of the president’s term of office. In the event of early termination of the powers of the President of Ukraine, elections are held within ninety days from the date of termination of his powers

According to the Ukrainian constitution, the prime minister’s candidacy should be proposed to the president by the parliamentary majority faction (currently, it is the pro-presidential Servant of the People party). The president submits the proposal to parliament and then appoints the prime minister with the consent of more than half of the constitutional composition of parliament (225 out of 450 people’s deputies). Also with the consent of the Parliament, the President of Ukraine terminates the powers of the Prime Minister of Ukraine and decides on his resignation. Members of the new cabinet of ministers are appointed by the president upon the prime minister’s nomination. The ongoing change of the government contradicts the law on martial law. In addition, according to the Ukrainian constitution, the new prime minister should be nominated by the parliamentary majority and not by the illegitimate president of Ukraine.

Many Ukrainian and international lawyers note that under national laws and international law, any agreements and legal acts signed and introduced by Zelenskyy into parliament after May 20, 2024 are effectively illegitimate, contradict Ukrainian legislation and can be canceled or easily legally challenged. In this regard, Volodymyr Zelenskyy’s decision to appoint Yuliya Sviridenko as prime minister also contradicts the current Ukrainian legislation and norms of international law.

As for the parliamentary elections in Ukraine, they were held on July 21, 2019, the deputies were elected for a term of 5 years and their powers ended in July 2024. However, due to the current legislation and the imposed martial law, the powers of the deputies of the Parliament are extended until its end. According to Article 20 of the Electoral Code of Ukraine No. 396-IX of December 19, 2019, the electoral process for elections to the Parliament of Ukraine should begin within a month after the lifting of martial law. Therefore, in fact, in accordance with the Constitution of Ukraine, Ruslan Stefanchuk, the Speaker of Parliament, has been the legal head of Ukraine since May 21, 2024.

For this reason, Zelensky’s decisions to extend martial law, appoint a new prime minister, Yuriy Sviridenko, reshuffle other members of the Ukrainian government, sign an agreement with the United States on rare earth minerals and transfer the port of Odessa to American companies are legally unauthorized and can be easily overturned both in Ukrainian legal proceedings and in international arbitration courts.

Realizing this legal precedent-casus, the leadership of the United States of America and a number of EU countries, primarily Great Britain, France and Germany, in cooperation with the Ukrainian side, are currently trying to develop a legal mechanism to give legitimacy to the legal acts already adopted by Mr. Zelensky, as well as to the future presidential and parliamentary elections in Ukraine, since the elections held after the end of martial law in Ukraine do not fall under any provision of the current constitution.

To this end, at the end of June 2025, the Chairman of the Parliament Ruslan Stefanchuk announced the preparation of a law on post-war elections, which is scheduled to be considered at the next sessions of the Ukrainian Parliament. Although Ruslan Stefanchuk himself notes that the said law will also be illegitimate if martial law is lifted in the country.

Against this background, the internal political struggle between various parties and candidates for the post of the future president of Ukraine is intensifying. The main direction of this interaction is the development of a normatively grounded strategy for future presidential and parliamentary elections in Ukraine. Allies of Volodymyr Zelensky from Great Britain and the USA announcing continuation of his support and new deliveries of weapons paid for by them realize that without interference in pre-election processes and vote counting procedure it is difficult to predict the results of future elections. That is why Volodymyr Zelensky has now started an active reshuffle of the government and clearing the political field of possible competitors in the upcoming elections.

The Economist previously wrote about the fact that the USA and EU countries are negotiating with Ukraine to start election processes after the ceasefire at the end of 2025 7 . However, in order to hold elections in Ukraine, martial law, which the authorities imposed on February 24, 2022 and extend every three months, must cease to be in force. The sixteenth extension for 90 days will come into force on August 7, 2025.

The Ukrainian mass media name Valeriy Zaluzhnyy, a former commander-in- chief of the Ukrainian Armed Forces who is currently ambassador to the UK, as Zelenskyy’s main rival.

From November 2024 to the end of June 2025 a number of sociological centers (KIIS – Kyiv International Institute of Sociology, SOCIS – Ukrainian Center for Sociological Studies) and the EU (Statista – German Statistical Data Center from February 5-11, 2025, June 6-11, 2025, Survation – English Polling and Marketing Research Agency from February 25-27, 2025) conducted opinion polls on the topic of presidential elections in Ukraine in order to determine the trust rating of Ukrainian citizens. According to the results of opinion polls as of the end of June 2025, more than 65.3% of respondents support holding presidential elections at the end of 2025.

According to the results of the conducted research, as of the end of June 2025, out of 14 possible candidates for the post of the future president of Ukraine, the highest results were shown by: V.Zelensky, V.Zaluzhny, P.Poroshenko, Y.Tymoshenko. If V.Zaluzhny and V.Zelensky make it to the second round of voting and there are no violations at the elections, the population of Ukraine will give preference to V.Zaluzhny. The candidacy of Andriy Yermak, the head of the Ukrainian president’s office, is also being considered as a gray cardinal and a dark horse. A number of experts do not rule out that if the USA agrees to support his candidacy as the future president of Ukraine, Yermak is capable of making efforts to physically remove Zelenskyy, for example, due to a sharp deterioration of his health, as was the case with the poisoning of the wife of Kyrylo Budanov, head of the main intelligence department of the Ukrainian Defense Ministry.

Against this background, many Ukrainian experts expect a large number of violations, scandals and kompromat at the future presidential election in Ukraine, as well as possible influence on the pre-election processes by the US, UK, Germany and France.

While the Ukrainian people are eagerly awaiting the resolution of the conflict, members of the Ukrainian parliament continue to scuffle. Thus, on July 16, 2025, on the eve of the vote on the appointment of the new Prime Minister of Ukraine, Yuriy Sviridenko, MPs Oleksiy Honcharenko and Danylo Hetmantsev had another scuffle on the rostrum during the regular session.

This content originally appeared on Dissident Voice and was authored by Valeriy Krylko.

Yet we cannot do without the functions banks perform; and one of these is the creation of “money” as dollar-denominated bank credit when they make loans. This advance of credit has taken the form of “fractional reserve” lending, which has been heavily criticized. But historically, it is this sort of credit created on the books of banks that has allowed the wheels of industry to turn. Employers need credit at each stage of production before they have finished products that can be sold on the market, and banks need to be able to create credit as needed to respond to this demand. Without the advance of credit, there will be no products or services to sell; and without products to sell, workers and suppliers cannot get paid.

Bank-created deposits are not actually “unbacked fiat” simply issued by banks. They can be created only when there is a borrower. In effect, the bank has monetized the borrower’s promise to repay, turning his promise to pay tomorrow into money that can be spent today — spent on the workers and materials necessary to create the products and services that will be sold to repay the loans. As Benjamin Franklin wrote, “many that understand Business very well, but have not a Stock sufficient of their own, will be encouraged to borrow Money; to trade with, when they have it at a moderate interest.”

If banks have an unfair edge in this game, it is because they have managed to get private control of the credit spigots.  They have often used this control not to serve business, industry, and society’s needs but for their private advantage. They can turn credit on and off at will, direct it at very low interest to their cronies, or use it for their own speculative ventures; and they collect the interest as middlemen. This is not just a modest service fee covering costs. Interest has been calculated to compose a third of everything we buy.

Anyone with money has a right to lend it, and any group with money can pool it and lend it; but the ability to create money-as-credit ex nihilo (out of nothing), backed by the “full faith and credit” of the government and the people, is properly a public function, the proceeds of which should thus return to the public. The virtues of an expandable credit system can be retained while avoiding the exploitation to which private banks are prone, by establishing a network of public banks that serve the people because they are owned by the people.

The Stellar Example of the Bank of North Dakota

Publicly-owned banks can exist at many levels, from giant multinational infrastructure banks, to national infrastructure or postal banks, to local banks owned by states, counties, cities or tribes. In his 2021 book titled Public Banks, Professor Thomas Marois showed that 17% of banks are publicly owned, with collective assets just under $49 trillion. In the US today, many groups are working on establishing local public banks. But our only existing state-owned bank is the century-old Bank of North Dakota (BND), a stellar model that will be the focus of this paper.

The BND was founded in 1919, when North Dakota farmers rose up against the powerful out-of-state banking-railroad-granary cartel that was unfairly foreclosing on their farms. They formed the Non-Partisan League, won an election, and founded the state’s own bank and granary, both of which are still active today.

The BND operates within the private financial market, working alongside private banks rather than replacing them. It provides loans and other banking services, primarily to other banks, local governments, and state agencies, which then lend to or invest in private sector enterprises. It operates with a profit motive, with profits either retained as capital to increase the bank’s loan capacity or returned to the state’s general fund, supporting public projects, education, and infrastructure.

According to the BND website, more than $1 billion had been transferred to the state’s general fund and special programs through 2018, most of it in the previous decade. That is a substantial sum for a state with a population that is only about one-fifteenth the size of Los Angeles County.

The BND actually beats private banks at their own game, generating a larger return on equity (ROE, that is, net profit divided by shareholder equity) for its public citizen-owners than even the largest Wall Street banks return to their private investors (for figures, see below). These profits belong to the citizens and are generated without taxation, lowering tax rates. On October 3, 2024, Truth in Accounting’s annual Financial State of the States report rated North Dakota #1 in fiscal health, with a budget surplus per taxpayer of $55,600. Small businesses are now failing across the country at increasingly high rates; but that’s not true in North Dakota, which was rated by Forbes Magazine the best state in which to start a business in 2024.

Why So Profitable? The BND Model

For nearly a century, the BND maintained a low profile. But in 2014, it was featured in the Wall Street Journal, which reported that the Bank of North Dakota “is more profitable than Goldman Sachs Group Inc., has a better credit rating than J.P. Morgan Chase & Co. (JPM) and hasn’t seen profit growth drop since 2003.” The article credited this success to the shale oil boom; but North Dakota was already reporting record profits in the spring of 2009, when every other state was in the red and the oil boom had not yet hit.

The average ROE of the BND from 2000 through 2024 (its latest annual report) was 19.4%. Compare JPMorgan Chase (JPM), by far the largest bank in the country, with 2.4 trillion in deposits. Its average ROE from 2000-23 was 11.38% over the same period. For a detailed breakdown, see here.

How could the BND have outperformed JPM, the nation’s largest bank? Most important, it has substantially lower costs and risks than private commercial banks. It has no exorbitantly-paid executives; pays no bonuses, fees, or commissions; has no private shareholders; and has low borrowing costs. It partners with local banks in “participation loans,” avoiding loan origination costs. It engages in old-fashioned conservative banking and does not speculate in derivatives, so it has no losses or risk from derivative trades gone wrong.

The BND does not need to advertise or compete for depositors. It has a massive, captive deposit base in the state itself, which must deposit all of its revenues in the BND by law.  Most state agencies also must deposit there. The BND takes some token individual deposits, but it does not compete with local banks for commercial deposits or loans. As for municipal (as distinct from state) government deposits, the BND generally not only reserves those deposits for local community banks but enhances their ability to secure municipal deposits. In many states, stringent collateral requirements are attached to municipal government deposits, such as a 110% collateral requirement with high quality securities. This essentially prevents local banks from using municipal deposits to fund local lending. In North Dakota, however, the BND provides letters of credit that guarantee the deposits of municipal governments and other public corporations, making collateral unnecessary and making municipal deposits available for local lending. In addition to its deposit base, the BND also has a substantial capital base, with a capital fund totaling $1.059 billion in 2023, along with deposits of $8.7 billion.

Among other costs avoided by the BND are those for fines, penalties and settlements arising from government and civil lawsuits. Since the year 2000, JPM has paid more than $40 billion in total fines and settlements to regulators, enforcement agencies and lawsuits related to anti-competitive practices, securities abuses and other violations; and it is still facing several hundred open legal cases.

The State’s Deposits Are Safer in Its Own Bank

The BND is not only more profitable but also safer than JPM. In fact federal data show that JPM is the most systemically risky bank in the country. The BND, by contrast, has been called the nation’s safest bank. Its stock cannot be short-sold, since it is not publicly traded; and it will not suffer a run, since the state would not “run” on itself.

Compare JP Morgan Chase, which has over $1 trillion in uninsured deposits, the type most likely to be withdrawn in a crisis. In March 2023, the FDIC insurance fund had a balance of only $116.1 billion – only 5% of JPM’s total deposits of $2.38 trillion. JPM also had major counterparty risk in the derivatives market, with close to $60 trillion in total (notional) derivatives. The risks of large notional derivative exposures were highlighted in the 2012 “London Whale” scandal, in which JPM incurred $6.2 billion in losses from exotic derivatives trades.

Not just the Bank of North Dakota but North Dakota’s local banks are very safe, aided by the BND with liquidity, capitalization, regulation, loan guarantees, and other banker’s bank services. No local North Dakota banks have been in trouble during this century, but if they were to suffer a bank run, the BND would be there to help. According to its former CEO Eric Hardmeyer, the BND has a pre-approved fed funds line set up with every bank in the state; and if that is insufficient for liquidity, the BND can simply buy loans from a troubled local bank as needed.

Today, state governments often deposit their revenues in giant Wall Street banks designated as SIFIs (Systemically Important Financial Institutions), including JPM; but those banks are riskier than they appear.  They “insure” their capital with interconnected derivatives backed by collateral that has been “rehypothecated” (pledged or re-used several times over). The Financial Stability Board in Basel has declared that practice to be risky, “[a]s demonstrated by the 2007-09 global financial crisis.” The five largest Wall Street depository banks hold $223 trillion in derivatives — a risk highlighted by the Bank for International Settlements as “huge, missing and growing” in its December 2022 Quarterly Review — and they have a combined half trillion dollars in commercial real estate loans, also very risky in the current financial environment.

Under the Dodd Frank Act of 2010, a SIFI that goes bankrupt will not be bailed out by the government but will be recapitalized through “bail-ins,” meaning the banks are to “bail in” or extract capital from their creditors. That includes their “secured” and “collateralized” depositors, including state and local governments. Under the Bankruptcy Act of 2005 and Uniform Commercial Code Secs. 8 and 9, derivative and repo claims have seniority over all others and could easily wipe out all of the capital of a SIFI, including the “collateralized” deposits of state and local governments. The details are complicated, but the threat is real and imminent. See fuller discussions here and here, David Rodgers Webb’s The Great Taking, and Chris Martenson’s series drilling down into the obscure legalese of the enabling legislation, concluding here.

Even if the SIFIs remain solvent, they are not using state deposits and investments for the benefit of the state from which they come, and often they are betting against the public interest. The BND, on the other hand, is mandated to use its funds for the benefit of the North Dakota public. Other states would do well to follow North Dakota’s lead.

Advantages of a State-owned Bank for the Public, Local Government and Local Banks

Like private banks, a publicly-owned bank has the ability to create money in the form of bank credit on its books, and it has access to very low interest rates. But the business model of private banks requires them to take advantage of these low rates to extract as much debt service as the market will bear for the benefit of the bank’s private investors. A public bank can pass low rates on to local residents and businesses. It can also recapture the interest on local government projects, making them substantially cheaper than when funded through the bond market. As described above, the BND’s profits belong to the citizens and are generated without taxation, lowering tax rates. The BND also serves North Dakota’s local banks. It acts as a mini-Fed for the state, providing correspondent banking services to virtually every financial institution in North Dakota. It provides secured and unsecured , check-clearing, cash management and automated clearing house services for local banks. It participates in their loans and guarantees them, so the banks are willing to take on more risk, and they have been able to keep loans on their books rather than selling them to investors to meet capital requirements.  As a result, North Dakota banks were able to avoid the 2008-09 subprime and securitization debacles and the 2023 wave of bank bankruptcies.

By partnering with the BND, local banks can also take on local projects that might be too large for their own resources or in which Wall Street has no interest, projects that might otherwise go to out-of-state banks or remain unfunded. Due to this amicable partnership, the North Dakota Bankers’ Association endorses the BND as a partner rather than a competitor of the state’s private banks.

Serving the State as a Rainy Day Fund and for Disaster Relief

Unlike the Federal Reserve, which is not authorized to support state and local governments except in very limited circumstances,  North Dakota’s “mini-Fed” can help directly with state government funding. Having a cheap and ready credit line with the state’s own bank reduces the need for wasteful rainy-day funds invested at minimal interest in out-of-state banks.

The BND has also demonstrated the power of a state-owned bank to leverage state funds into new credit-dollars for disaster relief. Its emergency capabilities were demonstrated, for example, when record flooding and fires devastated Grand Forks, North Dakota, in 1997. Floodwaters covered virtually the entire city and took weeks to fully recede. Property losses topped $3.5 billion. The response of the state-owned bank was immediate and comprehensive. It quickly established nearly $70 million in credit lines – to the city, the state National Guard, the state Division of Emergency Management, the University of North Dakota in Grand Forks, and for individuals, businesses and farms. It also launched a Grand Forks disaster relief loan program and allocated $5 million to help other areas affected by the spring floods. Local financial institutions matched these funds, making a total of more than $70 million available.

The BND coordinated with the U.S. Department of Education to ensure forbearance on student loans; worked closely with the Federal Housing Administration and Veterans Administration to gain forbearance on federally backed home loans; established a center where people could apply for federal/state housing assistance; and worked with the North Dakota Community Foundation to coordinate a disaster relief fund, for which the bank served as the deposit base. The bank also reduced interest rates on existing Family Farm and Farm Operating programs. Remarkably, no lives were lost, and the city was quickly rebuilt and restored.

More recently during the COVID crisis, North Dakota distributed unemployment benefits through community banks coordinated by the BND 10 times faster than the slowest state, and North Dakota’s small businesses secured more Paycheck Protection Program funds per worker than any other state.

Progress and Challenges

In the past 15 years, groups across the country have worked diligently to establish publicly-owned banks in their states and communities. A big push came in 2011 with the Occupy Wall Street movement, demonstrating that even the dry subject of banking can incite large groups of people to take action in times of economic crisis. Many people moved their individual deposits out of big Wall Street banks into local community banks, but what about the large public deposits held by state and local governments? No community bank was large enough for their needs. The Bank of North Dakota demonstrated the feasibility of another alternative: the state or city could form its own bank.

Although more than 50 public bank bills and resolutions have been filed since 2010, the only new bank to emerge is the Territorial Bank of American Samoa, founded in 2016. Lobbying in opposition by big private banks has deterred politicians, who are reluctant to rock the boat when times are good and no immediate need is perceived. However, times are not so good today for the majority of the population, and they could soon get worse even for the wealthy.

To muster the political will to take action, politicians need a business plan in which the benefits of establishing their own banks clearly outweigh the costs; and public bank advocates today face hurdles that the BND avoided by being grandfathered in before the relevant agency rules were instigated.

One hurdle is that states today typically require uninsured public funds to be backed by pledged collateral (i.e. surety bonds or letters of credit) exceeding 100 percent of the value of the deposits. California, for example, has state tax revenues exceeding $80 billion. As a single deposit in a bank, only $250,000 of that sum would be covered by FDIC insurance, leaving the balance uninsured; so the state insures that balance with a collateral requirement that is 110% of uninsured deposits. The result is to tie up more liquidity than the deposits provide. Public banking advocates argue that the requirement is unnecessary and unfairly burdensome for state-owned banks. The deposits of the BND, which was chartered as “the State of North Dakota doing business as the Bank of North Dakota,” are backed by the state itself. Meanwhile, letters of credit, e.g. from a Federal Home Loan Bank, are a viable alternative.

Another hurdle is that most state constitutions prohibit the state from “lending its credit” to private parties. This has been construed as prohibiting the state from owning a bank, but legal memoranda have refuted that interpretation.

Besides a profitable business plan, politicians need a push from their constituents to take action, and most people haven’t heard of public banks and don’t understand the concept. Wider public exposure and education are necessary. Even many politicians are unaware of how banking actually works. Chartered depository banks have the power to create money as deposits when they make loans, expanding the local money supply and increasing the capacity for local productivity. Over 95% of our money supply today is created by banks in this way. This vast power to create money as credit is one that properly belongs in the public domain.

Times are changing, and public banking momentum continues to grow. By making banking a public utility, with expandable credit issued by banks that are owned by the people, the financial system can be made to serve the people and local enterprise without draining their resources away. Credit flow can be released so that industry and free markets can thrive, and the economy can move closer to reaching its full potential.

• First published at Just Money.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

“The House GOP has revealed in broad daylight that their tax bill is a clear scam—one that hands out massive giveaways to their billionaire and corporate donors off the backs of their constituents with a price tag of over $5 trillion,” said David Kass, ATF Executive Director. “The plan’s massive cuts to vital programs like Medicaid and SNAP will drive up healthcare and food prices for millions of workers and families, while billionaires pocket the money and the national debt soars. Working and middle-class families—and future generations—shouldn’t have to pay higher prices simply to enrich billionaire elites and the politicians in their pocket.”

This content originally appeared on Common Dreams and was authored by Newswire Editor.

The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.

— PBOC Governor Zhou Xiaochuan, October 9, 2009.

Only Xi can rescue Trump from his self-created tariff blunder, but his price will shock the West.

The Story So Far

President Trump’s tariffs will barely affect China’s GDP growth but, says Molson Hart, by April 10 America will face an economic catastrophe worse than the global financial crisis (GFC), as hospitals close and the bond market triggers hyperinflation.

As my subscribers know, China began preparing for this moment in 2009, when the PBOC¹ started developing mBridge, the international trading platform on which countries trade in their own currencies quickly and securely. mBridge has been operating smoothly since 2022.

Next came CIPS, China’s alternative to SWIFT’s slow, expensive, insecure, dollar-denominated system. CIPS daily transaction volume surpassed SWIFT’s last week.

But by far its most ambitious project was an international reserve currency modeled on Keynes’ bancor² system, which makes surplus countries invest their excess foreign reserves abroad and deficit countries reduce their foreign borrowings accordingly. Keynes proposed the bancor at Bretton Woods in 1945 when, after centuries as the world’s reserve currency, the pound sterling could no longer afford to serve both domestic and global needs. The United States rejected it, insisting that the dollar replace the pound. President Trump recently admitted that the United States is fast approaching that moment.

The PBOC aimed to introduce the bancor in the late 2030s but will bring that forward , to save the US dollar from collapse. It will also support America as it adapts to the new regime. Then, freed of international obligations, the RMB, the USD and the Euro can focus on domestic priorities.

The rescue

PM Li Qiang, who has known him since their Shanghai days, will invite Elon Musk and Federal Reserve Chairman Jerome Powell to convey the bancor offer to the White House and even allow Trump to claim credit for it. Implementation will require years of patience, trust and skill, but Trump has no alternative. War is definitely not one: the US was never a match for China militarily, as Beijing demonstrated in 1951. Nor is a trade war: China’s GDP will be unaffected by tariffs and grow 5.4%, by $1.7 trillion, this year while America’s is already contracting.

Xi the Merciful

Moral leaders whose own states always act correctly will unfailingly attain primacy. States wishing to exercise humane authority must be the first to respect the norms they advocate, because leaders of high ethical reputation and great administrative ability are attractive to other states and, since the domestic determines the international, winning hearts and minds is more important than winning territory. Being compassionate in great matters and overlooking small ones makes one fit to become lord of the covenants. Rulers win leadership by acting morally and, by presiding over the meetings of other states, earn international acknowledgement of their humane authority.

— Xunzi, 300 BC.

Beijing is hunting much bigger game than tariffs: the liberation of Palestine. China, Palestine’s oldest and most loyal friend, has endured America’s genocidal mania for generations and now has the tools to end their shared misery.

Every major US industry, from arms to hi-tech to automotive, relies entirely on Chinese rare earth metals and lacks the skills to manufacture them. Beijing restricts REM exports and forbids foreign buyers, like Occupied Korea, to on-sell them to the West. If the US wants them, it must end the genocide before the last of its REM stockpiles is exhausted: eight months at most. The clock is running down.

This year, we will witness the most momentous events since WWII. Global leadership will return to Asia, America will enters its post-imperial twilight, and Palestine will become free and independent, and the Zionists return to Ukraine whence they came.

Appropriately, Xi is in Moscow today…to celebrate Victory Day.

They’ve won.

ENDNOTES:

This content originally appeared on Dissident Voice and was authored by Godfree Roberts.

This essential premise has been embedded in various climate agreements signed since the 1990s, including the most recent pact inked at the 29th Conference of Parties, or COP29, in Baku, Azerbaijan, late last year. There, wealthy countries agreed to provide $300 billion per year to developing nations by 2035.

Wealthy countries, however, have frequently failed to live up to their promises, slowly eroding the Global South’s trust in a multilateral approach to the climate crisis. Over the last three months, the Trump administration has only accelerated that process. First, President Donald Trump withdrew the United States from the Paris Agreement, the 2015 climate treaty to keep global warming to less than 1.5 degrees Celsius. Then, Trump cut funding for various international climate programs, including the Just Energy Transition Partnerships and other initiatives supported by the U.S. Agency for International Development. And most recently, Treasury Secretary Scott Bessent criticized the World Bank and International Monetary Fund, prominent financial institutions that have made climate a priority in recent years, for straying from their mission. 

“The IMF was once unwavering in its mission of promoting global monetary cooperation and financial stability,” Bessent said last week. “Now it devotes disproportionate time and resources to work on climate change, gender, and social issues.”  

These changes in the U.S.’s stance are taking place at a time when the European Union is also slashing its development funding, which includes climate aid. Countries including the United Kingdom, Switzerland, Germany, France, and the Netherlands have cut as much as 37 percent of their aid budgets, moving the money instead to defense and stimulus measures. According to one analysis, the aid cuts add up to nearly $40 billion.

While it’s unclear exactly how much total climate aid will be lost as a result of these changes, the figure is a substantial portion of international climate finance. The U.S. alone provided $11 billion last year — 8 percent of global climate aid. Much of that has already been lost this year through cuts to the U.S. Agency for International Aid and the Green Climate Fund. 

“We are at a very uniquely devastating moment,” said Harjeet Singh, founder of the Satat Sampada Climate Foundation, a nongovernmental organization based in India, and a climate justice activist. “The U.S.’ retreat, more fossil fuel production, no climate finance or aid, and trust in the multilateral system at the bottom — that’s where we are. It’s not inspiring.”

The resulting vacuum in leadership is increasingly being filled by countries in the Global South, primarily China. In the wake of the Trump administration’s yo-yoing on tariffs, President Xi Jinping reaffirmed China’s commitment to climate action at a meeting of global leaders. In a speech last week, Xi announced that China would set more stringent emission targets ahead of COP30, the annual climate conference taking place in Brazil later this year. 

“However the world may change, China will not slow down its climate actions,” he said. 

At the same time, China is forging stronger alliances across the world. With tensions rising between the United States and European countries over tariffs, China has been deepening diplomatic ties in Europe. Similarly, it has called for a “Dragon-Elephant tango” with India, a country with which it has historically clashed over border disputes. 

“We’re seeing an inflection point in the global world order,” said Kaveh Guilanpour, a climate finance expert at the Center for Climate and Energy Solutions and a former climate negotiator for the United Kingdom, European Union, and small island states. “It’s accelerated in a matter of weeks, something that was probably going to take decades.”

The shift in the global order toward the East is being recognized by top climate officials. COP30 President André Correa do Lago told reporters last month that with the U.S. retreating from climate leadership and Europe prioritizing defense spending, countries in the Global South have an opportunity to step forward. 

“The Global South has an important role to play at this stage,” he said. “We followed the agreements and engaged in extensive debates but remained constructive. We accepted the Paris Agreement, among others. However, the North’s commitments related to financial support and accelerating emission reductions have not materialized as planned.”

It’s unclear exactly what these changing political dynamics might mean for climate negotiations in Belém, Brazil, in November. For one, the distinction between developed and developing countries has been enshrined in climate agreements since the convening of the United Nations Framework Convention on Climate Change, the 1992 international treaty and process by which countries limit global temperature rise. That crucial classification was based on countries’ economic status at the time — and hasn’t been revised since. As a result, even as countries like South Korea, Singapore, United Arab Emirates have grown economically and contributed increasingly more to climate change, they continue to be classified as developing nations during climate negotiations. 

While developing countries have worked to preserve the distinction on paper, many have contributed funding to poorer nations outside of the United Nations framework in recognition of their responsibility to help tackle climate change. According to one estimate, China, for instance, has provided $24 billion in climate aid to Global South countries since 2016. In 2023, during COP28 in Dubai, the United Arab Emirates pledged $100 million to help emerging economies manage the losses that have already resulted from a warming planet. Similarly, Brazil, Russia, and India have also contributed billions of dollars to multilateral banks and other international institutions that provide climate aid.

Ultimately, these shifts in climate action and funding may allow for new partnerships to form and new climate leaders to emerge.

“If advanced economies are pulling back and ceding power and influence, and other countries are stepping up, shouldn’t we recognize that?” said Joe Thwaites, an expert on international climate funding at the nonprofit Natural Resources Defense Council. “That realignment is going to determine how successful a lot of climate action is going to be in the next decade or two.” 

This story was originally published by Grist with the headline Who will finance global climate solutions? Not the West. on May 1, 2025.

This content originally appeared on Grist and was authored by Naveena Sadasivam.

Nearly 250 years after our nation’s founders rebelled over abused property rights, Americans are once again being subjected to taxation without any real representation, all the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little concern for the plight of its citizens.

Nothing has changed for the better with Donald Trump. Indeed, it’s getting worse by the day.

Having inherited one of the strongest economies in the world, President Trump—whose credentials as a businessman include multiple failed business ventures, bankruptcies, and a mountain of debt and unpaid bills—has managed to singlehandedly torch the economy with his misguided tariffs and self-serving schemes, which are being carried out without any oversight or checks from Congress.

Yet it is Congress, not the president, that holds the authority to control government spending.

This is spelled out in the Appropriations Clause, found in Article I, Section 9, Clause 7 of the Constitution, which establishes a rule of law about how the monies paid to the government by the taxpayers are to be governed, and in the Taxing and Spending Clause of Article I, Section 8, Clause 1. In a nutshell, Congress is in charge of accounting for those funds and authorizing how those funds are spent (or not spent).

The founders intended this regulatory power, referred to as the “power of the purse” (to determine what funds can be spent and what funds can be withheld) to serve as a potent check on any government agency that exceeds its authority, especially the executive branch.

As law professor Zachary Price observes, “Given how strong this check is, it may not be surprising that presidents have sought ways to get around it.”

Yet while past presidents have sought to expand their authority under the guise of national emergency declarations, Trump has taken this executive overreach to unprecedented extremes.

Price explains how various presidents from Obama to Biden to Trump have attempted to subvert that same congressional power to press their own agendas, whether by funding the Affordable Care Act, advancing student debt, or as in Trump’s case, by dismantling and defunding agencies funded by Congress.

Executive orders and national emergencies have become a favored tool by which presidents attempt to govern unilaterally. As the Brennan Center reports, presidents have access to 150 such emergency powers, which essentially allow them to become limited dictators with greatly enhanced powers upon declaration of an emergency.

Because the National Emergencies Act does not actually define what constitutes an emergency, presidents have an incredible amount of room to wreak constitutional mischief on the citizenry.

While presidents on both sides of the aisle have abused these powers, Trump is attempting to test the limits of these emergency powers by declaring a national emergency anytime he wants to sidestep Congress and quickly impose his will on the nation.

Trump’s liberal use of emergency powers to sidestep the rule of law underscores the danger they pose to our constitutional system of checks and balances.

Since taking office in January 2025, Trump has used his presidential emergency powers in a multitude of ways in order to mount brazen power grabs thinly disguised as concerns for national security, thereby allowing him to justify tapping into the nation’s natural resources, rounding up and deporting vast numbers of migrants (both documented and undocumented), and imposing duties and tariffs against longtime allies and trade partners.

Thus far, the Republican-controlled Congress, which has the power to terminate an emergency with a two-thirds vote, has done nothing to rein in Trump’s dictatorial tendencies.

These unchecked powers aren’t just a threat to the balance of government—they have immediate, devastating consequences for the economy and working Americans.

Economists fear the ramifications of Trump’s latest national emergency, which he claims will usher in “the golden age of America” through the imposition of heavy tariffs on foreign nations, could push the U.S. and the rest of the world into a major recession by inciting a global trade-war, isolating America economically from the rest of the world, and flat-lining businesses that had expected to boom.

Fears of a recession are growing stronger by the hour.

In addition to sabotaging the economy, laying off tens of thousands of federal employees and dismantling those parts of government which serve the interests of working-class Americans, as well as its aging, disabled and homeless populations, Trump and his cabal of billionaire buddies are dismantling the few remaining checks on public and private corruption—fueling corporate greed at every turn.

This is how the man who promised to drain the swamp continues to mire us in the swamp.

Meanwhile, taxpayers—whose retirement savings have taken a nosedive—are expected to foot the bill to the tune of tens of millions of dollars for Trump’s frequent golf trips to his own golf courses (he’s also charging exorbitant rates to Secret Service to stay at his properties while protecting him), his multimillion-dollar photo ops at the Super Bowl and the Daytona 500, his desire to redo the White House gardens and build a $100 million ballroom, and his latest demand for a costly military parade in honor of his 79^th birthday.

While President Trump may talk a good game about his plans for making America richer, it’s becoming increasingly clear that the only person he’s making richer—at taxpayer expense—is himself.

This fiscal insanity, coupled with Trump’s imperialistic and tyrannical ambitions, echoes the very abuses that drove America’s founders to rebel against King George III.

In other words, the government is still robbing us blind.

Trump hasn’t reined in the government’s greed—he’s just been using a different playbook to get the same result: beg, borrow or steal, the government wants more of our hard-earned dollars any way it can get it.

Indeed, Trump, the self-proclaimed “debt king,” has presided over one of the most reckless expansions of government spending in modern history while posturing as a fiscal conservative.

This isn’t governance. It’s looting—by legislation, debt, and design.

We’re being robbed blind so the governmental elite can get richer.

This is financial tyranny.

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, if you have no choice, no voice, and no real say over how your money is used, you’re not free.

You’re being ruled.

This content originally appeared on Dissident Voice and was authored by John W. Whitehead and Nisha Whitehead.

As the date approaches, global financial markets including the US stock market have experienced a rollercoaster ride as investors’ anxiety continues to worsen.

Asia-Pacific markets were mixed on Wednesday. Japan’s benchmark Nikkei 225 edged up 0.28 percent higher to close at 35,725.87, and the broader Topix index closed down by 0.43 percent at 2,650.29. Meanwhile, South Korea’s Kospi slipped 0.62 percent to close at 2,505.86 while the Kosdaq declined 0.95 percent to close at 684.85.

As for European markets, the benchmark STOXX 600 was trading down as of press time.

US stocks dropped Wednesday as Wall Street braced for the expected rollout of the US tariffs. The Dow Jones Industrial Average lost 333 points, or 0.8 percent. The S&P 500 slid 1 percent, and the Nasdaq Composite pulled back by 1.5 percent, CNBC reported.

It followed a volatile session on Monday as investors awaited clarity on US President Donald Trump’s tariff rollout. The S&P 500 and the Nasdaq Composite posted on Monday their worst quarterly performances since 2022, as uncertainty around the Trump administration’s economic agenda roiled US equity markets in the first quarter of 2025. For the quarter, the S&P 500 slumped 4.6 percent, while the Nasdaq Composite plummeted 10.5 percent, Reuters reported.

In the bond market, the yield on the 10-year Treasury fell to 4.16 percent from 4.23 percent late Monday and from roughly 4.80 percent in January, the AP reported.

Gold prices on Monday surged above $3,100 per ounce for the first time as concerns around the US tariffs and the potential economic fallout, combined with geopolitical worries, drove a fresh wave of investments into the safe-haven asset. Spot gold prices hit a record high of $3,106.50 per ounce, according to a separate Reuters report.

Growing backlash‌ 

The tariff plan has also drawn widespread opposition from the US’ trading partners, with officials from various countries speaking out to safeguard their interests while potentially retaliating if necessary.

Canadian Prime Minister Mark Carney pledged to fight unjustified trade actions, protect Canadian workers and businesses and build Canada’s economy, including through increased trade between Canada and Mexico as he spoke with Mexican President Claudia Sheinbaum on Tuesday.

“With challenging times ahead, Prime Minister Carney and President Sheinbaum emphasized the importance of safeguarding North American competitiveness while respecting the sovereignty of each nation,” Carney’s office said in a statement.

Other economies have also threatened countermeasures.

The EU has “a strong plan to retaliate if necessary,” European Commission (EC) President Ursula von der Leyen said on March 20 in a speech, according to the speech released by the EC on Tuesday.

“Our objective is a negotiated solution. But of course, if need be, we will protect our interests, our people and our companies,” von der Leyen said.

The sweeping tariff measures adopted by the US will not work because they are built on a flawed assumption and “completely mistaken” diagnosis on its economy, and it wrongly blames global trade for domestic struggles, which will only lead to negative consequences, Pascal Lamy, former Director General of the World Trade Organization (WTO) told the Global Times in an exclusive interview.

Sharp tariff hikes can indeed disrupt global value and supply chains, adversely affecting other nations while simultaneously impacting the US itself, Gao Lingyun, an expert at the Chinese Academy of Social Sciences, told the Global Times on Wednesday.

Experts warned that the tariffs will backfire, disrupting global supply and industrial chains and saddling US businesses and consumers with higher costs.

Lamy cautioned that the US itself stands to suffer most. “If the US triggers a trade war, it will primarily hurt the US economy by raising prices, driving inflation and likely pushing up interest rates,” Lamy said, adding that this fallout could also trigger pushback from US financial markets and the general public.

Gao noted that after tariff hikes, domestic US producers often raise prices, leaving consumer welfare unimproved.

According to Gao, studies indicate that 25 percent tariffs could raise consumer costs by $5,000 to $10,000, exacerbating uncertainty for both the US and global economies. The price of a typical car could rise by between $5,000 to $10,000 “out of the gates” due to the new tariffs, according to a March 31 estimate from Wedbush Securities analyst Dan Ives, CBS News reported.

Gao pointed to recent market volatility, low consumer confidence and rising recession risks as evidence.

Goldman Sachs said in a report released on Sunday US local time “We now see a 12-month recession probability of 35 percent [in the US]. The upgrade from our previous 20 percent estimate reflects our lower growth baseline, the sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies.”

Tariffs are a double-edged sword. On the one hand, they can suppress imports of foreign products into the US. On the other hand, tariffs do not offer as many advantages for the development of the US as Washington might imagine, Liu Weidong, a research fellow at the Institute of American Studies at the Chinese Academy of Social Sciences, told the Global Times on Wednesday.

Tariffs fuel inflation and stifle innovation among local firms. Moreover, due to potential retaliation from other countries, US exports can also be affected, and the impacts of tariffs on the US would be mostly negative, Liu said.

However, former WTO chief Lamy downplayed the tariffs’ potential to reshape global trade, noting that the US accounts for just 15 percent of world imports. “The rest of the international trading system – 85 percent of global imports, involving trade between countries like China, India, Mexico, and Canada – can remain largely unaffected,” he said.

As for China, Liu said that as the detailed measures have not been disclosed, the specific impacts remain uncertain, though it will likely target specific sectors.

Regarding China’s response, Liu said that the country is well-prepared, with ample technological, industrial and strategic reserves.

Chinese authorities, including the Foreign Ministry and the Commerce Ministry, have stated multiple times that trade and tariff wars have no winners and the unilateral imposition of tariffs by the US undermines the multilateral trading system, as well as disrupting normal international trade order.

China-US trade ties are based on reciprocal interactions. Cooperation will bring about mutual benefit and win-win, and China will definitely take countermeasures in response to arbitrary pressure, Chinese Foreign Ministry spokesperson Mao Ning said on March 12.

This content originally appeared on Dissident Voice and was authored by Global Times.

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Since the Trump administration moved to dismantle the Consumer Financial Protection Bureau last month, the bureau has dropped nine lawsuits that it had brought on behalf of consumers.

The actions effectively freed major financial firms like Capital One and the mortgage giant Rocket Homes from the threat of consequences for their alleged significant wrongdoing, shocking consumer advocates and raising questions about the future of America’s consumer watchdog. For their part, when the cases were dropped, the companies lauded the decisions, with a bank spokesperson welcoming the dismissal of the case, “which we strongly disputed,” and Rocket Homes calling the suit an “empty claim.”

But the administration’s new hands-off approach to enforcement at the CFPB extends far beyond those public lawsuits. Behind the scenes, dozens of ongoing investigations into alleged corporate malfeasance are now frozen at the agency, potentially denying accountability and financial relief for untold numbers of consumers, a ProPublica investigation has found.

Under a stop-work order issued by the agency’s new leaders, CFPB investigators have been unable to press forward on probes into companies whose products and services are used by tens of millions of Americans, including Carvana, the online used-car retailer; Mr. Cooper, one of the country’s largest mortgage servicers; and CareCredit, a leader in medical credit cards, according to multiple people with knowledge of the matters.

The ongoing inquiries, the existence of which ProPublica is revealing for the first time, were at various stages of development, with subpoenas issued in most of them and companies submitting records in response. And while the nature of the alleged wrongdoing wasn’t clear in all cases, people familiar with the inquiries said several probes tracked closely with problems featured in the agency’s own recent public reports.

Last fall, for example, the CFPB examined automobile finance companies and found numerous problems with industry practices, including failing “to timely provide consumers with title after loan payoff,” which can result in drivers losing their cars after traffic stops and accidents. That issue is one of several at play in probes of Carvana and VW Credit Inc., said the people, who like others interviewed by ProPublica spoke on condition of anonymity to discuss sensitive bureau actions.

Carvana didn’t respond to multiple emails seeking comment and a spokesperson didn’t return a voicemail. Spokespeople for VW Credit haven’t responded to emails seeking comment and a spokesperson didn’t return a phone call.

If you or someone you know has recently sought help from the CFPB, please fill out this form.

The investigatory pullback worries consumer advocates who fear the agency is now poised to effectively walk away from years of work that undergirds civil actions — a decision that they say will ultimately neuter the government’s ability to enforce America’s consumer financial protection laws while signaling to companies that all business practices, no matter how pernicious, are fair game. The latest agency data shows that it takes an average of 35 months from opening an investigation to either filing a lawsuit or settling the case.

“What we’re seeing is a wholesale abandonment of consumer protection, leaving people to fend for themselves when credit card companies, banks, payday lenders and payment apps violate the law,” said Lauren Saunders, the associate director of the National Consumer Law Center.

Indeed, the freeze in enforcement has stalled probes into companies that had previously agreed to legal payouts to settle allegations that they’d harmed consumers, the people said. At least two such companies were under investigation for allegedly backsliding into similar problematic behavior, the people said, even after those businesses had struck deals: data furnisher Afni Inc., which in 2020 agreed to pay a $500,000 civil penalty and more accurately report information to credit reporting agencies, and the home improvement fintech company GreenSky, which in 2021 paid a $2.5 million civil penalty and agreed to stop making fraudulent loans.

Afni didn’t respond to an email seeking comment and a spokesperson didn’t return a voicemail. GreenSky declined to comment.

The enforcement freeze effectively halts the CFPB’s efforts begun under former President Joe Biden to police tech companies, some of which have donated millions to President Donald Trump, the people said. Among the firms under agency scrutiny are Meta, the parent company of Facebook, and Greenlight Financial Technology, the maker of a popular debit-card-for-kids app.

The inquiry into Meta was being watched closely as a test case for the agency’s expansion into regulating tech companies whose businesses intersect with financial services.

According to people familiar with the probe, the CFPB was looking into whether Facebook was, without users’ knowledge, improperly holding onto confidential financial information that users entered into loan applications advertised by businesses on the platform.

The company disclosed the existence of the CFPB inquiry to shareholders last fall, saying it disagreed with the bureau’s claims that its advertising practices had violated the consumer financial protection laws and believed “an enforcement action is unwarranted.” In January, CEO Mark Zuckerberg told podcaster Joe Rogan that he didn’t know what the agency’s initials stood for and said of the bureau’s inquiry that “we had organizations that were looking into us that were, like, not really involved with social media.”

“We’re not a bank,” he added. “But they kind of found some theory that they wanted to investigate, and it’s like, OK.”

Meta donated $1 million to Trump’s inauguration. Asked for comment, a spokesperson referred ProPublica to the company's September 2024 securities filing.

Another prominent Trump donor, venture capitalist Marc Andreessen, has similarly criticized the bureau’s efforts to oversee financial technology companies. Andreesen, whose firm was a major backer of Greenlight, told Rogan last November that the bureau works to “terrorize financial institutions, prevent fintech, prevent new competition, new startups that want to compete with the big banks.” He didn’t disclose his investment in Greenlight during the appearance.

The CFPB has been looking into allegations that the company wasn’t allowing kids immediate access to their money as it had advertised that it would, leaving some users unable to pay for purchases, the people said. Then, they said, the company allegedly failed to provide sufficient customer service.

Greenlight didn’t respond to emailed requests for comment sent to its media address, and the company’s general counsel didn’t respond to a voicemail or an email. Neither Andreessen, his assistant nor his venture capital firm’s press office responded to emails seeking comment, and his assistant didn’t return a voicemail.

The tech leaders’ criticisms mirror those of Elon Musk, the billionaire head of Trump’s Department of Government Efficiency. He posted “Delete the CFPB” on his social media site, X, after Trump’s presidential victory in November and then, just over two months later, as DOGE workers were given access to the agency, he posted “CFPB RIP.” Between those posts, Musk’s X announced that it was getting into the mobile payments business via a partnership with Visa. That would put it squarely in the jurisdiction of the CFPB; the bureau said last fall it would also start supervising large technology companies that provide digital payments.

A spokesperson for DOGE didn’t respond to a request for comment. A voicemail left with the entity handling X’s payment services wasn’t returned. In an interview last month, Musk, when asked about how his business interests and government work may intersect, said, “I’ll recuse myself if it is a conflict.”

Since Musk’s posts, the administration has sought to fire most of the more than 1,700 agency staffers, has canceled more than 200 contracts and has issued sweeping stop-work orders, court records show. Unionized employees sued the CFPB’s acting director, Russell Vought, last month to stop many of those moves, and a federal judge has temporarily blocked some of them. The court is expected to rule soon on what staffing levels the administration must maintain for the CFPB to meaningfully perform dozens of statutorily required functions that Congress built in when it created the agency in the wake of the 2008 financial crisis.

Amid the back-and-forth, Vought and Mark Paoletta, the agency’s chief legal officer, have backed off some of their positions, permitting some work and undoing some of the canceled contracts, according to court records. The result, though, said people familiar with the bureau’s operations, is a highly micromanaged work environment.

Within the enforcement division, virtually all pending investigations have been brought to a near standstill. Except for attorneys working on seven ongoing lawsuits that Paoletta has permitted to move forward, investigators still can’t speak with lawyers representing companies that have been subpoenaed, interview witnesses or take other significant actions without first obtaining his approval, bureau emails reviewed by ProPublica show. One Feb. 10 directive from Paoletta threatened enforcement division employees with “insubordination” for working without approval. Some employees’ requests for permission to work have gone unanswered. Others haven’t logged onto their computers for days at a time.

When administrations change, it is not uncommon for agency leaders to evaluate existing work and shift priorities to align with the new president’s agenda. During Trump’s first administration, Mick Mulvaney, the CFPB’s acting director, ordered agency attorneys to write summaries to justify working on more than 100 open cases, The New York Times reported. No such mandate has been issued since Trump took office two months ago.

Neither the CFPB nor Paoletta responded to ProPublica’s requests for comment.

While some of the stalled cases involve companies with no prior enforcement history, like Meta, others have had past run-ins with the agency.

The mortgage servicer Mr. Cooper, for example, had previously agreed to pay $73 million to more than 40,000 borrowers as part of a 2020 settlement with the CFPB to resolve allegations that it had engaged in multiple servicing problems, including improperly increasing monthly loan payment amounts and foreclosing on borrowers after it had promised not to do so while they were in the process of resolving the loans.

The bureau’s current inquiry revolves around the company’s disclosure that the sensitive personal information of nearly 15 million people — what the company described in a 2023 securities filing as “substantially all of our current and former customers” — was hacked, people familiar with it said. The CFPB had publicly issued guidance a year prior warning companies that “inadequate security for the sensitive consumer information collected, processed, maintained, or stored by” companies subject to agency oversight can violate consumer financial protection laws.

The company didn’t respond to an emailed message seeking comment, and the chief legal officer did not respond to a call and email.

Likewise, Synchrony Financial, whose subsidiary CareCredit is one of the top three medical credit card issuers, agreed to pay $225 million in 2014 to resolve a bureau probe into discriminatory card practices. It was subpoenaed again in 2017 by the agency for information about credit cards it promoted that allowed consumers to defer paying interest, court records show. The deals can result in consumers owing huge sums of accrued interest all at once when the deferral period ends. The American Banker reported that that inquiry did not result in any enforcement.

CareCredit is now the subject of another inquiry that, according to people familiar with it, closely tracks with a bureau report from last summer that found consumers “frequently complained of healthcare providers misrepresenting the specifics” of medical credit card promotions. Consumers also said they were “pressured by healthcare providers to open a credit card while receiving treatment.”

A spokesperson said the company works closely with federal regulators but wasn’t aware of any CFPB enforcement actions. In a July 2023 earnings call, Synchrony CEO Brian Doubles said the company was “very proud of the CareCredit products that we offer."

The agency was also investigating Point, a major player in the so-called alternative mortgage industry, another sector that caters to vulnerable borrowers, people familiar with the investigation said.

Lenders offer an up-front payment in exchange for a percentage of the growth in the value of the home at a future date. The deals often result in huge balloon payments, and purchasers have complained “about the financing terms, surprise at the size of the repayment amounts, disputes about appraisal values” and other issues, according to a CFPB industry report issued five days before Trump’s inauguration.

A spokesperson for Point didn’t respond to an email or voicemail seeking comment.

If you or someone you know has recently sought help from the CFPB, please fill out this form.

This content originally appeared on ProPublica and was authored by by Jake Pearson.

“Under Oz’s watch, could strip crucial health care services through Medicare, Medicaid, and the Affordable Care Act could be stripped from hundreds of millions of Americans. As he showed in his confirmation hearing, Oz would seek to further privatize Medicare, threatening access to care for tens of millions of Americans. Privatized Medicare Advantage plans deliver inferior care and cost taxpayers nearly $100 billion annually in excess costs.

“He also refused to commit to push back on efforts to slash Medicaid, which would harm access to care for millions – especially the poor and vulnerable – just so Trump and Musk can give tax breaks to their billionaire buddies.

“We need a CMS Administrator who believes in the importance of protecting crucial health programs like Medicare and Medicaid and would put patients ahead of corporate profits.

We can only hope that sanity prevails when Oz comes for a vote before the full Senate. No Senator should be fooled by the snake oil Oz is selling.”

Click here to read Public Citizen’s analysis on the impacts of expanding Medicare Advantage.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

America’s politicians punted on tackling climate change decades ago, except for Senator Sheldon Whitehouse, who has masterfully delivered more than 290 “Time to Wake Up” climate speeches to the Senate, calling out deniers and demanding bold action. If Congress had been composed of “Whitehouse intellect,” the world climate system would be in much better shape today. And not threatening the American Dream of Homeownership.

At a Senate confirmation hearing for Trump appointee Michael Faulkender as Deputy Treasury Secretary, Senator Whitehouse opened up all firing cylinders, blasting away like there’s no tomorrow, which may be where we’re headed after listening to the senator’s scolding rendition of how Congress has failed climate change impacting the financial system and US economy. In short, climate change is raising hell with the financial system as US property insurance goes up in flames.

In his opening remarks, the senator referenced “very dark economic storm clouds on the horizon,” because of climate change which the administration cannot seriously address because massive political funding has made it “an article of faith to deny climate change,” in fact, claiming “it’s a hoax.” This perverse attitude is now holding America’s homeowner’s hostage.

Interestingly, over past decades, scientists have gotten it right, even the Exxon scientists got it right, meaning, fossil fuel emissions (CO2) cause climate change. Nevertheless, Congress has failed to act because of pressure by fossil fuel interests, including the “largest campaign of disinformation that America has ever seen,” as dark money spills out all over the place. As a result, all serious bipartisan efforts on The Hill on climate change have been squelched. Poof!

Disinformation, disinformation, disinformation has been the guiding light of climate denialism. It’s a hoax; it’s a hoax; it’s a hoax; it’s fake news; it’s fake news, repetition creates fact.

As the senator and the Trump appointee discussed in a meeting beforehand in the senator’s office, the consequences of climate change are severe based upon professional risk judgement where fiduciary responsibly is considered. For example, the chief economist of Freddie Mac told committee hearings we are headed for a “property insurance collapse” that will cascade into a crash in coastal property values that will be so significant that it will cascade into the entire economy, same as 2008. That’s the warning on coastal properties. Additionally, wildfires have now added new property insurance risks that are far removed from coastal property. Climate change knows no boundaries as congressional ineptness and timidity to challenge it clobbers American homeownership.

Senator Whitehouse offered one example after another of how climate change is undermining the financial system of America.  In a recent Senate banking committee hearing, the Fed Chairman said there will be “areas of the country where you can’t get a mortgage any longer” because of climate change; a very stern warning that something has to change.

Also, as related by the senator, the Financial Stability Board, the entity that warns the international banking system of impending issues gives the same warning that “property insurance has become a major risk to the survival of the economic system.”

And even closer to home base, meaning Congress itself, a recent bipartisan CBO (Congressional Budget Office) report identified fires, floods and climate change in toto, threatening to undermine our financial system. Yet, Congress ignores its own warnings.

And The Economist magazine cover story in April 2024 depicted climate damage undermining insurance markets and threatening the biggest asset class in the world, RE. predicting a 25 trillion dollar hit to RE because of climate change.

Senator Whitehouse: “The lie that climate change is a hoax is no longer just an act of political malfeasance. It is now an act of economic malfeasance.” Climate change is hitting America’s pocketbooks throughout the country like an early summer thunderstorm crackling in the sky.

The financial-Wall Street-economic impending upside down collapse due to radical climate change should be item number one on Congress’s docket to do whatever is necessary, but it’s not even given a glancing look. Yet, the insurance industry is feeling the heat; homeowners are feeling the heat. Mortgage companies are feeling the heat. And Wall Street is starting to feel the heat. Can the Trump climate hoax syndrome, “ignore it, it’s not real… it’s fake news” hold up in the face of extremely severe financial strain impacting the world’s largest asset class, real estate?

“President Trump issued an executive order aimed at dismantling many of the key actions that have been undertaken at the federal level to address climate change. The order, ‘Promoting Energy Independence and Economic Growth.” (“Trump Issues Executive Order on Climate Change,” Sabin Center for Climate Change Law, Columbia Law School)

“Nobody’s Insurance Rates Are Safe From Climate Change,” Yale Climate Connections, January 14, 2025.

“Property Values to Crater Up to 60% Due to Climate Change,” Business Insider, Aug. 9, 2024.

“U.S. Department of the Treasury Report: Homeowners Insurance Costs Rising, Availability Declining as Climate-Related Events Take Their Toll,” U.S. Department of the Treasury, January 16, 2025.

“Next to Fall: The Climate-driven Insurance Crisis is Here – And Getting Worse,” Senate Budget Committee, Dec. 18, 2024.

“Climate Risk Will Take Trillion-dollar Bite Out of America’s Real Estate, Report Finds,” USA Today, Feb. 7, 2025.

“Homeowners Insurance Sector Slammed by Climate Impacts,” Insurance Business America, May 14, 2024.

“Climate Change Is Coming for U.S. Property Prices,” Heatmap News, Feb. 3, 2025.

“Insurers Are Deserting Homeowners as Climate Shocks Worsen,” New York Times, Dec. 18, 2024.

“Climate Resiliency Flips the Housing Market Upside Down,” Forbes, Feb. 20, 2025.

“Climate Change Set to Lower Home Prices,” Business Insider, Feb. 4, 2025.

“How Climate Change Could Upend the American Dream,” Propublica, Feb. 3, 2025.

“Climate Change to Wipe Away $1.5 Trillion in U.S. Home Values, Study Says,” Wall Street Journal, Feb. 3, 2025.

“Opinion: That Giant Sucking Sound? It’s Climate Change Devouring Your Home’s Value,” New York Times, Feb. 3, 2025.

“How and Where Climate Change Will Lower U.S, Home Values,” Context News, Feb. 10, 2025.

“Climate Change Is Driving an Insurance Crisis,” The Equation – Union of Concerned Scientists, June 19, 2024.

“Real Estate: How Climate Risk is Changing Prices,” Medium, March 3, 2025.

“At Least 20% of U.S. Homes Will be De-Valued Due to Climate Change, Says DeltaTerra CEO Dave Burt,” CNBC, Feb. 19, 2025.

“Climate Change is Fueling the US Insurance Problem,” BBC, March 18, 2024.

“US Housing Market May Face Losses Due to Climate Change,” Realty, Feb. 21, 2025.

“Nearly Half of U.S. Homes Face Severe Threat from Climate Change, Study Finds,” CBS News, March 13, 2024.

“The Possible Collapse of the U.S. Home Insurance System,” New York Times, May 15, 2024.

“The Climate Crisis Will End Home Ownership as We Know It and Eventually Crash the Economy,” Splinter, Jan. 8, 2025.

Fake news?

The big question going forward is whether climate change’s real estate devaluation, which impacts every American household, will take MAGA down to its knees, drowning its lameness in a sea of turbulent financial chaos followed by a massive irrepressible political tsunami payback event that cleanses the nation of lies?

This content originally appeared on Dissident Voice and was authored by Robert Hunziker.

Negotiators are meeting in Paris this week at the OECD Export Credits Forum, it is clear that the opportunity that existed at the last meeting, before the Trump Administration took office, is gone.

Alongside the EU, the UK, Canada, US, New Zealand, Australia and Norway supported binding OECD fossil fuel restrictions after already adopting such restrictions at the national level as part of the Clean Energy Transition Partnership. However, South Korea stalled negotiations until the change in US administration, rejecting even basic transparency measures for export finance. It blocked what could have been a historic deal that would have catalysed the global clean energy transition and supported parallel and pressing energy security and affordability objectives. Most OECD export finance for fossil fuels flows to Liquefied Natural Gas (LNG) projects. Rather than supporting energy security or affordability, these projects increase countries’ exposure to volatile gas markets and, according to a recently published report from Carbon Tracker, involve stranded assets risks as the market is on a trajectory towards oversupply as gas demand drops.

Amidst growing geopolitical instability, OECD countries committed to climate leadership must continue to walk the walk and find new ways to end international taxpayer subsidies for fossil fuels, while increasing support for a just energy transition. Efforts to end international public finance for fossil fuels is not only a critical win for the climate, but also equally important for energy security and affordability worldwide.

The Export Credits Forum is also taking place as news is breaking that the US Export Credit Agency, US EXIM, is set to approve financing for the controversial Mozambique LNG project, which is mired in allegations of human rights violations as well as having the potential to have annual emissions as large as all 27 EU countries combined. EXIM is set to take this decision at its board meeting tomorrow.

In response:

Dongjae Oh, Head of Oil and Gas, Solutions for Our Climate (Korea), said: “South Korea’s reluctance to align with its partners in restricting fossil fuel financing was a major obstacle in the negotiations, contributing to their failure. At a time when renewable energy is expanding globally, Korea has instead chosen to side with the fossil fuel industry—jeopardizing our planet’s future. This year, Korea must step up and work with its allies to make a meaningful commitment to combating climate change by ending fossil fuel finance, whether through OECD mechanisms or bilateral agreements. If it fails to act, Korea risks being left behind as the world transitions to a cleaner, more sustainable future.”

Nina Pusic, Export Finance Climate Strategist, Oil Change International, said: “Despite the disappointing outcome, an unprecedented number of OECD countries worked around their differences and nearly reached an agreement to end the largest flow of international public money to oil and gas. We expect those countries who argued for fossil fuel restrictions to stay committed in their leadership and meet their international obligations to stop funding fossil fuels and instead support a just transition to reliable and affordable renewable energy.”

This content originally appeared on Common Dreams and was authored by Newswire Editor.

Even more impressive, however, is the infrastructure China has built, including 26,000 miles of high speed rail, the world’s largest hydroelectric power station, the longest sea-crossing bridge in the world, 100,000 miles of expressway, the world’s first commercial magnetic levitation train, the world’s largest urban metro network, seven of the world’s 10 busiest ports, and solar and wind power generation accounting for over 35% of global renewable energy capacity. Topping the list is the Belt and Road Initiative, an infrastructure development program involving 140 countries, through which China has invested in ports, railways, highways and energy projects worldwide.

All that takes money. Where did it come from? Numerous funding sources are named in mainstream references, but the one explored here is a rarely mentioned form of quantitative easing — the central bank just “prints the money.” (That’s the term often used, though printing presses aren’t necessarily involved.)

From 1996 to 2024, the Chinese national money supply increased by a factor of more than 53 or 5300% — from 5.84 billion to 314 billion Chinese yuan (CNY) [see charts below]. How did that happen? Exporters brought the foreign currencies (largely U.S. dollars) they received for their goods to their local banks and traded them for the CNY needed to pay their workers and suppliers. The central bank —the Public Bank of China or PBOC — printed CNY and traded them for the foreign currencies, then kept the foreign currencies as reserves, effectively doubling the national export revenue.

Investopedia confirms that policy, stating:

One major task of the Chinese central bank, the PBOC, is to absorb the large inflows of foreign capital from China’s trade surplus. The PBOC purchases foreign currency from exporters and issues that currency in local yuan. The PBOC is free to publish any amount of local currency and have it exchanged for forex. … The PBOC can print yuan as needed …. [Emphasis added.]

Interestingly, that huge 5300% explosion in local CNY did not trigger runaway inflation. In fact China’s consumer inflation rate, which was as high as 24% in 1994, leveled out after that and averaged 2.5% per year from 1996 to 2023.

https://www.macrotrends.net/global-metrics/countries/CHN/china/inflation-rate-cpi?form=MG0AV3

How was that achieved? As in the U.S., the central bank engages in “open market operations” (selling federal securities into the open market, withdrawing excess cash). It also imposes price controls on certain essential commodities. According to a report by Nasdaq, China has implemented price controls on iron ore, copper, corn, grain, meat, eggs and vegetables as part of its 14th five-year plan (2021-2025), to ensure food security for the population. Particularly important in maintaining price stability, however, is that the money has gone into manufacturing, production and infrastructure. GDP (supply) has gone up with demand (money), keeping prices stable. [See charts below.]

https://tradingeconomics.com/united-states/money-supply-m2Gross Domestic Product for China (MKTGDPCNA646NWDB) | FRED | St. Louis Fed

Gross Domestic Product for China (MKTGDPCNA646NWDB) | FRED | St. Louis Fed

The U.S., too, has serious funding problems today, and we have engaged in quantitative easing (QE) before. Could our central bank also issue the dollars we need without triggering the dreaded scourge of hyperinflation? This article will argue that we can. But first some Chinese economic history.

From Rags to Riches in Four Decades

China’s rise from poverty began in 1978, when Deng Xiaoping introduced market-oriented reforms. Farmers were allowed to sell their surplus produce in the market, doors were opened to foreign investors and private businesses and foreign companies were encouraged to grow. By the 1990s, China had become a major exporter of low-cost manufactured goods. Key factors included cheap labor, infrastructure development and World Trade Organization membership in 2001.

Chinese labor is cheaper than in the U.S. largely because the government funds or subsidizes social needs, reducing the operational costs of Chinese companies and improving workforce productivity. The government invests heavily in public transportation infrastructure, including metros, buses and high-speed rail, making them affordable for workers and reducing the costs of getting manufacturers’ products to market.

The government funds education and vocational training programs, ensuring a steady supply of skilled workers, with government-funded technical schools and universities producing millions of graduates annually. Affordable housing programs are provided for workers, particularly in urban areas.

China’s public health care system, while not free, is heavily subsidized by the government. And a public pension system reduces the need for companies to offer private retirement plans. The Chinese government also provides direct subsidies and incentives to key industries, such as technology, renewable energy and manufacturing.

After it joined the WTO, China’s exports grew rapidly, generating large trade surpluses and an influx of foreign currency, allowing the country to accumulate massive foreign exchange reserves. In 2010, China surpassed the U.S. as the world’s largest exporter. In the following decade, it shifted its focus to high-tech industries, and in 2013 the Belt and Road Initiative was launched. The government directed funds through state-owned banks and enterprises, with an emphasis on infrastructure and industrial development.

Funding Exponential Growth

In the early stages of reform, foreign investment was a key source of capital. Export earnings then generated significant foreign exchange reserves. China’s high savings rate provided a pool of liquidity for investment, and domestic consumption grew. Decentralizing the banking system was also key. According to a lecture by U.K. Prof. Richard Werner:

Deng Xiaoping started with one mono bank. He realized quickly, scrap that; we’re going to have a lot of banks. He created small banks, community banks, savings banks, credit unions, regional banks, provincial banks. Now China has 4,500 banks. That’s the secret to success. That’s what we have to aim for. Then we can have prosperity for the whole world. Developing countries don’t need foreign money. They just need community banks supporting [local business] to have the money to get the latest technology.

China managed to avoid the worst impacts of the 1997 Asian Financial Crisis. It did not devalue its currency; it maintained strict control over capital flows and the PBOC acted as a lender of last resort, providing liquidity to state-controlled banks when needed.

In the 1990s, however, its four major state banks did suffer massive losses, with non-performing loans totaling more than 20% of their assets. Technically, the banks were bankrupt, but the government did not let them go bust. The non-performing loans were moved on to the balance sheets of four major asset management companies (“bad banks”), and the PBOC injected new capital into the “good banks.”

In a January 2024 article titled “The Chinese Economy Is Due a Round of Quantitative Easing,” Prof. Li Wei, Director of the China Economy and Sustainable Development Center, wrote of this policy, “The central bank directly intervened in the economy by creating money. Seen this way, unconventional financing is nothing less than Chinese-style quantitative easing.”

In an August 2024 article titled “China’s 100-billion-yuan Question: Does Rare Government Bond Purchase Alter Policy Course?,” Sylvia Ma wrote of China’s forays into QE:

Purchasing government bonds in the secondary market is allowed under Chinese law, but the central bank is forbidden to subscribe to bonds directly issued by the finance ministry. [Note that this is also true of the U.S. Fed.] Such purchases from traders were tried on a small scale 20 years ago.

However, the monetary authority resorted more to printing money equivalent to soaring foreign exchange reserves from 2001, as the country saw a robust increase in trade surplus following its accession to the World Trade Organization. [Emphasis added.]

This is the covert policy of printing CNY and trading this national currency for the foreign currencies (mostly U.S. dollars) received from exporters.

What does the PBOC do with the dollars? It holds a significant portion as foreign exchange reserves, to stabilize the CNY and manage currency fluctuations; it invests in U.S. Treasury bonds and other dollar-denominated assets to earn a return; and it uses U.S. dollars to facilitate international trade deals, many of which are conducted in dollars.

The PBOC also periodically injects capital into the three “policy banks” through which the federal government implements its five-year plans. These are China Development Bank, the Export-Import Bank of China, and the Agricultural Development Bank of China, which provide loans and financing for domestic infrastructure and services as well as for the Belt and Road Initiative. A January 2024 Bloomberg article titled “China Injects $50 Billion Into Policy Banks in Financing Push” notes that the policy banks “are driven by government priorities more than profits,” and that some economists have called the PBOC funding injections “helicopter money” or “Chinese-style quantitative easing.”

Prof. Li argues that with the current insolvency of major real estate developers and the rise in local government debt, China should engage in this overt form of QE today. Other commentators agree, and the government appears to be moving in that direction. Prof. Li writes:

As long as it does not trigger inflation, quantitative easing can quickly and without limit generate sufficient liquidity to resolve debt issues and pump confidence into the market.…

Quantitative easing should be the core of China’s macroeconomic policy, with more than 80% of funds coming from QE…

As the central bank is the only institution in China with the power to create money, it has the ability to create a stable environment for economic growth. [Emphasis added.]

Eighty-percent funding just from money-printing sounds pretty radical, but China’s macroeconomic policy is determined by five-year plans designed to serve the public and the economy, and the policy banks funding the plans are publicly-owned. That means profits are returned to the public purse, avoiding the sort of private financialization and speculative exploitation resulting when the U.S. Fed engaged in QE to bail out the banks after the 2007-08 banking crisis.

The U.S. Too Could Use Another Round of QE — and Some Public Policy Banks

There is no law against governments or their central banks just printing the national currency without borrowing it first. The U.S. Federal Reserve has done it, Abraham Lincoln’s Treasury did it, and it is probably the only way out of our current federal debt crisis. As Prof. Li observes, we can do it “without limit” so long as it does not trigger inflation.

Financial commentator Alex Krainer observes that the total U.S. debt, public and private, comes to more than $101 trillion (citing the St. Louis Fed’s graph titled “All Sectors; Debt Securities and Loans”). But the monetary base — the reserves available to pay that debt — is only $5.6 trillion. That means the debt is 18 times the monetary base. The U.S. economy holds far fewer dollars than we need for economic stability.

The dollar shortfall can be filled debt- and interest-free by the U.S. Treasury, just by printing dollars as Lincoln’s Treasury did (or by issuing them digitally). It can also be done by the Fed, which “monetizes” federal securities by buying them with reserves it issues on its books, then returns the interest to the Treasury and after deducting its costs. If the newly-issued dollars are used for productive purposes, supply will go up with demand, and prices should remain stable.

Note that even social services, which don’t directly produce revenue, can be considered “productive” in that they support the “human capital” necessary for production. Workers need to be healthy and well educated in order to build competitively and well, and the government needs to supplement the social costs borne by companies if they are to compete with China’s subsidized businesses.

Parameters would obviously need to be imposed to circumscribe Congress’s ability to spend “without limit,” backed by a compliant Treasury or Fed. An immediate need is for full transparency in budgeted expenditures. The Pentagon, for example, spends nearly $1 trillion of our taxpayer money annually and has never passed a clean audit, as required by law.

We Sorely Need an Infrastructure Bank

The U.S. is one of the few developed countries without an infrastructure bank. Ironically, it was Alexander Hamilton, the first U.S. Treasury secretary, who developed the model. Winning freedom from Great Britain left the young country with what appeared to be an unpayable debt. Hamilton traded the debt and a percentage of gold for non-voting shares in the First U.S. Bank, paying a 6% dividend. This capital was then leveraged many times over into credit to be used specifically for infrastructure and development. Based on the same model, the Second U.S. Bank funded the vibrant economic activity of the first decades of the United States.

In the 1930s, Roosevelt’s government pulled the country out of the Great Depression by repurposing a federal agency called the Reconstruction Finance Corporation (RFC) into a lending machine for development on the Hamiltonian model. Formed under the Hoover administration, the RFC was not actually an infrastructure bank but it acted like one. Like China Development Bank, it obtained its liquidity by issuing bonds.

The primary purchaser of RFC bonds was the federal government, driving up the federal debt; but the debt to GDP ratio evened out over the next four decades, due to the dramatic increase in productivity generated by the RFC’s funding of the New Deal and World War II. That was also true of the federal debt after the American Revolution and the Civil War.

One chart that tells the story of US debt from 1790 to 2011

A pending bill for an infrastructure bank on the Hamiltonian model is HR 4052, The National Infrastructure Bank Act of 2023, which ended 2024 with 48 sponsors and was endorsed by dozens of legislatures, local councils, and organizations. Like the First and Second U.S. Banks, it is intended to be a depository bank capitalized with existing federal securities held by the private sector, for which the bank will pay an additional 2% over the interest paid by the government. The bank will then leverage this capital into roughly 10 times its value in loans, as all depository banks are entitled to do. The bill proposes to fund $5 trillion in infrastructure capitalized over a 10-year period with $500 billion in federal securities exchanged for preferred (non-voting) stock in the bank. Like the RFC, the bank will be a source of off-budget financing, adding no new costs to the federal budget. (For more information, see https://www.nibcoalition.com/.)

Growing Our Way Out of Debt

Rather than trying to kneecap our competitors with sanctions and tariffs, we can grow our way to prosperity by turning on the engines of production. Far more can be achieved through cooperation than through economic warfare. DeepSeek set the tone with its free, open source model. Rather than a heavily guarded secret, its source code is freely available to be shared and built upon by entrepreneurs around the world.

We can pull off our own economic miracle, funded with newly issued dollars backed by the full faith and credit of the government and the people. Contrary to popular belief, “full faith and credit” is valuable collateral, something even Bitcoin and gold do not have. It means the currency will be accepted everywhere – not just at the bank or the coin dealer’s but at the grocer’s and the gas station. If the government directs newly created dollars into new goods and services, supply will grow along with demand and the currency should retain its value. The government can print, pay for workers and materials, and produce its way into an economic renaissance.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

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New York Times (1/9/25)

This week on CounterSpin: While the New York Times rolls out claptrap about how both “the left and the right” have ideas about causes behind the devastating Los Angeles wildfires—the right blame DEI hires, while the left blame climate change—many people have moved beyond that sort of stultifying nonsense to work that directly confronts the fossil fuel companies, and their political enablers, for the obvious role that fossil fuels play in climate disruption, and that climate disruption plays in extreme weather events. Many are also now calling out insurance companies that take folks’ money, but then hinder their ability to come out from under when these predictable and predicted crises occur.

Would you be surprised to hear that these powerful industries—fossil fuels and insurers—are intertwined? We talked about it last year with writer and historian Derek Seidman. We’ll hear that conversation on this week’s show.

19th (12/6/23)

Also on the show: Did you see the coverage of how people with disabilities are dealing with the California fires’ impact? Probably not, given that the place of people with disabilities in elite media coverage ranges roughly from afterthought to absent. We talked about that last year with disability rights advocate and policy analyst Ariel Adelman, in the wake of a Supreme Court case that considered dismantling civil rights protections for people with disabilities, by criminalizing the ways that we learn about whether those protections are actually real. We’ll hear that too.

This content originally appeared on FAIR and was authored by Fairness & Accuracy In Reporting.

At the COP28 UN climate summit in Dubai, Norway signed the Clean Energy Transition Partnership, committing to end its international public finance for fossil fuel projects within a year. Recent research shows the CETP is working, with most signatories eliminating or considerably reducing their international fossil fuel financing. Collectively, signatories cut their international public finance for fossil fuels by up to two thirds since signing the agreement, a drop of USD 15 billion a year. Norway’s new policy will contribute to this progress.

Norway’s new policy will end the government’s public finance for fossil fuel projects overseas, which largely comes from its government export credit agency, Eksfin – although the policy does not appear to address the role that Eksfin plays in providing financing to the Norwegian state oil company, Equinor. Between July 2021 and June 2023, Eksfin provided between NOK 8.78 billion and 10.98 billion ($749 – 993 million) for fossil fuel projects. In 2023, Eksfin provided NOK 3.7 billion ($334 million) in support for the controversial Sakarya oil and gas field in Turkey. Phase 1 of the Sakarya field, which Eksfin helped to enable by providing Norwegian government backing, is expected to emit 140 million tonnes of CO2 over its lifetime, approximately equivalent to the annual emissions of 37 coal plants.

While Norway’s climate policies are in the spotlight for both national and international critique in many other areas – not least its status as one of only five Global North governments responsible for a majority of the entire world’s planned expansion of new oil and gas fields through 2050 – the publication of the Norwegian CETP policy is important progress. Norway must build on this progress to ensure a comprehensive approach to phasing out oil and gas in line with the 1.5C temperature rise limit.

The publication of Norway’s policy helps increase momentum for a global, binding deal that can end $41 billion a year in oil and gas export financing at the OECD, where Norway will be among countries partaking in final negotiations tomorrow (Tuesday, 10th December). With the EU, US, UK, Canada, Norway, Australia and New Zealand all supporting fossil fuel restrictions a deal is within reach. This would free up significant sums in public money for clean energy instead.

A deal would be difficult to undo by any one country, making this a last opportunity for President Biden to reach a ‘Trump-proof’ climate deal. With Norway aligning its financing with the CETP, this creates a further incentive for Norway and other CETP countries to create binding OECD rules restricting export finance for fossil fuels from all OECD countries, creating a ‘level playing field’ for trade. Reportedly, Korea and Turkiye are the last countries that still need to be convinced to support the agreement.

Adam McGibbon, Campaign Strategist at Oil Change International, said:
“Norway’s decision to honor its pledge to end international oil and gas financing is a crucial domino falling at exactly the right moment. Tomorrow’s OECD negotiations represent a once-in-a-generation opportunity to redirect $41 billion in annual oil and gas export finance toward cleaner energy. With Trump looming on the horizon, this could be our last chance to lock in climate progress that would be difficult to reverse.

“Prime Minister Støre must now urgently contact his Korean and Turkish counterparts, the last holdouts at the OECD, to encourage them to ensure a historic deal is reached that helps accelerate the energy transition and secures a liveable planet for all.”

This content originally appeared on Common Dreams and was authored by Newswire Editor.

After wealthy countries refused to agree to a $1 trillion proposal from developing countries facing the brunt of climate change’s impacts, the COP29 U.N. climate summit concluded with a $300 billion climate finance deal that is “a drop in the ocean compared to what is needed.” For more, we hear from two climate activists who attended the conference and were among those calling for wealthier countries to contribute more to a global green energy transition. Brandon Wu, the director of policy and campaigns at ActionAid USA, says the U.S. in particular owes “a climate debt to the rest of the world,” yet has spent years performing a “great escape from [its] obligations” by avoiding and reneging on promises to commit its vast financial resources to fighting the climate crisis. We’re then joined by Asad Rehman of War on Want and the Climate Justice Coalition, who further discusses the deal’s shortcomings and what to expect from next year’s conference in Brazil.

This content originally appeared on Democracy Now! and was authored by Democracy Now!.

The new finance goal and the Mitigation Working Group texts in their current form currently fail to provide a global roadmap for alignment with a 1.5 degree future, which requires urgent and quality funding in the scale of trillions in order to replace fossil fuels with clean renewable energy.

Andreas Sieber, 350.org Associate Director of Policy and Campaigns said:

“The new climate finance and mitigation draft texts presented at COP29 today fail to deliver what is needed to transform the lives of those most impacted by the climate crisis and have done the least to cause it. Will governments recall this moment too, when the next climate disaster hits their country? A fast, fairly funded fossil fuel phase out is what we need reflected in these texts. We demand this is corrected, the world is watching.

By the end of the UN climate talks, we must see at least a trillion dollars in public finance on the table. This historic debt that rich countries owe will enable all nations to take action on climate at home and meet the collective goal agreed last year at COP28 – to triple renewable energy, and transition away from fossil fuels. Right now, we only see cowardice and a void in leadership, ignoring the undeniable science that we can’t keep polluting our planet with dirty oil, gas and coal.

The time to course correct is now – the European Union and other rich countries must stop playing poker with the planet and humankind’s future at stake. It’s time to put their cards on the table and commit real, transformative funding – no more excuses, no more delays, it’s time.”

Joseph Sikulu, 350.org Pacific Director and Pacific Climate Warrior said:

“We hoped to see a draft text today that would show rich nations putting their money where their mouth is and responding to the demands from the Global South. What we got is a text with no clear grant based core money. Nothing less than one trillion dollars in grants per year will be enough to see those most impacted by climate change on a just transition towards a safe, equitable future. Rich countries must stop dithering, and start delivering – this is not charity, it’s time for them to pay their debt.

The new climate finance goal isn’t just an arbitrary number, it’s a lifeline for climate vulnerable nations like mine that are drowning – literally – due to a crisis we did not cause. But despite it all, we are fighting. Rich countries need to start doing the same – be the first ones to commit to the rapid phase out of fossil fuels agreed upon at last year’s climate talks in Dubai. Financial commitments must also be paired with ambitious goals to transition to a renewable economy. There is still time for this COP to deliver, do not leave us behind once again.”

This content originally appeared on Common Dreams and was authored by Newswire Editor.

As the U.N. climate summit nears its close, we examine a proposed climate finance deal that is already being contested by participants. Among the major issues is the absence of a firm number in the draft text on how much rich countries will pay. Poorer nations bearing the brunt of the climate crisis say at least $1.3 trillion a year is needed, a target that comprises just 1% of the global economy. “We’re here to negotiate a global settlement on climate finance, which is all about getting the funds that the poor world needs in order to cut greenhouse gas emissions, shift to a low-carbon economy and adapt to the impacts of extreme weather driven by the climate crisis,” explains our guest Fiona Harvey, a longtime environment editor at The Guardian. Developed countries’ resistance to shifting their methods of industrial development, as well as the outsized role of fossil fuel lobbyists at the summit, has led to a deal that satisfies no one. However, says Harvey, for as long as their investment in fossil fuels creates the very problem “we are trying to solve,” it is crucial that wealthy nations commit to setting aside funding for poorer nations, as “the future of these countries depends on getting this finance.”

This content originally appeared on Democracy Now! and was authored by Democracy Now!.

We are broadcasting live from the COP29 climate summit in Baku, Azerbaijan, which has entered its second and final week, and already there is frustration over a lack of progress on the key issue of financing the energy transition and climate adaptation in Global South countries. Asad Rehman, executive director of War on Want and lead spokesperson for the Climate Justice Coalition, says this year’s summit is supposed to be “the finance COP” and calls for about $5 trillion a year in financing, but “rich, developed countries are putting pennies on the table.” He also addresses the overwhelming presence of industry lobbyists at the annual summits and calls from some activists to boycott the talks. “If we, as civil society, weren’t here also holding the feet of Global North governments to the fire, we would see much worse outcomes than we are seeing already,” says Rehman.

This content originally appeared on Democracy Now! and was authored by Democracy Now!.

As thousands of government ministers and climate activists descend on Baku, Azerbaijan, for the annual United Nations climate summit known as COP29, they have a difficult task ahead of them. Meeting the historic targets outlined in the 2015 Paris climate agreement will require wealthy nations to send huge amounts of money to poorer nations to help them not only decarbonize but also adapt to climate change. Developing countries tend to be more vulnerable to climate disasters, and everyone agrees they need assistance. But no one can agree how much money is needed — or who exactly should have to pony up.

This year marks the world’s self-imposed deadline for all these countries to agree on a new global target for climate aid. Negotiations over this target will determine how much aid wealthy developed nations send to poorer developing ones — as well as exactly which countries count as “developing,” and what form their aid will take.

The world has tried this once before. In 2009, rich countries committed to sending $100 billion in climate finance to poorer nations within a decade. They blew through that deadline by multiple years, and much of the finance provided by the developed world came in the form of debt-producing loans rather than the no-strings-attached grants favored by recipients. Relatively little aid has gone to countries in Africa and Asia to help them prepare for climate disasters like drought and sea-level rise. Research has also shown that some contributions turned out to be fraudulent or irrelevant to the climate fight.

As the clock runs out on the deadline to set a second target, which is known in official parlance as the New Collective Quantified Goal, developed countries like the U.S. and the United Kingdom are tangling with developing countries such as Somalia and Barbados over every detail, from the target’s size and timeline to the role of loans and private finance. Ministers are also fighting over the role of countries like China and the oil-producing states of the Persian Gulf, which have traditionally been considered developing nations but have become much wealthier in recent decades. (Their carbon emissions have grown alongside their pocketbooks.)

After deadlocking on technical questions for more than two years, government leaders are now rushing to hammer out a text in the next few weeks. They’ll draft this final agreement against a backdrop of high inflation, fragile economic growth, and strained government budgets around the world.

The fault lines in this debate are not always intuitive. Each country has its own red-line priorities, and many are shifting their positions from day to day. But there are a few core disagreements that are holding up a final consensus. The questions below highlight four different viewpoints that are clashing in Baku, based on proposals that countries made before the conference. For each, pick one answer that represents how you would tackle the issue. At the end, we’ll tell you which country you align with most closely—or if you’re stuck in the middle.

Naveena Sadasivam contributed reporting to this story.

1 of 7

How large do you think the new climate aid goal should be?

Most studies suggest that developing countries need trillions dollars of climate aid each year, but U.N. negotiators can’t agree on how much they should try to raise. A large target could mean more money for climate action — and more lives saved in developing countries — but it might also be counterproductive if contributing countries think it’s an unrealistic goal.

More than $100 billion per year, but it doesn’t make sense to focus on the overall number. Around $450 billion per year, primarily supplied by the world’s richest governments, with more from other sources if possible. Around $1.3 trillion per year combined from rich governments, development banks, and the private sector. Well over $1 trillion per year, from rich governments alone.

2 of 7

How do you think the new goal should be apportioned?

Most climate aid to date has gone toward “mitigation” projects to slow future warming, such as solar and wind installations, but developing countries are also seeking money for adaptation projects that will make them resilient to future climate shocks (e.g. sea walls). Some countries are also insisting that the new goal include money for “loss and damage” — essentially reparations for climate-fueled disasters that have already happened.

We should try to address everything — mitigation, adaptation, and loss and damage — but not worry about the breakdown of each category. We should address everything, but prioritize funding for climate adaptation and loss-and-damage payments, which have been neglected in the past. We should set individual goals for mitigation, adaptation, loss and damage, and addressing the social impacts of the energy transition. But the more important thing is meeting a large overall goal. Each country should try to divide their contributions evenly between mitigation, adaptation, and loss and damage.

3 of 7

How strict do you think the goal should be about defining what counts as climate aid?

The first $100 billion aid target was extremely vague about what counts as climate finance, so countries are only now haggling over what kinds of money should count. Some negotiators argue that loans from a country’s private sector should count toward that country’s total contributions, and that new financial instruments like debt swaps and insurance programs should count as well.

The main goal should count all forms of financing, including loans. The main goal should only count direct support from wealthy countries. Private sector contributions to climate aid can count toward the overall goal — but only if they reduce developing countries’ debt. We should be creative about finding new sources of money, but the goal should emphasize direct support from rich governments.

4 of 7

How should loans count toward the new climate finance goal?

Almost 70 percent of the first round of international climate aid came in the form of loans rather than no-strings-attached grants. While wealthy nations and private banks often issue aid loans at below-market interest rates, many recipient countries argue that loans can trap them in a predatory cycle of debt and interest.

While wealthy countries should try not to increase others’ debt burdens, all loans should count, even if they’re at market rates. We should only count grants and loans that are given at below-market rates. Funding for energy transition projects can come through loans, but adaptation funding should only come through no-strings-attached grants. Loans should not count; all climate finance must come through grants.

5 of 7

Which countries do you think should contribute to the new goal?

When the United Nations Framework Convention on Climate Change was signed in 1992, countries were categorized into two groups: developed and developing. The world has changed a lot since then. While the original “developed” countries bloc is still responsible for a disproportionate share of the world’s historic carbon emissions, emissions in some of the original “developing” countries have risen rapidly (alongside their national incomes).

Only the original countries defined as “developed” in 1992 should have to contribute. It’s only fair for countries that have become wealthy in recent decades, like China and Saudi Arabia, to pull their own weight. Countries should contribute based on their share of historic greenhouse gas emissions. Only countries originally defined as “developed” should have to contribute, but other large economies should be encouraged to donate and document contributions.

6 of 7

Which countries do you think should receive funds from future climate aid?

A core tenet of the 2015 Paris climate accord is that developed countries have a duty to fund the energy transition in developing nations. But under the original definition, the United Arab Emirates — home to the world’s tallest skyscraper and glitzy artificial islands — is still considered “developing.” Some countries have also argued that the very poorest nations and smallest island states should get extra consideration.

All the same countries that were defined as developing under the 1992 agreement. The same developing countries as they were originally defined, except for those who have become wealthy in recent decades. The same original group of developing countries, but with support levels indexed to each country’s need and climate ambition. All developing countries as originally defined, but a larger share of aid should be set aside for small islands and the least developed countries.

7 of 7

Over what period do you think countries should raise funds?

Negotiators are hoping to learn from the lessons of the delayed $100 billion promise: They’re debating whether to set a short-term goal that will play out over just a few years, or a more ambitious goal on a longer timeline.

Wealthy nations should try to deliver a big cumulative total over a longer period of time, perhaps by 2035 or 2040. Countries should be pushed to meet an ambitious new annual target by 2030, then review it every few years. Countries should meet the new target immediately and maintain it through 2035, with an option to increase the funding totals in 2030 if necessary. Countries should set a reasonable annual aid target and meet it from 2025 through 2030.

Your Results

Congratulations! Your plan for international climate aid aligns you most closely with:

This story was originally published by Grist with the headline Can you solve the world’s trillion-dollar climate finance puzzle? on Nov 14, 2024.

This content originally appeared on Grist and was authored by Jake Bittle.

But these moves are an essential aspect of the BRICS countries’ de-risking from Western banking systems. Following the sanctions on Russia, whereby billions of dollars of Russian reserves in US and European banks were seized, China and India were strongly motivated to reduce their exposure to Western regulators. China sold off huge portfolios of US Treasury bonds, and both China and India demanded physical deliveries of gold previously held by European custodians.

This content originally appeared on Dissident Voice and was authored by Inside China Business.

Pacific delegates fear the implications of a Trump presidency and breach of the 1.5 degree Celsius warming target will overshadow negotiations on climate finance at the UN’s annual COP talks that have started in Azerbaijan this week.

At the COP29 summit — dubbed the “finance COP” — Pacific nations will seek not just more monetary commitment from high-emitting nations but also for the funds to be paid and distributed to those countries facing the worst climate impacts.

With the US as one of the world’s largest emitters, it is feared Trump’s past withdrawal from the Paris Agreement could foreshadow diminished American involvement in climate commitments.

• READ MORE: COP29: Pacific countries cannot be conveniently pigeonholed
• COP29 Azerbaijan: What’s at stake at the 2024 global climate summit?
• Other COP29 climate reports

“We have our work cut-out for us. We are wary that we have the Trump administration coming through and may not be favourable to some of the climate funding that America has proposed,” Samoan academic and COP veteran Salā George Carter told BenarNews.

“We will continue to look for other ways to work with the US, if not with the government then maybe with businesses.”

This year, for the first time, a COP President’s Scientific Council has been formed to be actively involved in the negotiations. Carter is the sole Pacific representative.

Past COP funding promises of US$100 billion annually from developed countries to support vulnerable nations “has never been achieved in any of the years,” he said.

Disproportionate Pacific burden
Pacific nations contribute minimally to global emissions but often bear a disproportionate burden of climate change impacts.

Pacific Island Climate Action Network regional director Rufino Varea argues wealthier nations have a responsibility to support adaptation efforts in these vulnerable regions.

“The Pacific advocates for increased climate finance from wealthier nations, utilizing innovative mechanisms like fossil fuel levies to support adaptation, loss and damage, and a just transition for vulnerable communities,” Varea told BenarNews.

COP29 is being held in the capital of Azerbaijan, the port city of Baku on the oil and gas rich Caspian Sea, once an important waypoint on the ancient Silk Road connecting China to Europe.

The country bordering Russia, Iran, Georgia and Armenia is now one of the world’s most fossil fuel export dependent economies.

About 40,000 delegates will attend COP29 from all the U.N. member states including political leaders, diplomats, scientists, officials, civil society organizations, journalists, activists, Indigenous groups and many more.

All nations are party to the 1992 United Nations Framework Convention on Climate Change (UNFCCC) and most signed up to the 2015 Paris Climate Agreement and the 1.5 degree target.

Priorities for Pacific
Pacific Islands Forum Secretary General Baron Waqa in a statement yesterday said “the priorities of the Pacific Islands countries, include keeping the 1.5 degree goal alive.”

“The outcomes of COP 29 must deliver on what is non-negotiable – our survival,” he said.

Ahead of COP29, the 39 members of the Alliance of Small Island States (AOSIS) — representing the Pacific, Caribbean, African, Indian, and South China Sea — met in Baku to discuss negotiation priorities to achieve the 1.5 degree target and make meaningful progress on climate finance.

Pacific negotiators have historically found COP outcomes disappointing, yet they continue to advocate for greater accountability from major polluters.

“There have been people who have come to COP and refuse to attend anymore,” Carter said. “They believe it is a waste of time coming here because of very little delivery at the end of each COP.”

Papua New Guinea is not attending in Baku in an official capacity this year, citing lack of progress, but some key PNG diplomats are present to support the Pacific’s goals.

Climate data last week from the Europe Union’s Copernicus Climate Change Service predicted 2024 will be the hottest year on record, and likely the first year to exceed the 1.5 degree threshold set in Paris.

Science becoming marginalised
Delegates worry science is becoming marginalised in climate negotiations, with some “arguing that we have reached 1.5, why do we continue to push for 1.5?,” Carter said.

“Although we have reached 1.5 degrees, we should not remove it. In fact, we should keep it as a long-time goal,” he said.

Carter argues for the importance of incorporating both scientific evidence and “our lived experience of climate change” in policy discussions.

The fight for the Paris target and loss and damage funding has been central to Pacific advocacy at previous COPs, despite persistent resistance from some countries.

The 1.5-degree target is “a lifeline of survival for communities and people in our region and in most island nations,” Varea said.

He stressed the need for “a progressive climate finance goal based on the needs and priorities of developing countries, small island developing states (SIDS), and least developed countries (LDC) to enable all countries to retain the 1.5 ambition and implement measures for resilience and loss and damage (finance).”

“As Pacific civil society, we obviously want the most ambitious outcomes to protect people and the planet.”

Pacific negotiators include prominent leaders, such as President Hilde Heine of the Marshall Islands, Vanuatu’s Special Envoy Ralph Regenvanu, Tuvalu’s Climate Change Minister Maina Talia and negotiators Anne Rasmussen from Samoa and Fiji’s Ambassador Amena Yauvoli.

Republished from BenarNews with permission.

This content originally appeared on Asia Pacific Report and was authored by APR editor.

In questions of power then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.

—Thomas Jefferson

Public trust in the government to “do what is right” understandably remains at an all-time low.

After all, how do you trust a government that continuously sidesteps the Constitution and undermines our rights? You can’t.

When you consider all the ways “we the people” are being bullied, beaten, bamboozled, targeted, tracked, repressed, robbed, impoverished, imprisoned and killed by the government, one can only conclude that you shouldn’t trust the government with your privacy, your property, your life, or your freedoms.

Consider for yourself.

Don’t trust the government with your privacy, digital or otherwise. In the more than two decades since 9/11, the military-security industrial complex has operated under a permanent state of emergency that, in turn, has given rise to a digital prison that grows more confining and inescapable by the day. Wall-to wall surveillance, monitored by AI software and fed to a growing network of fusion centers, render the twin concepts of privacy and anonymity almost void. By conspiring with corporations, the Department of Homeland Security “fueled a massive influx of money into surveillance and policing in our cities, under a banner of emergency response and counterterrorism.”

Don’t trust the government with your property. If government agents can invade your home, break down your doors, kill your dog, damage your furnishings and terrorize your family, your property is no longer private and secure—it belongs to the government. Hard-working Americans are having their bank accounts, homes, cars electronics and cash seized by police under the assumption that they have allegedly been associated with some criminal scheme.

 Don’t trust the government with your finances. The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are being forced to foot the bill for the government’s fiscal insanity. The national debt is $35 trillion and growing, yet there seems to be no end in sight when it comes to the government’s fiscal insanity. According to Forbes, Congress has raised, extended or revised the definition of the debt limit 78 times since 1960 in order to allow the government to essentially fund its existence with a credit card.

Don’t trust the government with your health. For all intents and purposes, “we the people” have become lab rats in the government’s secret experiments, which include MKULTRA and the U.S. military’s secret race-based testing of mustard gas on more than 60,000 enlisted men. Indeed, you don’t have to dig very deep or go very back in the nation’s history to uncover numerous cases in which the government deliberately conducted secret experiments on an unsuspecting populace—citizens and noncitizens alike—making healthy people sick by spraying them with chemicals, injecting them with infectious diseases and exposing them to airborne toxins. Unfortunately, the public has become so easily distracted by the political spectacle out of Washington, DC, that they are altogether oblivious to the grisly experiments, barbaric behavior and inhumane conditions that have become synonymous with the U.S. government, which has meted out untold horrors against humans and animals alike.

Don’t trust the government with your life: At a time when growing numbers of unarmed people have been shot and killed for just standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety, even the most benign encounters with police can have fatal consequences. The number of Americans killed by police continues to grow, with the majority of those killed as a result of police encounters having been suspected of a non-violent offense or no crime at all, or during a traffic violation. According a report by Mapping Police Violence, police killed more people in 2022 than any other year within the past decade. In 98% of those killings, police were not charged with a crime.

Don’t trust the government with your freedoms. For years now, the government has been playing a cat-and-mouse game with the American people, letting us enjoy just enough freedom to think we are free but not enough to actually allow us to live as a free people. Freedom no longer means what it once did. This holds true whether you’re talking about the right to criticize the government in word or deed, the right to be free from government surveillance, the right to not have your person or your property subjected to warrantless searches by government agents, the right to due process, the right to be safe from militarized police invading your home, the right to be innocent until proven guilty and every other right that once reinforced the founders’ belief that this would be “a government of the people, by the people and for the people.” On paper, we may be technically free, but in reality, we are only as free as a government official may allow.

Whatever else it may be—a danger, a menace, a threat—the U.S. government is certainly not looking out for our best interests, nor is it in any way a friend to freedom.

Remember the purpose of a good government is to protect the lives and liberties of its people.

Unfortunately, what we have been saddled with is, in almost every regard, the exact opposite of an institution dedicated to protecting the lives and liberties of its people.

“We the people” should have learned early on that a government that repeatedly lies, cheats, steals, spies, kills, maims, enslaves, breaks the laws, overreaches its authority, and abuses its power at almost every turn can’t be trusted.

So what’s the answer?

For starters, get back to basics. Get to know your neighbors, your community, and your local officials. This is the first line of defense when it comes to securing your base: fortifying your immediate lines.

Second, understand your rights. Know how your local government is structured. Who serves on your city council and school boards? Who runs your local jail: has it been coopted by private contractors? What recourse does the community have to voice concerns about local problems or disagree with decisions by government officials?

Third, know the people you’re entrusting with your local government. Are your police chiefs being promoted from within your community? Are your locally elected officials accessible and, equally important, are they open to what you have to say? Who runs your local media? Does your newspaper report on local events? Who are your judges? Are their judgments fair and impartial? How are prisoners being treated in your local jails?

Finally, don’t get so trusting and comfortable that you stop doing the hard work of holding your government accountable. We’ve drifted a long way from the local government structures that provided the basis for freedom described by Alexis de Tocqueville in Democracy in America, but we are not so far gone that we can’t reclaim some of its vital components.

As an article in The Federalist points out:

Local government is fundamental not so much because it’s a “laboratory” of democracy but because it’s a school of democracy. Through such accountable and democratic government, Americans learn to be democratic citizens. They learn to be involved in the common good. They learn to take charge of their own affairs, as a community. Tocqueville writes that it’s because of local democracy that Americans can make state and Federal democracy work—by learning, in their bones, to expect and demand accountability from public officials and to be involved in public issues.

To put it another way, think nationally but act locally.

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, there is still a lot Americans can do to topple the police state tyrants, but any revolution that has any hope of succeeding needs to be prepared to reform the system from the bottom up. And that will mean re-learning step by painful step what it actually means to be a government of the people, by the people and for the people.

This content originally appeared on Dissident Voice and was authored by John W. Whitehead and Nisha Whitehead.

Very recently I read a scholarly article in which the author attempted to summarize the history of US policy in Africa, dating from when the Kingdom of Morocco was the first government to recognize the newly formed confederation of North American states that had won their independence from Great Britain. The author supplied a diplomatic history which culminated in the regime’s focus on the risks of “terrorism” in Africa as a key element of its foreign policy. Nowhere in the article—and this is no exception—was the concept of terrorism defined or elaborated. Apparently there was no need to identify or even to investigate the content of a “terrorism” or “counter-terrorism” policy.

In previous reflections I have attempted to clarify the political language used to manage and confuse both the ordinary person and those who for whatever reason have devoted professional efforts to understand the course of events since the end of what Eric Hobsbawm called the “long 19th century”. Economist Michael Hudson has argued that until the outbreak of the Great War (World War I) the world—at least the industrialised part—had in fact been moving toward socialism. Anglo-American scholarship has traditionally mocked this observation attributed most notably to Karl Marx. However such a denial of historical facts only served to justify the wars initiated by the British and American Empires to prevent this development. Professor Hudson argued that there were competing forms of socialism. Marx was a partisan for a particular tendency. However, Marx had every reason to believe that some form of socialism was inevitable. The successful October Revolution in Russia and the failed November revolution in Germany were not aberrations. On the contrary the two world wars and subsequent long war after 1945 were concerted efforts by the meanwhile merged Anglo-American Empire to resist and ultimately defeat socialism—except in China.

The summary argument below is based on the assumption that the 20th century and its extension into the 21st century has been shaped by the Anglo-American war against any form of socialism, especially to the extent based upon popular democratic political culture. The principal obstacle to understanding this long war lies in a failure to properly comprehend the underlying philosophy of governance in the Anglo-American Empire and its idiosyncratic use of the term “democracy”. The US, due largely to its settler-colonial history, but also to the culturally diverse immigrant pool that would compose its population, has been the site of considerable conflict over the terms of “democracy” to the extent that immigrants from non-English-speaking countries also brought their own political and social culture with them. Hence, much of US political warfare has been the concerted effort by the Anglo-American elite to impose that idiosyncratic democracy model on ethnic communities with different social and political traditions. The imposition of a highly concentrated mass media propaganda apparatus and industrial management structure was facilitated by the absence of any surviving indigenous socio-political culture or entrenched population. Thus, it is hardly surprising that numerous foreign observers of US society were struck by the extreme conformism among the country’s inhabitants, something quite unfamiliar to visitors from the European continent or other parts of the world.

Anglo-American political theory, going back at least as far as the so-called Glorious Revolution, defined democracy, not as a principle of popular political rule but as a model for the governance of joint stock companies. The franchise was not only explicitly restricted to property ownership. The scope of the franchise extended to the appointment of officers and servants and the allocation of profits generated by business operations. Following the example of the Dutch East India Company (VOC), the British East India Company became the model of the corporate state, where even the monarch was reduced to the role of shareholder. The “democracy” and democratic procedures formulated for directing the business of the chartered companies were never intended for determining, let alone implementing, policies for the general welfare. The general welfare, although occasionally the subject of English and Scottish theories, was effectively limited to the privileges and immunities of shareholders, individually or collectively. The origin of parties in this system was not the organised interest of citizens but of economic actors, i.e. adventurers (investors), landowners, and merchants. The fact that Anglo-American political theory has been extrapolated to include citizens, i.e. nominally independent commercial actors, does not mean that the underlying qualification for the franchise has been altered.

Here it is important to note that the joint stock company is an exclusive not an inclusive entity. The substance of political struggle throughout the 19th and 20th centuries can also be understood as efforts to either reduce the entry barrier to shareholding or expand the scope of business interest to include elements of the general welfare. The so-called progressive movement was essentially an effort to subject social or general welfare interests to the principles of scientific management. Management principles that evolved in the concentration of industry were adapted to discipline populist demands. Professional specialisation in political, social and economic functions created experts in the fields to which citizen interests were allocated. Just as Frederick Taylor used time-motion studies to turn skilled work into discrete operations that could be performed by unskilled workers, the progressive movement and emerging social sciences turned complex social and economic interests into simplified business operations that could be performed without the need for educated, informed and interested deliberation. Politics was established as a management discipline within the dominant ideology of corporatism, the underlying theory of joint stock company governance.

Fast forward to the post-colonial, liberation struggle epoch following the failed attempt to destroy the Soviet Union and prevent the emergence of New China: After the consensus-building diplomacy among the great powers of Europe and North America, culminating in the Berlin Conference, the allocation of overseas territories, mainly but not exclusively Africa, was inscribed in international law. When in 1918, the German Empire, Austria-Hungary, and the Ottoman Empire were subjugated militarily, their respective overseas territories or domains were allocated to the victors. In some cases they were absorbed into the winning empires properly and in other cases they were distributed after negotiations to the victors as so-called “mandates”. After WWII the remaining mandates were converted into so-called Trusteeships, reflecting the change in language between the League of Nations and its successor the United Nations. The mandate was a legal concept introduced to conceal the spoils system by which the losers of the Great War were punished by depriving them of their colonial possessions under the pretext of self-determination, whereby the victors’ colonies were not offered such benefits. The survival of the Soviet Union despite all attempts to destroy it since its foundation, left the Western powers, now led by the United States of America, with the unpleasant task of supporting the independence of former colonies while keeping the deep economic control over them that had made them so profitable for their owners. The USSR, which since the consolidation of the October Revolution had renounced imperial aspirations or legacy, became a vocal and occasionally material supporter of the rights to national self-determination which had first been proposed by the insincere US government presided over by Thomas Woodrow Wilson. Whether Wilson actually believed his famous 14 points or simply promoted them as beneficial for US interests can never be known for sure. The man who “kept the US out of war (in Europe)” to win election and then proceeded to approve US war mobilization efforts may be accused of insincerity or impotence (or both). The details are something for archivists and apologists to sort.

One of the less directly advertised outcomes of the Great War was the consolidation of financial capital protected mainly in the City of London, New York City and the Swiss Confederation. The establishment of the Federal Reserve System in 1913 extended the private control of national economies exercised through the Bank of England in the British Empire to the once independent North American federation. Carroll Quigley, in his posthumously published The Anglo-American Establishment, describes the Cecil Rhodes Round Table project for reasserting the British Empire by integrating the United States. What later became known as the Milner group, after Rhodes protégé Alfred Milner, concentrated doctrinal control over the British media, through All Souls and Baliol and the Rhodes Scholarships over British academia, and through the Chatham House consortium (Royal Institute of International Affairs and Council on Foreign Relations) over the formulation of imperial policy. According to Quigley, this doctrinal control was imposed on what passes for journalism and historical scholarship. Thus in combination with its friends in North America, Herbert Hoover comes to mind, what counts as knowledge about the British Empire (and since 1945 the Anglo-American Empire) has been subject to the control and manipulation by a complex cadre structure extending through universities, publishers, research institutions and so-called “think tanks”. While this invisible ministry of truth, as George Orwell called it, has not been able to suppress all dissenting interpretations of the past three centuries of Anglo-American dominance, it has been able to force much of the dissent to the margins. This is done by a) denying access to regular teaching and research posts with the authority they confer; b) strict control of access to archives and official records much of which are held in secured private vaults like those of the Hoover Institution at Stanford University; c) exclusion from the reputable press and publishing entities who propagate the authorized history and interpretations; d) rewarding ideological compliance with all the preferment and largesse at the Empire’s disposal; e) the creation and promotion of innumerable institutions with real and simulated scholarly expertise to flood public space with the authorized version(s). Of course, there are less pleasant means available but despite the proliferation of alternative and social media these are sufficient to impose an enormous burden on anyone trying to present facts or interpretations inconsistent with the preservation of the Empire and the devotion it fosters.

Quigley admits that he actually agreed with the objectives of the Establishment he described. As a sympathetic reporter he was more concerned about the potential failures than betraying any secrets that might impede the progress of the world he ardently supported. That is probably one reason why he discusses the problems created by the Rhodes testaments in their various versions, aggravated by the fact that Cecil Rhodes had no heirs to the fortune he had amassed through his British South Africa Company and other entities. Quigley gives little attention to Lord Rothschild, Rhodes’s friend and executor. In fact, the Rothschild interests are barely mentioned. Although the two branches of the infamous financial barony are notorious for the extent of their involvement in international affairs (business and political), discussion of their familial or business interests in the affairs of nations has been consistently trivialized if mentioned at all. In the era when the Habsburg dynasty ruled an “empire upon which the sun never set”—predating British claims to that distinction—no serious historian would ignore the matrimonial arrangements made to extend that control. Yet since the French Revolution, the only attention to dynastic profligacy has been given to the House of Saxe-Coburg/ Battenberg/ Windsor, in short the dispersion of the family of which Britain’s Victoria became “grandmother”. Monarchy, especially the British, is inseparable from pageantry. The display of opulence or even its conspicuous avoidance serves a critical function in maintaining the respect for the power behind it. Although apparently trivial, the fact that the recently deceased and longest reigning British monarch, Elizabeth Windsor, was casually called “the queen” even by people who were not imperial/ commonwealth subjects or citizens demonstrates how an archaic form of personal rule can be popularized even among ostensible republicans. In other words, what is displayed officially should never be treated as accidental. At the same time what is conspicuously absent from public view should not be considered careless omission.

All that said, what does this tell us about the definition of the term “terrorism”? Meanwhile there is an enormous body of literature on the subject. The subject has been treated as a species of crime, as an instrument of political action, as a moral issue, and as a field of behavioural control, e.g. policing, prevention, protection, care for victims etc. Terrorism has been defined sociologically, psychologically and politically. It has been treated as a policing problem and a military threat. An industry has been established and thrives on the products of “counter-terrorism”, “anti-terrorism”, and security. Innumerable institutions have been founded and funded to handle the problem. In my youth the term “terrorism” was used to categorize violent crime or threatened violence by persons or organizations that were not entitled to use violence, usually against—at least it was claimed—unarmed, innocent or defenceless civilians. The most notorious “terrorist” act of my youth resulted in the death of an Israeli Olympic squad during the Munich Olympics. According to the story at the time, a group called “Black September” seized the Israeli Olympic team in Munich as a means of calling attention to the policies of the Israeli government in Palestine. The immediate result of this action was the deployment of a special weapons and tactics team, what became Grenzschutzgruppe Neun (GSG 9) to rescue the hostages whereby all hostages and Black September members were killed. The second result was the first regular and systematic searches of international airline traffic, initially applied to all flights to Israeli destinations.

Of course the actions of the National Liberation Front in Vietnam were also called “terrorism,” but due to the fact that the US was waging a massive war in the then Republic of Vietnam (the scale of which only became apparent after Richard Nixon’s forced resignation) and that all these acts occurred in Vietnam, they were merely local matters for those in Vietnam. Terrorism in the western peninsula of Eurasia was mainly of interest to NATO bases and the political establishment that had been created by the US after 1945. Bombings and kidnapping in Italy or kidnapping and assassination in Germany were designated as terrorism but still treated as local matters. No later than the late 1990s it was revealed that much if not all of that European terrorism was organized by the Gladio network created by the Anglo-American intelligence services at the end of WWII. The term that emerged was the “strategy of tension” whereby covert NATO forces intended to purge what remained of the Left from European politics by associating it with supposed “left-wing terrorism”. The immediate effect of this covert action campaign, aside from the selective death and destruction caused, was the adoption of internal security legislation and proliferation of special police powers throughout the West European Union/ EEC/ EU. Those powers and legislation have only been increased and radicalized with time.

The ideological premise of the “strategy of tension” was that the Soviet Union and its communist allies was funding and arming groups of dissidents (mainly youth) in order to foment revolution and overthrow the “basic democratic order” in the West. In some cases these terrorists were supposed to be Maoists or even Trotskyists. These distinctions added to public confusion and permitted the actual sponsors to manipulate competing groups. As operatives have occasionally admitted, the funding of a Maoist group of “ultra-leftists” was a powerful strategy for dividing mainstream socialist and communist parties, thus diluting their electoral impact in countries like France and Italy where they enjoyed substantial support.

With the demise and annexation of the German Democratic Republic and subsequent collapse of the Soviet Union with the entire Eastern European infrastructure it had created, terrorism could no longer be presented as the work of the “Evil Empire” headquartered in Moscow. The only useful terrorist venue remaining was in Palestine where the terrorist regime that established the Israeli State had been waging war against the remainder of the indigenous inhabitants (their “Indians”) at least since 1948. The expansion of the occupation to part of Egypt and parts of the other states reluctantly carved by the French and British out of their Sykes-Picot mandates had elevated the armed resistance to international terrorism. Despite United Nations resolutions adopted with the license given to European and Ottoman terrorists to found an independent state by the name of Israel, recognizing the inherent rights of the indigenous inhabitants as at least equal to those of the invading immigrants, the Israeli terrorist forces were regularized as a national army while the indigenous self-defence was relegated to the status of terrorists. The expansion of territorial control—i.e. conquest and imposition of vassalage—in neighbouring countries created the conditions de facto whereby the indigenous resistance became “international terrorism”. Countries that explicitly supported what would become the Palestine Liberation Organization in compliance with the UN resolutions licensing the establishment of Israel and the inherent rights of Palestine’s historic inhabitants were denounced by the former mandatory powers, under aegis of the Anglo-American Empire, as sponsors of “international terrorism”. While the term terrorism continued to be used in US-led counter-insurgency operations throughout Southeast Asia and Latin America, the focus of attention became the Middle East. Terrorism was popularized as a kind of generic trait of “Arabs”, itself a term of distortion applied now to all people in the Middle East who are not European Jews or their descendants living under the state of Israel.

In 1997, William Kristol and Robert Kagan, founded the Project for the New American Century (PNAC). In this context, such notions as “a new Pearl Harbor” began to circulate in what are called neo-conservative political circles. The “new” American Century refers to the appellation attributed to Henry Luce, that the 20th century, especially in the wake of World War II, was the American century. Kristol, Kagan and their like argued that with the elimination of the Soviet Union as the archenemy the world had essentially been made free for US supremacy. However, such supremacy would be challenged. They asserted that just as “Pearl Harbor” brought Americans together behind strong leadership to wage an international war for American values, it would take extreme stimulus to move the American people from their inherent lethargy and turn them into a force capable of assuring US supremacy around the world. This stood in stark contrast to the idea held widely beyond American shores that the end of the Soviet Union and hence the end of the so-called Cold War would bring the long-desired “peace dividend”. Kristol, Kagan and those who supported them were worried—just as their fathers had been in 1945—that peace would break out. Members of the permanent foreign policy establishment, like George Kennan, and the arms industry, like the DuPont family, were seriously concerned that the enormous profits and power accrued waging covert war against the Soviet Union and counter-insurgency everywhere else would stop once the public on both sides of the Atlantic recognized that there was no more enemy. In fact, the principal occupation of the policy elite in the Anglo-American Empire as it emerged in 1913 has been the threat of peace. Once one understands the implications of that principle then it is no longer a mystery that the longest continuing war since 1945 is the United Nations invasion of the Korean peninsula in 1951.

Just as Carroll Quigley pays almost no attention to the interest the Rothschild dynasty could have in the Round Table project, almost no attention is given to the role of the Rockefeller dynasty—acting mainly, but not exclusively, through the Rockefeller Foundation—in the establishment of the United Nations. However, a sober recognition of the function of so-called philanthropy (the corporate successor to papal or royal patronage and preferment) ought to induce more critical attention to dynastic power. The League of Nations is inconceivable without the establishment of the Federal Reserve System with its merger of Rockefeller and Rothschild interests. The shift from Geneva to New York was an acknowledgement of where industrial and military power lay. The invisible pseudo-neutrality of the imperial-based League was replaced by the unabashed display of US power, managed by its paramount dynasty. While it is true that the Du Pont dynasty is the senior “noble house” in North America it lacked the international scope that the Standard Oil magnates had acquired when dividing the world of petroleum with their British counterparts. The October Revolution and the failure to destroy the Soviet Union by 1943 meant that Standard Oil was simply the more powerful of the two energy kingdoms. Naturally it can only be speculation but it is reasonable to assume that the Anglo-American financial oligarchy consummated in 1913 and baptised in 1918 was ready to wed in 1945.

The preeminence of the financial oligarchy, not just in the latter half of the 20th century, but for the entirety of the 20th century, must be understood in order to grasp what terrorism really means today. Political-economist Michael Hudson has argued—in support of Karl Marx but based on historical analysis—that in fact everyone in the industrialized economies saw socialism as inevitable by the end of the 19th century. Marx was not utopian. Nor did the 1918 German revolutionaries, murdered at the behest of their Social Democratic and aristocratic enemies, err in the judgement that the collapse of the Hohenzollern monarchy was the signal for socialism in the German Reich. It took enormous violent effort to prevent socialism from becoming the dominant political-economic form in the West. That effort began with the Great War, later World War I, which despite propaganda at the time and since was a class war intended to destroy working class movements throughout Europe and impose the new world financial order on what had been an agricultural and industrial economic system. A lot of popular debate, stimulated by attacks on China, focusses on the deindustrialization of the major Western economies. This is attributed to free trade agreements and expanding offshore manufacturing promoted by the policies introduced under Ronald Reagan and Margaret Thatcher. While it is true that the end of the war against Vietnam and the artificial oil crisis nominally caused by the 1973 oil boycott were inducements for major manufacturers to look for cheaper labour, this was opportunity not novelty. The end of World War II would have returned the US to massive unemployment had the destruction of competing industrial base not been so thorough, leaving US cartels with seemingly infinite markets for excess production. By 1973 this was no longer the case. European manufacturing, especially in Germany had recovered and was demonstrably more competitive than anything the US had to offer. Thus, the oil boycott purged the SME sector and—because of the secret agreements between the US and the main Arab producers to only bill oil in US dollars—allowed the US to continue to increase its financial stranglehold on much of the world economy that now needed USD liquidity to buy fuel and feed stock. The official media practically equated the results of this covert deal-making with “economic terrorism” by Arab states taking advantage of their nominal sovereignty over much of the world’s known oil reserves in an attempt to impose a solution to the expansion of the Israeli state in the region.

The confluence of interests that led to the so-called Oil Crisis can be grasped by anyone who has read John Blair’s book The Control of Oil (1976), based on his work as a researcher for the US Congress investigating transnational corporations. The original report upon which Blair based his book exposed the intricate workings of the “Seven Sisters”, the world oil cartel, but was suppressed by order of President Eisenhower since its publication would possibly impair national security. Specifically the report showed how the oil cartel, led by Standard Oil (Esso), controlled the world supply of oil—and not the Arab potentates most of whom had been installed through the efforts of those very oil companies. Naturally the Eisenhower administration did not want to expose a key element of its international economic power. More importantly, as the 1973 fixing of oil prices to US dollars demonstrated, the control of oil was integral to the power of the Anglo-American financial oligarchy. Although the Bretton Woods institutions, World Bank and IMF, were initially designed so that the US dollar would replace sterling and subordinate the franc, the oil coup in 1973 gave the regime virtually unlimited power to bankrupt its collective bete noir, the newly independent countries of the fallen empires.

Jamaican prime minister at the time, Michael Manley, made the point clear. When the Bretton Woods accords were signed, Jamaica as well as practically all the newly independent countries were part of either the sterling or franc system. They had no national currencies. Needless to say they were not represented in the negotiations. Until 1973 they imported or exported based on fixed exchange rates for their own currencies. With the Oil Crisis (coup) all these countries had to buy US dollars at exchange rates that could only drive their economies into debt spirals. Meanwhile the US Treasury could issue as many dollars as it needed to buy whatever it desired. Its banks, as owners of the World Bank and IMF, could dictate terms to any country without its own oil reserves and refining capacity. As Cuba learned, US refiners would not process alternative oil supplies from the Soviet Union, forcing it to nationalize plants built and operated by US multinationals. The capacity to manipulate both energy markets and currency markets was lodged in the two biggest banking and oil cartels, those of the Rockefeller and Rothschild families. The story of the international debt crisis is to extensive and complex to elaborate here. Yet it is crucial to recognize that energy and finance are two sides of the same institutional power. There is no financial power without control over energy and no energy policy without brute financial power.

The familial or dynastic element in this analysis will strike many as excessively personal and others as insufficiently dialectical. However, even if men do not make history as they choose, history is nonetheless made by men. Men make history through organized action and through the capacity to shape the perceptions upon which others base their action. Men create institutions and they shape them, even if no one man ever completely controls even the institutions he creates. As I pointed out at the start of this appreciation, there are methods for investigating or at least describing how history is made or how power is exercised. Yet, many of these methods are incomplete or even insincerely applied. Political science and history offer explanations, but these are actually fairly low order descriptions of group behaviour or the results attributed to such actions. The terms of reference are simply too restricted. In the case of the Anglo-American Empire, Quigley argued that these restrictions are not accidental or incidental to some scholarly process which, were it refined, would give better results. Instead, Anglo-American historiography and hence its political science are skewed by those upon whose patronage they ultimately depend. This patronage has long ceased to be merely the gentlemen’s agreements made at All Souls or White’s. It did not take a century, but more than a hundred years have lapsed in which generations of cadre have spread throughout the imperial system. There is a plenitude of institutions whose staff and members may never have heard of let alone seen a Rockefeller or a Rothschild. The last thing that would occur to them is that they are domestic servants or courtiers in some great aristocratic household. However, they were born and raised in a culture which sustains the ideas, values and practices of those who engendered these dynasties. That is what distinguished institutions do. It is their primary function. Oxford, Cambridge, Harvard and Yale do have the capacity to educate but their foremost role is to indoctrinate, to instil loyalty first to the alma mater but also the culture for which she stands. While the fashions may change, the petty morality be modified, the essence which made these institutions possible and continues to sustain them is spiritual, in the Hegelian sense (cultural in Peckham’s sense). Hence it is from the capacity for cultural continuity along with the capability of undermining or destroying competing cultures that any serious analysis must accept as a foundation to extended power.

It must be added here that the focus on the Rockefeller or Rothschild dynasties is historically accidental. They did not invent the financial system they currently dominate. The central elements of the modern financial system were internationalized by the papal-rabbinical regime in Rome. Meanwhile, these instruments have been digitalized. However the root of them all is the complex of indulgences, auricular confession, Inquisition and crusades. There is really nothing available to the IMF or Goldman Sachs that was not in the purview of Innocent III when waging the Fourth Crusade.

Finance and energy are governed by two rarely stated but cardinal rules: “other people’s money” and “other people’s oil”. Since whatever is called money in any society is ultimately arbitrary, there is no natural limit to the supply. Financial power derives from controlling other people’s money. The Standard Oil trust was established not by owning the oil supplies but by controlling the transport, refining, sale and distribution of oil and oil products. The Anglo-American “central bank” cartel does not create money—that is solely the prerogative of the State. It creates debt for which the State farms taxes and other charges or provides enforcement. This is plain from the statutes establishing the Federal Reserve, the charter of the Bank of England and the agreements by which the Bank of International Settlements, World Bank, International Monetary Fund and their subsidiaries were formed as international entities beyond the reach of sovereign states or their citizens.

Terrorism is not really what masked men do when they try to kidnap someone or seize something to extort a favourable political decision. It is not something Arabs, Muslims or communists do to achieve their aims. Terrorism is not a phenomenon against which one can be protected like locking one’s car or home or wearing safety belts. There is no armour or surveillance that can prevent or interrupt terrorism. Airport controls or entry controls at other public spaces cannot prevent terrorism or limit any damage attributed to it. Neither the amount of fluids carried in hand luggage, nor the prohibition of cutlery or small arms can have any impact on terrorism. Moreover, none of the foregoing are relevant to terrorism at all—in the way has been consistently and deceptively defined for decades.

In order to understand terrorism and its relationship to the innumerable activities supposedly conducted or promoted to counter terrorism, one has to have a proper understanding of the overall cultural system in which this term is applied. It is necessary to examine what behaviour corresponds to terrorism, not the term is used to label. In other words one has to move from the explicit to the implicit or the stated to the unstated. Watch what is done. Do not be distracted by what is said. The overall cultural system is financial. That means that the instructions for performance at the highest explanatory level are governed by what can be called the imperatives of cash flow. Cash flow describes the movement of money, energy, primary commodities, and people (who for all intents and purposes are just another commodity).

In the process of transforming the agricultural – industrial society back into a system of rents (or to use the papal-rabbinical terminology, the trade in grace), an model of allocating economic surplus was replaced with a model for managing scarcity. This model, sometimes attributed to Alfred Marshall but in fact developed by his successors, has been called marginalism. Coincidentally the economic theories upon which marginalism is based were articulated and popularized about the same time chattel slavery was being abolished, at least formally. One can speculate whether a restored theory of economic scarcity just happened to become popular once bonded labour was withdrawn from the market and newly freed labour could demand some of the surplus it had been forced to generate. It is not necessary to prove that the economists of the day devised theories to diminish any demands by freed slaves. If one accepts the premise that an emerging financial oligarchy funding and guiding the direction of teaching and research raises the questions that scholars and scientists ought to answer—as is clearly the case today—then no explicit instruction was needed to shape the overall agenda. At the same time as the political economy of surplus allocation was being realigned to reflect planned scarcity, free labour and other popular movements were being guided by what became known as progressivism in North America and Fabianism in Britain. There many of the proponents were more explicit that professional or expert solutions were needed for systemic problems (disorder) to prevent popular movements from asserting themselves in such a way as to threaten the oligarchy materially. Again the trail of philanthropy can be found. Without disparaging actual improvements in the daily lives of millions, the purpose of philanthropy is not to end the plunder and exploitation which enriches the donor but to selectively dilute resistance to the donor’s plunder and exploitation. Philanthropy is like the fluid a parasite injects into its host to conceal extraction or make it less painful. Progressivism evolved from the same cultural swamp as Frederick Taylor’s scientific management. By analysing the complaints among populists, the pwog administrator performs the equivalent of a time-motion study on the movement under study. Like Frederick Taylor who saw this dissection as a means of replacing skilled workers with interchangeable employees performing subroutines that could be easily taught and learned, the pwog or Fabian sought to identify the elements of discontent which could be corrected by employing professional staff and permanent bureaucrats who were able to perform the needed tasks but immune to the political or social concerns from which they arose.

Parallel to these organizational developments the chartered/ public accounting profession was launched. The financial oligarchy was able to prevent legislation which would oblige public companies (joint stock corporations) to submit their books to government regulators for inspection. Based, among other things, on assertions of intellectual and trade property rights vis a vis competitors but also the State, the legislatures adopted laws which permitted companies to hire their own inspectors whose certificates would be accepted in lieu of government inspection or public disclosure. The employees of these accounting companies would be examined and certified by boards of their peers. Only accountants so credentialed by their peers would be permitted to issue certificates for the accuracy and completeness of corporate financial records. Thus corporate financial records could remain secret and the public demand for disclosure diverted. Certified accountants and lawyers together would protect the public interest in fair dealing vicariously.

For this system to function in an environment dominated by huge, international trusts, internal corporate structures had to change too. Slowly major manufacturing enterprises managed by engineers or men with experience in their respective fields were to be subordinated to the new financial management ideology. The certified accountant gave birth to the controller. The controller or financial controlling department had two basic tasks. One was to translate all the manufacturing management data into accounting figures that could then be rendered in company reports, either to shareholders or regulatory/ tax authorities. The other task was to police material production processes using accounting and measurement criteria. That is to say the physical operations had to be reduced to measurable cash flows. The pinnacle of controlling was articulated in what became known as systems theory. From this controlling function all manner of operations were translated and integrated to produce reporting routines. Reporting, the regular production of measurement data and its application to internal corporate management, expanded wherever there was some movement from which value accumulation or loss could be expected. The bigger the corporation and more diverse the operations, e.g. in the trusts and conglomerates, the more powerful the controlling/ reporting function became. Economic concentration, which has not ceased since the end of the 19^th century, has made central controlling, reporting and planning indispensable. The central controlling and reporting departments do not add value or increase the effectiveness of any manufacturing or other enterprise operation. They provide the means for regulating the extraction of value from the enterprise both upstream in terms of reporting and downstream by dictating which activities are to be preferred or abandoned (because of their impact on key performance indicators). The controlling department is not interested in the end customer, the employee, the supplier of inputs or any other material quality relevant for actual business operation. It is a surveillance instrument. Its mere presence in the form of reporting requirements and planning targets imposes limits on all those doing real work, buying or selling, or anything else entrepreneurial. The demand to reduce everything to some numerical value shapes the corporate environment internally and at all the interfaces between corporation and other actors and entities.

To say that this controlling ideology is a metaphor for observable institutional behaviour beyond the factory gate is too little. The introduction of analogue computing machines in the 1940s found immediate application in state operations. An IBM subsidiary supplied state of the art computing machines to partially automate the administration of forced labour camps in Germany under the NSDAP regime. The creators of the Phoenix Program in the CIA developed—in collaboration with renowned academic institutions—the Phoenix Information System. This computer system reduced the digested interrogation and police surveillance data collected by units of the Republic of Vietnam on behalf of the CIA to numerical input to generate “kill lists” for the US counter-insurgency campaign against the National Liberation Front in Vietnam. One former CIA officer later called it “computerized mass murder”. Recent reporting from occupied Palestine told of a system called “Lavender” that supplies Israeli forces with similar “kill lists”. The controlling systems have been developed and deployed without interruption.

As horrifying as the use of computer technology for planned assassination or mass murder is, that is only the most spectacular and infamous application. The underlying controlling ideology is far more insidious. Controversy, albeit superficial, about the dangers of artificial intelligence (AI) beyond the industrial applications already common focus on the error rate or the capacity of someone, presumably decent and law-abiding, to control the AI systems and prevent their abuse or defective performance. They only rarely address the ideology embedded in the technology and its social-political genealogy, i.e. its cultural historical content. In a recent interview I was asked if AI, with its military-policing history, could not be converted to benign civilian uses? My reply was simple. Why should any society be spending extraordinary amounts for military technology to convert to civilian use? Would it not make more sense to invest in civilian uses from the very beginning? This economic aspect was so obvious to me that I cannot understand why it is so rarely asked—except as Joan Roelofs has shown, so much of the economy has been literally bought to support military over civilian purposes in return for token support of residual community needs. It is therefore tempting to ask if there really is any meaningful civilian sector in today’s economy or society?

The Anglo-American Empire in its conversion (or reversion) to a quasi-feudal formation ruled by a financial oligarchy adopted or restored systems for policing, regulating, expanding or restricting the flows of money and energy as well as people and primary commodities. The highest order principle in this organization (and hence explanation) is the numerical control of data flows. In the system of domination and enrichment (capital accumulation) these data flows can be distinguished as cash, energy, “contraband”, primary commodities or raw materials, and human populations. In the first two decades of the 21st century, the overall objective of the financial oligarchy or the output of the system it has created can be represented as the rearrangement of human populations such that they are removed from areas where the underlying resources are deemed more valuable than any labour that could be extracted by the inhabitants. These populations are being transferred to the spaces where populations are declining or actively being reduced. This population transfer policy is global and it is organized and conducted by a combination of actors including intergovernmental private-public partnerships (a euphemism for fascist organizations). At the same time resource flows are increasing, e.g., plundering of oil and grain from states under attack and subject to deliberate deportation efforts. One of the ancient professionals using this business model is George Soros, who by his own public admission already enriched himself at the age of 14 with the help of Nazi occupiers of his native Hungary. Another class of professionals use the World Health Organization and related agencies. They follow the Bill Gates version for neutralizing the recalcitrant and profiting through the entire value chain. Those are simply the most notorious. They are creatures of the financial oligarchy and its controlling system. As has been said often enough even Soros or Gates will die, like David Rockefeller finally did. However the proclamation “the king is dead, long live the king” does not apply solely to crowned monarchs. A culture’s resilience, even as a pathology or parasitical form, is reflected in the survival of the system even after the demise of its bodily representatives.

So having said what terrorism is not as well as recounting in summary form a lot of 20th century history, something ought to be said about what terrorism is, besides a much abused and confusing word. When the Project for the New American Century “anticipated” the “new Pearl Harbor” as the bonding moment for another century of US (Anglo-American) supremacy, to the extent that they were honest and not just true believers, they would have understood that they were calling for a state sponsored act that could be manipulated in order to impose a war that no ordinary person otherwise would have demanded—certainly not in the great and insular United States of America. Here is not the place to elaborate the means by which the demolition of the NY World Trade Center towers on 11 September 2001 was executed. The crucial point is that this event was branded as the “new Pearl Harbor” and led to the declaration of the Global War on Terror and the adoption of the USA Patriot Act.

A “war on terror” reflects language dating back to the presidency of Lyndon Johnson who while presiding over the war against Vietnam also led the launch of a “war against poverty”. This would be followed by “the war on drugs.” This habit of applying war as an instrument of social policy has been called “Wilsonian”. Thomas Woodrow Wilson, kept the US briefly out of the Great War only to turn it into the “war to end war”. American presidents would also advertise “war for democracy”. The real fact, however, has been that the financial oligarchy that seized power in 1913 transformed the US into a war economy and a war society. It was both financialized and militarized at the same time. The Great War—to end war—also gave birth to what is now the largest psychological warfare industry on the planet, comprising Hollywood and Madison Avenue, plus the “Beltway”. The Valstead Act (prohibition of alcoholic beverages) was the first step in the creation of what can now be called the pharmaceutical-military-industrial complex. The 20th century marked the transformation of the United States from a continental empire into the most heavily armed, full spectrum belligerent on the planet. In other words, every aspect of American life was defined by warfare in one form or another. This is reflected in the vernacular as well as the astronomical sums expended officially (the unofficial or concealed budget is immeasurable) for national defence.

What is the Global War on Terror, if it is more than a slogan like so many in American politics? I believe the answer can be found by returning to the cultural historical context—to the conditions under which the financial oligarchy seized power and maintains it. The project for the new American century is undoubtedly a program for permanent war. Yet that is restating the obvious. What is not so obvious, but bears closer scrutiny, are the beneficiaries of permanent war. For much of the twentieth century, the financial oligarchy could be and was identified with the dynasties responsible for its inception, specifically the Rockefeller and Rothschild families, their relatives and retainers. Today the public faces of the financial oligarchy are the CEOs of a small group of hedge funds, BlackRock being the most notorious among them. The hedge fund is the modern manifestation of the financial framework created by the papal-rabbinical monarchy in Rome—it is the modern market-maker in sin, grace and salvation. The hedge fund and its precursors in the evolution of the financial oligarchy rely on the accounting-controlling ideology originally applied within corporations but as the corporation and the State merged was extended to the management of the State itself. Just as the controlling department became the central policing, surveillance and regulatory element of the corporation, its equivalent has become the organizational heart of the State. The corporation is managed using surveillance and reporting the results of which are distilled into key performance indicators and many other measurements. The corporate state is not only a merger of interests, whereby the corporation excludes any previous claims against the State by citizens, it is also a merger of methods and instruments. These methods and instruments are applied to control the flows of cash, energy, contraband, raw materials and crucially people. While cash, energy, contraband and raw materials have historical economic measures that can be easily applied within the controlling framework. People, especially those who are neither bonded labour nor serfs, require intermediary methods and instruments in order to translate them into accounting values. When travel was relatively rare and largely restricted to upper classes, there was little need for mass surveillance. Even the great immigration waves of until the early 1920s were one-time policing actions, except for dissident deportations and race removals on the Pacific coast. Both the relative improvement of living standards in North America and post-war Europe added to the human traffic but not significantly.

The most significant challenges for population control began during the Central American counter-insurgency waged under Ronald Reagan. Eliminating about 20% of the population of El Salvador, by death or migration, was considered sufficient to suppress any nationalist movements that could threaten US domination. As long as the Soviet Union existed immigration/ migration in Western Europe was largely confined to movements from former colonies to the urban conurbations of the colonizers. The defeat of the Soviet Union and with it the expected potential to redesign the planet in the interests of the Anglo-American Empire (financial oligarchy) called for an entirely different scale of management. That was what the Project for the New American Century was actually proposing. That new management system is terrorism. Terrorism is not the advertised acts of politically or economically dissident individuals or groups. Those advertised acts are epiphenomena within what should properly be called the “terrorism system” or “terrorism resource management system”. When the US government—in the widest sense of that term—declared the Global War on Terror they were announcing the introduction of a global surveillance and accounting system intended to manage human flows worldwide. Just as Taylorism once had to be imposed by force in factories, terrorism has been imposed as a management tool wherever humans congregate, labour or are in transit. The arbitrary inspection and “security” measures, whether at airports or other nodes of human movement, are accounting instruments. They are dictated by the controlling department of the corporate state for operational management as well as reporting. Unarmed, ordinary travellers are monitored just as are those whose task it is to transport contraband or deploy to armed propaganda and terror action against targeted populations. The so-called “terrorists”, whether branded as Al Qaeda or ISIS, like their precursors in Phoenix and Gladio are system products and instruments for managing population flows. In some places, like Syria, they are also deployed for the management of resource plundering or demolition of civilian infrastructure, both of which are in turn parts of the cash flow model by which hedge funds operate. In order to understand the elusive meaning of the language around terrorism, a cultural historical concept is needed not merely a trivial political one. The political concept of terrorism is a marketing/ branding idea with no substantive explanatory utility. Just as so much political science is written about politics but not about power, the literature on terrorism describes supposed terrorists and imagined terrorist organizations but does not identify the terrorism system within the financial oligarchical culture that dominates the West in the early 21st century. By expanding the concept of terrorism to include, literally, the full spectrum of domination, the relevance of global psychological and financial warfare campaigns like the Covid-19 war and the Global Climate Change war to a culture of total financial control can be imagined and understood without losing the explanatory power for examining the nature of corporate state violence.

This content originally appeared on Dissident Voice and was authored by T.P. Wilkinson.

I thought it fitting to revisit the recent Canadian Patriot Review film (based upon the essay “Why Assume There Will be a 2024 Election?“) where we are introduced into this dense period of history from the orchestrated demolition of the financial system in 1929, the Wall Street/London fueled “economic miracle solution” of fascism and eugenics between 1930-1934, and the story of FDR’s war with the financier oligarchy’s London and Wall Street tentacles. From this vantage point, we are then thrust into a deep dive into the person of Smedley Butler and his courageous defense of the republic.

This content originally appeared on Dissident Voice and was authored by Matthew J.L. Ehret.

The debt this bill is supposed to address only exists because of the incessant and indiscriminate borrowing by the previous government of Kenya, for which Ruto was vice president. Ruto is a Grade A lackey for U.S. interests reminiscent of the dictator Mobutu of the Democratic Republic of Congo (then Zaire) who U.S. imperialism supported for 32 years in order to plunder the Congo.

U.S. neo-colonialism praised as an “endearing” and “enduring” democracy, the Ruto presidency, a puppet government that unleashed its notoriously vicious police to reportedly arrest more than 300, kill as many as 23 and injure dozens of Kenyan citizens in the demonstrations over the past week. These police are the same force U.S. imperialism has maneuvered into being dispatched to Haiti to contain the people’s resistance against imperialism in that Caribbean nation.

An elevation in the parlance of U.S. statecraft is the paternalistic promise of granting Kenya the status of a “Major Non-NATO Ally,” a role granted to the African Union’s African Standby Force. This designation is in sharp contrast to the Alliance of Sahel States newly formed confederation, a declaration of African self-determination.

The Africa Team of the Black Alliance for Peace (BAP) and the organizing arm U.S. Out of Africa Network (USOAN) stand in uncompromising solidarity with the masses of Kenyans fighting against the proposed Finance Bill 2024. We denounce in the strongest terms the complicity of the U.S., especially its Black misleaders in Congress, in passing this legislation. In fact, on the day the bill was introduced in the Kenyan parliament, members of the U.S. Congress including Barbara Lee.

Ruto must go! U.S. Out of Africa! BAP and USOAN salute the courage and determination of the masses of youth throughout Kenya “Gen Z”! The blood spilled will not be in vain. Our martyrs are alive alongside the living. We stand unwaveringly with the Gen Z Movement, our people of Kenya!

This content originally appeared on Dissident Voice and was authored by Black Alliance for Peace.

This content originally appeared on Dissident Voice and was authored by Visualizing Palestine.

This content originally appeared on Dissident Voice and was authored by Visualizing Palestine.

It will beg, steal or borrow if necessary, but it wants your money any way it can get it.

This is what comes of those $1.2 trillion spending bills: someone’s got to foot the bill for the government’s fiscal insanity, and that “someone” is the U.S. taxpayer.

The government’s schemes to swindle, cheat, scam, and generally defraud taxpayers of their hard-earned dollars have run the gamut from wasteful pork barrel legislation, cronyism and graft to asset forfeiture, costly stimulus packages, and a national security complex that continues to undermine our freedoms while failing to making us any safer.

Americans have also been made to pay through the nose for the government’s endless wars, subsidization of foreign nations, military empire, welfare state, roads to nowhere, bloated workforce, secret agencies, fusion centers, private prisons, biometric databases, invasive technologies, arsenal of weapons, and every other budgetary line item that is contributing to the fast-growing wealth of the corporate elite at the expense of those who are barely making ends meet—that is, we the taxpayers.

According to the number crunchers with the Committee for a Responsible Federal Budget, in order to spend money it doesn’t have on programs it can’t afford, the government is borrowing roughly $6 billion a day.

Basically, the U.S. government is funding its existence with a credit card.

Let’s talk numbers, shall we?

The national debt (the amount the federal government has borrowed over the years and must pay back) is more than $34 trillion and will grow another $19 trillion by 2033.

The bulk of that debt has been amassed over the past two decades, thanks in large part to the fiscal shenanigans of four presidents, 10 sessions of Congress and two wars.

It’s estimated that the amount this country owes is now 130% greater than its gross domestic product (all the products and services produced in one year by labor and property supplied by the citizens).

In other words, the government is spending more than it brings in.

The U.S. ranks as the 12th most indebted nation in the world, with much of that debt owed to the Federal Reserve, large investment funds and foreign governments, namely, Japan and China.

Interest payments on the national debt are more than $395 billion, which is significantly more than the government spends on veterans’ benefits and services, and according to Pew Research Center, more than it will spend on elementary and secondary education, disaster relief, agriculture, science and space programs, foreign aid, and natural resources and environmental protection combined.

According to the Committee for a Reasonable Federal Budget, the interest we’ve paid on this borrowed money is “nearly twice what the federal government will spend on transportation infrastructure, over four times as much as it will spend on K-12 education, almost four times what it will spend on housing, and over eight times what it will spend on science, space, and technology.”

In ten years, those interest payments will exceed our entire military budget.

This is financial tyranny.

We’ve been sold a bill of goods by politicians promising to pay down the national debt, jumpstart the economy, rebuild our infrastructure, secure our borders, ensure our security, and make us all healthy, wealthy and happy.

None of that has come to pass, and yet we’re still being loaded down with debt not of our own making while the government remains unrepentant, unfazed and undeterred in its wanton spending.

Indeed, the national deficit (the difference between what the government spends and the revenue it takes in) remains at more than $1.5 trillion.

If Americans managed their personal finances the way the government mismanages the nation’s finances, we’d all be in debtors’ prison by now.

Despite the government propaganda being peddled by the politicians and news media, however, the government isn’t spending our tax dollars to make our lives better.

We’re being robbed blind so the governmental elite can get richer.

In the eyes of the government, “we the people, the voters, the consumers, and the taxpayers” are little more than pocketbooks waiting to be picked.

“We the people” have become the new, permanent underclass in America.

Consider: The government can seize your home and your car (which you’ve bought and paid for) over nonpayment of taxes. Government agents can freeze and seize your bank accounts and other valuables if they merely “suspect” wrongdoing. And the IRS insists on getting the first cut of your salary to pay for government programs over which you have no say.

We have no real say in how the government runs, or how our taxpayer funds are used, but we’re being forced to pay through the nose, anyhow.

We have no real say, but that doesn’t prevent the government from fleecing us at every turn and forcing us to pay for endless wars that do more to fund the military industrial complex than protect us, pork barrel projects that produce little to nothing, and a police state that serves only to imprison us within its walls.

If you have no choice, no voice, and no real options when it comes to the government’s claims on your property and your money, you’re not free.

It wasn’t always this way, of course.

Early Americans went to war over the inalienable rights described by philosopher John Locke as the natural rights of life, liberty and property.

It didn’t take long, however—a hundred years, in fact—before the American government was laying claim to the citizenry’s property by levying taxes to pay for the Civil War. As the New York Times reports, “Widespread resistance led to its repeal in 1872.”

Determined to claim some of the citizenry’s wealth for its own uses, the government reinstituted the income tax in 1894. Charles Pollock challenged the tax as unconstitutional, and the U.S. Supreme Court ruled in his favor. Pollock’s victory was relatively short-lived. Members of Congress—united in their determination to tax the American people’s income—worked together to adopt a constitutional amendment to overrule the Pollock decision.

On the eve of World War I, in 1913, Congress instituted a permanent income tax by way of the 16^th Amendment to the Constitution and the Revenue Act of 1913. Under the Revenue Act, individuals with income exceeding $3,000 could be taxed starting at 1% up to 7% for incomes exceeding $500,000.

It’s all gone downhill from there.

Unsurprisingly, the government has used its tax powers to advance its own imperialistic agendas and the courts have repeatedly upheld the government’s power to penalize or jail those who refused to pay their taxes.

While we’re struggling to get by, and making tough decisions about how to spend what little money actually makes it into our pockets after the federal, state and local governments take their share (this doesn’t include the stealth taxes imposed through tolls, fines and other fiscal penalties), the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little thought for the plight of its citizens.

To top it all off, all of those wars the U.S. is so eager to fight abroad are being waged with borrowed funds. As The Atlantic reports, “U.S. leaders are essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

Of course, we’re the ones who have to repay that borrowed debt.

For instance, American taxpayers have been forced to shell out more than $5.6 trillion since 9/11 for the military industrial complex’s costly, endless so-called “war on terrorism.” That translates to roughly $23,000 per taxpayer to wage wars abroad, occupy foreign countries, provide financial aid to foreign allies, and fill the pockets of defense contractors and grease the hands of corrupt foreign dignitaries.

Mind you, that’s only a portion of what the Pentagon spends on America’s military empire.

The United States also spends more on foreign aid than any other nation, with nearly $300 billion disbursed over a five-year period. More than 150 countries around the world receive U.S. taxpayer-funded assistance, with most of the funds going to the Middle East, Africa and Asia. That price tag keeps growing, too.

As Forbes reports, “U.S. foreign aid dwarfs the federal funds spent by 48 out of 50 state governments annually. Only the state governments of California and New York spent more federal funds than what the U.S. sent abroad each year to foreign countries.”

Most recently, the U.S. has allocated nearly $115 billion in emergency military and humanitarian aid for Ukraine since the start of the Russia invasion.

As Dwight D. Eisenhower warned in a 1953 speech, this is how the military industrial complex continues to get richer, while the American taxpayer is forced to pay for programs that do little to enhance our lives, ensure our happiness and well-being, or secure our freedoms.

This is no way of life.

Yet it’s not just the government’s endless wars that are bleeding us dry.

We’re also being forced to shell out money for surveillance systems to track our movements, money to further militarize our already militarized police, money to allow the government to raid our homes and bank accounts, money to fund schools where our kids learn nothing about freedom and everything about how to comply, and on and on.

There was a time in our history when our forebears said “enough is enough” and stopped paying their taxes to what they considered an illegitimate government. They stood their ground and refused to support a system that was slowly choking out any attempts at self-governance, and which refused to be held accountable for its crimes against the people. Their resistance sowed the seeds for the revolution that would follow.

Unfortunately, in the 200-plus years since we established our own government, we’ve let bankers, corporate turncoats and number-crunching bureaucrats muddy the waters and pilfer the accounts to such an extent that we’re back where we started.

Once again, we’ve got a despotic regime with an imperial ruler doing as they please.

Once again, we’ve got a judicial system insisting we have no rights under a government which demands that the people march in lockstep with its dictates.

And once again, we’ve got to decide whether we’ll keep marching or break stride and make a turn toward freedom.

But what if we didn’t just pull out our pocketbooks and pony up to the federal government’s outrageous demands for more money?

What if we didn’t just dutifully line up to drop our hard-earned dollars into the collection bucket, no questions asked about how it will be spent?

What if, instead of quietly sending in our tax checks, hoping vainly for some meager return, we did a little calculating of our own and started deducting from our taxes those programs that we refuse to support?

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, we’re no longer living the American dream.

We’re living a financial nightmare.

This content originally appeared on Dissident Voice and was authored by John W. Whitehead and Nisha Whitehead.

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Only a few hours elapsed between the time that Carl’s pay landed in his checking account and when online thieves pilfered it. “They took all of it but like 67 cents,” he said. Months before, Carl had signed up for One Finance, a banking app. It’s owned and promoted by Walmart, where Carl works in a grocery department.

He was enticed by features like cash back on purchases at Walmart and the chance to receive his pay two days early, as well as by low fees and high interest rates. Everything was fine until Carl used his One debit card — for the very first time — to buy a video game at Walmartlast fall. The next time he checked the app, he saw a series of unauthorized transactions that had drained his account. To get by, he tapped his savings, which he said was “just enough to cover everything.” Carl asked to be identified by first name only out of concern for his job security.

Carl’s experience has been distressingly common. One Finance was plagued by fraud and customer dissatisfaction after a Walmart-controlled partnership acquired it in 2022. As Walmart began touting One to employees and others, the “neobank” — as such ultraconvenient, lightly regulated apps are called — weakened user security and outsourced customer support. Con artists took advantage, spurring a litany of customer complaints to regulators and the Better Business Bureau and across social media platforms. One froze some accounts and blocked access to its app and website from several countries, according to current and former customers and employees.

Frustrated users tanked One’s rating on Google Play from 4.6 to 2.8 stars. So many complaints inundated a Reddit community for One users that moderators made the page private “due to ONE fraud issue and their lack of customer support.” One’s Better Business Bureau page warns that scammers are using the One name and logo to steal money via “loan and impersonation scams.”

One’s problems echo the fraud and compliance issues revealed in a recent ProPublica investigation of Walmart’s financial services business. That article found that the company resisted calls to rein in fraud and skimped on employee training as more than $1 billion in consumer fraud losses were routed through Walmart’s financial systems over the past decade.

One had a higher rate of complaints lodged against it at the federal Consumer Financial Protection Bureau in 2023, its first full year under Walmart control, than most other large neobanks for which data is publicly available. The CFPB received 89 complaints about One, which has 1.6 million customers, according to a recent internal company presentation. That was six more complaints than Dave, a neobank with 9.9 million customers. One also has more complaints per customer than both Current and MoneyLion, two large neobanks. Chime, the largest neobank in the U.S., has by far the highest rate of complaints. (These comparisons are imperfect because neobanks don’t always use the same definitions of “customer.”)

To Carla Sanchez-Adams, a senior attorney with the National Consumer Law Center, the rate of complaints about One shows that “they don’t have the proper amount of resources dedicated to resolving customer disputes and complaints.”

The CFPB received 13 complaints about One in December, almost double the neobank’s monthly average for 2023. Five drivers for Spark, Walmart’s delivery service, have complained in the past two months that hackers stole their personal information, set up fake One accounts in their names, and then diverted their paychecks into those accounts. One was “telling me that they were going to escalate this issue, and weeks would go by and I’d never hear anything from them,” said one driver who requested anonymity to protect his job. Walmart eventually reimbursed his lost pay, he said.

There are signs that the peak of the One-related fraud may have passed. The Reddit page was made public again at the end of January, and the app’s Google Play rating has rebounded to 4.6 stars.

In a statement to ProPublica, One acknowledged blocking access in unspecified countries, due to “significant occurrences or patterns of fraud or cybersecurity risk.” But the neobank denied that problems with fraud, customer support or customer accounts were ever unusually frequent or have increased since the acquisition. When customer growth is factored in, One said, the rate of complaints has fallen “significantly.” The company declined to provide comparative data.

The company said it has taken “an industry-leading approach to protecting its customers and platform from bad actors” and added that it has enhanced its customer support, fraud and security operations. “We take our customers' feedback seriously and take pride in the investments we have made in our product and the ways in which we serve our customer base, which has grown substantially since we acquired the platform less than two years ago,” a One spokesperson said.

For its part, Walmart said in a statement that it works hard to protect customers and that it has “long been committed to bringing much-needed access and affordability to unbanked and underbanked consumers who have been locked out of traditional financial services, and our partnership with One to help develop and offer modern, innovative, and affordable financial solutions is no different.”

One’s issues threaten to undermine Walmart’s biggest opportunity to enter consumer banking. Starting in 1999, Walmart made four bids to go into the banking business. All failed in the face of what a 2007 New York Times article called a “firestorm of criticism from lawmakers, banking industry officials and watchdog groups.”

Many feared that Walmart would use its power as the biggest retailer on the planet to become a financial behemoth that would wipe out small banks and suck up the profits of the big ones. In the face of stiff opposition, the company seemed to give up. The Times article quoted Walmart’s president for financial services saying, “We don’t plan to do this again. The bank is behind us. We will use our partners to roll out new products.”

Since then, Walmart has steadily expanded its financial services. The company now provides check cashing, money transfers, prepaid debit cards, gift cards and bill payment services in thousands of U.S. stores, typically at lower prices than those offered by competitors. Walmart managed to do that without becoming a government-approved bank, thus allowing it to avoid most regulatory oversight.

The rise of online-only neobanks provided a new opportunity: Essentially any company could offer checking and savings accounts, as long as it partnered with a traditional regulated bank, which would handle the underlying functions of holding deposits and insuring money. One launched as an independent operation in 2020 and sold itself with a brash anti-bank message. It created stickers with the slogan “Un*uck Your Money” and said it wouldn’t use customer deposits to invest in fossil fuel, tobacco or firearms companies.

In January 2022, Walmart announced that a partnership it majority owned was acquiring One and another company, Even, and merging them under the One brand. When the deal closed on March 31 of that year, Walmart valued the merged business at $3.67 billion, according to internal documents obtained by ProPublica.

Under Walmart, One expanded beyond its previous target market of middle-class users to focus on signing up Walmart’s 1.6 million employees and getting them to deposit their paychecks into One accounts. The goal was to keep associates’ pay in the Walmart ecosystem and induce them to spend it with the retailer, according to former One managers. “The idea that ‘Hey, how crazy is it that they’re going to be spending the money we give them with us? How perfect of a situation is that?’” a former senior manager said. A former One exec said she came to think of their company as “no longer One, but instead the Bank of Walmart.”

Walmart doesn’t require associates to use One. But the service has been overhauled to emphasize features that benefit Walmart employees and shoppers, such as free ATM withdrawals and cash back on purchases at Walmart stores. Walmart also incentivized the hundreds of thousands of contract drivers on its Spark platform, the company’s answer to delivery apps like Instacart, to use the app. Drivers get paid the same day if they use One as their deposit option, weekly if they don’t.

Soon after the acquisition, One eliminated some popular features, such as customer credit lines with low interest rates. It eliminated account overdraft coverage for some customers and reduced it to $200 for others. It also restricted the functionality of account “pockets,” a signature feature for budgeting, sharing and spending money. In a conversation with moderators of the One Reddit community, company reps said the restrictions were necessary to fight fraud.

But the company simultaneously made it easier for scammers to log in to and compromise accounts of Walmart employees and other customers. Previously, One users needed a username and password and a verification code sent by text message. After the acquisition, One removed the username and password requirement for mobile users. Instead, customers entered their phone number and received a login code via text. Nowadays, fewer companies require a password. They typically rely on a username, such as an email address, and a second form of authentication. But One uses the same telephone number both for the username and to deliver the login code, which makes it less secure, said Allison Nixon, the chief research officer of Unit 221B, a security research and consulting firm.

One also asks users to set up a PIN. But if you forget your PIN, you can reset it with the last four digits of your Social Security number, which Nixon said is easy for criminals to obtain. “It doesn't feel safe and it doesn't seem like the way we should protect people's entire bank accounts,” said Nixon, who tested One’s login flow at ProPublica’s request. “When the criminal underground realizes that there's a weakness, a lot of different parties jump on that.”

In its statement to ProPublica, One said that its accounts “require two-factor authentication.” Nixon disagreed. "Possession of a phone number plus a PIN that isn't really required because you can just reset it is one-factor authentication," she said.

Without a password barrier, fraudsters were able to impersonate company representatives in calls and messages to gain access to customer accounts, according to interviews and online reports. Natasha Tabachnikoff, a One account holder who works in local government in Pennsylvania, said she received two calls from someone falsely claiming to work for One. The caller said her account, which she’d had for years, had unauthorized charges and asked her to confirm her identity by sharing the authentication code sent to her phone.

Tabachnikoff almost shared the code but instead hung up and contacted One. “I told them, ‘You have a very insecure system here.’ And they were basically like, ‘Well, we'll never call you and ask you to give us your code,’” said Tabachnikoff. She said she moved her savings out of One “to a more reputable bank.”

As fraud mounted, One took steps that weakened the human side of its defenses. Last May, it laid off nearly all of its U.S. customer support agents and replaced them with outsourced workers in India and El Salvador. Although many of the new workers weren’t fully trained, they were assigned to provide frontline support via chat and phone.

“They were trained to only handle the lowest intake questions that do not require advanced knowledge or support,” said a former One employee with knowledge of support operations. Every One user interviewed by ProPublica who had contacted customer service after being defrauded said that the outsourced agents could answer only basic questions. “These folks were really gatekeepers, they weren’t there to resolve your problem,” said James Scherber, an Oregon-based entrepreneur who had convinced several members of his family to join One.

Separately, One hired outsourced agents to assist with reviewing reports of fraud. This delayed the resolution of problems and has caused One to reject valid reports of fraud, according to the former employee and to transcripts of customer support chats provided by One users. One did not comment specifically on these criticisms, but it said it has “substantially grown its investment” and personnel in both customer support and fraud review.

Jae Bleiberg contends that One brushed off legitimate claims of fraud. Bleiberg, who has run customer service and operations for other neobanks for eight years, used One as their primary bank since 2021. (Bleiberg uses they/them pronouns.) Early in 2023, Bleiberg was unable to use their One debit card in Brazil, forcing them to cut their vacation short. A One support rep told Bleiberg that “all transactions in and out of Brazil were blocked due to ‘security concerns,’” Bleiberg said. When Bleiberg returned to New York, the card remained inactive and wasn’t replaced for another month. “Their response was ‘You can go to Walmart and get cash with your virtual One card,’ Bleiberg said. But, they added, “there are no Walmarts in New York City.”

Worse, multiple fraudulent transactions had been made using Bleiberg’s account. One reimbursed Bleiberg for those transactions, but rejected a subsequent claim. After weeks of back and forth, One eventually issued a $250 credit after Bleiberg threatened to complain to the CFPB and other agencies. Beliberg provided a screenshot of their bank statement showing the credit. “This clearly came with the understanding I would not seek regulatory action,” Bleiberg said. One said it’s “categorically false” to say that it pays customers to not file complaints. As their dispute with One escalated, Bleiberg filed complaints last month with several federal agencies. When Bleiberg asked for copies of their chat-support transcripts and call logs, screenshots show, One said it would provide the materials only if served with a subpoena. “I have spent the last year trying to obtain the records” of their interactions with One, Bleiberg wrote to the Federal Reserve Board. “My account was closed without consent a few days ago by a spiteful support agent.”

Scherber, the customer from Oregon who got his family to join One, said the company’s ineffective fraud response cost him thousands of dollars last fall. The company froze all of his money and stonewalled him after he reported a series of unauthorized charges. “They have a firehose of fraud and you have to wait for a response back from the relevant team,” Scherber said.

The account lockup meant his scheduled payments to American Express didn’t go through, he said. That lowered Scherber’s credit rating, causing a lender to raise the interest rate on a planned mortgage refinancing. “I had to postpone my refinancing,” he said. “Now it’s not going to happen.” Scherber and his family ditched One last year.

One said the rate at which it freezes or otherwise restricts customer accounts due to fraud “is down by more than 50% since the acquisition of One.” It declined to share the data or time frame used to calculate that statistic or to address specific customer accounts of fraud or poor service.

Carl, the Walmart employee whose paycheck was stolen by fraudsters, eventually got his money back. But he’s done with One. Now he gets his Walmart pay deposited in a traditional bank. As he put it, “After losing the whole check I wasn't going to risk losing it again.”

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Doris Burke contributed research.

This content originally appeared on Articles and Investigations - ProPublica and was authored by by Craig Silverman and Peter Elkind.

If you get healthcare news from major media outlets, the industry press or even medical journals, you might conclude that private equity investors are “taking over” US healthcare. But when it comes to hospitals and doctors, you’d be wrong.

Intense media coverage of the small part of the healthcare system owned by private equity focuses public attention on policies that won’t affect the twin crises of access and out-of-control costs (NBC, 5/13/20).

Many reporters and researchers have mistaken an episodic cycle of cynical profit-taking as a “takeover.” The reporting focuses public attention away from the power of hospital chains affiliated with universities and churches, which employ far more doctors than private equity, and the US’s refusal to exert political control of the medical industry to rein in costs and cover everyone.

One of the widely reported “abuses” by private equity–owned providers—“surprise bills” for doctors’ care delivered in hospitals— is simply the exercise of the market forces that are supposed to control costs and expand coverage, but have been failing for a half century.

US media have been in private equity panic mode for several years now. An early entrant informed the American Prospect’s readers “How Private Equity Makes You Sicker” (10/7/19). Time (7/31/23) asked readers, “What Happens When Private Equity Buys Your Doctor’s Office?”; the New York Times (7/10/23) phrased the question as “Who Employs Your Doctor? Increasingly, It’s a Private Equity Firm.” NBC (5/13/20) reported, “Private Equity Firms Now Control Many Hospitals, ERs and Nursing Homes,” and asked, “Is It Good for Healthcare?”

KFF Health News is in the midst of a series called “Patients for Profit: How Private Equity Hijacked Healthcare.” Bloomberg (5/20/20), Common Dreams (11/29/22), Public Citizen (3/21/23), Atlantic (10/28/23), NPR (11/7/23) and a host of others have weighed in.

A bad idea

Profit-focused healthcare is a bad idea, and private equity–controlled companies have outsized influence on nursing homes and specialty hospitals, where patients are held for a long time. There is evidence that private equity–owned nursing homes kill even more patients than the rest of that chronically underfunded and understaffed industry.

But when it comes to general acute care hospitals and physician services, the degree of private equity control has been exaggerated, often with sloppy academic research. Private equity firms employ far fewer doctors than hospitals and insurance companies do, own less than 5% of general acute care hospitals, and are showing signs of exiting these segments of healthcare.

“Private equity” is just one of many vehicles for private investment. (See “What Is ‘Private Equity,’ Anyway?”) Presenting a particular corporate structure as uniquely destructive ignores the history of boom-and-bust cycles of Wall Street investment in hospitals and doctors, and confuses readers about the ultimate winners.

The unfortunate outcome of this misunderstanding is that most media analysis promotes policy changes that apply only to private equity—like increased transparency from private equity firms, limits on some abusive real estate transactions, and post-acquisition restrictions on staffing cuts. These will do nothing to restrain extreme US healthcare costs, to expand access to healthcare or to stop actors with different corporate structures from engaging in the same abusive behavior.

Let’s do it again

This Bloomberg piece (5/20/20) about “how private equity is ruining healthcare” has an anecdote about toilet paper shortages that could have come from a story about how Wall Street-backed firms were ruining healthcare two decades earlier (Fortune, 6/21/99).

The current private equity investment boom in physician practices differs little from the late 1990s, when Wall Street–backed physician practice management companies (PPMs) bought doctors’ practices by the hundreds, and then collapsed in a wave of bankruptcies. Those acquisitions were made not by private equity–controlled entities, but by companies whose stock traded openly on markets like the New York Stock Exchange and NASDAQ, known as “publicly traded” companies.

Media narratives about doctors’ experiences in the earlier Wall Street dive into medicine are nearly identical to current private equity reporting. Doctors start off hoping well-capitalized firms will bring administrative efficiency and growth, while allowing them to focus on patients. They end with unsustainable debt, bankruptcy, fraud and extreme corporate cost-cutting. Two decades apart, Fortune and Bloomberg reported identical iconic toilet paper shortfalls under lurid headlines:

As the top administrator at the 120-doctor Diagnostic Clinic in the Tampa Bay area, Robert Dippong had $250,000 in spending authority before his group became part of MedPartners in 1996. The day after the purchase, he recalls, “I couldn’t even buy toilet paper.”

—”Vulgarians at the Gate: How Ego, Greed and Envy Turned MedPartners From a Hot Stock Into a Wall Street Fiasco” (Fortune, 6/21/99)

A doctor at Advanced Dermatology says that waiting for corporate approvals means his office is routinely left without enough gauze, antiseptic solution and toilet paper.

—“How Private Equity Is Ruining American Healthcare” (Bloomberg, 5/20/20)

When the dust settled in 1999, there were two big winners in the US acute healthcare system: large tax-exempt “charitable” hospital systems, and hospital companies whose stock is sold openly on Wall Street. Not only have these players consolidated their power by acquiring smaller, financially weaker hospitals, they spent the last two decades buying up physician practices, thanks in part to the efforts of the George W. Bush and Obama administrations.

Shortly after the Wall Street–backed PPM industry imploded, the George W. Bush administration issued new Medicare payment regulations that allowed doctors employed by hospitals to charge more than traditional private practices (Federal Register, 8/1/02). Treatment in a doctor’s office is paid on a different schedule than the same treatment at a hospital’s outpatient department. The 2002 rules legally transformed doctors’ offices, miles away from a hospital’s campus, into a wing of its outpatient department. These changes allowed hospitals to add large “facility fees” on top of fees for doctors’ services, creating a big incentive for hospitals to buy doctors out.

The News and Observer (12/16/12) ran a Pulitzer-finalist series more than ten years ago describing how this process socked patients with large unexpected bills, as Duke University Medical Center and UNC Health bought up doctors across North Carolina. (More on facility fees at Healing and Stealing—10/21/23.)

Corporate consolidation of physician practices accelerated in 2009, when President Barack Obama signed a law requiring a shift to electronic medical records, which created new requirements for capital investment by physicians. Heavily endowed tax-exempt hospital chains and publicly traded hospital corporations were happy to help with those investments—in exchange for ownership or control of a practice.

Who doctors really work for

While there are, as the New York Times (7/10/23) noted, some markets where private equity–backed physician practices have monopoly power, 72% of all US metropolitan areas have no meaningful private equity market power, and often face physician monopolies owned by nonprofit hospitals.

A widely reported April 2022 study—prepared by healthcare consultants Avalere for the Physicians Advocacy Institute (4/22), a nonprofit founded with money from settlements of class action lawsuits by doctors against insurance companies—found that nearly 70% of doctors are now employees, not owners of their practices.

And who employs them? Hospitals, mostly. According to the study data, 70% of doctors who are employees—52% of all US doctors—are employed by hospital systems. The remaining 30% of employed doctors—22% of all US doctors—are employed by “other corporate entities,” which “include health insurers, private equity firms, umbrella corporate entities that own multiple physician practices, etc.”

Private equity employers are only a slice of that remaining pie. Becker’s Payer Issues (2/16/23), a health insurance industry trade newsletter, reported last February that the largest employer of physicians in the US is health insurance giant UnitedHealth Group, with 70,000 “employed or aligned” physicians. Nine months later, the company disclosed that the number of “employed or affiliated” doctors had jumped to 90,000 (Becker’s Hospital Review, 11/29/23).

“Aligned” and “affiliated” doctors are not necessarily direct UnitedHealth employees, but insurers and major drug store chains account for a large chunk of doctors employed by “other corporate entities” (New York Times, 5/12/23).

The research on the private equity “takeover” of physician practices reveals the relatively small industrial power of those firms. A study by nonprofit and UC/Berkeley researchers warned that in 28% of US metropolitan statistical areas (MSAs), a single private equity firm had gained 30% market share in at least one of 10 specialties, and in 13%, a single firm had gained 50% market share in at least one specialty. The study was reported widely in the business press, and formed the basis for a major New York Times story (7/10/23).

Looking through the other end of the telescope, 72% of all US metropolitan areas have no meaningful private equity market power in any specialty at all. Many of the MSAs threatened by private equity are far smaller than nearby areas facing monopoly threats from university- and church-affiliated hospitals.

The Johnstown, Pennsylvania, MSA has 129,000 people. Johnstown has a PE firm with 50% market share in at least one specialty. Seventy miles away, the Pittsburgh MSA, with 2.3 million people, does not. What Pittsburgh does have is the headquarters of the tax-exempt University of Pittsburgh–affiliated UPMC health system, which generated $26 billion in revenue last year, and sits atop $23 billion in assets. UPMC has recently been the subject of antitrust scrutiny from state and federal legislators (WPXI, 1/19/23) and employs more than 5,000 doctors.

Falling off the same cliff

Even as the “takeover” drumbeat reached a crescendo, Envision Healthcare, the largest private equity–owned physician practice in the US, declared bankruptcy last May (Stat, 5/15/23).

In a dissection of the 1990s’ PPM crash, the late Princeton economist Uwe Reinhardt (Health Affairs, 1–2/00) pointed out how the value of the PPM companies’ stock depended on a constant growth that was obviously impossible to sustain.

The companies first paid for practices with cash and stock trades. Since, beyond skimping on toilet paper, there are few “efficiencies” from owning practices in different regions, the cash soon ran out, and companies borrowed money to keep the buying spree going. That, wrote Reinhardt, “can spell disaster in periods of revenue downturns,” as the cost of paying back loans exceeds incoming profits. PPMs wound up on a fast track to bankruptcy court.

The PE investment wave has also loaded practices with debt, and is falling off the same cliff, as conditions that prompted firms to buy doctors’ practices have changed.

Decades of US policy have encouraged nearly all US health plans to use administrative rules and financial coercion to strip patients of the ability to choose their doctors and hospitals (KFF Employer Health Benefits Survey, 2023). Limiting choice to contracted physician and hospital “networks” is supposed to save money, as insurers pay providers discounted rates in exchange for higher patient volume. As cost control, it has been failing for 50 years, but as an economic opportunity for financial manipulators, it works wonders.

Emergency medicine doctors who resisted becoming hospital employees have been a prime target for PE money, taking advantage of the fact that hospitals must treat patients who show up at the emergency room (NBC, 5/13/20). If a practice that staffs a hospital’s ER doesn’t have a contract with an insurer, they bill at sticker prices much higher than the network discount. So in recent years, patients who went to network hospitals for emergencies have sometimes been treated by “out of network” emergency doctors, who bill them and their insurers at the shockingly higher rates—an appealing situation for private equity.

However, new state and federal laws have curbed surprise billing. The new laws, along with a shrinking pool of doctors who haven’t already been bought out by hospitals or insurers, have touched off a wave of debt-fueled bankruptcies and sell-offs similar to the 1990s. Even as the “takeover” drumbeat reached a crescendo, Envision Healthcare, the largest private equity–owned physician practice in the US, declared bankruptcy last May (Stat, 5/15/23). American Physician Partners, “one of the nation’s biggest employers of emergency physicians,” followed suit in July (American Prospect, 7/29/23).

The real hospital bad guys

American Prospect (10/7/19) explained that “private equity makes you sicker” because “consolidated hospitals harm patients with higher prices and worse outcomes”—but private equity has very little to do with hospital consolidation.

When it comes to hospitals, Philadelphia is ground zero for misdirected media attention on private equity. In 2018, Paladin Healthcare Capital, a private equity firm controlled by investor Joel Freedman, purchased Hahnemann Hospital, promising to invest in needed improvements. Freedman instead drove the hospital into bankruptcy, after selling the land under it to another company he controlled. It’s now the site of a condo development.

Sen. Bernie Sanders (I–Vt.) made Hahnemann a symbol of his support for Medicare for All in the run-up to the 2020 primaries (CBS News Philadelphia, 7/15/19). Hahnemann became the go-to example of private equity’s aggressive takeover of hospitals with the intent of selling them to real estate developers. Eileen Applebaum, co-director of the Center for Economic and Policy Research, led with the Hahnemann story in her influential American Prospect reporting (10/7/19) on private equity, warning that

private equity firms are using borrowed money to assemble medical empires across the country. Not only do consolidated hospitals harm patients with higher prices and worse outcomes, but the shaky financial pictures that result habitually lead to massive cost-cutting and closures of unprofitable facilities, which put entire communities at risk of losing access to medical care.

But private equity has almost nothing to do with hospital industry consolidation. By the time Freedman bought and closed Hahnemann, and its St. Christopher’s Hospital for Children affiliate, they were isolated facilities, neglected by their previous owner. And they were under withering competitive pressure from tax-exempt charitable hospitals affiliated with local universities: Temple University, Thomas Jefferson University and the University of Pennsylvania.

‘More symptoms than disease’

The New Yorker (5/31/21) was right to note that “the story of Hahnemann is as much about the structural forces that have compromised many American hospitals…as it is about the motives of private equity firms.”

In 2021, New Yorker writer Chris Pomorski (5/31/21) published a more nuanced retrospective take on “The Death of Hahnemann Hospital.” While detailing Freedman’s managerial incompetence and the transaction that left the land under the hospitals in Freedman’s hands and out of bankruptcy as the hospital closed, Pomorski pointed out the primary villain: The hospital had been the victim of Wall Street–backed neglect for 20 years by the company that sold the hospital to Paladin—the $19 billion publicly-traded Tenet corporation.

Private equity’s maneuvers with Hahnemann, wrote Pomorski,

are more symptoms than disease. The story of Hahnemann is as much about the structural forces that have compromised many American hospitals—stingy public investment, weak regulation and a blind belief in the wisdom of the market—as it is about the motives of private equity firms.

Beyond that insight, however, Pomorski missed the bigger story in Philadelphia. As press reports noted (e.g., US News, 7/10/19), Hahnemann was a hospital that primarily treated poor patients. When it closed, patients struggled to find care at other locations, and the abrupt closure placed a heavy burden on surrounding hospitals.

Penn and Temple saw ER visits increase by 12%, and Jefferson, less than a mile from Hahnemann, by 20%, with ambulance volume doubling as emergency patients who lived close to Hahnemann dialed 911 instead of finding their own way to the emergency room. A doctor told Pomorski that the ER became so crowded, ambulances were often diverted to other hospitals, a situation known to cause unnecessary deaths. An emergency physician told Pomorski that “the ER became the scene of ‘daily human tragedies.’”

Beyond absorbing the sudden spike in patient volume and the stress it brought to frontline caregivers, at the institutional level, Jefferson and Penn played another role in Hahnemann’s woes: They were among its agents and beneficiaries.

While Tenet was neglecting Hahnemann, wealthy university hospitals were building medical empires, with “satellite hospitals, physician practices and urgent-care centers.” Pomorski quotes a Hahnemann executive criticizing Freedman for failing to negotiate higher insurance rates to stave off bankruptcy.

Telling details

Philadelphia’s non-profit hospitals had the money for a huge building spree (Philadelphia Inquirer, 10/30/21), but not to absorb the doctors and patients from a private equity–backed hospital that went under.

The details are telling. Hahnemann’s competitors, like other large tax-exempt systems, flex their market power to drive up prices. They commanded prices so much higher than Hahnemann that the executive thought it might cost insurers less to give Hahnemann a small raise than to shift its patients to the charitable competitors.

After interviewing two patients who struggled to find specialist doctors when Hahnemann closed, Pomorski also interviewed Jefferson CEO Bruce Meyer. Jefferson hired eight Hahnemann-affiliated ob-gyn doctors to care for Hahnemann patients, but Pomorski neglected to ask why Jefferson didn’t simply hire the rest of Hahnemann’s specialists immediately and absorb their patients. After all, Jefferson had the money to start building a new $762 million specialist physician office tower three-fourths of a mile from the Hahnemann site, months before the New Yorker piece ran (WHYY, 9/10/20).

Penn was in an even stronger position to deal with the challenges. When Hahnemann closed, Penn was already building a palatial new $1.6 billion, 504-room hospital across the street from the existing Hospital of the University of Pennsylvania (Philadelphia Inquirer, 10/30/21). The “Pavilion” opened just four months after the New Yorker piece, and includes a new two-story state-of-the-art emergency department, with 61 private rooms (Penn, 10/21/21).

Some problems in nearby ERs were likely inevitable, given that Freedman closed Hahnemann suddenly. But sitting two miles from Hahnemann with a $21 billion endowment, Penn had the resources necessary to figure out how to transition Hahnemann’s patient volume to new locations. The ultimate outcome of Hahnemann’s demise for Penn, Jefferson and Temple is a market with one less competitor, one less hospital willing to take lower rates from insurers.

The real hospital story in Philadelphia is that major nonprofit health systems are at the tail end of a 15-year, $9 billion building boom. The Pavilion is reportedly the largest capital project in Penn’s history (Philadelphia Inquirer, 10/30/21), but soon won’t even be the priciest hospital in its own neighborhood. The closely allied Children’s Hospital of Pennsylvania (CHOP), which shares a campus with Penn’s hospital, is building its own $1.9 billion new tower (Philadelphia Inquirer, 3/1/20). CHOP says they won’t need to borrow money for the project, but will pay with cash on hand, profits and contributions.

As this article was going to press, Jefferson Health announced a proposed merger with Lehigh Valley Health System. If approved, the merger would create a 30-hospital system across eastern Pennsylvania. The new Jefferson system would become Pennsylvania’s largest employer, surpassing the current champion—the University of Pennsylvania. The combined systems generated $13.8 billion in revenue last year (WHYY, 12/19/23). The question is whether all those billions in construction and revenue will afford Hahnemann’s low-income patients better or even the same treatment as they found at Hahnemann.

Who’s taking over whom?

In Connecticut, a private equity firm is selling its hospitals to a multi-billion-dollar university-affiliated tax-exempt chain—but that doesn’t fit the “takeover” narrative.

The idea that Hahnemann could become a pattern has been a critical element in the private equity takeover, or “hijacking,” narrative. According to CNN (7/29/19), “advocates worry other private equity firms may try it with struggling hospitals in gentrifying neighborhoods all over the US.” In reality, Hahnemann is an example of grotesque wealth extraction from a dying hospital bludgeoned by neglect from a publicly traded company and competition from massively endowed urban “nonprofit” hospitals. Private equity won’t be “taking over” those winners any time soon.

In Connecticut, the reverse is happening. In 2015 and 2016, private equity firm Prospect Medical Holdings bought three tax-exempt hospitals and converted them to for-profit status (CT Mirror, 5/25/16). Prospect bought the financially struggling hospitals after the collapse of a bid from a short-lived partnership between publicly traded Tenet and Yale-New Haven Health, the state’s largest tax-exempt chain, because Tenet found state regulators’ proposed conditions to protect the public “too burdensome” (CT Mirror, 5/31/15).

Prospect’s purchase and conversion was supposed to inject capital into financially struggling Waterbury, Manchester and Rockville hospitals. Eight years later, Prospect is selling all three hospitals. The buyer? Yale-New Haven Health.

The deal gives Yale-New Haven an anchor in Waterbury, Connecticut’s fifth-largest city, where the only other hospital is owned by Trinity Health, a nationwide tax-exempt Catholic chain with 101 hospitals (and a “family” of “nearly 36,500 physicians”). As is common, Prospect moved the real estate to a different subsidiary and leased the land back to its hospital entity, a maneuver documented in detailed local reporting (CT Mirror, 11/16/23).

Yale-New Haven wants state subsidies to deal with the hospitals’ financial distress, even though the YNH system had more than $4 billion in net assets at the end of the 2022 fiscal year, and drives patients to its facilities in close partnership with Yale University, which runs the state’s largest physician specialty practice and has a $41 billion endowment.

Blaming vultures for the kill

When a private equity firm shuts down failing rural hospitals, KFF Health News (6/15/22) presents this as a story about the danger of private equity rather than a collapsing rural healthcare delivery system.

Beyond Hahnemann, rural hospitals are a major focus of private equity media coverage. Some long form reporting on rural hospitals acknowledges the transient nature of private equity investment, but coverage still tends to blame vultures who are actually feeding on carcasses killed by others.

Rural hospitals have been in systemic crisis for decades. A 2022 report (Bipartisan Policy Project, 5/22) estimated that more than 20% are at risk of service reductions or closure. Before closure, desperate owners often cut staff and shut down services, requiring some patients travel long distances for certain types of care. As with Hahnemann, private equity firms have taken advantage of the crisis in some areas, buying hospitals and stripping assets, but the death throes most often are brought on by other owners and failed policy.

In a 3,000 word story headlined “Buy and Bust: When Private Equity Comes for Rural Hospitals,” KFF Health News (6/15/22) described how Noble Health, a three-year old PE firm bought and closed Audrain Community Hospital and Callaway Community Hospital in rural Missouri. Reporter Sarah Jane Tribble makes the anguish and anger of caregivers and patients palpable, but, as with Hahnemann, Audrain was on life support when Noble pulled the plug:

Audrain had struggled before Noble came calling, said Dr. Joe Corrado, a longtime surgeon at the hospital: On an average day in 2019, 40% of beds were empty, as more treatments moved to the outpatient setting and some patients drove an hour to larger hospitals for specialty care.

Distorted research fuels panic 

The story of HCA, which has repeatedly switched from a publicly traded to a privately held for-profit company (New York Times, 8/14/12), illustrates the danger of focusing on corporate structure rather than on the US healthcare system’s perverse economic incentives.

Distorted academic research has fueled the past four years of private equity media panic. The KFF Health News piece on rural hospitals cited a 2021 Health Affairs study (5/21) showing that private equity investments in hospitals “increased 20-fold from 2000 to 2018, and have only accelerated since.” But the study doesn’t credibly support the idea that private equity is “taking over” hospital care at all.

The researchers found “a total of 42 private equity acquisitions involving 282 unique hospitals occurred during the period 2003–17,” which means it took private equity 15 years to make deals involving 5% of US hospitals. The vast majority of these hospitals were owned by private equity for a short period of time, and 74% of the deals involved hospitals that were already for-profit, many bought from companies with their own track records of fraud and national reports of patient abuse.

More than half of the hospitals were bought in just one 17-year-old deal that bears little resemblance to the stories common in major media today. In 2006, Bain Capital bought HCA, the largest for-profit hospital company in the US (CNN, 7/20/06). It was the third time the company “went private.” Six years later, HCA started selling stock publicly again, giving a windfall to Bain and the family of former Senate Majority Leader Bill Frist, whose father founded the company (New York Times, 8/14/12).

Before the Bain deal, when the company was known as Columbia/HCA and its stock traded publicly, the hospital chain coughed up what was then the biggest Medicare fraud settlement in history, and faced national publicity about quality of care concerns (Department of Justice, 6/26/03; Vanity Fair, 8/1/98).**

In reality, hospital ownership patterns have been relatively stable since 2000, except that public hospitals are slowly disappearing. According to KFF reporting of American Hospital Association data (2000, 2021), at the turn of the century 61% of community hospitals were private not-for-profits, 15% were for-profit and 24% public. In 2021, 58% of the nation’s community hospitals remained nonprofit, and 24% were for-profit, with much of their growth at the expense of public facilities, whose share dropped to 18%.

Data downloaded from the nonprofit Private Equity Stakeholder Project shows that just 390 hospitals are owned by private equity firms, or less than 7% of all hospitals (PE Hospital Tracker, accessed 12/12/23). The majority are psychiatric, long-term acute care and rehabilitation hospitals, specialty facilities whose reimbursement patterns are attractive to private equity investors. Less than 4% of general acute care hospitals are owned by private equity firms.

The Hospital Tracker has useful data (it’s maintained by former colleagues of mine), but the PE Stakeholder Project’s research isn’t immune from pumping numbers up with “takeover” hot air. The web page for the tracker says “34% of private equity hospitals serve rural areas,” a claim repeated by Stakeholder Project researchers in a Health Affairs article (12/18/23) headlined “Private Equity: The Metastasizing Disease Threatening Healthcare.” Thirty-four percent sounds like a big number, but 34% of less than 7% isn’t much. According to the tracker’s data, less than 5% of all rural hospitals are owned by private equity firms.

Bad behavior all around

A Wall Street Journal series (7/25/22–12/26/22) makes clear that ostensibly nonprofit hospitals have the same profit-maximizing behaviors that openly commercial hospitals do.

While some media have fed the public a litany of private equity horror stories, other journalists continue to report that “Nonprofit Hospitals Are Big Business,” as the title of a 2022 Wall Street Journal series (7/25/22–12/26/22) puts it. The Journal and others, including outlets simultaneously reporting on the private equity “takeover,” have demonstrated that tax-exempt and publicly traded hospitals yield to no one in their commitment to wealth extraction and harmful operations, including:

Staff cuts: Private equity coverage often focuses on hospital cost-cutting. At the same time, systematic staffing reductions by Ascension Health prompted an in-depth New York Times investigation (12/15/22) that found that the 140-hospital Catholic system “spent years reducing its staffing levels in an effort to improve profitability, even though the chain is a nonprofit organization with nearly $18 billion of cash reserves.”

Price increases: KFF Health News and others have reported that insurance payments to gastroenterologists, ophthalmologists and dermatologists in private equity practices are higher than those in non–private equity practices, based on a 2022 study by Johns Hopkins and Harvard researchers (JAMA Network, 9/2/22). The study found that payments to PE-owned practices were 11% higher than a control group.

However, the researchers only compared the prices to doctors in the shrinking universe of independent practices, excluding those “with other corporate ownership and hospital or health system affiliation” from the control group.While the independent doctors had lower prices, including hospital-owned practices may have yielded a different result. A 2018 Journal of Health Economics study (4/22/18) found that “the prices for the services provided by [hospital] acquired physicians increase by an average of 14.1% post-acquisition,” and by more “when the acquiring hospital has a larger share of its inpatient market.”

Closure of Services: Eliminating unprofitable services is a constant theme of reporting on private equity–owned hospitals, especially in rural areas. According to the Wall Street Journal (4/11/21), after then–publicly traded Lifepoint merged two hospitals in Riverton and Lander, Wyoming and rebranded them SageWest, the company closed Riverton’s ob/gyn unit, forcing patients to travel the 30 miles to Lander to deliver babies. Under community pressure, Lifepoint announced that they’d reopen the services, but the company reversed itself again after being bought by the private equity firm Apollo.

These closures and consolidations are endemic to the crisis-wracked rural hospital landscape, regardless of ownership. In Connecticut, rural residents waged an identical three-year community struggle to maintain ob/gyn services after tax-exempt Hartford HealthCare bought Windham Hospital. The conflict received both local and national coverage (US News/NBC, 11/21/21). The state finally approved the closure this month, so patients will have to make the 17-mile trek to the nearest ob/gyn unit. Now the tax-exempt owners of two of the state’s three other rural hospitals, Nuvance Health and Catholic Church-affiliated Trinity Health, have also applied to close their ob/gyn services (CT Mirror, 12/11/23).

Wrong focus yields useless policies

The Atlantic (10/28/23) recognizes that private equity’s interest in healthcare is ebbing, but its reform proposals are focused on this admittedly vanishing problem.

Media healthcare misdirection matters because it fuels useless policy solutions, most evident in the conclusions of long form articles in leading opinion magazines and health research journals. After regaling readers with shocking stories and sometimes misleading data, the articles typically wind up pointing to a suite of policies like those found in the recent Health Affairs article (12/18/23) from Private Equity Stakeholder Project staffers Emily Stewart and Jim Baker, and a piece by Joseph Nocera and Bethany McLean in the Atlantic (10/28/23): increased transparency, making it easier to sue private equity owners, and restrictions on financial manipulations like real estate sale-leaseback arrangements.

To their credit, Nocera and McLean inform their readers that private equity firms “appear to have lost interest in acquiring more” hospitals, but the story’s conclusion focused only on solutions to this admittedly vanishing problem, in particular Sen. Elizabeth Warren’s Stop Wall Street Looting Act.

Some of these proposals are sound general public policy, and banning private equity from nursing homes altogether probably makes sense. But a set of proposals targeting one specific corporate structure that controls relatively small slices of physician and hospital services for financial regulation has no chance to meaningfully improve a healthcare system that sends thousands of people to unnecessary deaths, and millions into debt and bankruptcy each year. These policies are a get-out-of-jail-free card for politicians on healthcare policy, allowing them to hold shocking hearings without actually fixing the country’s mess.

Until public officials decide to treat healthcare as a public good, the cycles of exploitation and patient harm will continue, regardless of the corporate structure of hospitals and physician practices. The Atlantic chose to highlight Warren’s bill as potential policy, but could have pointed in a different direction. Warren’s original cosponsors include House Progressive Caucus Chair Pramila Jayapal (D-Wash.), lead sponsor of the House version of the Medicare for All Act.

The residents of Riverton, Wyoming, have recognized the need for public investment in rural healthcare. They’ve formed a medical district to raise money for a new, publicly controlled hospital. After five years of organizing and planning, the community broke ground in July (Riverton Ranger, 7/15/23).

The community’s work is inspiring, but it also closes a circle that indicts generations of political leaders across the US for failing to accept responsibility for our healthcare system. Decades before private equity giant Apollo bought LifePoint, and years before Riverton’s Hospital was included in a group of rural hospitals that Columbia/HCA spun off to form publicly traded LifePoint, what is now called SageWest Riverton Hospital was a public hospital, controlled by the local community.

*In 2014 and 2015, I lobbied for UNITE HERE! on parts of two bills that dealt with these issues.

**I worked with SEIU on a campaign to organize Columbia/HCA workers in Las Vegas from 1997–99.

The post Private Equity ‘Takeover’ Is Not Driving Healthcare Crisis appeared first on FAIR.

This content originally appeared on FAIR and was authored by John Canham-Clyne.

Han Youngsoo (Republic of Korea), Seoul, Korea 1956–1963.

In October 2023, the United Nations Conference on Trade and Development (UNCTAD) published its annual Trade and Development Report. Nothing in the report came as a major surprise. The growth of the global Gross Domestic Product (GDP) continues to decline with no sign of a rebound. Following a modest post-pandemic recovery of 6.1% in 2021, economic growth in 2023 fell to 2.4%, below pre-pandemic levels, and is projected to remain at 2.5% in 2024. The global economy, UNCTAD says, is ‘flying at “stall speed”’, with all conventional indicators showing that most of the world is experiencing a recession.

The latest notebook from Tricontinental: Institute for Social Research, The World in Depression: A Marxist Analysis of Crisis, questions the use of the term ‘recession’ to describe the current situation, arguing that it acts as ‘a smokescreen meant to hide the true nature of the crisis’. Rather, the notebook explains that ‘the prolonged and profound crisis that we are experiencing today is… a great depression’. Most governments in the world have used conventional tools to try and grow their way out of the great depression, but these approaches have placed an enormous cost on household budgets, which are already hit hard by high inflation, and have curbed the investments needed to improve employment prospects. As UNCTAD notes, central banks ‘prioritise short-term monetary stability over long-term financial sustainability. This trend, together with inadequate regulation in commodity markets and continuous neglect for rising inequality, are fracturing the world economy’. Our team in Brazil explores these matters further in the recently launched Financeirização do capital e a luta de classes (‘Financialisation of Capital and the Class Struggle’), the fourth issue of our Portuguese-language journal Revista Estudos do Sul Global (‘Journal of Global South Studies’).

There are some exceptions to this rule, however. UNCTAD projects that five of the G20 countries will experience better growth rates in 2024: Brazil, China, Japan, Mexico, and Russia. There are different reasons why these countries are exceptions: in Brazil, for instance, ‘booming commodity exports and bumper harvests are driving an uptick in growth’, as UNCTAD writes, while Mexico has benefited from ‘less aggressive monetary tightening and an inflow of new investment to establish new manufacturing capacity, triggered by the bottlenecks that emerged in East Asia in 2021 and 2022’. What seems to unite these countries is that they have not tightened monetary policy and have used various forms of state intervention to ensure that necessary investments are made in manufacturing and infrastructure.

Farhan Siki (Indonesia), Market Review on School of Athens, 2018.

The OECD’s Economic Outlook, published in November 2023, is consistent with UNCTAD’s assessment, suggesting that ‘global growth remains highly dependent on fast-growing Asian economies’. Over the next two years, the OECD estimates that this economic growth will be concentrated in India, China, and Indonesia, which collectively account for nearly 40% of the world population. In a recent International Monetary Fund assessment entitled ‘China Stumbles But Is Unlikely to Fall’, Eswar Prasad writes that ‘China’s economic performance has been stellar over the past three decades’. Prasad, the former head of the IMF’s China desk, attributes this performance to the large volume of state investment in the economy and, in recent years, to the growth of household consumption (which is related to the eradication of extreme poverty). Like others in the IMF and OECD, Prasad marvels at how China has been able to grow so fast ‘without many attributes that economists have identified as being crucial for growth – such as a well-functioning financial system, a strong institutional framework, a market-oriented economy, and a democratic and open system of government’. Prasad’s description of these four factors is ideologically driven and misleading. For instance, it is hard to think of the US financial system as ‘well-functioning’ in the wake of the housing crisis that triggered a banking crisis across the Atlantic world, or given that roughly $36 trillion – or a fifth of global liquidity – is sitting in illicit tax havens with no oversight or regulation.

What the data shows us is that a set of Asian countries is growing very quickly, with India and China in the lead and with the latter having the longest sustained period of rapid economic growth over at least the past thirty years. This is uncontested. What is contested is the explanation for why China, in particular, has experienced such high rates of economic growth, how it has been able to eradicate extreme poverty, and, in recent decades, why it has struggled to overcome the perils of social inequality. The IMF and the OECD are unable to formulate a proper assessment of China because they reject – ab initio – that China is pioneering a new kind of socialist path. This fits within the West’s failure to comprehend the reasons for development and underdevelopment in the Global South more broadly.

Over the past year, Tricontinental: Institute for Social Research has engaged with Chinese scholars who have been trying to understand how their country was able to break free of the ‘development of underdevelopment’ cycle. As part of this process, we collaborate with the Chinese journal Wenhua Zongheng (文化纵横) to produce an international quarterly edition that collects the work of Chinese scholars who are experts on the respective topics and brings voices from Africa, Asia, and Latin America into dialogue with China. The first three issues have looked at the shifting geopolitical alignments in the world (‘On the Threshold of a New International Order’, March 2023), China’s decades-long pursuit of socialist modernisation (‘China’s Path from Extreme Poverty to Socialist Modernisation’, June 2023), and the relationship between China and Africa (‘China-Africa Relations in the Belt and Road Era’, October 2023).

The latest issue, ‘Chinese Perspectives on Twenty-First Century Socialism’ (December 2023), traces the evolution of the global socialist movement and tries to identify its future direction. In this issue, Yang Ping, the editor of the Chinese-language version of Wenhua Zongheng, and Pan Shiwei, the honorary president of the Institute of Cultural Marxism, Shanghai Academy of Social Sciences, contend that a new period in socialist history is currently emerging. For Yang and Pan, this new ‘wave’ or ‘form’ of socialism, following the birth of Marxism in nineteenth-century Europe and the rise of many socialist states and socialist-inspired national liberation movements in the twentieth century, began to emerge with China’s period of reform and opening up in the 1970s. They argue that, through a gradual process of reform and experimentation, China has developed a distinct socialist market economy. The authors both assess how China can strengthen its socialist system to overcome various domestic and international challenges as well as the global implications of China’s rise – that is, whether or not it can promote a new wave of socialist development in the world.

Denilson Baniwa (Brazil), The Call of the Wild//Yawareté Tapuia, 2023.

In the introduction to this issue, Marco Fernandes, a researcher at Tricontinental: Institute for Social Research, writes that China’s growth has been sharply distinct from that of the West since it has not relied upon colonial plunder or the predatory exploitation of natural resources in the Global South. Instead, Fernandes argues that China has formulated its own socialist path, which has included public control over finance, state planning of the economy, heavy investments in key areas that generate not only growth but also social progress, and promoting a culture of science and technology. Public finance, investment, and planning allowed China to industrialise through advancements in science and technology and through improving human capital and human life.

China has shared many of its lessons with the world, such as the need to control finance, harness science and technology, and industrialise. The Belt and Road Initiative, now ten years old, is one avenue for such cooperation between China and the Global South. However, while China’s rise has provided developing countries with more choices and has improved their prospects for development, Fernandes is cautious about the possibility of a new ‘socialist wave’, warning that the obstinate facts facing the Global South, such as hunger and unemployment, cannot be overcome unless there is industrial development. He writes:

this will not be attainable merely through relations with China (or Russia). It is necessary to strengthen national popular projects with broad participation from progressive social sectors, especially the working classes, otherwise the fruits of any development are unlikely to be reaped by those who need them the most. Given that few countries in the Global South are currently experiencing an upsurge in mass movements, the prospects for a global ‘third socialist wave’ remain very challenging; rather, a new wave of development with the potential to take on a progressive character, seems more feasible.

This is precisely what we indicated in our July dossier, The World Needs a New Socialist Development Theory. A future that centres the well-being of humankind and the planet will not materialise on its own; it will only emerge from organised social struggles.

Philip Fagbeyiro (Nigeria), Streets of Insignificance, 2019.

This content originally appeared on Dissident Voice and was authored by Vijay Prashad.

The Finance Ministry is also projecting that the war against Hamas will cost the country’s budget somewhere in the order of NIS 50 billion (US$13.8 billion).  NIS 9.6 billion will go towards such expenses as evacuating residents close to the borders of the country’s north and south, buttressing emergency forces and rehabilitation purposes.

The increased military budget is predictable and in keeping with the proclivities of the Israeli state.  What is striking is that Prime Minister Benjamin Netanyahu has regarded Israeli defence expenditure as generally inadequate when looked at as a percentage of gross domestic product (GDP).  Between 2012 and 2022, military expenditure as a percentage of GDP fell from 5.64% to 4.51%.   Doing so enables him to have two bites at the same rotten cherry: to claim he was blameless for that very decline in military expenditure, and to show that he intends to rectify a problem he was hardly blameless for.

Even in war time, Netanyahu is proving oleaginous in his policy making.  The mid-December supplementary budget for 2023, coming in at NIS 28.9 billion, was intended to cover the ongoing conflict with Hamas and Hezbollah.  But its approval was hardly universal.  Opponents of the budget noted the allocation of hundreds of millions of shekels towards “coalition funds” intended for non-war related projects relevant to parliamentarians and ministers.  Benny Gantz’s National Unity party, a coalition partner, would have nothing to do with it.  Intelligence minister Gila Gamliel was absent from the vote, while Yuli Edelstein of Netanyahu’s own Likud Party abstained.  Opposition leader Yair Lapid pointed the finger at the rising budget deficit.

On December 18, Yaron gave vent to some of his concerns.  “During this period, more than at any other time, and as investors, rating agencies, financial markets and the public as a whole are carefully examining policymaking in Israel, it is necessary to manage economic policy – fiscal and monetary – with great responsibility.”

Body counts interest Yaron less than budget figures and reputational damage in the markets, though killing Palestinians is proving an expensive business.  “The government will have to find the right balance between financing war expenses and the expected increase in the defence budget and the need to continue investing in other civilian budgets, which are already low, in particular in growth engines such as infrastructure and education.”

Yaron has every reason to assume that costs will continue to balloon.  For one thing, Netanyahu’s idea of peace in the current conflict reads like a blueprint for ongoing, lengthy massacre, accompanied by permanent mass incarceration: the destruction of Hamas itself, the demilitarisation of Gaza and a Palestinian society free of radical elements.  This is a nightmare to both humanitarians and the belt-tighteners in the Finance Ministry.

Notably, the plan says nothing about Palestinian statehood, which, in the scheme of Israel’s aims, has been euthanised.  Gaza, the designated monstrosity Israel nourished as a supposedly useful tool to keep Palestinian ambitions in check, is to be turned into a prison entity that seems awfully much like it was prior to the October 7 attacks by Hamas.  (The cruel, in such cases, lack imagination.)

A “temporary security zone on the perimeter of Gaza and an inspection mechanism on the border between Gaza and Egypt” will be established in accordance with “Israel’s security needs”.  The zone will also serve to prevent “smuggling of weapons into the territory”, which sounds much like the original blockade, lasting 14 years, that was meant to achieve the same purpose.

The Israeli PM is, however, promising that the destruction of Hamas will take place “in full compliance with international law”, begging the question what sort of international law he is consulting.  Given various official statements from Netanyahu’s cabinet and the Israeli Defence Forces, it must be either a law of jungle provenance or one applicable to animal kind.  That same standard of legal analysis has permitted the generously expansive massacre of over 20,000 Palestinians, a staggering number of them children, the ongoing flattening of Gaza, and the utter destruction of critical infrastructure.

Given that Israeli law, alongside military and administrative policy, does nothing other than encourage the radicalisation of Palestinians and the fertilising of the Jihadist soil, this is charmingly delusionary.  The current war will simply prove to be the same as previous ones, protean, adjustable, and shape changing.  Conflict will simply continue by other means, a continued growth of flowering hatreds, leaving Israel a butcher’s bill of shekels and casualties it is only now chewing over.

This content originally appeared on Dissident Voice and was authored by Binoy Kampmark.

As Organisation for Economic Co-operation and Development (OECD) delegates prepare to meet in Paris from November 6-10, over 250 civil society organizations (CSOs) from 30 countries published an open letter calling on negotiators to support an end to OECD export finance for fossil fuels. Signatories include Amnesty International, Greenpeace International, and Friends of the Earth International.

The Financial Times (FT) has revealed that the UK and the EU will put forward proposals for doing so, with Canada planning to back the UK’s proposal. These efforts can end the USD 41 billion per year flowing to fossil fuel projects from government-run OECD export credit agencies (ECAs).

The OECD Arrangement on Officially Supported Export Credits sets rules that all OECD country ECAs must follow. OECD countries have previously placed extensive restrictions on the financing of coal, and civil society is now calling on restrictions to cover oil and gas too. Ending OECD oil and gas support is critical to limit global heating to 1.5°C. The International Energy Agency (IEA) has established that no new coal, oil, fossil gas supply or LNG infrastructure investments are compatible with a 1.5°C warming limit.

The proposal is expected to attract significant support, since over 50% of OECD countries already signed on to the Clean Energy Transition Partnership (CETP), an international commitment forged in Glasgow in 2021 under which signatories promised to end their international public finance for fossil fuels by the end of 2022 and support efforts to advance this agenda elsewhere, “in particular at the OECD.”

The civil society letter, addressed to CETP signatory country negotiators in the OECD, calls on them to live up to their commitment and support the UK’s and the EU’s efforts to end public finance for fossil fuels. Canada is already planning to do so. According to the Financial Times, Canada’s finance department stated it “looked forward to working alongside like-minded partners at the OECD and in other international forums to grow and promote the clean economy around the world”.

Oil Change International research shows that OECD ECAs provided an average of $41 billion per year in export support to fossil fuels between 2018 and 2020, almost five times more than their clean energy export finance ($8.5 billion). This directly contradicts international climate goals, including the CETP and the Paris Agreement objective to align financial flows with the low-carbon energy transition. OECD ECAs are particularly responsible for advancing large fossil fuel infrastructure projects that enable the rest of the industry, for example investing in 56 percent of new hazardous liquified gas (LNG) export terminal capacity built in the last decade (providing at least $81 billion total).

The initial OECD proposal is expected to kick-off a period of negotiations on oil and gas export finance restrictions at the OECD starting on 6 November. These negotiations will succeed only if and when a large enough number of OECD members support the proposed restrictions. By doing so, OECD members have a historic opportunity to not only avoid breaching climate goals, but also stranded fossil fuel assets.

Nina Pusic, Strategist at Oil Change International, said: “This is the moment where OECD countries can turn their words into action. Will they live up to the pledge most of them made in Glasgow in 2021 to end international public finance for fossil fuels at the OECD? All eyes are on them, the world is watching. Immediate action is necessary to align global financial flows with a habitable climate future, and this November represents a critical opportunity that we can’t afford to miss.”

Kate DeAngelis, Senior International Finance Program Manager at Friends of the Earth United States, said: “We have waited long enough for the United States, and other wealthy historical emitters, to be a force for good at the OECD. The U.S. must turn away from its multi-billion dollar fossil financing and support the UK and Canada proposal, leading the push to finally end export credit agency support for fossil fuels.”

Yuki Tanabe, Program Director at Japan Center for a Sustainable Environment and Society (JACSES), said: “Japan should not be a blocker at the OECD negotiations and should agree to end its public finance for fossil fuel projects. Ammonia and hydrogen co-firing should not be exempted as ‘abatement’ technologies, since the current co-firing development roadmap is not in line with the Paris goals”

Samuel Okulony, Chief Executive Officer at Environment Governance Institute Uganda (EGI), said: “The impacts of climate change in Africa are a matter of life and death, and Japan, Korea and other OECD countries should listen to the lived realities of global south communities, who have been devastated by the impacts of climate change for decades. It is imperative that these countries make resolute commitments, support a resolution to stop public financing for fossil fuels at the OECD, and demand the global community align itself with the commitments to keep the 1.5°C target alive.”

This content originally appeared on Common Dreams and was authored by Newswire Editor.

Detail from a New York Times photograph (10/2/23) of Sam Bankman-Fried leaving a courthouse earlier this year. (photo: Hiroko Masuike)

Sam Bankman-Fried, once a celebrity of the cryptocurrency market, is now on trial for fraud and money-laundering charges related to the collapse of his billion-dollar crypto exchange, FTX, and its associated firm, Alameda.

The accusations, according to the New York Times (10/2/23), have made Bankman-Fried (aka SBF) emerge “as a symbol of the unrestrained hubris and shady deal-making” that have defined the cryptocurrency business. The trial will “offer a window into the Wild West–style financial engineering that fueled crypto’s growth,” which “lured millions of inexperienced investors, many of whom lost their savings when the market crashed.”

A year ago (FAIR.org, 11/19/22), I wrote that the business media, leading up to Bankman-Fried’s arrest, failed in their duty to scrutinize FTX and question what was going on behind its public relations. Far too often, he was lionized as a quirky visionary, a big-hearted man willing to funnel his profits into philanthropy and political progress. Bankman-Fried’s boy genius image collapsed with his arrest, but the business media’s credibility took a hit, too.

SBF’s chief defender

60 Minutes (10/1/22): “Michael Lewis has never before written something that dovetails so dramatically with a sensationalized news event.”

Today, acclaimed business writer Michael Lewis has stepped into the role of SBF’s chief defender. He interviewed Bankman-Fried over more than a year for his upcoming book on him, Going Infinite: The Rise and Fall of a New Tycoon (Wall Street Journal, 10/4/23), and he took to CBS’s 60 Minutes (10/1/22) to tell the world that the accused was simply misunderstood.

“This is not a Ponzi scheme,” he said of FTX, adding:

In this case, they had a great real business. If no one had ever cast aspersions on the business, if there hadn’t been a run on customer deposits, they’d still be making tons of money.

Lewis reiterated this point on MSNBC’s All In With Chris Hayes (10/3/23), saying the “alleged crime makes no sense.”

This is the reporting (CoinDesk, 11/2/22) that Michael Lewis dismissed as “aspersions.”

It is true that CoinDesk (11/2/22) obtained documents showing that

Bankman-Fried’s trading giant Alameda rests on a foundation largely made up of a coin that a sister company invented, not an independent asset like a fiat currency or another crypto.

And as the New Yorker (9/25/23) later put it, “The disclosure raised questions about the true value of Alameda’s holdings and about the conflict of interest between the two supposedly independent companies.” This revelation led to doubts about and then a run on the exchange (CoinDesk, 11/10/22; New York Times, 11/14/22).

In essence, Lewis is upset that some parts of the business press and the cryptocurrency investing community were too probing of FTX and Alameda, despite the fact that no one disputes CoinDesk’s findings. As CoinDesk even noted, the exchange’s quick demise spoke to the risks involved in new markets with scant regulation:

The immense scope of this black swan-style event serves as a key reminder of just how rapidly confidence can erode in the parallel financial universe of digital assets—where there are no central banks to bail out the key players—as happened in 2008 when nearly all of Wall Street ran short of liquidity and had to turn to the Federal Reserve for emergency funding.

‘Misappropriating billions’

CoinDesk (11/16/23) compared the FTX/Alameda collusion to the corporate fraud behind Enron.

And even if Lewis genuinely believes the CoinDesk exposure or other players’ doubts about FTX unfairly caused an asset run, that still doesn’t negate the serious criminal activity being alleged. For starters, a Department of Justice press release (12/13/22) states that SBF

perpetrated a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds.  As alleged, the defendant used billions of dollars of FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to federal political candidates and committees, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency hedge fund also founded by the defendant.

The federal government also accuses Bankman-Fried of “conspiring with others to defraud FTX’s lenders ‘by providing false and misleading information to those lenders regarding Alameda Research’s financial condition,’” and alleges that “he conspired with others to make illegal donations to political candidates, using the names of other persons to mask and augment political giving” (CNBC, 12/13/22). The prosecution claims that his wealth and power—highly lauded and accepted at face value in the establishment press until the moment of his collapse—was “built on lies” (Reuters, 10/4/23).

Like anyone, Bankman-Fried is innocent until proven guilty, and has the right to defend himself in court. And it is, of course, an open question if what SBF is accused of engaging in was a Ponzi scheme or mere fraud (Guardian, 12/17/22). In fact, CoinDesk (11/16/23) likens the FTX downfall not necessarily to a Ponzi schemer like Bernie Madoff, but to the shady energy company Enron: “One core similarity is the role of publicly traded, equity-like assets ultimately linked to the performance of the firms themselves,” it wrote; in “both cases, these internal assets flowed between entities that were nominally or even legally separate, but that in fact served the same masters.”

But it’s remarkable for an esteemed business journalist to use one of the country’s most important news programs to declare that everyone except SBF was to blame for a business collapse that had enormous consequences for everyone involved. It’s even weirder to hear a business writer insinuate that critical reporting and asking key questions about the health of a business constituted casting “aspersions.”

‘Effective altruism’

Dylan Matthews (Vox, 12/12/22): “SBF was an inexperienced 25-year-old hedge fund founder who wound up, unsurprisingly, hurting millions of people due to his profound failures of judgment.”

More bizarrely, Lewis went on to say that the world is poorer without SBF at the helm of a cryptocurrency exchange. “A lot of people wanted there to be a Sam,” he said. “There is still a Sam Bankman-Fried–shaped hole in the world that now needs filling. That character would be very useful…. What he wanted to do with the resources.”

One can only imagine that Lewis means SBF’s commitment to “effective altruism” (Vox, 12/12/22), a philosophy that often advocates amassing as much money as possible in order to have more to give away. But Lewis’ declaration here displays the narrow vision the business press has for the world: Society doesn’t need a massive market for internet-based currency, and surely no one needs to profit off such exchanges. Nor can social problems only be addressed by bleeding-heart rich people.

There is a hole in society. But it isn’t another crypto capitalist we need, but a system that taxes the wealthy to fund social programs and to curb the influence of money in our political system. Lewis’ desire for a new SBF is as much a political statement as it is commentary on SBF’s case.

And Lewis’ political naivete came on full display when he told 60 Minutes that SBF came up with an idea to pay Donald Trump not to run for president, an idea that would no doubt delight many liberals. However, putting aside the question of how much Trump ever entertained such a buy-off, the sleazy scheme would likely have no meaningful impact on our politics today. Whether Trump gets the nomination this year or not doesn’t change the fact that his ideas have become firmly rooted in the Republican Party, and living on in the policies of Republican governors around the country.

One has to wonder if SBF’s openness with Lewis inspired Lewis to cross the line into a guest of his source, compromising his vision. Andy Kessler wrote at the Wall Street Journal (10/1/23) that “Lewis spent more than 70 days in the Bahamas” with SBF, where FTX was based, “on a dozen different trips.” “That’s commitment,” Kessler wrote, noting that “Lewis had all access.”

Lewis told the Journal that in his many discussions with SBF, under house confinement at his parents’ home in Palo Alto, California (Lewis lives nearby in the East Bay),  “nothing he said was untrue.” He added, “If you asked him the right question, you got the answer.”

Judging from both this and the 60 Minutes appearance, Lewis is looking at the FTX and Alameda collapse not with a cold outside eye, but the view of an insider, by SBF’s side.

‘Too much in love with his subjects’

Michael Lewis (60 Minutes, 10/1/22): “The story of Sam’s life is people not understanding him.”

Lewis, a prolific author and a contributor at Vanity Fair, is far from just another business journalist. He is a rare kind of successful writer who can turn business reporting into drama, which has made him rich both via book sales (starting with Liar’s Poker in 1989) and movie deals (The Blind Side, Moneyball, The Big Short).

While his narratives about business and other spheres of life are popular around the world, some wonder if he’s on the other side of career peak. As long ago as 2015, Columbia Journalism Review (1/15) was noting he had been lambasted by critics  for “journalistic laziness” and “falling much too in love with his subjects.” The Washington Post (5/5/21) called his pandemic account The Premonition “disappointing” and “murky and unconvincing.”

Then his book The Blind Side, about the adoption of future African-American football star Michael Oher by a wealthy white family, became the subject of a scandal all its own (People, 8/17/23), when Oher revealed that he was never actually adopted, and charged that the idea that he had been was “a lie concocted by the family to enrich itself at his expense” (ESPN, 8/14/23).

Personal tragedy also struck: Lewis told 60 Minutes (10/1/23) that he almost stopped writing after his daughter, along with her boyfriend, was killed in a car accident (AP, 5/29/21).

Lewis’ appearance on 60 Minutes is an extension of the press enthusiasm for SBF that FAIR documented before the fall of FTX. Lewis is entranced at SBF’s friendships with celebrities, his charismatic shabbiness, his lofty ambitions, and his obsession with news and information. All that creates an image of an adorable whiz kid rocking the stodgy world of Wall Street. But it really is the media’s job to look behind that and see him for who he really is: a competent adult who ran a business accused of serious wrongdoing.

But worst of all, Lewis’ praise for Bankman-Fried is the kind of business advocacy that not only takes the boss’ defense at face value, but doesn’t have any kind of empathy or interest in the victims of FTX’s collapse (Atlantic, 1/30/23; Fortune, 10/1/23). Skeptics of cryptocurrency often disregard cryptocurrency investors as dupes or small-time scammers. On 60 Minutes, Lewis dismissed the ethical implications of Bankman-Fried’s machinations: “What you’re doing is possibly losing some money that belonged to crypto speculators in the Bahamas.”

However, many people are attracted to cryptocurrency investing for the same reason people invest in other risky ventures that promise great reward: Wages are not keeping up with the cost of living, and thus people are desperate to find other ways to attain financial security (Business Insider, 1/12/20). Though some people come to crypto exchanges because they want a Lamborghini, others just want to create a nest egg for retirement, start a college fund or pay off their mortgage.

Whether it’s the subprime crisis of 2008 or the savings and loan crisis of the 1980s, all financial collapses create victims, very real people whose lives are upended by greedy financial barons. We should be hearing more about the victims of financial collapse on venues like 60 Minutes.

The post Why Are Michael Lewis—and <i>60 Minutes</i>—Hyping SBF? appeared first on FAIR.

This content originally appeared on FAIR and was authored by Ari Paul.

The derivatives bubble has been estimated to exceed one quadrillion dollars (a quadrillion is 1,000 trillion). The entire GDP of the world is estimated at $105 trillion, or 10% of one quadrillion; and the collective wealth of the world is an estimated $360 trillion. Clearly, there is not enough collateral anywhere to satisfy all the derivative claims. The majority of derivatives now involve interest rate swaps, and interest rates have shot up. The bubble looks ready to pop.

Who were the intrepid counterparties signing up to take the other side of these risky derivative bets? Initially, it seems, they were banks –led by four mega-banks, JP Morgan Chase, Citibank, Goldman Sachs and Bank of America. But according to a 2023 book called The Great Taking by veteran hedge fund manager David Rogers Webb, counterparty risk on all of these bets is ultimately assumed by an entity called the Depository Trust & Clearing Corporation (DTCC), through its nominee Cede & Co. (See also Greg Morse, “Who Owns America? Cede & DTCC,” and A. Freed, “Who Really Owns Your Money? Part I, The DTCC”).  Cede & Co. is now the owner of record of all of our stocks, bonds, digitized securities, mortgages, and more; and it is seriously under-capitalized, holding capital of only $3.5 billion, clearly not enough to satisfy all the potential derivative claims. Webb thinks this is intentional.

What happens if the DTCC goes bankrupt? Under The  Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, derivatives have “super-priority” in bankruptcy. (The BAPCPA actually protects the banks and derivative claimants rather than consumers; it was the same act that eliminated bankruptcy protection for students.) Derivative claimants don’t even need to go through the bankruptcy court but can simply nab the collateral from the bankrupt estate, leaving nothing for the other secured creditors (including state and local governments) or the banks’ unsecured creditors (including us, the depositors). And in this case the “bankrupt estate” – the holdings of the DTCC/Cede & Co. – includes all of our stocks, bonds, digitized securities, mortgages, and more.

It sounds like conspiracy theory, but it’s all laid out in the Uniform Commercial Code (UCC), tested in precedent, and validated by court rulings. The UCC is a privately-established set of standardized rules for transacting business, which has been ratified by all 50 states and includes key provisions that have been “harmonized” with the laws of other countries in the Western orbit. The UCC makes boring reading and is anything but clear, but Webb has diligently picked through the obscure legalese and demonstrates that the amorphous “they” have it all locked up. They can take everything in one fell swoop, without even going to court. Ideally, we need to get Congress to modify some laws, beginning with the super-priority provisions of the Bankruptcy Law of 2005. Even billionaires, notes Webb, are at risk of losing their holdings; and they have the clout to take action.

About The Great Taking and Its Author

As detailed in the introduction, “David Rogers Webb has deep experience with investigation and analysis within challenging and deceptive environments, including the mergers and acquisitions boom of the 80’s, venture investing, and the public financial markets. He managed hedge funds through the period spanning the extremes of the dot-com bubble and bust, producing a gross return of more than 320% while the S&P 500 and the NASDAQ indices had losses. His clients included some of the largest international institutional investors.”

A lengthy personal preface to the book not only establishes these bona fides but tells an interesting story concerning his family history and the rise and fall of his home city of Cleveland in the Great Depression.

As for what the book is about, Webb summarizes in the introduction:

It is about the taking of collateral (all of it), the end game of the current globally synchronous debt accumulation super cycle. This scheme is being executed by long-planned, intelligent design, the audacity and scope of which is difficult for the mind to encompass. Included are all financial assets and bank deposits, all stocks and bonds; and hence, all underlying property of all public corporations, including all inventories, plant and equipment; land, mineral deposits, inventions and intellectual property. Privately owned personal and real property financed with any amount of debt will likewise be taken, as will the assets of privately owned businesses which have been financed with debt. If even partially successful, this will be the greatest conquest and subjugation in world history.

You might have to read the book to be convinced, but it is not long, is available free on the Net, and is heavily referenced and footnoted. I will try to summarize his main points, but first a look at the derivatives problem and how it got out of hand.

The Derivative Mushroom Cloud

A “financial derivative” is defined as “a security whose value depends on, or is derived from, an underlying asset or assets. The derivative represents a contract between two or more parties and its price fluctuates according to the value of the asset from which it is derived.”

Warren Buffett famously described derivatives as “weapons of financial mass destruction,” but they did not start out that way. Initially they were a form of insurance for farmers to guarantee the price of their forthcoming crops. In a typical futures contract, the miller would pay a fixed price for wheat not yet harvested. The miller assumed the risk that the crops would fail or market prices would fall, while the farmer assumed the risk that prices would rise, limiting his potential profit.

In either case, the farmer actually delivered the product, or so much of it as he produced. The derivatives market exploded when speculators were allowed to bet on the rise or fall of prices, exchange rates, interest rates and other “underlying assets” without actually owning or delivering the “underlying.” Like at a race track, bets could be placed without owning the horse, so there was no limit to the potential number of bets. Speculators could “hedge their bets” by selling short — borrowing and selling stock or other assets they did not actually own. It was a form of counterfeiting that not only diluted the value of the “real” stock but drove down the stock’s price, in many cases driving the company into bankruptcy, so that the short sellers did not have to cover or “deliver” at all (called “naked shorting”). This form of gambling was allowed and encouraged due to a number of regulatory changes, including the Commodity Futures Modernization Act of 2000 (CFMA), repealing key portions of the Glass-Steagall Act separating commercial from investment banking; the Bankruptcy Law of 2005, guaranteeing recovery for derivative speculators; and the lifting of the uptick rule, which had allowed short selling only when a stock was going up.

Enter the DTC, the DTCC and Cede & Co.

In exchange-traded derivatives, a third party, called a clearinghouse, ensures that the bets are paid, a role played initially by the bank. And here’s where the UCC and the DTCC come in. The bank takes title in “street name” and pools it with other “fungible” shares. Under the UCC, the purchaser of the stock does not hold title; he has only a “security entitlement”, making him an unsecured creditor. He has a contractual claim to a portion of a pool of shares held in street name, assuming there are any shares left after the secured creditors have swept in. Webb writes:

In the late 1960’s, something called the Banking and Securities Industry Committee (BASIC) had been formed to find a solution to the “paperwork crisis.” It seemed the burdens of handling physical stock certificates had suddenly become too great, so much so, that the New York Stock exchange had suspended trading some days. “Lawmakers” then urged the government to step into the process. The BASIC report recommended changing from processing physical stock certificates to “book-entry” transfers of ownership via computerized entries in a trust company that would hold the underlying certificates “immobilized.”

Thus was established the Depository Trust Company (DTC), which began operations in 1973, after President Nixon decoupled the dollar from gold internationally. The DTC decoupled stock ownership from paper stock certificates. The purchasers who had put up the money became only “beneficial owners” entitled to interest, dividends and voting rights, leaving title of record in the DTC. The Depository Trust and Clearing Corporation (DTCC) was established in 1999 to combine the functions of the DTC and the National Securities Clearing Corporation (NSCC). The DTCC settles most securities transactions in the U.S. Title of record is with DTC’s nominee Cede & Co. Per Wikipedia:

Cede and Company (also known as Cede and Co. or Cede & Co.), shorthand for “certificate depository”, is a specialist United States financial institution that processes transfers of stock certificates on behalf of Depository Trust Company, the central securities depository used by the United States National Market System, which includes the New York Stock Exchange, and Nasdaq.

Cede technically owns most of the publicly issued stock in the United States. Thus, most investors do not themselves hold direct property rights in stock, but rather have contractual rights that are part of a chain of contractual rights involving Cede. Securities held at Depository Trust Company are registered in its nominee name, Cede & Co., and recorded on its books in the name of the brokerage firm through which they were purchased; on the brokerage firm’s books they are assigned to the accounts of their beneficial owners. [Emphasis added.]

Greg Morse notes that the dictionary definition of “cede” is to “relinquish title.” For more on “beneficial ownership,” see the DTCC website here.

“Harmonizing” the Rules

The next step in the decoupling process was to establish “legal certainty” that the “anointed” creditors could take all, by amending the UCC in all 50 states. This was done quietly over many years, without an act of Congress. The key facts, notes Webb, are these:

• Ownership of securities as property has been replaced with a new legal concept of a “security entitlement”, which is a contractual claim assuring a very weak position if the account provider [bank/clearing agent] becomes insolvent.
• All securities are held in un-segregated pooled form. Securities used as collateral, and those restricted from such use, are held in the same pool.
• All account holders, including those who have prohibited use of their securities as collateral, must, by law, receive only a pro-rata share of residual assets.
• “Re-vindication,” i.e. the taking back of one’s own securities in the event of insolvency, is absolutely prohibited.
• Account providers may legally borrow pooled securities to collateralize proprietary trading and financing.
• “Safe Harbor” assures secured creditors priority claim to pooled securities ahead of account holders.
• The absolute priority claim of secured creditors to pooled client securities has been upheld by the courts.

The next step was to “harmonize” the laws internationally so that there would be no escape, at least in the Western orbit. Webb learned this by personal experience, having moved to Sweden to escape, only to have Swedish law subsequently “harmonized” with the “legal certainty” provisions of the UCC.

“Safe Harbor” in the Bankruptcy Code

The last step was to establish “safe harbor” in the 2005 Bankruptcy Code revisions – meaning “’safe harbor’ for secured creditors against the demands of customers to their own assets.” Webb quotes from law professor Stephen Lubben’s book The Bankruptcy Code Without Safe Harbors:

Following the 2005 amendments to the Code, it is hard to envision a derivative that is not subject to special treatment. The safe harbors cover a wide range of contracts that might be considered derivatives, including securities contracts, commodities contracts, forward contracts, repurchase agreements, and, most importantly, swap agreements. …

The safe harbors as currently enacted were promoted by the derivatives industry as necessary measures . . . The systemic risk argument for the safe harbors is based on the belief that the inability to close out a derivative position because of the automatic stay would cause a daisy chain of failure amongst financial institutions. The problem with this argument is that it fails to consider the risks created by the rush to close out positions and demand collateral from distressed firms. Not only does this contribute to the failure of an already weakened financial firm, by fostering a run on the firm, but it also has consequent effects on the markets generally . . . the Code will have to guard against attempts to grab massive amounts of collateral on the eve of a bankruptcy, in a way that is unrelated to the underlying value of the trades being collateralized.

A number of researchers have found that super-priority in bankruptcy for derivatives actually increases rather than decreases risk. See e.g. a National Bureau of Economic Research paper called “Should Derivatives be Privileged in Bankruptcy?” Among other hazards, super-priority has contributed to the explosion in speculative derivatives, threatening the stability of national and global markets. For more on this issue, see my earlier articles here and here.

What to Do?

Webb does not say much about solutions; his goal seems to be to sound the alarm. What can we do to protect our assets? “Probably nothing,” he quoted a knowledgeable expert in a recent webinar. “We just have to stop them.” But he did point out that even the assets of the wealthy are threatened. If the issue can be brought to the attention of Congress, hopefully they can be motivated to revise the laws. Congressional action could include modifying the Bankruptcy Act of 2005 and the UCC, taxing windfall profits, imposing a financial transaction tax, and enforcing the antitrust laws and Constitutional property rights. As for timing, Webb says just the movement in interest rates, from 0.25% to 5.5%, should have collapsed the market already. He thinks it is being held up artificially, while “they” get the necessary systems in place.

Where to save your personal monies? Big derivative banks are risky, and Webb thinks credit unions and smaller banks will go down with the market if there is a general collapse, as happened in the Great Depression. Gold and silver are good but hard to spend on groceries. Keeping some emergency cash on hand is important, and so is growing your own food if you have space for a garden. Short-term Treasuries bought directly from the government at Treasury Direct might be the safest savings option, assuming the government doesn’t wind up in bankruptcy itself.

Meanwhile, we need to design an alternative financial system that is equitable and sustainable. Promising components might include publicly-owned banks, product-backed community cryptocurrencies, a land value tax, and a financial transaction tax.

A neoliberal, financialized economy of the sort we have today produces little and leaves the workers in debt. Goods and services are produced by the “real” economy; finance is just superstructure. Derivatives do not now produce even the security for which they were originally intended. A healthy, enduring economy must produce real things and exchange them fairly for the wages earned by labor.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

A key part of efforts to normalize ties between the United States and the self-governing island, which Beijing claims as a renegade province but enjoys close military ties with Washington, the bill now heads to the full Senate, where it is expected to receive similar support. 

Sen. Ron Wyden, a Democrat from Oregon who serves as committee chair, said he expected the legislation to be encoded into the tax code “within months not years” given its broad support.

“The momentum behind the proposal comes from the fact that the Senate, on a bipartisan basis, fully supports strengthening America's economic partnership with Taiwan,” Wyden said at the hearing.

Taiwan is the United States’ 9th largest trade partner, according to the Census Bureau, with a similar volume of trade as with India. The island makes more than two-thirds of the world’s microchips, with one company, TSMC, responsible for 90% of the most advanced chips.

Wyden said the bill would simplify cross-border investment by making life easier for business people and companies operating in both the United States and Taiwan, and reduce the tax burden.

“Let's say somebody from Portland needs to go to Taipei for three weeks as part of their job training,” he said. “Right now, they may have to fill out a Taiwanese tax return and deal with all kinds of U.S. tax filing headaches. Once we get this done, they go to Taiwan for a short business trip, they do their job, come home and not worry.”

No treaty

Sen. Mike Crapo, a Republican from Idaho and his party’s ranking member on the committee, said that the bill includes a clause that will prevent it from taking effect without reciprocal laws in Taiwan.

He noted that Taiwan was the “second-largest export destination for Idaho products,” with large exports of electrical goods and machinery, and that the island’s extensive trade ties with the United States meant the reform would also receive widespread support in Taiwan.

“Deepening ties with Taiwan and its vibrant democracy is in our nation's best interest,” Crapo said. “Taiwan is our largest trading partner with whom we do not have an income tax treaty.”

“For Taiwanese workers performing services in the U.S., this bill provides that they can spend up to half a year in the U.S. before subjecting their wages to U.S. income tax, encouraging those workers to invest more time in U.S. operations,” he said.

But Crapo added that Taiwan’s unique status in Sino-American diplomacy, with the U.S. eschewing formal ties with the democratic island, meant the changes were not coming from a formal tax treaty.

“Taiwan's unique status precludes it from dealing with double tax issues through a traditional tax treaty,” he said, noting that the Foreign Affairs Committee usually takes charge of treaty negotiations.

Instead, he said, the Finance Committee was enacting the changes directly into the U.S. tax code, awaiting a reciprocal Taiwanese bill.

“The process we're considering today should not be viewed as a new template to short-cut or get around tax treaties,” the lawmaker said. “Taiwan's very unique status requires a very unique solution.”

Security aspect

Wyden said there was a national security element to the bill, with Beijing trying “to intimidate and isolate Taiwan through diplomatic and economic coercion” to force it to “reunite” with the mainland.

As the global leader in the manufacture of “the chips used in TVs and iPhones, but also in advanced weapons and military equipment,” he said, “Taiwan plays a key role in the security of democratic nations.”

But Wyden said the economic impact for the United States would also be significant, and build off the CHIPS Act’s $52.7 billion of subsidies for chipmaking on domestic soil, which he said has already led Taiwanese chipmakers to shift some operations to America.

“$45 billion was invested in the United States from Taiwan in the semiconductor sector,” Wyden said. “We anticipate billions of dollars more translating into good paying jobs across the country to ensure that our country continues to grow these investments in America.”

“We don't want these investments to fall through,” he said, “or go to other countries because we're not providing double-tax relief.”

Edited by Malcolm Foster.

This content originally appeared on Radio Free Asia and was authored by By Alex Willemyns for RFA.

This content originally appeared on The Intercept and was authored by Prem Thakker.

New research shows that more than half of New Zealanders are struggling financially.

The annual survey by the Retirement Commission found the number of people in financial difficulty increased by 17 percent since their first survey in 2021.

A total of 55 percent reported being in a financially difficult position – including many Pacific Islanders.

• READ MORE: Other NZ living costs reports

Of those surveyed, 51 percent reported they were “starting to sink” or “treading water”, while a further 3.5 percent reported they were “sinking badly”.

Personal Finance lead Tom Hartmann said women, Māori and Pacific Peoples were being hit the hardest.

The survey found 61 percent of women were financially struggling in contrast to 48 percent of men.

Sixty percent of Māori and 58 percent of Pacific Peoples also reported feeling financially stressed. Those aged 18-34 were also more likely to experience financial stress.

Hartmann said it was concerning that so many New Zealanders were feeling the pressures of cost increases.

Long-term consequences
“We have now tipped into more than half the population feeling squeezed financially. This significantly reduces people’s ability to grow their money for tomorrow, which has long-term consequences for their future financial well-being,” he said.

The survey found that more people were borrowing money, but also that more people were budgeting and saving.

It also reported that the gap was widening for women compared to men in terms of optimism, financial sentiment, personal savings and savings for retirement.

The main source of data for the information came from the Retirement Commission’s online population survey of New Zealanders aged over 18 which is run by market research agency TRA. The commission said the sample was nationally representative of New Zealand based on age, gender and region.

This article is republished under a community partnership agreement with RNZ.

This content originally appeared on Asia Pacific Report and was authored by APR editor.

When the FDIC put Silicon Valley Bank (SVB) and Signature Bank into receivership in March, a study reported on the Social Science Research Network found that nearly 200 mid-sized U.S. banks were similarly vulnerable to bank runs. First Republic Bank went into receivership in May, but the feared contagion of runs did not otherwise occur. Why not? As was said of Lehman Brothers fifteen years earlier, the targeted banks did not fall; they were pushed, or so it seems. One blogger shows how even JPMorgan Chase, the country’s largest bank, could be pushed — not perhaps by local short-sellers, but by China. And that is another good reason not to provoke the Chinese Dragon into “war by other means.”

The Targeted Crypto Banks

SVB, Signature and First Republic were not insolvent: they had sufficient assets (largely long-term Treasuries) to match their liabilities. They were just “illiquid”: they lacked enough readily available funds to meet the unanticipated deluge of deposit withdrawals in March. In fact, no bank could withstand a bank run in which 85% of its depositors demanded their money back in the space of three days, as happened to SVB that month.

As of December 31, 2022, SVB had roughly $211 billion in assets, which were primarily offset by $173 billion in deposit liabilities; but it had only $13.8 billion in actual cash and “equivalents” – liquid money available to meet withdrawals. It had been flooded with deposits from tech startups funded by venture capitalists, and the startups did not need loans. The deposited reserves had therefore been used to buy Treasury securities, at a time when interest rates were so low that only long-term securities provided an adequate return. Some were marked “hold to maturity,” meaning they could not be sold at all; and the rest could be sold only at a major loss, since old bonds attracted few buyers after interest rates on new bonds shot up in the last year.

Yet many other banks had followed that path, investing in long-term assets that could not be liquidated or could be liquidated only at a substantial loss. So why did only SVB, Signature and First Republic wind up in government receivership? As explained in my earlier article here, they were considered “crypto-friendly” banks. In a revealing article called “Operation Choke Point 2.0 Is Underway, and Crypto Is in Its Crosshairs,” blogger Nic Carter details the “coordinated, ongoing effort across virtually every US financial regulator to deny crypto firms access to banking services.”

Whoever instigated the raid on the three targeted banks, their stock was heavily short-sold, driving share prices down. This alarmed the venture capitalists, who alerted their tech startup clients. Word spread quickly by social media, and the bank runs were on.

The Infamous Bear Raid

In a 2010 article titled “Wall Street’s Naked Swindle,” Matt Taibbi showed that the bankruptcies of both Bear Stearns and Lehman Brothers, which triggered the banking crisis of 2008-09, were the result of targeted short sales. He wrote:

[W]hen Bear and Lehman made their final leap off the cliff of history, both undeniably got a push —especially in the form of a flat-out counterfeiting scheme called naked short-selling.… Wall Street has turned the economy into a giant asset-stripping scheme, one whose purpose is to suck the last bits of meat from the carcass of the middle class.

Even countries have been victims of targeted short-selling of their currencies. One infamous case occurred in 1992. According to Investopedia:

George Soros is said to have “broken” the Bank of England and precipitated “Black Wednesday” in the U.K. in September 1992 as a result of massive bets he made against the British pound.… As a consequence, the pound rapidly devalued, leading to an estimated $1 billion profit for Soros and his Quantum Fund.

Bear raids were also responsible for the “Asian Crisis” of 1997-98. Again according to Investopedia:

The crisis started in Thailand when the government ended the local currency’s de facto peg to the U.S. dollar after depleting much of the country’s foreign exchange reserves trying to defend it against months of speculative pressure.

Just weeks after Thailand stopped defending its currency, Malaysia, the Philippines, and Indonesia were also compelled to let their currencies fall as speculative market pressure built. By October, the crisis spread to South Korea, where a balance-of-payments crisis brought the government to the brink of default.

No Bank Is Safe from a Targeted Takedown

Which brings us to the largest U.S. bank, J.P. Morgan Chase (JPM). First Republic, SVB and Signature were not small banks. The country’s second, third, and fourth largest bank failures, they had assets of $229B, $209B and $118B respectively. But unlike JPM, they were not GSIBs — Globally Systemically Important Banks. Credit Suisse, however, was; and it too went bankrupt after it was subjected to massive short selling and deposit withdrawals in March 2023. Even GSIBs can be vulnerable.

JPM, however, is the fifth largest bank in the world, with assets of $3.7 trillion. Who could possibly bring that behemoth down or have the motivation or assets to do it? In a March 28, 2023 post titled “How to Wreck a Big Old GSIB Bank,” an anonymous blogger going by the pen name “DeepThroat IPO” laid out a plausible scenario. He observed:

Interestingly enough, JPM has about the same amount of cash on hand (available for immediate wire out) as SVB did when it blew up … $ 27.7 Billion.

However, he wrote, it has other liquid assets, totalling about $884 billion. That sounds like a lot, but

JPM has about “$2.34 Trillion in hair trigger Deposit liabilities (gulp) on the books — 15% of the total $16T deposits sitting on the books of the 2,135 U.S. Banks with assets over $ 300 million — that can move anywhere in the world with a few mouse clicks.”

DeepThroatIPO argues that China has U.S. assets sufficient to trigger a bear raid on this gargantuan bank, largely because of the unique way it handles its own currency. In the domestic Chinese economy, yuan are used, and the PBOC can print them at will. Merchants exporting to the U.S. take their dollars to the bank, trade them for yuan, and pay their workers and suppliers in yuan, leaving the PBOC with “free” U.S. dollars. This maneuver is confirmed in Investopedia:

One major task of the Chinese central bank, the PBOC, is to absorb the large inflows of foreign capital from China’s trade surplus. The PBOC purchases foreign currency from exporters and issues that currency in local yuan currency. The PBOC is free to publish any amount of local currency and have it exchanged for forex [foreign exchange]. This publishing of local currency notes ensures that forex rates remain fixed or in a tight range. It ensures that Chinese exports remain cheaper, and China maintains its edge as a manufacturing, export-oriented economy. Above all, China tightly controls the foreign money coming into the country, which impacts its money supply.

Printing domestic currency is another measure applied by China. The PBOC can print yuan as needed, although this can lead to high inflation. However, China has tight state-dominated controls on its economy, which enables it to control inflation differently compared to other countries. [Emphasis added.]

DeepThroatIPO comments:

The key, for China, Russia, Middle East regimes, etc., is to set up these export relationships with legitimate Western Businesses, continually collect Western Currency, maintain a significant trade surplus, and reinvest the currency in Western Assets, while keeping the RMB/Yuan “walled off”.…

The goal is not “free trade”. The goal, from the Chinese-axis perspective, is the accumulation of Western currency and financial assets … and it’s been working beautifully for more than twenty-five years … and it will continue to work as long as the Chinese-axis Trade Surplus with the rest of the world continues to remain substantially positive….

We know that the Party has been successfully walling off the currency since there are no meaningful RMB/Yuan balances anywhere on the planet (other than the mainland). There’s no need … because nobody uses Chinese currency for commerce/investing (… other than on Mainland China). Today, the World’s 2nd Largest Economy only lets about 2% of global settlements occur in RMB/Yuan.

The Chinese government and affiliated Chinese entities have purchased not just U.S. Treasuries with their dollars, but U.S. stocks, real estate, farmland and other assets. DeepThroatIPO calculates that the Chinese have “accomplished constructive control of approximately $58.58 Trillion of Western Financial Assets, stealthily hiding in Western Financial Markets, likely in plain sight.… [T]hat $58.58 Trillion, focused directly on select targets … is more than enough to sink our previously thought unsinkable fleet of battleship banks.”

Not that China would, but it could. In peaceful times, it profits from trade with the U.S., just as we need Chinese goods. But “all is fair in war,” and it is prudent to be aware of these covert potential weapons before fanning the flames of aggression. Cooperation serves the people on both sides of the conflict better than war.

Other Defenses

DeepThroatIPO admonishes that when a financial institution perceives that it is under attack, there needs to be a “circuit breaker”:

Our Banks should NOT blindly wire out all of the current withdrawal requests (or accept the incoming wires).… Whenever withdrawals or deposits breach normal daily volume by a significant amount, at any particular institution we need to stop.…

We cannot continue to come to the nebulous conclusion that “Oh boy … it looks like we a need another systemic liquidity boost” and blindly provide it. We need to slow the entire process down.

Jamie Dimon, CEO of JPM, argues that shortselling bank stock should be banned. Better yet, as argued in my earlier article here, would be to make all shortselling illegal.

Another possibility comes to mind. Banks are vulnerable to shortselling only if they are publicly-traded. State-owned or city-owned banks are impervious to that sort of attack. The Bank of North Dakota, our one and only state-owned bank, is a stellar example. It cannot be short sold and it is not vulnerable to bank runs, since over 95% of its deposits come from the state itself. The Bank of North Dakota also acts as a mini-Fed for local North Dakota banks, extending a lifeline in the event of capital or liquidity shortages.

Like the U.S., China has a vast network of local banks; but most of its banks are government-owned. We may need to follow suit as a matter of defense. We need to ensure, however, that the governments owning our local banks actually represent the people. Banks should be public utilities, serving the public interest.

• This article was first posted on ScheerPost.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

Fitch, on an earlier occasion, put the US on watch for a potential downgrade. At that time, it warned: The US could soon lose its AAA score due to an inability to pay its bills, within a matter of days.

Reports by CNN and other leading parts of the US media said:

Fitch downgraded its US debt rating on Tuesday afternoon from the highest AAA rating to AA+, citing “a steady deterioration in standards of governance.”

The downgrade follows lawmakers negotiated up until the last minute on a debt ceiling deal earlier this year, risking US’ first default.

The January 6 insurrection in the Capitol centering presidential election result was also a major contributing factor in the downslide.

January 6th incident

In a meeting with Biden administration officials, the US media reports said, representatives from Fitch repeatedly highlighted the January 6 incident as a significant concern as it relates to US governance, a person familiar with the matter told CNN.

However, Fitch did not mention the incident in their full report on the downgrade; and Fitch did not immediately respond to CNN’s request for comment.

US debt’s luster lost

According to the reports, the rating cut suggests US debt has lost some of its luster, with potential reverberations on a lot – from the mortgage rates US citizens pay on their homes to contracts carried out all across the world. The move could cause investors to sell US Treasuries, leading to a spike in yields that serve as references for interest rates on a variety of loans.

High, growing government debt burden

Explaining its rationale for the downgrade, the US media reports said:

Fitch pointed to “the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”

Deterioration in governance

Fitch said the decision was not just prompted by the latest debt ceiling standoff but rather “a steady deterioration in standards of governance over the last 20 years” regarding “fiscal and debt matters.”

Fitch predicted a growing government deficit, noting that the US debt-to-GDP ratio was currently at 100.1%, two and a half times higher than the AAA-rated countries’ median of 39.3%. Fitch also cited the US Fed’s recent credit rate hikes, “weakening business investment, and a slowdown in in consumption” to predict a “mild recession” in the fourth quarter of 2023 and the first quarter of 2024.

Fitch’s Version

Fitch Ratings said on August 1, 2023):

Fitch Ratings has downgraded the United States of America’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘AA+’ from ‘AAA’. The Rating Watch Negative was removed and a Stable Outlook assigned. The Country Ceiling has been affirmed at ‘AAA’.

For the second time, international credit rating agency Fitch has downgraded the US federal government’s credit rating, citing dismal economic expectations.

Fitch said the downgrading is based on “expected fiscal deterioration over the next three years.”

Fitch mentions following key rating drivers:

Ratings downgrade: The rating downgrade of the US reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.

Erosion of governance: In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025. The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process. These factors, along with several economic shocks as well as tax cuts and new spending initiatives, have contributed to successive debt increases over the last decade. Additionally, there has been only limited progress in tackling medium-term challenges related to rising social security and Medicare costs due to an aging population.

Rising GG deficits: We expect the general government (GG) deficit to rise to 6.3% of GDP in 2023, from 3.7% in 2022, reflecting cyclically weaker federal revenues, new spending initiatives and a higher interest burden. Additionally, state and local governments are expected to run an overall deficit of 0.6% of GDP this year after running a small surplus of 0.2% of GDP in 2022. Cuts to non-defense discretionary spending (15% of total federal spending) as agreed in the Fiscal Responsibility Act offer only a modest improvement to the medium-term fiscal outlook, with cumulative savings of US$1.5 trillion (3.9% of GDP) by 2033 according to the Congressional Budget Office. The near-term impact of the Act is estimated at US$70 billion (0.3% of GDP) in 2024 and US$112 billion (0.4% of GDP) in 2025. Fitch does not expect any further substantive fiscal consolidation measures ahead of the November 2024 elections.

Fitch forecasts a GG deficit of 6.6% of GDP in 2024 and a further widening to 6.9% of GDP in 2025. The larger deficits will be driven by weak 2024 GDP growth, a higher interest burden and wider state and local government deficits of 1.2% of GDP in 2024-2025 (in line with the historical 20-year average). The interest-to-revenue ratio is expected to reach 10% by 2025 (compared to 2.8% for the ‘AA’ median and 1% for the ‘AAA’ median) due to the higher debt level as well as sustained higher interest rates compared with pre-pandemic levels.

GG Debt to Rise: Lower deficits and high nominal GDP growth reduced the debt-to-GDP ratio over the last two years from the pandemic high of 122.3% in 2020; however, at 112.9% this year it is still well above the pre-pandemic 2019 level of 100.1%. The GG debt-to-GDP ratio is projected to rise over the forecast period, reaching 118.4% by 2025. The debt ratio is over two-and-a-half times higher than the ‘AAA’ median of 39.3% of GDP and ‘AA’ median of 44.7% of GDP. Fitch’s longer-term projections forecast additional debt/GDP rises, increasing the vulnerability of the U.S. fiscal position to future economic shocks.

Medium-term fiscal challenges unaddressed 

Fitch said:

Over the next decade, higher interest rates and the rising debt stock will increase the interest service burden, while an aging population and rising healthcare costs will raise spending on the elderly absent fiscal policy reforms. The CBO projects that interest costs will double by 2033 to 3.6% of GDP. The CBO also estimates a rise in mandatory spending on Medicare and social security by 1.5% of GDP over the same period. The CBO projects that the Social Security fund will be depleted by 2033 and the Hospital Insurance Trust Fund (used to pay for benefits under Medicare Part A) will be depleted by 2035 under current laws, posing additional challenges for the fiscal trajectory unless timely corrective measures are implemented. Additionally, the 2017 tax cuts are set to expire in 2025, but there is likely to be political pressure to make these permanent as has been the case in the past, resulting in higher deficit projections.

Exceptional Strengths Support Ratings: Several structural strengths underpin the US’ ratings. These include its large, advanced, well-diversified and high-income economy, supported by a dynamic business environment. Critically, the US dollar is the world’s preeminent reserve currency, which gives the government extraordinary financing flexibility.

Economy to slip into recession: Tighter credit conditions, weakening business investment, and a slowdown in consumption will push the US economy into a mild recession in 4Q23 and 1Q24, according to Fitch projections. The agency sees U.S. annual real GDP growth slowing to 1.2% this year from 2.1% in 2022 and overall growth of just 0.5% in 2024. Job vacancies remain higher and the labor participation rate is still lower (by 1 pp) than pre-pandemic levels, which could negatively affect medium-term potential growth.

Fed tightening: The Fed raised interest rates by 25bp in March, May and July 2023. Fitch expects one further hike to 5.5% to 5.75% by September. The resilience of the economy and the labor market are complicating the Fed’s goal of bringing inflation towards its 2% target. While headline inflation fell to 3% in June, core PCE inflation, the Fed’s key price index, remained stubbornly high at 4.1% yoy. This will likely preclude cuts in the Federal Funds Rate until March 2024. Additionally, the Fed is continuing to reduce its holdings of mortgage backed-securities and US Treasuries, which is further tightening financial conditions. Since January, these assets on the Fed balance sheet have fallen by over USD500 billion as of end-July 2023.

ESG – Governance: The US has an ESG Relevance Score (RS) of ‘5’ for Political Stability and Rights and ‘5[+]’ for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in Fitch’s proprietary Sovereign Rating Model. The U.S. has a high WBGI ranking at 79, reflecting its well-established rights for participation in the political process, strong institutional capacity, effective rule of law and a low level of corruption.

Fitch mentions rating sensitivities:

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

–Public Finances: A marked increase in general government debt, for example due to a failure to address medium-term public spending and revenue challenges;

–Macroeconomic policy, performance and prospects: A decline in the coherence and credibility of policymaking that undermines the reserve currency status of the US dollar, thus diminishing the government’s financing flexibility.

Fitch’s proprietary Sovereign Rating Model (SRM) assigns the US a score equivalent to a rating of ‘AA+’ on the Long-Term Foreign-Currency IDR scale.

Fitch’s sovereign rating committee did not adjust the output from the SRM to arrive at the final Long-Term Foreign-Currency IDR.

Macro: Fitch removed the + 1 notch to reflect the deterioration of the GDP volatility variable and sharp spike in inflation following the pandemic and its aftermath. The economic volatility and inflation impacts on the SRM have begun to revert towards historical levels and no longer warrant a positive Qualitative Overlay (QO) notch.

US protests the downgrade

The White House and the US Treasury Department raised objections on the decision by Fitch to downgrade US long-term rating from AAA to AA+.

White House press secretary told reporters: “We strongly disagree with the decision.” She claimed: It “defies reality”, as President Joe Biden has led the US economy to a “robust recovery”.

US Treasury Secretary Janet Yellen “strongly disagreed” with Fitch’s decision. She said: It was “arbitrary and based on outdated data” and that US Treasury securities remained the world’s “preeminent safe and liquid asset.”

Earlier, China’s credit rating agency downgraded US

In the later part of May 2023, China’s leading credit rating agency Chengxin International Credit Rating (CCXI) downgraded its sovereign credit score for the US by one nick.

The CCXI, US’ Moody-China’s Zhixiang Information Management Consulting joint venture, lowered the US to AAg+ from AAAg, having placed it on review for a further downgrade, according to a statement released on Thursday.

At that time, the CCXI’s statement said:

“The intensification of political divisions between the two parties in the United States has increased the difficulty of resolving the debt-ceiling issue. Even if a consensus is reached, the brinkmanship would pose uncertainty to the US government’s policy path and dampen economic confidence, which could trigger further volatility in the US politics and economy.”

The US debt has already puffed up to more than $31 trillion.

What would have happened – the way the imperialist media machine and its local-level orderlies started shouting – had the downgrading-declaration was in case of some other country, for example, China, Russia, Mexico, Bangladesh, or other similar state?

What does it mean by the words: steady deterioration in governance, and which is going over the last 20 years, and how would have the imperialist media and imperialism’s proxy sepoys sold sounds in their market of politics based on that assessment?

Doesn’t these say: Something is rotten in the state of the Empire, in politics, in economy, in democracy that it practices?

Shouldn’t those faults there be welded before delivering democracy-sermons, one sort of interference, to others, as these conditions appearing tattered take away moral standing for delivering sermon to others?

Note: All cited parts, direct or indirect, even if not with quotation marks, are from relevant reports.

This content originally appeared on Dissident Voice and was authored by Farooque Chowdhury.

Fitch, on an earlier occasion, put the US on watch for a potential downgrade. At that time, it warned: The US could soon lose its AAA score due to an inability to pay its bills, within a matter of days.

Reports by CNN and other leading parts of the US media said:

Fitch downgraded its US debt rating on Tuesday afternoon from the highest AAA rating to AA+, citing “a steady deterioration in standards of governance.”

The downgrade follows lawmakers negotiated up until the last minute on a debt ceiling deal earlier this year, risking US’ first default.

The January 6 insurrection in the Capitol centering presidential election result was also a major contributing factor in the downslide.

January 6th incident

In a meeting with Biden administration officials, the US media reports said, representatives from Fitch repeatedly highlighted the January 6 incident as a significant concern as it relates to US governance, a person familiar with the matter told CNN.

However, Fitch did not mention the incident in their full report on the downgrade; and Fitch did not immediately respond to CNN’s request for comment.

US debt’s luster lost

According to the reports, the rating cut suggests US debt has lost some of its luster, with potential reverberations on a lot – from the mortgage rates US citizens pay on their homes to contracts carried out all across the world. The move could cause investors to sell US Treasuries, leading to a spike in yields that serve as references for interest rates on a variety of loans.

High, growing government debt burden

Explaining its rationale for the downgrade, the US media reports said:

Fitch pointed to “the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”

Deterioration in governance

Fitch said the decision was not just prompted by the latest debt ceiling standoff but rather “a steady deterioration in standards of governance over the last 20 years” regarding “fiscal and debt matters.”

Fitch predicted a growing government deficit, noting that the US debt-to-GDP ratio was currently at 100.1%, two and a half times higher than the AAA-rated countries’ median of 39.3%. Fitch also cited the US Fed’s recent credit rate hikes, “weakening business investment, and a slowdown in in consumption” to predict a “mild recession” in the fourth quarter of 2023 and the first quarter of 2024.

Fitch’s Version

Fitch Ratings said on August 1, 2023):

Fitch Ratings has downgraded the United States of America’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘AA+’ from ‘AAA’. The Rating Watch Negative was removed and a Stable Outlook assigned. The Country Ceiling has been affirmed at ‘AAA’.

For the second time, international credit rating agency Fitch has downgraded the US federal government’s credit rating, citing dismal economic expectations.

Fitch said the downgrading is based on “expected fiscal deterioration over the next three years.”

Fitch mentions following key rating drivers:

Ratings downgrade: The rating downgrade of the US reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.

Erosion of governance: In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025. The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process. These factors, along with several economic shocks as well as tax cuts and new spending initiatives, have contributed to successive debt increases over the last decade. Additionally, there has been only limited progress in tackling medium-term challenges related to rising social security and Medicare costs due to an aging population.

Rising GG deficits: We expect the general government (GG) deficit to rise to 6.3% of GDP in 2023, from 3.7% in 2022, reflecting cyclically weaker federal revenues, new spending initiatives and a higher interest burden. Additionally, state and local governments are expected to run an overall deficit of 0.6% of GDP this year after running a small surplus of 0.2% of GDP in 2022. Cuts to non-defense discretionary spending (15% of total federal spending) as agreed in the Fiscal Responsibility Act offer only a modest improvement to the medium-term fiscal outlook, with cumulative savings of US$1.5 trillion (3.9% of GDP) by 2033 according to the Congressional Budget Office. The near-term impact of the Act is estimated at US$70 billion (0.3% of GDP) in 2024 and US$112 billion (0.4% of GDP) in 2025. Fitch does not expect any further substantive fiscal consolidation measures ahead of the November 2024 elections.

Fitch forecasts a GG deficit of 6.6% of GDP in 2024 and a further widening to 6.9% of GDP in 2025. The larger deficits will be driven by weak 2024 GDP growth, a higher interest burden and wider state and local government deficits of 1.2% of GDP in 2024-2025 (in line with the historical 20-year average). The interest-to-revenue ratio is expected to reach 10% by 2025 (compared to 2.8% for the ‘AA’ median and 1% for the ‘AAA’ median) due to the higher debt level as well as sustained higher interest rates compared with pre-pandemic levels.

GG Debt to Rise: Lower deficits and high nominal GDP growth reduced the debt-to-GDP ratio over the last two years from the pandemic high of 122.3% in 2020; however, at 112.9% this year it is still well above the pre-pandemic 2019 level of 100.1%. The GG debt-to-GDP ratio is projected to rise over the forecast period, reaching 118.4% by 2025. The debt ratio is over two-and-a-half times higher than the ‘AAA’ median of 39.3% of GDP and ‘AA’ median of 44.7% of GDP. Fitch’s longer-term projections forecast additional debt/GDP rises, increasing the vulnerability of the U.S. fiscal position to future economic shocks.

Medium-term fiscal challenges unaddressed 

Fitch said:

Over the next decade, higher interest rates and the rising debt stock will increase the interest service burden, while an aging population and rising healthcare costs will raise spending on the elderly absent fiscal policy reforms. The CBO projects that interest costs will double by 2033 to 3.6% of GDP. The CBO also estimates a rise in mandatory spending on Medicare and social security by 1.5% of GDP over the same period. The CBO projects that the Social Security fund will be depleted by 2033 and the Hospital Insurance Trust Fund (used to pay for benefits under Medicare Part A) will be depleted by 2035 under current laws, posing additional challenges for the fiscal trajectory unless timely corrective measures are implemented. Additionally, the 2017 tax cuts are set to expire in 2025, but there is likely to be political pressure to make these permanent as has been the case in the past, resulting in higher deficit projections.

Exceptional Strengths Support Ratings: Several structural strengths underpin the US’ ratings. These include its large, advanced, well-diversified and high-income economy, supported by a dynamic business environment. Critically, the US dollar is the world’s preeminent reserve currency, which gives the government extraordinary financing flexibility.

Economy to slip into recession: Tighter credit conditions, weakening business investment, and a slowdown in consumption will push the US economy into a mild recession in 4Q23 and 1Q24, according to Fitch projections. The agency sees U.S. annual real GDP growth slowing to 1.2% this year from 2.1% in 2022 and overall growth of just 0.5% in 2024. Job vacancies remain higher and the labor participation rate is still lower (by 1 pp) than pre-pandemic levels, which could negatively affect medium-term potential growth.

Fed tightening: The Fed raised interest rates by 25bp in March, May and July 2023. Fitch expects one further hike to 5.5% to 5.75% by September. The resilience of the economy and the labor market are complicating the Fed’s goal of bringing inflation towards its 2% target. While headline inflation fell to 3% in June, core PCE inflation, the Fed’s key price index, remained stubbornly high at 4.1% yoy. This will likely preclude cuts in the Federal Funds Rate until March 2024. Additionally, the Fed is continuing to reduce its holdings of mortgage backed-securities and US Treasuries, which is further tightening financial conditions. Since January, these assets on the Fed balance sheet have fallen by over USD500 billion as of end-July 2023.

ESG – Governance: The US has an ESG Relevance Score (RS) of ‘5’ for Political Stability and Rights and ‘5[+]’ for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in Fitch’s proprietary Sovereign Rating Model. The U.S. has a high WBGI ranking at 79, reflecting its well-established rights for participation in the political process, strong institutional capacity, effective rule of law and a low level of corruption.

Fitch mentions rating sensitivities:

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

–Public Finances: A marked increase in general government debt, for example due to a failure to address medium-term public spending and revenue challenges;

–Macroeconomic policy, performance and prospects: A decline in the coherence and credibility of policymaking that undermines the reserve currency status of the US dollar, thus diminishing the government’s financing flexibility.

Fitch’s proprietary Sovereign Rating Model (SRM) assigns the US a score equivalent to a rating of ‘AA+’ on the Long-Term Foreign-Currency IDR scale.

Fitch’s sovereign rating committee did not adjust the output from the SRM to arrive at the final Long-Term Foreign-Currency IDR.

Macro: Fitch removed the + 1 notch to reflect the deterioration of the GDP volatility variable and sharp spike in inflation following the pandemic and its aftermath. The economic volatility and inflation impacts on the SRM have begun to revert towards historical levels and no longer warrant a positive Qualitative Overlay (QO) notch.

US protests the downgrade

The White House and the US Treasury Department raised objections on the decision by Fitch to downgrade US long-term rating from AAA to AA+.

White House press secretary told reporters: “We strongly disagree with the decision.” She claimed: It “defies reality”, as President Joe Biden has led the US economy to a “robust recovery”.

US Treasury Secretary Janet Yellen “strongly disagreed” with Fitch’s decision. She said: It was “arbitrary and based on outdated data” and that US Treasury securities remained the world’s “preeminent safe and liquid asset.”

Earlier, China’s credit rating agency downgraded US

In the later part of May 2023, China’s leading credit rating agency Chengxin International Credit Rating (CCXI) downgraded its sovereign credit score for the US by one nick.

The CCXI, US’ Moody-China’s Zhixiang Information Management Consulting joint venture, lowered the US to AAg+ from AAAg, having placed it on review for a further downgrade, according to a statement released on Thursday.

At that time, the CCXI’s statement said:

“The intensification of political divisions between the two parties in the United States has increased the difficulty of resolving the debt-ceiling issue. Even if a consensus is reached, the brinkmanship would pose uncertainty to the US government’s policy path and dampen economic confidence, which could trigger further volatility in the US politics and economy.”

The US debt has already puffed up to more than $31 trillion.

What would have happened – the way the imperialist media machine and its local-level orderlies started shouting – had the downgrading-declaration was in case of some other country, for example, China, Russia, Mexico, Bangladesh, or other similar state?

What does it mean by the words: steady deterioration in governance, and which is going over the last 20 years, and how would have the imperialist media and imperialism’s proxy sepoys sold sounds in their market of politics based on that assessment?

Doesn’t these say: Something is rotten in the state of the Empire, in politics, in economy, in democracy that it practices?

Shouldn’t those faults there be welded before delivering democracy-sermons, one sort of interference, to others, as these conditions appearing tattered take away moral standing for delivering sermon to others?

Note: All cited parts, direct or indirect, even if not with quotation marks, are from relevant reports.

This content originally appeared on Dissident Voice and was authored by Farooque Chowdhury.

Orientation

How long has capitalism existed? Has it always been with us all the way back to tribal societies or is it a product of the modern age? Is there any pattern to its evolution? Is it cyclic,  spiral-like  or random? What is the nature of capitalist crises? Why does capitalism grow flush in certain parts of the world, die out in others and yet seemingly reignite itself in another part of the world? What can world-systems theory tell us about the current battle between the Anglo-American empire and the multipolarists of China, Russia and Iran?

What is capitalism?

Capitalism is a historical economic system that arose in Europe in the 15^th century.  Over a 600-year period its leading hegemons were first the Italian city-states of Genoa and Venice. In the 17^th century these city-states were superseded by the Netherlands. The British overtook the Dutch in the 18^th century and the United States crowded out the British well before World War I. Capitalism is characterized by a law-enforced right of private property (as opposed to state or community ownership) in the areas of:

• raw materials (land)
• means of production (tools and methods of harnessing energy)
• labor (who uses the tools and the methods of harnessing energy to work on raw materials)
• commodities (finished products and services)
• money which is transformed into capital – stocks, bonds and derivatives
• power settings in which decisions about the economy are made (political settings). These include The National Association of Manufacturers and The Business Round Table. Internationally the Council of Foreign Relations, the World Economic Forum and the G7 are examples.

The purpose of capitalism is to make a profit which is unlimited in scope, protected by law, and if necessary, by the military. According to world-systems theorist Immanuel Wallerstein capitalists derive their profits by two processes:

• broadening its reach, colonizing the periphery counties for its natural resources, inducing it to produce a single cash crop while paying wages far below wages of the workers in the core countries.
• deepening its reach into core countries through increased commodification of previously uncommodified land and labor, automation, withdrawal of investment in military and finance capital

Trends in capitalism

Trends within capitalism over a 600-year period include:

• a tendency towards a concentration of capital
• a tendency to expand around the globe through transnational corporations
• a movement from scattered territories to larger territorial control
• phases in investing in merchant, agricultural (slavery), industrial, military and finance capital which become cycles
• these become Kondratieff waves of expansion and contraction which occur every 55 years.
• the end of a cycle is characterized by bifurcation points, crisis which occur at shorter and shorter intervals
• crises points fuel increasing anti-systemic opposition
• capitalist crises which accumulate to produce both the possibility of abundance, shorter work week and an accumulation of crisis of unresolved problems of previous cycles including ecological devastation
• greater variety of resources

Where are we headed?

I begin my article by comparing world-systems theory to modernization theory across seven categories.  Next, I compare the characteristics of the three zones in world-systems theory – core, periphery and semi-periphery. While we can imagine capitalism over a 600-year period as a movie, we also want to take “snapshots” of the world-system on four separate occasions. Probably the most important part of the article is in describing Giovanni Arrighi’s cycles and spirals of capitalism over the last 600 years up to the close of the 20^th century. In the last section in the piece I identify all the revolutionary changes that are happening to the 21^st century world-system. The battle between the Anglo-American empire and the multipolarists will be framed from a world-systems perspective.

What is World-systems Theory?

In the 1950s, political science and international relations was dominated by an anti-communist “modernization theory”. In the 1960s the conservativism of modernization theory was first challenged by something called “dependency theory” led by Andre Gunder Frank and later by the “world-systems theory” of Immanuel Wallerstein. World-system theories were socialist but they were critical of the state socialism of Russia, China and Cuba. They argued that those countries were state capitalist. They strove to apply Marx’s theory of capitalism to the whole world as opposed to just single nation states as many Marx did. They challenged Lenin’s theory of imperialism as the last stage of capitalism as being too linear. In their perspective, imperialism is part of the end of each of the four cycles and was common for the Italians, the Dutch, the English and now the Yankees.

World-systems theory was criticized by more traditional Marxists like Robert Brenner because he felt they did not emphasize enough the class struggle within nation states. World-systems theory seemed to be more interested in the political economy of the dynamics of three zones (core countries, peripheral countries and the semi-peripheral countries) rather than the class struggle within each zone.  I’ll discuss these zones in detail shortly.

Modernization Theory vs World-systems theory

Are nation-states primarily independent or interdependent?

For modernization theory, nation states are independent and internally driven. The responsibility for their past, present and future direction is strictly determined by their foreign policy. In world-systems theory, nation-states are subordinate to an international system of capitalism and have only relative control over their foreign policy.

Therefore, modernization theorists would look at poor countries in the world (what world-systems theory might call the periphery) and say their poverty was due to a failure to build modern institutions such as science or capitalism. They are dismissed as irrational tribalists marred by superstition. World-systems theorists would say countries on the world periphery are poor because they have been colonized and exploited by the core countries. Because nation-states are understood to be autonomous, capitalists are thought to be loyal patriotic servants of their nation-states. For world-systems theorists, capitalists are the most unpatriotic class of all. They are committed to making profits anywhere in the world. They will feign patriotism when they need foot soldiers to fight wars against other capitalist countries but otherwise they have no loyalties.

What is the relationship between politics and economics?

For modernization theorists’, politics and economics are separate. As you can well see, throughout the 1950s and even after modernization theory was criticized in the 1960s in political science classes, economics was never a serious part of a discussion. It would be like saying political meetings in Congress are strictly determined by the political ideologies of liberalism or conservatism. Money has no part in it. At the same time, the teachers of economics courses act like capitalist economics has no political dimension. This would be like saying the economic decisions of transnational corporations would not be influenced by political turmoil or a revolution in a periphery country in which they had large investments. Speaking internationally, for modernization theory, all wars are about political ideology.

For world-systems theorists, there is only political economy. All economics is political and all political acts have economic aspects to it. For world-systems theory, wars have mostly to do with battles over natural resources. They also can be political but when a socialist country gains power in a war the trade relations become more unfavorable for capitalists.

How is social evolution understood?

Modernization theories imagine social evolution as progress. They say there is something inherently progressive about Western societies that older civilizations such as China and India lack. The wealth produced by capitalist societies is distributed somewhat unevenly because some people work harder than others. All roads in social evolution lead to the West with the pinnacle being Western Europe and the United States. Progress is linear, and modernization theory imagines that tribal societies are just dying to be modernized, blaming themselves for their situation. Modernization theory fails to account for complex societies’ disintegration and going backward (Tainter, The Collapse of Complex Societies) or Jared Diamond (Why Societies Collapse). Even when socialist societies are industrialized they are not considered modern because state control over the economy and one-party rule lack democracy.

World-systems theory argue that progress in the history of human society has been uneven. They are willing to admit that the egalitarian nature of hunter-gatherers is admirable. They are well aware that an increase in the productive forces through technology, in fact, leads to more work for the lower classes rather than less. While world-systems theory acknowledges the benefits of science and some of the wealth produced by capitalism, it also points out the exploitation and misery it produces for working-class people as a result of class stratification.

Rate and type of change

Generally speaking, modernization theory understands the rate of social change to be gradual, evolutionary and relatively harmonious across social classes. For world-systems theory, like all Marxist theories, political and economic change is sudden, discontinuous, filled with conflict and driven by class struggle. For modernization theory instabilities are temporary and part of “business cycles” which settle back down into equilibrium and homeostasis. For world system theory, capitalist crisis is no static equilibrium model. Capitalism today will turn into a terminal crisis from which it will not recover. Whether it is the tendency of the rate or profit to fall, profit squeeze theory or under-consumption theory, the days of capitalism are numbered.

While for modernization theory all roads start and end in Western Europe and the United States, for world-systems theorists, modernization may have begun in Europe, but it by no means is it likely to stay there. As we can see today, the world-system is shifting operations to China, the new center of the world-economy.

Attitudes towards socialism

As I mentioned before, modernization theorists are anti-communist. The only socialism for modernization theorists is Stalinism. Even when socialist societies industrialize, modernization theorists deny they are a modern system, because they lack bourgeois rights and a two-party system. They see socialist societies as some kind of throwback to Karl Wittfogel’s Orientation Despotism. While world-systems theorists essentially call themselves socialist, they criticize Stalinism as state capitalist, and Cuba and China as bureaucratic states. They look more favorably to Nordic evolutionary socialism, especially Sweden in the 20^th century up to around 1980.

Modernization theory understands capitalism and socialism as two separate systems. It imagines the rebellions of the 1960s as rebellions against socialist regimentation. It has been difficult for them to explain why an entire generation would rebel against the fleshpots of capitalist modernization in Western Europe and the United States. On the other hand, world-systems theorists understand that the existing socialist countries, including the state socialist countries, are part of a broad anti-systemic movement against capitalism which includes the various Leninist parties, social democrats and anarchists.

For modernization theorists’ socialism has been tried and failed. Case closed. They would support Fukuyama’s claim that after the fall of the Soviet Union, history is over and capitalism has won. “Not so fast” say world-systems theorists. Capitalism is 500 years old and has only achieved economic and political dominance in the 19^th century. Socialism is about 170 years old. It is too soon to tell whether socialism is a realistic alternative.

Place and misplace of foreign aid

For modernization theorists aid to poor or peripheral countries may be driven by a combination of self-interest at worst, and at best creating win-win situations. Foreign aid is given in the hopes that with the help of the West poor countries will industrialize, shed their backward ways and become competitive partners. For world- systems theorists the relation between core and peripheral countries is not neutral but imperialistic. Rich countries exploit poor countries for their land and labor and turn them into one crop-producing colonies. As Andre Gunder Frank quipped, the core countries underdeveloped the peripheral countries. Furthermore, world capitalist banks like the World Bank or the IMF do not give loans that will enable peripheral countries to build scientific institutions along with engineers. One reason is because scientists and engineers may discover new resources that might undermine the resources of core countries such as oil. This is one reason why fundamentalist religious institutions always seem to grow in peripheral countries because they are of no threat to capitalism. The CIA always finds money for them.

Theoreticians

As I’ve said, modernization theorists were most prevalent in the 1950s. They included Walt Rostow and Lucian Pye. Daniel Lerner specialized in telling the story of how tribal societies got on the road to modernization. Samuel Huntington is more contemporary with works like The Clash of Civilizations along with Francis Fukuyama, with his book The End of History.

Early world-systems theorists were Oliver Cox who looked at race and caste from an international perspective. Immanuel Wallerstein provided a foundation for world-systems theories, drawing on the work of Fernand Braudel. Christopher Chase-Dunn and Tom Hall extended a world-systems perspective all the way back to tribal societies. Giovanni Arrighi took a deep look at the history of capitalism (to be covered shortly) and Samir Amin has been a kind of watchdog always trying to keep world-systems theory from being too Eurocentric. Beverly Silver made a study of workers movements from a world-systems perspective. Lastly Christopher Chase Dunn and Terry Boswell located the history of workers’ movements over a 600-year period of capitalism, not as isolated in nation-states (as traditional Marxists have done) but as part of the dark side of the cycles and spirals of capitalism.

Characteristics of the Three Zones

In world-systems theory, there are three regions of the world — the core, the periphery and the semi periphery. In the 20^th century the core countries were the wealthy countries of Yankeedom, Western Europe and Japan. The Scandinavian countries are cases of successful state-capitalism. Most of the periphery countries were the heavily colonialized states of Africa. In the semi-periphery were Russia, China, Eastern Europe, most of Latin America and Southeast Asia.

Economics and politics

Contrary to what Marx predicted, there are no countries in the core of the world- system that are socialist. In the semi-periphery there has arisen both capitalist and state socialist societies. Most of the periphery countries are operating with a combination of tribal or state redistributive system combined with exploited low wage workers at the beck-and-call of imperialists in the core.  In terms of political power, core countries have developed their own bourgeois representative systems without any political pressure outside the core. Peripheral countries have the least political power. Many of the core countries have installed dictatorships there in the hopes of controlling peripheral economies. Home-grown leaders of peripheral countries are often anti-imperialist revolutionaries agitating to overthrow imperialism in their country.

Countries in the semi-periphery have a moderate degree of autonomous political power but their elections are closely watched by the deep state in core societies because they have more technological self-rule and could get out of control. In state socialist countries, political power is highly concentrated at the top. Socialist societies cannot afford to have many political parties. Those smaller parties are subject to manipulation by the deep state within core countries which works to overthrow socialism. Because peripheral countries have been exploited by imperialism they are poor. World capitalist banks offer loans at interest rates so high that it is rare for peripheral countries to get out of debt. The loans received from these banks are only for raw materials and for cash crop agriculture. No loans are made for education or building infrastructures.

Energy bases, commodities and wages

The energy bases of core countries are electronic-industrial. The semi-periphery countries are industrial-agricultural while in the periphery they are mostly agricultural or horticulture in the sub-Sahara Africa. The technology in the core countries draws on inanimate sources of energy and machine-based. In the periphery, work is labor intensive using mostly animal and wind power. In the semi-periphery capitalists implement hand-me-down machines from core countries. As might be expected, wages are highest in core countries because unions have been institutionalized. In the periphery, because there is very little industry, there are no unions and it is here where wages are lowest. Typically, workers might work part-time in industry, also working in garment industry, as water carriers, day laborers with some cash crop planting. In the semi-periphery there is some unionization and in state-socialist societies wages might be good.

Commodities and economic policy: free trade vs protective tariffs

Because of their colonial relations with the periphery core counties import raw materials cheaply and export manufactured goods, which are more expensive. In peripheral countries, they export raw materials, mostly cash crops and import goods from the West at higher prices, keeping them in a dependent relationship.

The economic policy of the core countries is “free trade” which, of course, is not free but gives them a license to go wherever they want, exploiting land and labor where there is little or no resistance. Countries in the semi-periphery, when driven by their population or the vision of their leaders, may adopt protective tariffs in the hopes of protecting the growth of their home industries. On the periphery, the economic policy is forced free trade with colonialists. Often one of the major efforts in peripheral liberation movements is to elect leaders who follow protective tariffs to attempt to build up home industries. Semi-periphery countries are somewhat dependent on core countries but they in turn also exploit the periphery to a less extent. These semi-periphery countries use their surplus to invest more in their domestic economy. They export peripheral-like goods to the core and export core goods to the periphery.

Class, race, ethnic and regional conflicts

For most of the 20^th century in the core countries the conflicts between groups were class conflicts and in the United States, race conflicts. However, regional conflicts still smolder in Yankeedom between North and South. In Europe regional loyalties smolder in Spain, Northern Ireland, Belgium among others. The semi-periphery has similar class and regional problems. The periphery is torn apart between tribal loyalties and loyalties to the newly formed states which were once part of national liberation movements.

Role of the military

Lastly, we turn to the role of the military. After two world wars over colonies, core states have agreed not to attack each other and the military is rarely involved in its domestic politics. The military of core countries is mostly employed in attempting to control the political life in the semi-periphery and the periphery. The military in semi-periphery countries is more volatile because core countries are concerned about the domestic policies there since these countries have the resource base – the science and engineers – to undermine the resource base of the core. The military in the semi-periphery gets involved, either as right-wing dictators or to bring in a left-wing military leader such as Hugo Chavez. The most direct military involvement is in the periphery because colonialists want to maintain control of the cheap land and labor they exploit. The military also tries to impose order in clashes within the domestic population between tribes, ethnic groups and state loyalists.

Snapshots of the History of the World-system

In his book An Introduction to the World-system perspective, Thomas Shannon introduces four “snapshots” (maps) of the world-system:

• world-system from 1450-1620 (merchant capital)
• world-system in 1763 (agricultural, slave capitalism)
• world-system in 1900 (industrialization)
• the contemporary world system in 20^th century (finance capital, electronics)

What might be confusing is that the world-system, though it has the “world’ in it, does not mean it is a global society. For most of the history of world-system, the core, periphery and semi periphery only covered part of the globe. The fact is in the world system of 1450-1620 most of the world system was concentrated in Europe – Spain, Portugal, the Netherlands, France and England. The periphery consisted of the Scandinavian countries and central and South America. The United States was not even in the world-system while Russia, China and India were part of agricultural empires.

In the 1763 snapshot, the core countries are Great Britain and  France, with the Netherlands, Spain and Portugal slipping into minor core status. The semi-periphery then consisted of the North Italian city-states and Prussia. Thanks to colonialization by the British, the United States and West Africa were now on the periphery of the world system. Poland and Russia were now in the periphery. China and India were still outside the world system.

By 1900 Great Britain and France remained as core countries but they were now joined by late developing Germany and the United States.  By 1900 most of the globe was now in the world-system, with Russia moving to the semi-periphery and China now on the periphery. This was the age of colonialism as all of Africa, China and South America were on the world capitalist periphery.

By the 20^th century the world-system was rocked by two world wars which hollowed out Europe and reduced them to minor core status. The rise of Japan in the late 19^th century and early 20^th century catapulted it into core status. The first three quarters of the 20^th century were the time of Yankeedom. The 20^th century saw the emergence of the first socialist states in Russia, China and Cuba. Russia maintained its semi-peripheral status while Cuba and China continued to be poor and in the periphery of the world-system.

Capitalist Cycles and Their Leading Hegemons

In 1994 Giovanni Arrighi wrote a great book with a bad title, The Long 20^th Century.

The heart of the book is the tracing of the history of capitalism through four cycles. Instead of looking at capitalism as a linear line moving from merchant capitalism to agricultural capitalism, to industrial, to finance capitalism and imperialism, Arrighi analyzed capitalism as a series of four cycles which played themselves out through leading hegemons throughout Europe. Through each cycle there were mercantile, agricultural, industrial and financial phases, but they weren’t all of the same weight.

Italian city-states

For example, the first place the cycles occurred were in the city-states of Genoa and Venice between 1450 and 1640. They made profits based on merchant capital through trading. Being city states, they didn’t make much profit on agriculture and what industry existed was small. However, when their profits were made on finance and wars, that was the end of their power. As we shall see throughout all hegemon rulers, when profits are made on war and finance they are on their way out.

Dutch sea trade

After the Italian wars and the discovery of new trade routes West, the Italian city-states lost their core status. Dutch sea power arose in the 17^th century. Again, the Dutch profits were based on merchant trade but trade on a much larger scale than the Italians. They were led by East Indian and West Indian monopoly companies. There were at least five reasons the Dutch superseded Genoa and Venice.

• scale of operation – the Dutch had greater commercial and financial networks
• financial base of the Dutch monopoly companies are less vulnerable to competing trade countries
• Dutch interest clashed more dramatically with central authorities of medieval world. This drove them to be more independent from religion
• Dutch war-making was superior
• the Dutch had greater state-making capacity

The end of the line for the Dutch was also when money houses became a greater source of profit than trade. Dutch hegemony ended in wars with the English beginning in 1781. England was also a great sea power at this time and were also better colonizers than the Dutch.

The sun never sets on the British empire

The secret to British hegemony in the 19^th century was the industrial revolution. Here profits were made rebuilding cities with railroads and textile factories. While Britain made profits on trade (merchant capital), while it derived profits from cash crops and slavery (agricultural capital), what made it distinct was the industrial revolution and the harnessing of coal and steam. For Britain the end came towards the end of the 19^th century when it shifted its wealth from industry to finance, The British empire was with the wars over colonies with Germany, Italy and Japan.

The American century 1870-1970

The United States made profits off its sea power and its planters made profits on agricultural slavery working with the British. But its greatest profits derived from industry. By the second half of the 19^th century the United States became an industrial powerhouse, competing directly with the British. Besides coal, the oil Barons made a fortune on the railroads in this ascendent phase of capitalism. In the two world wars that followed, the United States became the only core country standing. After World War II it was the sole core power. Between 1948-1970 it peaked.

However, in the 19^th and 20^th centuries capitalist countries were racked by depressions in 1837, 1873 and 1896 and then the Great Depression of 1929-1939. Capitalists in the United States noticed that it was investment in military arms that got the US capitalist economy out of the depression more than Roosevelt’s programs. After World War II, the defense industry became an ongoing investment even in peace-time. Then it began to sell arms around the world to fight communism.

Lastly, investing in finance capital – stocks, bonds and derivatives – gave quicker turn-around profits than investing in industry. Once Japan and Germany had recovered from World War II, the United States faced real competition. Instead of investing in infrastructures, it invested in finance capital. Instead of investing in its workers, it pulled industries out of the United States and relocated in peripheral countries where land and labor were cheap. This was the beginning of the end. So began a 50-year decline.

Trends in the History of Capitalism

From investing in the physical economy to investment in finance

In describing these trends as a whole, Arrighi takes some liberties with Marx’s C-M-C; M-C-M formula. He says that in the ascendant phase of capitalism the M-C moment of capitalism is pronounced. That means that money is invested in commodities, trade, production and expansion. Money is invested in solid material. When a hegemon’s days are numbered C-M commodities are invested in money, the capitalist economy is contracting and capital is invested in finance capital, profits made on stocks and bonds can easily be moved around (liquidity).

Shortening of cycles

The four cycles Arrighi analyzes are not evenly distributed in time across the hegemons. The pace of rise and fall speeds up. The rise and fall of the Italian city-states was 220 years; the United Dutch provinces lasted 180 years; the British heyday lasted 130 years and the United States 100 years from 1873-1973. Meanwhile the cycles do not just end and resume again without accumulating consequences.

Some twentieth century trends

• artificial intelligence which has the potential to shorten the work week
• the opportunity to live longer – thanks to science
• the chance to colonize space
• an increase in rebellion over the centuries including the rise of socialism in the second half of the 19^th century among workers and peasants
• the impact of ecology with increasing pollution and severe weather
• the deterioration of health due to genetically modified foods and pharmaceutical drugs.

Revolution in the World-system in the 21^st Century

Rise of an alliance between semi-periphery countries

When the Soviet Union collapsed around 1990 it looked as if, despite its declining power, Yankeedom would continue to be the hegemon into the 21^st century. But a funny thing happened in the first two decades of the 20^th century. One was the rise of nationalism in Russia under Putin. The other was the emergence of a powerhouse economy in China. This was predicted  by Arrighi in his later book Adam Smith in Beijing and Andre Gunder Frank’s book ReORIENT.

From a world-systems perspective, the rise of a semi-peripheral country like China is no surprise, as world-systems theory has always argued that the semi-periphery countries have the most revolutionary potential. This is because they are wealthy enough to support scientists and engineers who potentially can produce an economic policy separate from the core countries. What seems unprecedented is the alliance of two semi-peripheral countries (Russia and China) with a deep alliance which cuts across military and economic cooperation.

In fact, the rise of BRICS as a challenge to the World Bank and the International Monetary Fund is noteworthy because virtually every country in BRICS is a semi-peripheral country. The multipolar world is composed of semi-peripheral countries unified by the New Silk Road. Furthermore, if China continues to grow the way it has been, in the next twenty years it will become the first core country since the beginnings of capitalism not located in the West. Secondly, under the leadership of the Communist Party and state-owned enterprises, China clearly has a socialist end in mind. It would be the first time a core country in the world-system was socialist. Third, China has not pressured Russia, Iran or any country in the multipolar orbit to become socialist. So whatever political and economic tensions might develop in the multipolar world, it is not likely to be the old capitalism vs socialism battle.

The United States and Europe

In the new multipolar world-system, the United States will sink to the status of a semi-peripheral country because its capitalists will not invest in rebuilding its abandoned infrastructure. It is likely to live on as a home of finance capitalists giving loans to other decimated capitalists countries or in supplying military arms to countries which have not joined in the multipolar world. These lost countries could be in South or Central America or in Middle Eastern countries which are not part of the Belt Road initiative.

Europe has been vassal of the United States for 80 years. Up until the last couple of years, Germany was the only European country which was an industrial powerhouse. But this has changed since the US has insisted that Europe abide by its sanctions of Russia. There is not a single European county with the exception of Hungary that has stood up to the United States. As the United States continues its decent from core to semi-periphery, Europe will follow with England being the weakest country. Once it slowly dawns on the European rulers that Yankeedom will not save them, they may attempt to make back-room deals with Russia and China in terms of natural gas and other sources of energy. It might be that in the next 50 years the old European core countries may regain their balance and occupy a semi-peripheral status in the new multipolar system.

The Middle East and South America

To the extent that China can diplomatically integrate Saudi Arabia and Iran and the Middle Eastern countries with oil, they will remain in the semi-periphery of the world’s new multipolar system. Expect Israel to degenerate as Mordor will be less able to help them and they will be surrounded by hostile Arab states with scores to settle. In South America Argentina and Chile will join Brazil in the semi-periphery. Venezuela will finally be spared from Mordor’s intervention and be protected by China as a fellow socialist society.

Global South

The refusal of African states to do the bidding of Mordor against Russia speaks volumes for the end of their hopes to ever get a fair deal from the United States or its financial institutions. There has been an openness to project proposals from China and Russia for building railroads and schools. Some African states like Nigeria or Sudan might, over the course of a generation, build their countries up to a semi-periphery status the way Libya was when Gaddafi was in power.

This content originally appeared on Dissident Voice and was authored by Bruce Lerro.

Activists from climate, labor, migrant, and social justice movements took part in creative actions around Paris. Coalitions across movements uplifted each other, drawing connections between interconnected justice issues and standing in solidarity to demand world leaders and financial institutions prioritize people over profit and address the climate crisis.

Amid the unprecedented climate impacts that are currently sweeping the world, and disproportionately affecting the Global South, the summit came at a crucial juncture in which climate finance, loss and damage, and debt cancellation to be discussed at the international level.

Despite powerful displays of activism, in terms of substance, the summit outcomes fall significantly short of what people and the planet need. Despite promising commitments on behalf of governments and financial institutions to begin implementing important reforms, bold and rapid leadership is required to address the multifaceted issues of our time.

Photos available here.

May Boeve, 350.org Executive Director says “There has been some progress this week, although still far too limited for what is needed. It’s clear that the true winner this week was civil society, who rose up and made loud and clear their demand that polluters pay. The money needed for financing climate action exists.

Some low hanging fruit available to rich government’s right now is a once in a generation opportunity to curtail excess money flowing to fossil fuel companies private bank accounts, and redirect it to communities around the world struggling with the climate and energy price crises. Politicians need to get behind voter sentiment and take this easy first step to tackle the climate and cost of living emergencies, and back the solar and wind energy global revolution that is taking place.”

Andreas Sieber, 350.org Associate Director for Global Policy says “The PACT Summit was only a starting point. This summit started an essential discussion: to reform an unjust financial system which is unfit to address the challenges of our time, namely the climate crisis. Trillions are needed to finance the transition to fair and clean renewable energy systems and address poverty, yet the summit delivered only a tiny fraction of that. World leaders must continue discussions on how to mobilize finance and reform our unfit financial institutions at the upcoming G20, World Bank, and IMF meetings.”

Clémence Dubois, 350.org Associate Director, Global Campaigns says “This week, we saw solidarity across communities, coalitions, and movements creatively and collectively calling for fundamental reform to the global financial system. While world leaders and the financial elite continue to lag behind, lacking the leadership required of our time, the people are ready to mobilize more than before to hold them accountable.”

Norly Mercado, 350.org Asia Regional Director says “Despite positive initial steps, the Pact Summit failed to produce sufficient outcomes for communities in the Global South, including across Asia, who are disproportionately impacted by climate impacts and who are the least responsible for them. At the same time, emerging economies are disproportionately impacted by concessional loans and crippling debt, leftovers from centuries of colonialism. It is crucial that the current status quo be redressed and that reparations be made. We are calling for debt cancellation and grant based climate finance, which are prerequisites for climate justice”.

Landry Nintereste, 350.org Africa Regional Director says “This summit was intended to address entrenched injustices that the global financial system has perpetuated for far too long. Communities in Africa and across the Global South are increasingly faced with worsening climate impacts exacerbated by the crippling burden of poverty, debt, lack of climate finance, and conditional aid. Without a significant increase in funding adaptation, resilience, and just energy transition on one hand, and a deep overhaul of the financial architecture that does not perpetuate injustice. With so many broken and empty promises made in the past, they are losing faith in such big gatherings. ”

Joseph Sikulu, 350.org Pacific Managing Director said: “The summit was meant to address the broken financial system that has failed to benefit those who need it most. It has gone some of the way, but not nearly far enough. Frontline communities are burdened with the need for adaptation and recovery, and the climate finance promised for this is ridiculously inaccessible. I firmly believe a world beyond destructive fossil fuels is possible, a world where Pacific Islands can thrive, but it’s going to need more than a broken system. It’s going to need debt cancellation, grant-based climate finance and a fossil fuel industry that pays for its crimes.”

Jeff Ordower, 350.org North America Director said “it is disappointing that time and time again countries in the Global North, controlled by the fossil fuel lobby, fail to suffiently move towards a less equitable world. The status quo fails to work for the majority of the world’s population. We need to reform our domestic banks and private equity, cancel countries’ debt, and make available the tools to help mitigate the climate crisis.”

Nicolo Wojewoda, 350.org Europe Regional Director said “European countries and the fossil fuel giants based here have a responsibility to pay back the Global South, who are facing disproportionate burdens from debt to climate impacts. It is their responsibility to provide climate finance, cancel debt, fund loss and damage.. It is crucial that we continue to push for a swift transition away from the current, fossil-fueled global financial system, and towards a just transition to renewable energy that puts people before profits.”

This content originally appeared on Common Dreams and was authored by Newswire Editor.

• The Right to Contraception Act (S. 1999)—which would codify the right to access and use contraceptives, and healthcare professionals' ability to provide birth control—was proposed by Sen. Ed Markey (D-Mass.) and blocked by Sen. Mike Braun (R-Ind.).
• The Freedom to Travel for Health Care Act (S. 2053)—which would prohibit interference with the ability to access out-of-state reproductive healthcare—was proposed by Sen. Catherine Cortez Masto (D-Nev) and blocked by Sen. Mike Lee (R-Utah).
• The Upholding Protections for Health and Online Location Data (UPHOLD) Privacy Act (S. 631)—which would protect the privacy of personally identifiable health and location data—was proposed by Sen. Amy Klobuchar (D-Minn.)—and blocked by Sen. Cindy Hyde-Smith (R-Miss.).
• The Let Doctors Provide Reproductive Health Care Act (S. 1297)—which would ensure the right to provide reproductive healthcare services—was proposed by Sen. Debbie Stabenow (D-Mich.) and blocked by Sen. Ted Budd (R-N.C.).

After the Republicans prevented passage of the four proposals, Murray, the Senate assistant Democratic leader, said that "none of these should be controversial" and slammed the GOP objections as "shameful."

Ahead of the attempts to advance the legislative package, the senator stressed that "every day, women across our country are confronting a dystopian reality: one where Republican politicians have the final say in their healthcare decisions."

"Women are forced to stay pregnant against their will—even when their health and lives are at risk, doctors in some states are having to deny patients the lifesaving care they need or risk being sent to jail, and other providers—in states like mine—are being pushed to the breaking point trying to serve an influx of patients from out of state," she noted. "The fallout has been devastating."

KFF survey results released Wednesday show that OB-GYNs across the United States say Dobbs has majorly impacted care, with providers reporting cases in which patients were unable to obtain an abortion they sought and faced constraints on the management of miscarriages and pregnancy-related medical emergencies.

"Large shares of OB-GYNs believe that the Dobbs decision has also exacerbated pregnancy-related mortality (64%), racial and ethnic inequities in maternal health (70%), and made it harder to attract new OB-GYNs to the field (55%)," KFF said.

As Molly Longman wrote for Cosmopolitan on Wednesday: "In the year since the Supreme Court plunged reproductive rights into chaos with its decision on Dobbs, a lot has gone down—much of it dismaying, dangerous, vile, problematic, and…dare we say…shitty. Alongside the devastation, though, there have also been hopeful developments, which prove that when people are unwilling to give up the fight, there is room for light, possibility, and collective power."

Longman cataloged "all the major milestones you should know," from "shitty" developments such as GOP-led states enacting abortion bans and U.S. Sen. Lindsey Graham (R-S.C.) proposing a nationwide 15-week ban to "hopeful" moments like Kansas voters rejecting an anti-abortion amendment and governors in several states taking action to protect patients and providers.

In the U.S. House of Representatives—narrowly controlled by Republicans—a trio of Democratic congresswomen on Wednesday moved to force a vote on the Women's Health Protection Act (WHPA), which would restore the right to access abortion care nationwide.

Rep. Judy Chu (D-Calif.), who authored WHPA, along with Congressional Pro-Choice Caucus Co-Chairs Diana DeGette (D-Colo.) and Barbara Lee (D-Calif.) filed a discharge petition for the legislation. If the petition receives 218 signatures, the bill must receive a floor vote, despite any objections from chamber leadership, including House Speaker Kevin McCarthy (R-Calif.).

"With House Republicans beholden to their extreme MAGA members, they refuse to restore and strengthen Americans' reproductive rights," said Chu. "I am beyond proud to work with House Democratic leadership and the Pro-Choice Caucus to offer the Women's Health Protection Act in a discharge petition to force accountability for their inaction. House members who do not add their signature are telling Americans that they shouldn't have the freedom to make their own healthcare decisions."

The developments on Capitol Hill came as advocates are preparing to mark the official one-year anniversary of Dobbs on Saturday with demonstrations across the country.

"We know there is power in numbers, and together we will send an unmistakable message that Roe may have fallen, but we are still fighting, and we won't stop until we win!" say organizers, including All Above All Action Fund, National Women's Law Center, NARAL Pro-Choice America, Planned Parenthood Action Fund, Ultraviolet, and Women's March.

Members of the Biden administration are also speaking out this week. Vice President Kamala Harris on Tuesday night was featured in an MSNBC special about Dobbs, during which she said that "this issue is so fundamentally about freedom."

First Lady Jill Biden on Tuesday hosted a White House conversation about Dobbs. While assuring those in attendance that President Joe Biden "is doing everything he can to fight back," the first lady also emphasized that "the only way we can ensure that every woman has the fundamental freedoms she deserves is for Congress to make the protections of Roe v. Wade the law of the land once again."

U.S. Health and Human Services Secretary Xavier Becerra on Friday plans to visit a Planned Parenthood clinic in Fairview Heights, Illinois, where abortions are still legal, then head to a facility 20 minutes away, in St. Louis, Missouri, where abortion is now illegal.

That's according toAxios, which noted that the latter clinic is "where Becerra was giving remarks last year when the Dobbs decision dropped." This year, the secretary's roundtable and press conference will focus on the "tale of two states," and the impact of last year's ruling throughout the country.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

• The Right to Contraception Act (S. 1999)—which would codify the right to access and use contraceptives, and healthcare professionals' ability to provide birth control—was proposed by Sen. Ed Markey (D-Mass.) and blocked by Sen. Mike Braun (R-Ind.).
• The Freedom to Travel for Health Care Act (S. 2053)—which would prohibit interference with the ability to access out-of-state reproductive healthcare—was proposed by Sen. Catherine Cortez Masto (D-Nev) and blocked by Sen. Mike Lee (R-Utah).
• The Upholding Protections for Health and Online Location Data (UPHOLD) Privacy Act (S. 631)—which would protect the privacy of personally identifiable health and location data—was proposed by Sen. Amy Klobuchar (D-Minn.)—and blocked by Sen. Cindy Hyde-Smith (R-Miss.).
• The Let Doctors Provide Reproductive Health Care Act (S. 1297)—which would ensure the right to provide reproductive healthcare services—was proposed by Sen. Debbie Stabenow (D-Mich.) and blocked by Sen. Ted Budd (R-N.C.).

After the Republicans prevented passage of the four proposals, Murray, the Senate assistant Democratic leader, said that "none of these should be controversial" and slammed the GOP objections as "shameful."

Ahead of the attempts to advance the legislative package, the senator stressed that "every day, women across our country are confronting a dystopian reality: one where Republican politicians have the final say in their healthcare decisions."

"Women are forced to stay pregnant against their will—even when their health and lives are at risk, doctors in some states are having to deny patients the lifesaving care they need or risk being sent to jail, and other providers—in states like mine—are being pushed to the breaking point trying to serve an influx of patients from out of state," she noted. "The fallout has been devastating."

KFF survey results released Wednesday show that OB-GYNs across the United States say Dobbs has majorly impacted care, with providers reporting cases in which patients were unable to obtain an abortion they sought and faced constraints on the management of miscarriages and pregnancy-related medical emergencies.

"Large shares of OB-GYNs believe that the Dobbs decision has also exacerbated pregnancy-related mortality (64%), racial and ethnic inequities in maternal health (70%), and made it harder to attract new OB-GYNs to the field (55%)," KFF said.

As Molly Longman wrote for Cosmopolitan on Wednesday: "In the year since the Supreme Court plunged reproductive rights into chaos with its decision on Dobbs, a lot has gone down—much of it dismaying, dangerous, vile, problematic, and…dare we say…shitty. Alongside the devastation, though, there have also been hopeful developments, which prove that when people are unwilling to give up the fight, there is room for light, possibility, and collective power."

Longman cataloged "all the major milestones you should know," from "shitty" developments such as GOP-led states enacting abortion bans and U.S. Sen. Lindsey Graham (R-S.C.) proposing a nationwide 15-week ban to "hopeful" moments like Kansas voters rejecting an anti-abortion amendment and governors in several states taking action to protect patients and providers.

In the U.S. House of Representatives—narrowly controlled by Republicans—a trio of Democratic congresswomen on Wednesday moved to force a vote on the Women's Health Protection Act (WHPA), which would restore the right to access abortion care nationwide.

Rep. Judy Chu (D-Calif.), who authored WHPA, along with Congressional Pro-Choice Caucus Co-Chairs Diana DeGette (D-Colo.) and Barbara Lee (D-Calif.) filed a discharge petition for the legislation. If the petition receives 218 signatures, the bill must receive a floor vote, despite any objections from chamber leadership, including House Speaker Kevin McCarthy (R-Calif.).

"With House Republicans beholden to their extreme MAGA members, they refuse to restore and strengthen Americans' reproductive rights," said Chu. "I am beyond proud to work with House Democratic leadership and the Pro-Choice Caucus to offer the Women's Health Protection Act in a discharge petition to force accountability for their inaction. House members who do not add their signature are telling Americans that they shouldn't have the freedom to make their own healthcare decisions."

The developments on Capitol Hill came as advocates are preparing to mark the official one-year anniversary of Dobbs on Saturday with demonstrations across the country.

"We know there is power in numbers, and together we will send an unmistakable message that Roe may have fallen, but we are still fighting, and we won't stop until we win!" say organizers, including All Above All Action Fund, National Women's Law Center, NARAL Pro-Choice America, Planned Parenthood Action Fund, Ultraviolet, and Women's March.

Members of the Biden administration are also speaking out this week. Vice President Kamala Harris on Tuesday night was featured in an MSNBC special about Dobbs, during which she said that "this issue is so fundamentally about freedom."

First Lady Jill Biden on Tuesday hosted a White House conversation about Dobbs. While assuring those in attendance that President Joe Biden "is doing everything he can to fight back," the first lady also emphasized that "the only way we can ensure that every woman has the fundamental freedoms she deserves is for Congress to make the protections of Roe v. Wade the law of the land once again."

U.S. Health and Human Services Secretary Xavier Becerra on Friday plans to visit a Planned Parenthood clinic in Fairview Heights, Illinois, where abortions are still legal, then head to a facility 20 minutes away, in St. Louis, Missouri, where abortion is now illegal.

That's according toAxios, which noted that the latter clinic is "where Becerra was giving remarks last year when the Dobbs decision dropped." This year, the secretary's roundtable and press conference will focus on the "tale of two states," and the impact of last year's ruling throughout the country.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

Touted as the green transportation of the future, demand has exploded for electric cars. This has, in turn, increased the demand for lithium and other rare earth metals, with corporations rushing to open as many new mines as possible. Indigenous elders have been at the forefront of resistance to this latest wave of extractive capitalism, particularly in Peehee Mu’huh also known as Thacker Pass, Nevada, where the Ox Sam Indigenous Women’s camp has been resisting the construction of what would be North America’s largest lithium mine.

Later, subMedia’s nihilist weather droid, UV-400 brings us the latest updates in the climate crisis with a global weather report. Included are record-breaking wildfires in Canada, a heatwave and devastating floods across China and an earthquake in Haiti.

Finally, in so-called Peru, Indigenous warriors seized oil tankers in yet another flare up of the ongoing tensions with Canadian oil company PetrolTal.

For more information on the Ox Sam Indigenous Women’s Camp visit OxSam.org.

This content originally appeared on Dissident Voice and was authored by subMedia.

Orientation

Summary of Part I

In Part I of this article, I contrasted the differences between rising Multipolarism with a declining Anglo-American empire. Taking the side of the multipolarists of the East, I  identified Lyndon LaRouche as someone who bridged the gap between East and West.

His concept of “The American system” defends the Enlightenment as the movement to look to if the west is going to join the multipolar world. I also presented Matthew Ehret’s book The Clash of the Two Americas: Volume I The Unfinished Sympathy as a concrete example of the battle between the British System and American system in the 18th and 19thcenturies. At the end of Part I, I raise questions as to where to place these advocates of the American system on the political spectrum and ask who its enemies are.

Are there times when centrism is unrealistic, ungrounded, and against common sense?

Unlike the left-wing and right-wing of the political spectrum, centrism is presented as a golden mean against the extremes. It embodied common sense, as opposed to fanaticism, pragmatism in contrast, unrealistic idealism and non-violence against violence. Yet there are times when centrism doesn’t work; occasions when centrism is not common sense, circumstances when centrism is not pragmatic, when compromise between extremes comes up empty. Not only is centrism unrealistic but the entire linear political spectrum founded at the end of the 18th century is bankrupt.

Strange bedfellows? Finance capitalists and the New Left

By the end of World War II, the financial capitalists had two enemies – the liberalism of FDR and the world communist movement. Most of us know the historical differences between the Old Left and the New Left. The Old Left represented the world communist movement as well as the forces of the Enlightenment. Is it possible that the emergence of the New Left with very different values driven by Romanticism was shaped by the anti-communist finance capitalists?

My claims in Part II

1)The political philosophy of the Anglo-American Empire and finance capitalists empire is centrism and it must be opposed.

2) The forces of Promethean City builders must dispense with the linear political spectrum create a new political spectrum which expresses its hopes.

3) For the past 70 years, the anti-communist forces of the Anglo-American empire have shaped a fake opposition, the romantic New Left, to oppose the development of a communist movement.

The first image at the top of this article includes arch anti-communists Arthur Koestler and Sidney Hook. The second image is the founder of Democratic Socialist of America, Michael Harrington, also an anti-communist.

Poverty of Centrism

As I wrote in my article: Are Socialists Going to Let Neoliberals Define Fascism?

All over the world, centrist parties are losing elections. People are either not voting at all or they are voting for fascists. In some countries people are voting for Social Democrats. The traditional choices between liberals and conservatives do not speak to world problems today. Additionally, just as centrist parties are collapsing (as depicted in the image above) so is the linear political spectrum model that serves as its visual description.

Today the fact that liberal and conservative parties are the same is far more significant than their differences. They have at least agreed on:

• Support of finance and military capitalism as an economic system domestically
• Never to discuss socioeconomic class in the way Marxists would
• Suppressing third-party access into political debates.
• Supporting imperialism around the world
• Supporting the instillation of right-wing dictators
• Supporting Israel elites despite 75 years of Zionist fundamentalism and their oppression of Palestinians
• Opposition to state-centered socialism around the world

What this means is that:

• There are far more commonalties between liberals and conservatives than there are between liberals and socialists because capitalism divides them
• There are far more commonalities between liberals and fascists than between liberals and socialists because both liberals and fascists support capitalism

The linear political spectrum is too simple for today’s complex politics

Examples include:

• China forming alliances with non-socialist countries like Russia and Saudi Arabia
• Social Democrats (socialists) forming alliances with imperialists (Germany, Norway, Sweden). This goes way back to Social Democrats voting for war in 1914
• Right-wing governments like Modi’s of India supporting a socialist country (China)
• The Recent elections in France in which Le Pen (supposed fascist) has social programs to the left of Macron (a neoliberal)
• A neoliberal Democratic Party supporting fascist Ukrainian forces

Centrism is bankrupt in extreme capitalist crises

The linear political spectrum also makes it appear that the middle of the political spectrum is compromising, pragmatic, down-to-earth and can never be unrealistic. Supposedly, centrists are moderate and not hysterical like the fascists or communists. What this ignores is that when there are extreme economic, political or ecological conditions the center doesn’t hold. It caves in.  In certain periods of history being moderate is unrealistic. Gradualist trial and error won’t cut the mustard because a storm is so overpowering that it would overwhelm its centrist structures. Under the conditions of our time extremes are the only answer because of capitalism’s failure to address its contradictions. It has brought us to the point where neither liberal nor conservative solutions can nor will work. A new model of the political spectrum must be:

• More inclusive of many more political ideologies
• Economic as well as political
• Able to account for qualitative leaps such as revolutions
• Able to decenter the spectrum so that both moderate and extreme solutions would seem reasonable
• Make room for alliances between the extremes on the political spectrum, not just among those next to each other

How the left and some conservatives might work together is because both are industrializers whose goal is to expand the productive forces. They may fight about how the wealth gets distributed but they agree that real wealth should be produced. By contrast, neo-liberals, fascists, Greens, Social Democrats, and anarchists are de-industrializers who abhor the introduction of new wealth-creation, especially nuclear technologies and city building. They are Malthusians.

We are now at the point where I can reintroduce the distinctions between the Enlightenment and Romanticism from Part I. I want to show how the Anglo-American empire, finance capitalists and the CIA shaped the New Left into embracing Romanticism.

Below is a table I developed from my book Forging Promethean Psychology which compares what the Enlightenment stands for as opposed to Romanticism.

Table A Enlightenment vs Romanticism Compared

The Politics of the Anglo-American Empire, The British System, Romanticism and the New left

The Old Left

As many of you know, soon after World War II capitalists in Mordor set out to destroy the Socialist and Communist parties. But the CIA also wanted to create a relatively harmless alternative to Communism by recruiting leftists who were critical of the Communist Party but did it in the name of socialist democracy. As many of you know, this began with the Congress of Cultural Freedom. Along the way, it helped to craft an ideology of the New Left that would render it harmless against capitalism while at the same time keep the Communist movement from growing back.

The heart of the Old Left was the defense of countries that were at least part way towards socialism – Russia, China and Cuba. Its economic focus was on the inherent contradictions of capitalism whether it be the tendency of the rate of profit to fall, underconsumption or the profit squeeze. Very importantly, communists were committed to the belief that Communism had to be based on abundance, which meant “developing the productive forces”. If a communist society’s economy stagnated that would introduce the temptation to steal. By producing more than enough stealing would not be an issue. As different as anarchists are from Marxists, even anarchists before the 1960s understood that abundance was the foundation for socialism.

The major social category for political organization was socio-economic class. It was only the working class that had the power to overthrow capitalism. Also, the only real democracy was economic democracy in which workers control what is produced, how much is produced and how it is distributed through centralized planning and workers’ control. In terms of political parties the Old Left advocated a Leninist vanguard party of dedicated revolutionaries.

While claiming that the workers were internationalists, in practice the Old Left political organization operated at the nation-state level. Whatever tiny ecology or changes in the climate movement existed it was not on the radar of communists. For communists’ growth of the human population was taken as given since by the second half of the 19th century and into the 1950s it seemed human productivity could easily accommodate a rising population.

When it came to the arts and psychology, the Old Left was fairly conservative. In the arts, socialist realist mural painting was predominant. In painting and music, the focus on working class life was its subject matter. In personal life, Communists usually did not drink and their appearance emulated working class clothes. Their personal life was relatively unimportant and their marriages were traditional. They were generally hostile to psychology, saw it as a bourgeois distraction from their main purpose was to work for the revolution. While most Communists were atheists, they understand that most workers were not, and they had to make relative peace with this “superstition” in order to organize workers. The CIA, and the Rockefellers set out to destroy the values of the Old left and replace  with a very different orientation to the world. Table B displays the values of the New Left, and what is equally important, how these values support and are beneficial to  the Anglo-American empire, finance capital, the Rockefellers, and the CIA.

Table B How the Values of the New Left Benefit the Anglo-American

Empire, Finance Capital the Rockefellers and the CIA

 Techniques Used by the Powers that be to Undermine Communism

• If you examine all twenty categories, the purpose of the CIA and the Rockefellers was to divide and conquer:
• Existing state socialism from the New Left
• Class on the one hand, race and gender on the other
• Personal life and political life
• Clothing, physical appearance middle class hippies and the working class
• Non-Christian religions and Christianity
• Ecology movement and the working class

 Distracting people:

• With sex and drugs and nihilistic or hedonistic rock music
• With psychological preoccupations as at Esalen (The Human Potential Movement, social psychology of groups and therapy) rather than economics
• With cultural or linguistic issues (Frankfurt School, postmodernism)
• With romantic exoticism, primitivism, individualism

Fragmentation by:

• Decentralizing politics from the nation-state to local configurations
• Championing infinite diversity to weaken commonality and unity of organization
• Treating ecology as separate from a Socialist program
• Making art psychological instead socially inspiring

Demoralization

• That capitalism had no inherent limits
• Undermine belief in progress and that people should expect an abundant life
• Pessimistic anti-science
• There is no alternative to the Democratic Party

Demonization:

• Of nuclear energy
• Of all state socialist societies
• Any international leader who wants to set their own economic foreign policy

 Qualifications

I am not suggesting that the New Left was simply a creature of the CIA and the Rockefellers. The New Left was a movement that came out of the middle class which was anti-war, anti-racist, mostly anti-capitalist and a rebellion against a conservative culture. Surely the “powers that be” did not encourage this. What I am saying is that the CIA and the Rockefellers either intervened directly as in the existence of COINTELPRO or threw money at New Left projects that suited their needs.

Conclusion

In Part II I argued that the political philosophy of the Anglo-American empire is centrism. I argued that political centrists are losing elections all over the world because centrism cannot speak to the extreme crisis that finance capital has created. Also, the linear political spectrum that houses centrism no longer works in depicting political change. I identify five characteristics a new political spectrum would need in order to be workable.

Then I contrasted the multipolar values in the East and the Enlightenment in the West to the Romantic values in depth. The reason for this comparison that Romanticism is the foundation of the Anglo-American empire’s attempt to control the potential forces of Communism in the West by shaping a New Left.

I close my article with a contrast between the Old and the New left. The Old Left of the Communist Party was a great threat to the Anglo-American empire, finance capital, the Rockefellers and the CIA. All these powers attempted to support the shaping of an anti-communist New Left. I begin with the values of the Old left. Then I identified 20 characteristics of the New Left and how each served directly or indirectly to support the powers that be against the rise of Communism. All twenty characteristics used a combination of five techniques: divide-and-conquer; distraction, fragmentation, demoralization and demonization.

This content originally appeared on Dissident Voice and was authored by Bruce Lerro.

Part I Who are Some Western Supporters of Multipolarists?

Orientation

Most of us realize there is a major tectonic shift in the world economy from West to East. The multipolar nations are basing their economies on investing in developing the productive forces of science and technology and to better human life. The Belt and Road Initiative is a good example. The West, on the other hand, has made its profits on finance capital and military capitalism. The US defense industry arms the whole world. This economy is in steep decline.

In addition, politically in Mordor (The United States), there is no New Deal liberal party, let alone any significant socialist party. The political ideology of the Anglo-American Empire is centrism. If the forces of The Enlightenment are the West – New Deal liberals and socialists – and wanted to join the movement towards a multipolar world what would its guiding principles look like? Where on the political spectrum would it locate itself?

Since Lyndon LaRouche is someone instrumental in developing an economic policy for multipolarists Russia and India, he might have something to teach the West. To become Western multipolarists, to become Promethean city builders, we must recognize that finance and military capitalists are our enemy. At the same time, we must realize that finance capitalists of the Anglo-American Empire combined with the CIA have shaped a fake opposition to itself in the New Left. Among other things, this article will expose the ways the New Left has served finance capital and the Rockefellers.

My claims for this two-part article are that:

1. In order to join with Multipolarists of the East, forces to the left of the Democratic Party must reorganize their worldview along the lines of The Enlightenment and become city-builders.
2. Lyndon LaRouche and some of the sympathetic organizations such as Rising Tide Foundation are good representations of what a multipolar policy world would look like in the West
3. The political philosophy of the Anglo-American Empire and finance capitalism is centrism and it must be opposed.
4. The forces of Promethean City Builders must dispense with the linear political spectrum and create a new political spectrum which expresses its hopes.
5. For the past 70 years, the anti-communist forces of the Anglo-American empire have shaped a fake opposition, the romantic New Left to oppose the continuation and development of the Enlightenment, the American system and a communist movement.

Part I of this article deals with the first two claims and Part II addresses the last three.

The Western World is Cracking Up

Internationally

If your analytical vision penetrates beyond the surface – the sanctions, the build-up of military bases and the vast financial profits made – the Anglo-American empire is fracturing. Its finance capitalists have nothing to offer the world that can compete with China’s Belt and Road Initiative. It promises the world nothing but weapons to fight wars. As China’s diplomats mediate between Iran and Saudi Arabia, Mordor’splans for dividing West Asia are fracturing. As more and more countries line up to join BRICS (Brazil, Russia, India, China, South Africa’s the alternative to the IMF), and the World Bank, Mordor’s allies dwindle. Meanwhile its European “coalition of the willing”, vassals for 80 years, are starting to stir. While some rulers quietly accept the leadership of Mordor, other countries, formerly the heart of the almost defunct European Union, are poking their heads above ground – as in France’s Macron statement in Beijing – and making noises about European autonomy. However, these rulers are also being pushed by the anti-war and anti-NATO elements on both left and right to stop wasting their resources on Ukraine.

Domestically

As Yankeedom engages in several wars at once internationally, domestically it is falling apart. The federal state stands helpless as regions of the country face ecological disasters and extreme cold, heat and tornadoes. Its trains cannot stay on the tracks and its roads and bridges rot from neglect. In a recent survey released by the US army, recruiters say most eligible young men and women cannot pass the physical because they are either overweight or have drug problems. The public education system is so beleaguered that a high school degree is no longer required to teach high school. Rather than invest in the physical or human infrastructures, finance capitalists cannibalize those infrastructures while they make profits on derivatives and stock options which produce no real social goods. As many of you know, there is none better than political economist Michael Hudson at pointing this out. A recent survey indicated that half the American population thinks there will be a civil war and/or secession in two years.

Tectonic Plates Shift Eastward

Like tectonic shifts, the real-world economy is shifting eastward towards China, Russia, Iran and to a lesser extent, India. South American counties are lining up to join the multipolar world, including Argentina and Brazil. In Africa, leaders are trading with the Chinese who are building railroads. Recently Russia has forgiven billions of dollars in debt. Even Mexico, along with 30 other countries, right under the nose of Mordor has applied to BRICS. What are the differences between the Anglo -American empire and the multipolar world of the East? See my table below:

Table A  The international World Divide

The Place of Lyndon LaRouche in the Multipolar World

Tribute to LaRouche by Russian economist Sergei Glazyev

In a recent article, the major Russian economist Sergei Glazyev sent a message of appreciation to the Schiller Institute on what would have been the 100th birthday of Lyndon LaRouche. LaRouche anticipated a disastrous end if finance capital policies continued. Further, he helped Russia to turn around after it was decimated by the neoliberal policies of Boris Yeltsin. I am emphasizing in the quotes below what I think is most important about Glazyev’s tribute:

Already 30 years ago, and perhaps even earlier, Lyndon LaRouche drew attention to the fact that the inflation of financial bubbles, including derivatives bubbles, and the creation of financial pyramid schemes would inevitably bring about the collapse of the world financial system. And he proposed to adopt timely measures to avert that collapse.

Back then he proposed that, instead of pumping up financial bubbles, the world reserve currency emitter-countries, together with their partners and other countries, should invest in building global infrastructure, which would reduce the cost of trade, increase the efficiency of international economic ties, and, overall, contribute to raising connectivity worldwide. [This is precisely China’s and Russia’s policy.] So, he viewed the process of globalization as a process of expanding cooperation among countries, rather than attempts by some countries to exploit others.

As for the liberal globalization that today is leading to the collapse of the world financial system, LaRouche criticized it. He proposed a different model of globalization, based on the principles of physical economy in The Truth of Man and Nature. In particular, the famous project, which he and his wife, Helga Zepp-LaRouche, put forward for international discussion – the so-called Eurasian Land Bridge. This is a splendid and interesting project, which now, after many years, has begun to be implemented through the Chinese Belt and Road initiative, which we support through linking it with the Eurasian Economic Union.

LaRouche’s voice was heard very well. We remember him. In practically all the major countries in the world today that are developing successfully – above all India and China – there are partisans of LaRouche. They have used his thoughts and ideas for creating economic miracles. It is the principles of Physical Economy championed by LaRouche that today underlie the Chinese economic miracles and are there in the foundations of India’s economic development policy. The supporters of LaRouche in those countries exist in a fruitful, very positive and constructive influence on economic policy-shaping in these leading nations of the new world economic paradigm.

LaRouche is hard to pigeonhole politically (stopped 6-7-23)

I have been around leftist movements for over 50 years. During that time, I have watched the socialist left call LaRouche a paranoid fascist and his organization a cult. It has never been easy to think or speak about him in a dialectical manner not only because the anticommunist left demonizes him, but because his followers are often uncritical of him, at least in public. Trying to find a biography of him that is objective is about as easy as looking for an objective biography of the occultist, Gurdjieff. The choices seem to be either as a cynic or true believer. Yet today some of those who have been influenced by LaRouche such as Rising Tide Foundation, have some valuable things to say. As I mentioned, LaRouche’s ideas connect nicely with the new international political configuration that is happening of creating a multipolar world. Lastly, his influence is felt in the left-right strategic alliances that are occurring in Germany and just beginning in the United States. (In the Antiwar rally 2/19/23 and in friendly debates among LaRoucheans, communists and right libertarians.)

Shifts, turns and reversals

Some of you know that LaRouche started out as a Marxist. Under the pen name of Lyn Marcus, he wrote an extraordinary book called Dialectical Economics, which I read twice and on which I took extensive notes. Since I was never an insider of the LaRouche movement, I am unable to track the changes in his political direction in depth in the early 1980s. I know he abandoned Marxism and developed what seemed to me an idealist theory of history, championing Plato. In the 1980s and 1990s he sometimes aligned himself with right-wing movements although it is difficult to see how his own economic system was, as is claimed by leftists, to be fascist.

Defender of western civilization and the Enlightenment

Why do the anarchists and social democrats hate LaRouche? First because he was an unapologetic defender of Western civilization while much of the left became skeptical of these values. Secondly, LaRouche believed that the pattern of social evolution can be claimed to have been progress at a time when the anarchists were championing hunter and gathering societies. Thirdly, the LaRouche movement stood for The Enlightenment against the Romanticism of the New left. He was opposed to most everything the New Left stood for – identity politics, experimental sex, rock music, zero growth and Malthusian population control. With some qualifications, I agree with his criticisms.

Developing the productive forces and moving from necessity to freedom

What LaRouche and his followers are for in at least one aspect is Marxism. They want to develop the productive forces. They strive for a life which shrinks the relationship between freedom and necessity. This means less necessary work and more time for creative thinking and implementation on the productive technologies, including nuclear power. For them, in Marxist terms, the productive forces are industrial capital. The enemy of industrial capitalism is finance capital or slave capitalism which is based on the premise of people learning to do with less (austerity).

Defending the nation-state

Today Laroucheans align themselves the forces of the nation-state building against the forces of globalization, which is supranationalism on the one hand and subnational regionalism on the other. Liberal globalism subordinates nation-states to the free trade dogma of the Anglo-American empire. Any nation-state that elects a leader who wants to develop an autonomous national economic policy will automatically be labelled a tyrannical strong man, and “abuser of human rights”, the new hobby-horse defamatory claim.

Criticisms of LaRouche from a Marxist perspective

Historical struggle is presented as a dualistic process

When LaRouche talks about history, he refers to two forces, the British system and the American system. It seems that the British empire is painted as negative all the way down the line, including assassinations and horrible international machinations to control the world. It would be more dialectical if there were some productive activities the British did to show complexity. That doesn’t mean the British Empire is not guilty of atrocities. It’s also a matter of knowledge that all ruling classes are guilty of this, not just the British. On the other hand, those who support the American system are presented as having no faults. This kind of extreme dualism is one of the reasons I lost interest in LaRouche over the years.

There doesn’t seem to be room for unintended consequences in history

History is presented as if there are no untended consequences. I have not found instances where the clashes between of industrial and finance capital ever produces  any historical results which were not planned. History seems to be the result of the victory of either of these two forces. There is nothing left over or in between. There are no messes. I do not find any instances in which the clash of these two forces resulted in circumstances that were not planned by either. I don’t think either of the protagonists are so powerful that either’s victor simply imposed their will on history. Marx said  humans make history but not as they pleased.

Where is the working class?

LaRouche is very good at locating the class struggles within the ruling classes in both Britain and the United States. However, there have been well over two hundred years of working class struggles in the US between workers and capitalists in cities and farmers and bankers in rural areas. As a Marxist I believe the working class produces most of the wealth of society.  Not mentioning the working class leaves out the overwhelming majority of the population. LaRouche’s analysis would be much richer if the horizontal struggle between the major political actors at the top (American system and British system) were joined by a vertical depiction of the relationship between these elites and the working classes of each country.

How does the existence of almost 200 years of the socialist movement fit into the evolution of the American system?

By roughly the 1870s, socialism and its leaders were serious competitors against both the English supporters of the South and the industrial capitalists of the North. This movement involved thousands of people, yet there is no mention of them. There is no stance taken for or against Marx or Engels or any of their American followers. This is a glaring historical omission.

Is there a capitalist system?

It is very clear that LaRouche advocated for industrial capitalism which means the real economy over finance capitalism. But this contrast is not rooted in the history of capitalism. Marx described how capitalism evolved from barter to the first money forms to the famous emergence money being invested in commodities in order to make more money. LaRouche seems to be arguing for a reversal of the historical movement of capitalism from industrial to financial and then back to industrial. But how would that process be rooted in the already existing history of capitalism in social evolution?  A renaissance in the flowering of the real economy seems to be the result of volunteerism on the part of LaRouche and his followers. It is not grounded in the history of capitalism.

Is there a crisis in capitalism?

Furthermore, there doesn’t seem to be any theory of a capitalist crisis. On page 15 of Michael Roberts’ book The Long Depression, he identifies both Marxist and non-Marxist theories of crisis. On the Marxist side, there is everything from the tendency of the rate of profit to fall to Rosa Luxemburg’s and David Harvey’s theory of underconsumption. When LaRouche wrote his book Dialectical Economics in the late 1970s he had a theory of capitalist crisis somewhat like Rosa Luxemburg’s theory. But my understanding is that when LaRouche left Marxism, he left his theory buried in that book.

Defense of Platonism and Christianity

According to George Johnson in Architects of Fear from Wikipedia:

According to George Johnson, LaRouche saw history as a battle between Platonists, who believe in absolute truth, and Aristotelians, who rely on empirical data. Johnson characterizes LaRouche’s views as follows: the Platonists include figures such as Beethoven, Mozart, Shakespeare, Leonardo da Vinci, and Leibniz. LaRouche believed that many of the world’s ills result from the dominance of Aristotelianism as embraced by the empirical philosophers such as Hobbes, Locke, Berkeley, and Hume, leading to a culture that favors the empirical over the metaphysical, embraces moral relativism, and seeks to keep the general population uninformed, LaRouche argued, whereas the Aristotelians use psychotherapy, drugs, rock music, jazz, environmentalism, and quantum theory to bring about a new Dark Age in which the world will be ruled by oligarchs. what matters is the Platonic versus Aristotelian outlook.

Lastly, LaRouche unapologetically accepts Platonic Christianity as an evolutionary advance from the polytheism and animism of pre-Christian times. He ignores the entire history of the misery Protestant and Catholic rulers have visited on their own populations with original sin, hatred of the body and fear of hell for starters. Neither does it seem to matter to LaRouche that both Protestants and Catholics persecuted thousands of pagans throughout history.

From LaRouche to the Rising Tide Foundation and the American System

Thanks to the Greanville Post I learned of the work of Matthew Ehret and Cynthia Chung and their Rising Tide Foundation. Influenced by LaRouche, they have excellent lectures, not only on geopolitics but also the arts and the history of science. Matthew Ehret has written a four-volume history of the United States and Cynthia Chung has written a great book called The Empire On Which the Black Sun Never Set. I’d like to share with you some highlights from Volume I of his book.

Clash of the two America’s – the Unfinished Symphony

History of industrial capitalism vs slave and finance capital in the United States

In Volume I of the Unfinished Symphony, Matthew Ehret divides the ruling factions in the United States into two groups: those who supported the British Empire and those who sided with the American system. Contrary to what most of us think, the British Empire was never really kicked out of the United States after the Revolutionary War. The US South continued to be involved with the British slave trade and many resisted fighting in the Revolutionary War.

The British Empire was dead-set against the United States becoming an industrial competitor to Great Britain. They wanted to maintain the US as a dependent country producing commercial agriculture (mostly cotton) for their textile mills. In their efforts to keep the United States under their thumb, the British were against the US establishing tariffs and protecting their industry to build canals and railroads. The British supported “free trade” and opposed Hamilton’s call for a national bank which invested in infrastructure projects. The British also supported the decentralization of banks. Doing the bidding of the British (whether consciously or not) Andrew Jackson cut out infrastructural projects and supported the spread of multiple species of currency which undermined longstanding economic projects.

The leading Americans who stood up for industrialization were Benjamin Franklin, Alexander Hamilton and in the 19th century, Abraham Lincoln. The forces of slave capital and finance capital supported the development of Wall Street, the City of London and later, the Bank of Manhattan. The British supported the South’s plea for states’ rights since that weakened the federal governments’ quest to centralize power which was necessary to build a strong nation-state.

As might be expected, the major theoretician of the British system of laissez-faire (let the markets rule) capitalism was Adam Smith. The economists of the American system were Franz List and Harry C. Carey. Believe it or not, there were some Americans who did not look East to Europe for a political vision. Rather, they looked to Russia and China as civilizations worth emulating. They included Charles Sumner, William Seward, William Gilpin and Asa Whitney. They toyed with building a trans-Siberian railroad. Seward purchased Alaska in the hopes of linking it to Russia via a railroad while William Gilpin wanted to build a world land bridge uniting the whole world. He was influenced by the great Alexander von Humboldt. The British deep state forces were embedded in the US Canadian United Empire Loyalists; Eastern establishment families and in Virginian slave-owning aristocrats, including Albert Pike who later was involved with the Ku Klux Klan.

In the case of Russia, the friendly outreach of Gilpin was rewarded. Most people do not know that during the Civil War, Czarist Russia came to the aid of forces of the Union when the British attempted to invade during the Civil War. The Russian Navy blocked the British land invasion on both the East and the West coasts of the United States.

Table B summarizes the relation of the American system against the British empire.

                             Table B American System vs the British Empire

Why are we discussing Rising Tide Foundation? Because it provides a necessary correction to the leftist trashing of all the Founding Fathers and shows there was a very progressive side to some of them. It also describes an American system which is consistent with the multipolar vision of China, Russia and the countries with BRICS.

Conclusion

I began this article using a contrast between the declining Anglo-American empire of the West and the rising Multipolar world of the East. Secondly, I identified Lyndon LaRouche as someone instrumental in developing an economic policy for Russia and India. Yet LaRouche also championed Western values of the Enlightenment, the importance of developing the productive forces of society and defending the nation-state against globalization. LaRouche argued that his ideas about developing the productive forces in Russia and India were also alive and kicking in the United States in what he called “the American system”. I then offered six reservations to his orientation from a Marxist perspective.

Finally, I brought in the work of the Rising Tide foundation and of Matthew Ehret in a book called The Clash of the Two Americas: Volume I: The Unfinished Sympathy. I presented how Matthew’s work demonstrated that there was a progressive tendency among the Founding Fathers and how the American system in the United States is connected to  a multipolar world in the East.

But where do LaRouche and Rising Tide stand on the linear political spectrum? Leftists have called LaRouche a fascist. I commented briefly that this was a ridiculous characterization. Yet who are the allies of the so-called American system, and where are they on the political spectrum? Finally, what is the relationship between LaRouche and the New Left on the political spectrum? We will learn their values are diametrically opposed because the New Left itself was shaped by the arch enemies of LaRouche and Rising Tide – finance capitalists, the Rockefellers and the CIA. We will see in Part II that the linear political spectrum itself is the problem.

This content originally appeared on Dissident Voice and was authored by Bruce Lerro.

A small financial transactions tax could correct a number of maladies in our economic system, from the federal debt crisis to the widening wealth divide to the rampant financialization of the economy, while eliminating taxes on income and sales.

The debt ceiling crisis has again brought into focus the perennial gap between what the government spends and what it accumulates in taxes, and the virtual impossibility of closing that gap by increasing taxes or negotiating cuts in the budget.

In a 2023 book titled A Tale of Two Economies: A New Financial Operating System for the American Economy, Wall Street veteran Scott Smith shows that we would need to tax everyone at a rate of 40%, without deductions, to balance the budgets of our federal and local governments – an obvious nonstarter. The problem, he argues, is that we are taxing the wrong things – income and physical sales. In fact, we have two economies – the material economy in which goods and services are bought and sold, and the monetary economy involving the trading of financial assets (stocks, bonds, currencies, etc.) – basically “money making money” without producing new goods or services.

Drawing on data from the Bank for International Settlements and the Federal Reserve, Smith shows that the monetary economy is hundreds of times larger than the physical economy. The budget gap could be closed by imposing a tax of a mere 0.1% on financial transactions, while eliminating not just income taxes but every other tax we pay today. For a financial transactions tax (FTT) of 0.25%, we could fund benefits we cannot afford today that would stimulate growth in the real economy, including not just infrastructure and development but free college, a universal basic income, and free healthcare for all. Smith contends we could even pay off the national debt in ten years or less with a 0.25% FTT.

A radical change in the tax structure may seem unlikely any time soon, due to the inertia of Congress and the overweening power of the financial industry. But as economist Michael Hudson and other commentators observe, the U.S. has reached its limits to growth without some sort of debt write down. Federal interest expense as a percent of tax revenues spiked to 32.9% in the first quarter of 2023, and it will spike further as old securities at lower interest rates mature and are replaced with new ones at much higher interest. A financial reset is not only necessary but may be imminent. Promising proposals like Smith’s can lead the way to a much-needed shift from serving “capital” to serving productivity and the broader public interest.

A Look at the Numbers

The material economy is roughly measured by the annual Gross Domestic Product (GDP), which for the U.S. had reached $25.6 trillion by the third quarter of 2022. (Michael Hudson observes that even GDP, as currently measured, is largely composed of non-productive financial services.) GDP is defined by spending, which depends on income. Collectively, Americans earned $21 trillion in 2021. The monetary economy is defined as the total amount of money that changes hands each year. Smith draws his figures from data that the Federal Reserve publishes annually in the Bank for International Settlements’ Red Book. The Red Book is not all-inclusive; it leaves out such payments as commodity trading, various options, crypto currency trades, and exchange-traded funds. But even its partial accounting shows $7.6 quadrillion in payments – more than 350 times our national collective income. Smith includes this chart:

Smith comments:

Most of these payments have little to do with what we regard as the real economy— the purchase of goods and services and the supply chain. Our GDP represents less than 0.33% of the payments in our economy. Once we see the big picture, the solution is obvious. We should tax payments instead of our income.

He calculates that U.S. spending by federal, state and local governments will total around $8.5 trillion in 2023. Dividing $7,625 trillion in payments by $8.5 trillion in government spending comes to a little more than 0.001, or a tenth of a percent (0.1%). Taxing payments at 0.1% could thus eliminate every tax we pay today, including social security (FICA) taxes, sales taxes, property taxes, capital gains taxes, estate taxes, gift taxes, excise taxes and customs taxes. With a 0.25% FTT, “If you have a net worth of $20 million or less, you would come out ahead. And if you make $500 million per year, you will finally be paying your fair share of taxes – $1.25 million!”

Bridging the Wealth Gap

The financial transaction tax is not a new concept. The oldest tax still in existence was a stamp duty at the London Stock Exchange initiated in 1694. The tax was payable by the buyer of shares for the official stamp on the legal document needed to formalize the purchase. Many other countries have imposed FTTs, including the U.S. — some successfully and some not. In January 2021, U.S. Rep. Peter DeFazio reintroduced The Wall Street Tax Act, which was accompanied in March 2021 by a Senate bill introduced by Sen. Brian Schatz. According to a press release on the Schatz bill, the tax “would create a 0.1% tax on each sale of stocks, bonds, and derivatives, which will discourage unproductive trading and redirect investment toward more productive areas of the economy. The new tax would apply to the fair market value of equities and bonds, and the payment flows under derivatives contracts. Initial public offerings and short-term debt would be exempted.” Schatz stated:

During the pandemic, Wall Street has cashed in on high-risk trades that add no real value to our economy and leave working families behind. We need to curb this dangerous trading to reduce volatility in the markets and encourage investment that can actually help our economy grow. By raising the price of financial transactions, we can make our financial system work better while bringing in billions in new revenue that we can reinvest in our workers and our communities.

Scott Smith concurs, noting that millions of people were forced into poverty during the first two years of the pandemic. In the same two years, the 10 richest men in the world doubled their fortunes and a new billionaire was minted every 26 hours. Much of this disparity was fueled by fiscal and monetary policy aimed at relieving the effects of the pandemic and of the 2008-09 banking crisis. Smith writes:

Our burgeoning monetary economy has fueled the rise of securitization, private equity, hedge funds, the foreign exchange market, commodity trading, cryptocurrency, digital assets, and investments in China. Quantitative easing further fanned these flames, driving up the price of financial assets. All such assets are monetary equivalents, and, thus, inflating the price of such assets balloons the money supply.

What many lauded as a robust economy was really monetary inflation. This makes it more difficult for the next generation to start life. Monetary inflation moves a select few out of the middle class, making them newly rich, while relegating many more to being poorer.

… The trading of financial assets in the monetary economy represents the majority of the payments in the economy, eclipsing payments related to wages or the purchase of goods or services. Thus, it would be wealthy individuals and institutions, such as hedge funds, that would shoulder most of the burden of a payment tax.

Predictably, the Wall Street Tax Act has gotten pushback and has not gotten far. But Smith says his proposal is different. It is not adding a tax but is replacing existing taxes – with something that is actually better for most taxpayers. He has asked a number of hedge fund managers, day traders, private equity fund managers, and venture capital managers if a quarter-point tax would impact their businesses. They have shrugged it off as not significant, and have said that they would certainly prefer a payments tax to income taxes.

Responding to the Critics: The Sweden Debacle

Among failed FTT attempts, one often cited by critics was undertaken in Sweden in the 1980s. As reported by the Securities Industry and Financial Markets Association (SIFMA):

There were negative capital markets impacts seen in the great migration of trading volumes across multiple products to London, equity index returns fell, volatility increased and the interest rate options markets essentially disappeared.

But as argued by James Li in a podcast titled “The Truth About a Financial Transaction Tax“:

Sweden’s tax policy … had an obvious, massive loophole, which is that Swedish traders could migrate to the London Stock Exchange to avoid the tax — which they did, until it was eventually abolished. On the other hand, the UK’s financial transaction tax has been much more successful. In 1694, King William III levied a stamp duty on all paper transactions, and a version of that levy still exists today, taxing many stock trades at 0.5 percent. Unlike the defunct Swedish tax, it applies to trades of shares of any UK company, regardless of where traders are based.

Again, Smith argues that the challenges met by other transaction tax proposals have arisen because they were being proposed as an additional tax. A payment tax in lieu of personal and corporate income taxes takes on a whole different character. He argues that big firms, rather than moving offshore to avoid a payments tax, would move to the U.S., since the tax rate in other nations would be much higher. Without a corporate or income tax, the U.S. would be the most favored tax haven in the world.

He adds that an exit tax could be a good idea: any money leaving the U.S. could be taxed at a 5% rate. That would discourage people from wiring money to an offshore exchange. But incoming money would not be taxed, encouraging foreign money to come to the U.S. to stay long-term, where it would be taxed less than elsewhere.

The Alleged Threat to Retirees

James Li’s favorite myth about a financial transactions tax is that it would be devastating for Main Street investors. He cites a report from the Modern Markets Initiative on the effects of the tax on savings and retirement security. A Business Wire headline on the report warns, “Latest Data from Modern Markets Initiative Shows the Financial Transaction Tax Would Threaten the Retirement Savings of Millions of Americans.” Among other claims is that a financial transactions tax would cost “$45,000 to $65,000 in FTT over the lifetime of a 401(k) account, or the equivalent of delaying the average individual’s retirement by approximately two years.” How that calculation was made is not included in the article, which refers the reader to the report. Li looked it up, and says on his podcast that it was highly misleading:

[T]he study stated that under this type of tax, for every $100,000 of assets in a 401(k) plan, the saver would owe $281 dollars in FTT taxes in a given year; and then over a 40-year time horizon paying in at $281 a year at 7% annual growth – the average for pension funds – that this would yield a total value of $64,232 after 40 years.

… [What they were] actually saying is, “If you put $100,000 a year into your 401(k), you would be paying approximately $281 in taxes for that $100,000; and if you had instead invested that money every year in a fund with 7% interest, that amount would add up to about $64,000 after 40 years.”

… I don’t know about you, but I can’t put $100,000 in my 401(k) plan every year. Very few people can. A more accurate estimate on how this would actually impact the average retirement savings is to look at the median income, which is around $52,000 a year, with an estimated $5,000 contribution into a 401(k) annually, which is around 10% of your gross pay based on commonly accepted financial planning advice. So the average person would only pay about $13 in FTT taxes in a given year.

These people are extremely tricky and their logic is also extremely flawed, because we pay taxes all the time. It’s like saying, “Oh, if I didn’t have to pay an income tax, I would be able to put all that money away and be up like a million bucks when I retire.”

Similar arguments are made concerning potential losses from FTTs to pension funds and the stock market. SIFMA contends, “What’s bad for the capital markets is bad for the economy,” stating “The capital markets fund 65% of economic activity in the U.S.” Perhaps, but the money paid for shares of stock traded in the stock market does not go to the corporations issuing the stock. It goes to the previous shareholders. Only the sale of IPOs – initial public offerings – generates money for the corporation, and this money is typically exempted from FTTs. Trades after that are simply gambling, hoping to sell at a higher price to the “greater fool.”

Killing the Parasite That Is Killing the Host

In the 2015 book Killing the Host – How Financial Parasites and Debt Destroy the Global Economy, Michael Hudson calls “finance capitalism” a parasite that is consuming the fruits of “industrial capitalism” – the goods and services traded in what Smith calls the material economy. Pam Martens writes in a review of Hudson’s book that this “blood-sucking financial leech [is] affixed to your body, your retirement plan, and your economic future.”

But it is not actually the pension funds that are doing most of the financialized trades or that would get taxed on those trades. It is their asset managers – including BlackRock and Vanguard, both of which lost money overall in 2022. If the asset managers can’t make money in the financialized economy, perhaps it would be better for the pension funds to move to more productive investments – from “finance capitalism” to “industrial capitalism.”

Publicly-owned banks mandated to serve the public interest would be good options if we had them. As the economy falters, the public banking movement is picking up steam, part of a much-needed shift towards an economy that puts the public interest above private profits.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

"We cannot have a biophysically safe planet without justice."

The new paper, written by many of the same people, introduces justice considerations into the framework, leading the authors to propose a set of "safe and just" Earth system boundaries (ESBs) at global and sub-global scales, some of which are stricter than the "safe" limits outlined previously.

"For the first time, we present quantifiable numbers and a solid scientific foundation to assess the state of our planetary health not only in terms of Earth system stability and resilience but also in terms of human well-being and equity/justice," said lead author Johan Rockström, director of the Potsdam Institute for Climate Impact Research.

The interdisciplinary team focused on five of the nine planetary systems identified in 2009—climate, biosphere, water, nutrient cycles, and atmosphere. To determine the health of these systems, they relied on the following eight measurable indicators:

1. Global mean surface temperature change since the pre-industrial era (climate);
2. Natural ecosystem area (biosphere);
3. Functional integrity (biosphere);
4. Surface water flows (water);
5. Groundwater levels (water);
6. Nitrogen (nutrient cycles);
7. Phosphorous (nutrient cycles); and
8. Aerosol loading (atmosphere).

As Phys.orgreported: "Safe boundaries ensure stable and resilient conditions on Earth, and use an interglacial Holocene-like Earth system functioning as a reference point for a healthy planet. A stable and resilient Earth is dominated by balancing feedbacks that cope with buffer and dampen disturbances. Cutting-edge science on climate tipping points features as one major line of evidence to set safe boundaries."

To establish "just" boundaries for each indicator, the authors assessed the conditions needed to avert "significant harm," which they defined as "widespread severe existential or irreversible negative impacts on countries, communities, and individuals from Earth system change, such as loss of lives, livelihoods, or incomes; displacement; loss of food, water, or nutritional security; and chronic disease, injury, or malnutrition."

As summarized by Carbon Brief, the researchers took into account the following justice criteria:

• Interspecies justice: prioritizing other species and ecosystems in addition to humanity.
• Intergenerational justice: considering how actions taken today will impact future generations.
• Intragenerational justice: accounting for factors including race, class, and gender, which "underpin inequality, vulnerability and the capacity to respond" to changes in planetary systems.

"The results of our health check are quite concerning: Within the five analyzed domains, several boundaries, on a global and local scale, are already transgressed," Rockström said. "This means that unless a timely transformation occurs, it is most likely that irreversible tipping points and widespread impacts on human well-being will be unavoidable. Avoiding that scenario is crucial if we want to secure a safe and just future for current and future generations."

According to the paper, "Social and economic systems run on unsustainable resource extraction and consumption" have pushed Earth past seven of the eight "safe and just" ESBs.

The paper includes the following image for reference. The Earth icons representing the current state of the planet should be in the green space, which marks where "safe" (red) and "just" (blue) ESBs overlap. Instead, they lie beyond the "safe and just corridor" for every indicator except aerosol loading.

When "safe" ESBs are looked at in isolation, the planet has entered the danger zone for six of the eight indicators. According to the authors, 1.2°C of global warming to date has pushed the world beyond the "just" ESB for climate, which requires mean surface temperature rise to be capped at 1.0°C. For now, the climate still remains in the "safe" threshold, they say, even as the impacts of increasingly frequent and intense extreme weather are already being felt, especially by the poor.

However, Gupta stressed that "justice is a necessity for humanity to live within planetary limits."

"This is a conclusion seen across the scientific community in multiple heavyweight environmental assessments," said Gupta. "It is not a political choice. Overwhelming evidence shows that a just and equitable approach is essential to planetary stability."

"We cannot have a biophysically safe planet without justice," she added. "This includes setting just targets to prevent significant harm and guarantee access to resources to people and for as well as just transformations to achieve those targets."

As Carbon Brief pointed out: "This study is the first to assess Earth-system boundaries at a local scale, rather than analyzing the planet as a whole. This allows the authors to determine which boundaries have been crossed in specific regions and to identify 'hotspots' for breached boundaries."

As a result, researchers were able to produce the following map, which shows that more boundaries have been breached in certain areas, including Eastern Europe, the Middle East, South and Southeast Asia, and substantial parts of Africa, Brazil, Mexico, China, and the U.S. West.

Rockström told reporters that the eight indicators were "carefully chosen" to be "implementable for stakeholders... across the world."

The researchers hope that the "safe and just" ESBs they have put forth "will underpin the setting of new science-based targets for businesses, cities, and governments to address the polycrises of: increasing human exposure to the climate emergency, biodiversity decline, water shortages, ecosystem damage from fertilizer overuse in some parts of the world coupled with lack of access elsewhere, and health damage from air pollution," Phys.org reported.

"Stewardship of the global commons has never been more urgent or important."

Rockström and Gupta are co-chairs of the Earth Commission, founded in 2019 "to advance the planetary boundaries framework," Carbon Brief observed. "The concept has been widely used in academia and policy spaces, but has also attracted criticism from scientists who say it oversimplifies a complex system, or could spread political will too thinly."

Earth Commission executive director Wendy Broadgate, for her part, said that "a safe and just transformation to a manageable planet requires urgent, collective action by multiple actors, especially in government and business to act within Earth system boundaries to keep our life support system of the planet intact."

"Stewardship of the global commons has never been more urgent or important," she added.

In their conclusion, the authors wrote that "nothing less than a just global transformation across all ESBs is required to ensure human well-being."

"Such transformations must be systemic across energy, food, urban, and other sectors, addressing the economic, technological, political, and other drivers of Earth system change, and ensure access for the poor through reductions and reallocation of resource use," they added. "All evidence suggests this will not be a linear journey; it requires a leap in our understanding of how justice, economics, technology, and global cooperation can be furthered in the service of a safe and just future."

This content originally appeared on Common Dreams and was authored by Newswire Editor.

Photo: Ludd, drawn here in 1812, was the fictitious leader of numerous real protests. Granger Collection, New York.

The question is, To be or not to be or not to be …

(from Hamlet, spoken by Hamlet)

To be, or not to be, that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles
And by opposing end them. To die—to sleep,
No more; and by a sleep to say we end
The heart-ache and the thousand natural shocks
That flesh is heir to: ’tis a consummation
Devoutly to be wish’d. To die, to sleep;
To sleep, perchance to dream—ay, there’s the rub:
For in that sleep of death what dreams may come,
When we have shuffled off this mortal coil,
Must give us pause—there’s the respect
That makes calamity of so long life.
For who would bear the whips and scorns of time,
Th’oppressor’s wrong, the proud man’s contumely,
The pangs of dispriz’d love, the law’s delay,
The insolence of office, and the spurns
That patient merit of th’unworthy takes,
When he himself might his quietus make
With a bare bodkin? Who would fardels bear,
To grunt and sweat under a weary life,
But that the dread of something after death,
The undiscovere’d country, from whose bourn
No traveller returns, puzzles the will,
And makes us rather bear those ills we have
Than fly to others that we know not of?
Thus conscience doth make cowards of us all,
And thus the native hue of resolution
Is sicklied o’er with the pale cast of thought,
And enterprises of great pith and moment
With this regard their currents turn awry
And lose the name of action.

Rolling out Smart Phone City, our 51st state’s govenor, Zelensky: Here, highlights from Lily Lynch’s recent blog: Ukraine’s ‘state in a smartphone’.

• Notice the language — run like an IT company, Smart Phone city, exporting digitalization, you only need two seconds to become an entrepreneur’ and ‘30 minutes to found a limited liability company;
• to ensure widespread adoption of the app, the government produced a miniseries with well-known Ukrainian film stars – creating what Fedorov calls ‘the Netflix of education’, particularly for those in rural areas and the elderly;
• Diia eVorog (‘eEnemy’), civilians can use a chatbot to report the names of Russian collaborators, Russian troop movements, the location of enemy equipment and even Russian war crimes. Such reports are processed through support services at Diia; if deemed legitimate, they are submitted to the headquarters of the Ukrainian armed forces. At first glance, the interface looks like a video game;
• that positions Ukraine as a technological powerhouse forged in war;
• it was announced that by 2030, Ukraine intends to have become the first country to go entirely cashless and have a court system governed by AI;
• As Zelensky noted at a recent Diia Summit, ‘A computer has no friends or godfathers, and doesn’t take bribes’;
• Residents of Diia City will also benefit from a ‘flexible employment model’, including the introduction of precarious ‘gig contracts’, hitherto nonexistent in Ukraine;
• Power announced that an additional $650,000 would be provided to ‘jumpstart’ the creation of Diia-ready infrastructure in other countries. On Tuesday, Power said these would include Colombia, Kosovo and Zambia;
• When the Clinton State Department introduced the notion of ‘digital diplomacy’ – with one senior advisor telling NATO that ‘the Che Guevara of the 21st century is the Network’ – it already rang hollow;
• It reflects the impoverishment of the Western liberal-democratic imagination, unable to deliver a convincing or desirable vision of the future, on- or offline;
• IT is about freedom’, the narrator says. ‘All you need is a computer to invent a great variety of things.’

Lynch: “Wearing the Silicon Valley uniform of blue jeans, a T-shirt and a headset mic, strutting the stage like he was delivering an impassioned TED talk, Ukraine’s 31-year-old Digital Transformation Minister Mykhailo Fedorov explained the many features of the country’s pioneering mobile application. Thanks to Diia, he said, Ukraine would be run less like a country and more like an IT company, soon becoming ‘the most convenient state in the world’. USAID Administrator Samantha Power echoed this aspiration, noting that Ukraine – long known as the breadbasket of the world – was now ‘becoming famous for a new product … an open source, digital public good that it will give to other countries’. This would be achieved through the transatlantic partnership between the two nations. ‘The US has always exported democracy’, Fedorov said, ‘now it exports digitalization.’

When Volodymyr Zelensky was elected president in 2019, he promised to transform Ukraine into a ‘state in a smartphone’, making most public services available online. A digitalization agenda of this kind was virtually unprecedented, dwarfing ‘e-Estonia’ in both the speed of its rollout and the scale of its ambition. The programme’s crown jewel was Diia, launched in February 2020 with ample support from USAID. US funds reportedly amounted to $25 million for ‘the infrastructure underpinning Diia’ alone. Additional grants have come from the UK, Switzerland, the Eurasia Foundation, Visa and Google. The app is now used by some 19 million Ukrainians, about 46% of the country’s prewar population.”

*****

The question is: Our we all part of this conspiracy? We use this fucking electronic computerized typewriter with millions of gigs of storage, and tied to the fiber optics, trolling the vast world wide net of information, so are we too the enemy? We communicate with cellular phones, so are we feeding the monster, the ghosts in machnines, the ghosts of the CIA and Mossad and MI6 who want us all handcuffed and monitored? We have our medical information Zoomed at home, and we bank on line, take Snap Shots of old fashioned checks to deposit, so are we responsible for our imprisonment?

We laugh at the Chromebook jokes our k12 students make. We love Hobbits in the next and next Lord of the Rings, and drool over Cruise and his CGI pecs in Mission Impossible streamed on our tiny black mirror at bedtime while asking Alexa the best place to get Civet feces washed coffee. Are we the enemy?

We all pay for this gulag creation, from IRS chasing small potatoes like me, to the big bad killers of Julian Assange. We all have our nano-breaths fogging up our black mirrors that are now part of the Zelensky’s wet dreams of tracking us ALL. First, try it in Estonia, Moldovia, Ukraine, then, the world!

Here’s a hell of a deal for USA taxpayer LLC, CIA: For $1 put in, $15 coming back.

It’s open, in the air, Wiki-CIA-Pedia: “In-Q-Tel (IQT), formerly Peleus and In-Q-It, is an American not-for-profit venture capital firm based in Arlington, Virginia. It invests in high-tech companies to keep the Central Intelligence Agency, and other intelligence agencies, equipped with the latest in information technology in support of United States intelligence capability. The name “In-Q-Tel” is an intentional reference to Q, the fictional inventor who supplies technology to James Bond.

In-Q-Tel has stated that the average dollar invested by In-Q-Tel in 2016 attracts fifteen dollars from other investors.”

It is a fascist’s, oligarch’s, racist’s wet dream:

I just do not think most radicals and revolutionaries and anti-imperialists and those for Russia’s right to defense, peace, accords, treaties, independence, get it, get how overarching these madmen and madwomen are, with their armies of nerds, eggheads and academics and STEM gurus. Watch this shit storm:

These are the end times, for sure, for guys like me, using this shit storm computer, doing my snap-shot deposits, who pays for IRS interest fines on old unaccounted for 1099s which one of my Gig employers failed to send me. Deplorable, man, not me, not them, but those are the facts, ma’am, just the facts:

For ZioAzovUkrainians, this is reality: eVorog (‘eEnemy’), i.e. RUSSIANS (or anyone looking beyond the dirty tricks of Mossad and DARPA and Blackrock and Tel Aviv, London, Brussels, DC) are THE enemy, and will be blasted on a computer video game app that ties into the security-finance-survelliance state actors, including Google-JP Chase Morgan-BlackRock-Blackstone-Vanguard!!!

Then after the app IDs us, well, then, send in the cocaine cowboy clown’s assassin drones, or just old fashioned black-booted SS or IDF or SBU kicking in the door and targeting with the latest Israeli-made sniper weapon.

From Lynch:

When Russian forces destroyed numerous TV towers, Diia launched broadcasting services to ensure an uninterrupted stream of Ukrainian news sources. Ukrainians can also register destruction to property from Russian military strikes, which the government says will guide the country’s post-war reconstruction. Beyond the introduction of these useful wartime services, Diia has rolled out an array of ‘civil intelligence’ features. With Diia eVorog (‘eEnemy’), civilians can use a chatbot to report the names of Russian collaborators, Russian troop movements, the location of enemy equipment and even Russian war crimes. Such reports are processed through support services at Diia; if deemed legitimate, they are submitted to the headquarters of the Ukrainian armed forces. At first glance, the interface looks like a video game. Icons are illustrated as targets and army helmets. After users submit a report about the location of Russian troops, a muscle-flexing emoji pops up. When they submit documentation of war crimes, they click an icon of a drop of blood.

You have to take a short leap from Ukraine to the WEF, Fourth Industrial Revolutionaries, Transumanism Backers, and understand how the Power of AI to Control Us all is their goal, but we have to leap backward in order to look at why leadership is so disconnected, so transhumanist, so censorious, so Farenheit 451, so Brave New World, so Lord of the Flies, so 1984, so eugenics drenched. These people are in their own world, but their polarized colored glasses and Stem cell smoothies are killing us, even those of us who believe in full stop/time out/precautionary limits on their machinations, on their scientific disgust, on their world of more and smaller and quantumized this and nano-tech that, CRISPR-flogging us all into oblivion.

These people, the policymakers, CEOs, politicians, lobbyists, they live in their own smeared up bubble of hubris and hasbara. They are the Frankenstein masters.

And that propensity is particularly dangerous when leadership groups have become both selfish and short-termist. There really was once upon a time some people who went into government service for the service part, and not for the revolving door and networking. There was also a time, before the rise of global elites, where the powerful had ties to particular physical communities and some took interest in their betterment. In other words, while there were plenty of self-promoting and mediocre people at the helm, there were often enough in the room who were concerned about long-term risks to put a check on the worst behavior. (“US Geopolitics: Believing Impossible Things”)

There are no ethics, really, when the stage is set at places like CIA-DARPA-DoD-FinTech Stanford, or name the one of a thousand universities, even community colleges:

(Introductions by Professor Rob Reich, President Marc Tessier-Lavigne, and grad student Margaret Guo end at 13:52.) Twin revolutions at the start of the 21st century are shaking up the very idea of what it means to be human. Computer vision and image recognition are at the heart of the AI revolution. And CRISPR is a powerful new technique for genetic editing that allows humans to intervene in evolution. Jennifer Doudna and Fei-Fei Li, pioneering scientists in the fields of gene editing and artificial intelligence, respectively, discuss the ethics of scientific discovery. Russ Altman moderated the conversation.

Stanford’s Fei-Fei Li and Jennifer Doudna of UC Berkeley will discuss the ethics of artificial intelligence and CRISPR technology. (Image credit: Getty Images)

This corrupt Big Time Stanford U, and the rottenness of the Prez: Stanford University President Marc Tessier-Lavigne is in hot water.

These high-tech, anything goes in science corrupt folks:

Since last fall, allegations of image manipulation in scientific papers for which Tessier-Lavigne is listed as an author have spurred questions about his decades-long scientific career. While members of Stanford’s Board of Trustees and several outside legal and scientific experts review the claims of scientific misconduct, Tessier-Lavigne has remained at the helm of one of the world’s premier research institutions.

His unusual position as president-under-investigation mirrors an unusual public-relations approach. Instead of staying silent, as many embattled leaders do during an investigation, Tessier-Lavigne has vocally defended his actions, criticized the student newspaper in harsh terms, and cast himself as a faculty member first and president second.

Some experts in higher ed and science have raised their eyebrows at the president’s tack. In embracing a defensive posture, critics say, he may have compromised his role as a community leader.

So, some egghead with the all that AI love and the other egghead with all the valorizing of CRISPR, they have zero weight in a discussion on the ethics of their Frankensteins, their creations, but in the world of controlled oppositions, controlled MSM, the media spinners in Academia who never scratch truth or rebelliousness, with of all of those secret private security bullet proof legions protecting bankers, millionaires, billionaires, the lot of them at Davos or Aspen, we will never get what we need — real debates with real revolutionaires, whether the beautiful people do or do not call us all Luddites.

Here, from the Stanford student newspaper, god love them:

Meanwhile, Tessier-Lavigne continues to evade questions. After a recent event with Colombian president Gustavo Petro, Tessier-Lavigne was approached by a Daily reporter about his research. To two questions, Tessier-Lavigne responded with silence: “Why did you publish Alzheimer’s research you knew wasn’t reproducible?” and “What was the decision-making process behind not retracting that paper?” To a third question, “What do you have to say to people who are wondering why there are so many allegations of research misconduct from your lab?” Tessier-Lavigne told the reporter, “very nice to see you and look forward to corresponding.” (source)

There are so many studies on this fact, how research is not reproducible. And, the solution to this? Yep, AI: Currently, researchers that have the most-cited or most popular studies in “high-impact” journals get rewarded — even though the methods may not be reproducible. In a recent piece in Issues in Science and Medicine, former Lown Institute VP Shannon Brownlee and National Institutes of Health researcher Bibiana Bielekova propose using machine learning algorithms to identify articles by their rigor, reproducibility, and societal impact, rather than their popularity or number of citations. This could incentivize better research methods while illuminating future research paths that are most likely to bear fruit.

Science as ideology. We think we follow science, but we are following blind ideology. Academic research has many problems. One is the replication crisis starting around 2005. In medical and biological sciences, 85 percent of research papers are not replicable/reproducible.

Did we overreact to “the virus” in 2020? Did we march out mRNA too quickly? Or, were those mRNA “things” way advanced in the pipeline? Well, it was in the plan. And if you put “it” (“Event 201” … or … “Moderna as already working on mRNA corona before 2019”) in a search box in Pharma-CIA-FinTech-DARPA Google, you will get pure deniability:

In October, 2019 Microsoft founder Bill Gates, who, together with his wife (now ex-wife), runs the richest and most powerful foundation in the world, co-organized a simulation exercise on a worldwide corona epidemic. Videos were posted documenting the exercise. Find them. Gates now denies such an exercise ever took place.

Why? On April 12, 2020, Bill Gates said in an interview to the BBC, “Now here we are. We didn’t simulate this, we didn’t practice, so both the health policies and economic policies, we find ourselves in uncharted territory.”

This is the same person who, just six months before the outbreak of the pandemic, organised a series of four role-playing simulations of a corona pandemic with very high-ranking participants. Event 201 was a simulation of a corona pandemic conducted by the Bill & Melinda Gates Foundation, the World Economic Forum and Johns Hopkins University in October 2019.

Participants from the private and public sectors were presented with a scenario, not unlike the one that has unfolded in reality, and discussed what needed to be done. There are official videos of the four meetings and a best-of-video scenario presentation and discussion by the participants, who are members of a pandemic control council in the role play.

It is true that if a little less emphasis had been placed on opinion manipulation, more attention could have been paid to health and economic policy. One of the four meetings was entirely devoted to this. But health and economic policies did get discussed. Gates can hardly have forgotten that.

The video on control of public opinion is the most interesting one, as it helps to put in perspective the efforts in this regard, which we are currently experiencing. One participant tells us that Bill Gates is financing work on algorithms which comb through the information on social media platforms to make sure that people can trust the information that they find there.

And the Chinese participant, the head of the Chinese Centre for Disease Control muses about ways to counter rumours that the virus is man-made. Remember, this exercise took place in October 2019, before the current pandemic broke out. (source)

So are we “anti-science” and “anti-knowledge” and “anti-civilization” if we QUESTION from the bottom of our intellects? Luddites? Am I blind?

Am I a Luddite: According to an article by Richard Conniff:

As the Industrial Revolution began, workers naturally worried about being displaced by increasingly efficient machines. But the Luddites themselves “were totally fine with machines,” says Kevin Binfield, editor of the 2004 collection Writings of the Luddites. They confined their attacks to manufacturers who used machines in what they called “a fraudulent and deceitful manner” to get around standard labor practices. “They just wanted machines that made high-quality goods,” says Binfield, “and they wanted these machines to be run by workers who had gone through an apprenticeship and got paid decent wages. Those were their only concerns.”

The original Luddites lived in an era of “reassuringly clear-cut targets—machines one could still destroy with a sledgehammer,” Loyola’s Jones writes in his 2006 book Against Technology, making them easy to romanticize. By contrast, our technology is as nebulous as “the cloud,” that Web-based limbo where our digital thoughts increasingly go to spend eternity. It’s as liquid as the chemical contaminants our infants suck down with their mothers’ milk and as ubiquitous as the genetically modified crops in our gas tanks and on our dinner plates. Technology is everywhere, knows all our thoughts and, in the words of the technology utopian Kevin Kelly, is even “a divine phenomenon that is a reflection of God.” Who are we to resist?

“The original Luddites would answer that we are human. Getting past the myth and seeing their protest more clearly is a reminder that it’s possible to live well with technology—but only if we continually question the ways it shapes our lives.” (source)

Men are grown mechanical in head and in heart, as well as in hand.
— Thomas Carlyle (source)

This content originally appeared on Dissident Voice and was authored by Paul Haeder.

]]> https://www.radiofree.org/2023/05/27/luddite-or-cantankerous-or-naysayer-or-devils-advocate-backward-or/feed/ 0 398930 https://www.radiofree.org/2023/05/23/new-report-ahead-of-oecd-negotiations-report-shows-oecd-export-finance-props-up-fossil-fuels-blocking-energy-transition/ https://www.radiofree.org/2023/05/23/new-report-ahead-of-oecd-negotiations-report-shows-oecd-export-finance-props-up-fossil-fuels-blocking-energy-transition/#respond Tue, 23 May 2023 12:53:15 +0000 https://www.commondreams.org/newswire/new-report-ahead-of-oecd-negotiations-report-shows-oecd-export-finance-props-up-fossil-fuels-blocking-energy-transition

In Paris this week, the Organisation for Economic Co-operation and Development (OECD) countries will negotiate terms and conditions for climate-friendly export financing. According to new analysis by Oil Change International, OECD countries supported fossil fuel exports by an average of $41 billion from 2018 to 2020, almost five times more than clean energy exports ($8.5 billion). This directly contradicts internationally agreed climate goals, including the Paris Agreement objective to align financial flows with the low-carbon energy transition.

A majority of international public finance for fossil fuels is provided by OECD governed Export Credit Agencies (ECAs) – more than even Multilateral Development Banks – with 71 percent of export financing for energy going to oil and gas.

OECD ECAs play a particularly influential role in getting large fossil infrastructure projects built. They invested in 56 percent of new hazardous liquified gas (LNG) export terminal capacity built in the last decade (providing at least $81 billion total), helping drive the global fossil gas boom by getting these large keystone projects built. Overall, about 42 percent of all fossil fuel finance from ECAs under the OECD supported midstream infrastructure activities, such as pipelines, LNG ports, and shipping.

According to IEA and IPCC scenarios, maintaining a 50% chance to limit global warming to 1.5°C requires an immediate end to investments in new coal, oil, and gas production and LNG infrastructure. Even in IEA scenarios that are not 1.5°C aligned, coal, oil, and gas demand, including demand for LNG, is forecasted to drop. To avoid breaching climate goals and stranded assets, countries must cease new expansion.

With 52 percent of OECD countries signed onto the COP26 Clean Energy Transition Partnership commitment (CETP) to end international public finance for fossil fuels by the end of 2022 and prioritize public finance for clean energy, OECD members have the opportunity and responsibility to align export finance with climate goals at the OECD. Under the CETP commitment, countries explicitly committed to promote this agenda at multilateral forums, including at the OECD. The OECD has in recent years assisted in building momentum on shifting finance out of fossil fuels through restrictions on coal export financing – showing that the OECD Arrangement has the power to enact policies that further align ECAs with financing the clean energy transition through placing restrictions on export finance for oil and gas.

This new report recommends that OECD countries present an ambitious proposal to prohibit financing all oil and fossil gas projects in order to align with a 1.5°C warming limit.

Authors of the new report recommend that:

• Australia, Norway, Turkey, Korea, and Japan, urgently sign onto the Clean Energy Transition Partnership (CETP).
• OECD members that have already signed onto the CETP, including the UK and Canada, fulfill their commitment to “driv[e] multilateral negotiations in international bodies, in particular in the OECD” to align with the Paris agreement goals and present a proposal for an OECD oil and gas export finance prohibition;
• OECD members close the existing coal loopholes, to extend the coal-fired power prohibition to cover coal mining, transport, and associated infrastructure;
• OECD members ensure that under the Climate Change Sector Understanding (CCSU) no favorable investment conditions are offered to any project or technology derived from fossil gas, including but not limited to blue, gray, and black hydrogen and ammonia, or projects that extend the lifetime of fossil fuel assets.

Experts at Oil Change International and partner organizations issued the following statements:

“Now is the time OECD countries must step up to the plate and make international climate goals a reality, by ending export finance for oil and fossil gas. The science is crystal clear that any new oil and gas projects are not compatible with a safe climate future, and that more oil and gas expansion will not solve concerns over energy security. ECA-supported oil and gas projects, such as recent LNG export projects in Mozambique, have played a role in displacing whole communities, fueling human rights violations, polluting the environment, and compounding the region’s climate vulnerabilities while providing little to no socioeconomic or energy benefits. OECD countries have an obligation to stop using public money against the public interest”. Nina Pušic, ECA Climate Strategist, Oil Change International

”At COP26, governments have shown that leadership on ending public finance for fossils is possible. Climate science dictates it is time to take the next step: creating a level playing field at the OECD by ending oil and gas export finance.” Niels Hazekamp, Both ENDS, The Netherlands

“It is high time for the United States to be a leader at the OECD to push for an end to export credit support for fossil fuels, alongside other wealthy historical emitters. Unfortunately, instead of leading and taking responsibility, the US is moving in the opposite direction – most recently approving almost $100 million for an oil refinery in Indonesia: a clear violation of the Glasgow commitment.” Kate DeAngelis, Friends of the Earth, United States

“Vaca Muerta, a shale mega project in Argentina promoted and financed by ECAs, turned 10 years old. Since the beginning of exploitation, it not only causes severe socio-environmental problems but also ties us to the past, delaying the just energy transition needed in the Global South. OECD ECAs have an opportunity to stop involvement in controversial projects, and redirect finance toward clean energy that can shape low carbon emission energy systems based on environmental, democratic, decentralized, popular and fair bases in the Global South.” Julia Gerlo, Fundación Ambiente y Recursos Naturales (FARN), Argentina

“The global south, burdened by the impacts of climate change, can no longer shoulder the heavy costs of adaptation while OECD countries persist in providing export support for fossil fuels. It is time for OECD countries to honor their commitments and cease such support. Embrace the urgent call to action on climate change and lead by example, inspiring others to join the cause. Together, let us forge a path towards sustainability. By taking decisive action, we can create a future that is fair, resilient, and inspiring for all.” Samuel Okulony, Environment Governance Institute, Uganda

This content originally appeared on Common Dreams and was authored by Newswire Editor.

]]> https://www.radiofree.org/2023/05/23/new-report-ahead-of-oecd-negotiations-report-shows-oecd-export-finance-props-up-fossil-fuels-blocking-energy-transition/feed/ 0 396991 https://www.radiofree.org/2023/05/20/csos-condemn-g7-leaders-for-dangerous-backsliding-on-gas-breaching-commitments-to-end-fossil-fuel-finance/ https://www.radiofree.org/2023/05/20/csos-condemn-g7-leaders-for-dangerous-backsliding-on-gas-breaching-commitments-to-end-fossil-fuel-finance/#respond Sat, 20 May 2023 17:13:02 +0000 https://www.commondreams.org/newswire/csos-condemn-g7-leaders-for-dangerous-backsliding-on-gas-breaching-commitments-to-end-fossil-fuel-finance

Today, G7 Leaders in Hiroshima concluded that there is “an important role” for “increased deliveries of LNG” and that “publicly supported gas investments can be appropriate”, jeopardizing the 1.5ºC warming limit and directly contradicting last year’s G7 commitment to end international public finance for fossil fuels by the end of 2022.

The G7 endorsement of increased gas finance comes despite strong opposition. Leading up to the Summit, activists organized over 50 actions in 22 countries to urge Japan and fellow G7 countries to end their support for fossil fuels and to stop driving the expansion of gas and other fossil-based technologies such as ammonia co-firing in coal-fired power plants. They say the science is clear: ending investments in fossil fuels and phasing them out is necessary to avoid climate breakdown and meet parallel energy security and affordability goals.

In their Leaders’ Communique, the G7 claim that “they are steadfast in their commitment to … keeping a limit of 1.5ºC global temperature rise within reach”. A true commitment to 1.5°C, however, requires the G7 to explicitly exclude continued investments in new upstream gas projects and Liquefied Natural Gas (LNG) infrastructure. Today’s G7 endorsement of increased gas investments came after a push from Japan and Germany, with Japan using its G7 Presidency to also promote other fossil fuel-based technologies such as hydrogen, ammonia and CCS.

The G7 play a central role in enabling the global buildout of LNG infrastructure. An Oil Change Internationalbriefing shows that 61% of LNG export terminal capacity built in the last decade had international public finance from the G7. A large portion of the G7’s fossil fuel finance went to support gas projects (42%), of which 75% went to support LNG projects, with Japan and the United States providing the majority of LNG finance.

According to the International Energy Agency (IEA), maintaining a 50% chance to limit global warming to 1.5°C requires an immediate end to investments not just in new coal, oil, and gas production, but also in LNG infrastructure. Such investments also come with serious stranded assets risks as gas demand, including for LNG, is forecasted to drop. These findings remain unchanged in the context of the war in Ukraine and its impact on global energy markets.

Reducing soaring energy costs and improving energy security requires phasing out fossil fuel reliance and shifting to clean energy, according to the IEA. Renewable energy technologies are more affordable, and can be scaled up more rapidly. They also help avoid fiscal instability linked to volatile fossil fuel prices and stranded asset risks as global gas demand drops. Today, the G7 failed to reap these benefits of an accelerated shift to clean energy.

Leaving the door open for new gas and LNG infrastructure is also in direct contradiction to last year’s G7 commitment to end international public finance for fossil fuels by the end of 2022 “except in limited circumstances … consistent with a 1.5°C warming limit…”. Today, G7 Leaders claim that they have fulfilled this commitment. However, data shows this is untrue, as Japan and Italy have continued to approve new international support to fossil fuel projects in 2023 that are not aligned with 1.5°C.

This year, Italy has already approved international public financing for the Santos Basin oil and gas production project in Brazil. The Japanese Export Credit Agency, JBIC, has provided USD 393 million for a gas-fired power plant (Syr Darya II Shirin combined cycle gas turbine (CCGT)) in Uzbekistan. During a recent visit to Mozambique, as part of Japan’s efforts to “deepen its involvement with the global south”, Prime Minister Kishida committed to help Mozambique revive its LNG project and support Japanese private investment in gas. The United States Export Import Bank (U.S. EXIM) voted to provide almost USD 100 million in export support to expand the controversial PT Kilang Pertamina Balikpapan Petroleum Refinery in Indonesia.

Had the G7 upheld their climate and fossil finance commitments, the group of nations could have collectively shifted over USD 24.3 billion per year out of fossil fuels and into clean energy and increased G7 clean energy finance to USD 34 billion annually, a sum nearly substantial enough to close the energy access finance gap. This would have catalyzed an even larger shift in public and private finance and further investments are needed for the G7 to deliver their fair share of climate, loss and damage and just energy transition finance support to the Global South.

Today, the G7 missed an opportunity to set the stage for success at key upcoming global climate events, including the UN Climate Action Summit in September and COP28 in December. World leaders must urgently change course to not forfeit the chance to limit global warming to 1.5°C while building a more energy secure and affordable future.

In response, experts at Oil Change International and partner organizations issued the following statements:

“This year’s G7 is revealing Japan’s failure of climate leadership at a global level. At a time when we rapidly need to phase out fossil fuels, this year’s G7 host has pushed for the expansion of gas and LNG and technologies that would prolong the use of coal. Activists mobilized 50 actions across 22 countries this week to demand that Japan end its fossil fuel finance and stop driving the expansion of gas and other fossil-based technologies. Japan will continue to face intense international scrutiny until it stops fueling the climate crisis,” said Susanne Wong, Asia Program Manager at Oil Change International.

“A month ago G7 ministers successfully pushed back against a Japan-led push for gas investments and fossil fuels. But Germany joining Japan in promoting gas investments means we now have a disastrous G7 Summit outcome. The repeated call for public gas investments directly contradicts the G7 Leaders’ claim that they have fulfilled their commitment to end public finance for fossil fuels by the end of last year. It also jeopardizes 1.5ºC and energy security goals. The G7 today missed an important opportunity to get on track for 1.5°C to set the stage for a successful G20 and COP28 — rather they have moved in the opposite direction. They need to urgently reroute to protect people and the planet,” said Laurie van der Burg, Global Public Finance Co-Manager at Oil Change International.

“Japan has used the G7 presidency to derail the global energy transition. Japan has been driving the push to increase gas investments and has been promoting its so-called ‘Green Transformation’ strategy. This greenwashing scheme includes fossil hydrogen, ammonia, CCS, and nuclear, technologies which will delay the urgently needed just energy transition. Japan and G7 governments must accelerate fossil fuel phase-out, not prolong the life of fossil fuel infrastructure. Japan must commit to a full fossil fuel phase-out and stop blocking efforts to phase out coal and fossil fuels at the G7,” said Ayumi Fukakusa, Deputy Executive Director at Friends of the Earth Japan.

“Last year, Germany led G7 discussions that secured a ground-breaking commitment to end international public finance for fossil fuels by the end of 2022. However, the G7’s continued approval for public investment in the gas sector, led by Germany and Japan, is in direct breach of that commitment and severely undermines progress made on this agenda. The immediate energy crisis has passed and G7 leaders have failed to act in accordance with clear market signals and climate science that new investments in fossil fuels are no longer needed. What is needed is a prioritisation of public investment in clean energy, that will help prevent fiscal instability and reduce stranded asset risks, especially as global gas demand will continue to drop. This is critical not only to meet climate targets but also to bring down energy costs and managing energy security,” said Louise Burrows, Energy Finance Lead at E3G.

“The endorsement of increased LNG deliveries and investment in gas in the G7 communique is no mere backsliding — it is a death sentence being dealt by the G7 to the 1.5°C limit and, in consequence, to the climate survival of vulnerable peoples in the Philippines, Southeast Asia, and across the world. Unless they genuinely put forward the phase out of all fossil fuels, Japan and all G7 nations spout nothing but lies when they say they have aligned to 1.5°C. They cannot claim to be promoting development while subjecting our people to decades more of pollution and soaring energy prices. We reject this notion of a development powered by fossil fuels. In the aftermath of the G7 Summit and lead up to this year’s COP, Japan and G7 leaders should already be warned that civic movements will not tire in pushing back against fossil fuels and false solutions and in demanding a renewable energy transition,” said Gerry Arances, Executive Director at Center for Energy, Ecology, and Development (Philippines).

“Where there was an opportunity to accelerate a renewable energy transition that would bring about energy security, accessibility, and keep us on track to meet climate targets, the G7 have chosen to remain on a fossil-fuelled collision course. Despite a week of sustained global calls from civil society, G7 leaders have let down their constituents on the frontlines. The final G7 communiqué does not heed the bold calls needed for our times and fails to include concrete plans to end the fossil fuel era. Instead of taking decisive action to tackle cost of living, energy, and climate crises, the text plays around the edges,” said May Boeve, Executive Director at 350.org.

“The G7 leaders’ communiqué shows a serious disconnect with science, as it enables new investment in fossil gas infrastructure, despite the very clear messages from both the International Energy Agency and Intergovernmental Panel on Climate Change, which show that a future below 1.5 degrees can’t include more fossil fuels. Most likely, the German chancellor Olaf Scholz has been a driving force behind the weak language on gas, which is a serious blow to Germany’s international credibility on climate,” said Petter Lydén, Head of International Climate Policy at Germanwatch.

“The G7, among the richest nations in the world, have once again proved to be poor leaders on climate with their statement from the Hiroshima Summit. Emphasising the need to keep global warming below 1.5ºC while at the same time committing to continue to invest in gas and LNG shows a bizarre political disconnect from science and a complete disregard for the severity of the climate emergency. This continued hypocrisy from historical polluters as climate impacts continue to increase sets a low bar and jeopardises global efforts to fight the climate crisis. The G7 countries must come to COP28 with a clear focus on doing their fair share on phasing out fossil fuels and delivering climate finance,” said Harjeet Singh, Head of Global Political Strategy at Climate Action Network.

“The G7 energy outcome correctly diagnoses a short-term need for energy security, then promotes a dangerous and inappropriate lock-in of fossil gas that would do nothing to address this need. Energy security can only be achieved by rapidly and equitably phasing out fossil fuels and transitioning to renewable energy, not locking in deadly fossil fuels and lining the pockets of oil and gas executives. This betrayal continues a disturbing turn by President Biden and Chancellor Scholz from rhetorically committing to climate leadership to openly boosting fossil fuel expansion. History will not look kindly on world leaders who accelerate the pace of fossil fuel buildout in the face of worsening climate crisis,” said Collin Rees, United States Program Manager at Oil Change International.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

]]> https://www.radiofree.org/2023/05/20/csos-condemn-g7-leaders-for-dangerous-backsliding-on-gas-breaching-commitments-to-end-fossil-fuel-finance/feed/ 0 396426 https://www.radiofree.org/2023/05/20/squeezed-by-the-shorts-time-to-ban-short-selling/ https://www.radiofree.org/2023/05/20/squeezed-by-the-shorts-time-to-ban-short-selling/#respond Sat, 20 May 2023 12:00:35 +0000 https://dissidentvoice.org/?p=140333 Short sellers have made a killing in the recent banking crisis, scalping $14.3 billion from bank stock owners just in March of this year. Short sellers “borrow” stock they don’t own and immediately sell it, driving the price down. Then they buy it back at the lower price, return the stock, and pocket the difference. Bankers say the practice is threatening the stability of the banking system and are calling for a ban on short sales of bank stock. The Securities Exchange Commission (SEC) is expected to decline but is investigating whether the practice constitutes illegal market manipulation intended to deceive investors.

It is argued here that short selling is fraudulent by its very nature—it is a fraud on the legitimate stock owners—and should be banned across the board. But first a closer look at the issues and some recent developments.

Flaws in the Banking Model

The banking crisis lingers on. On May 12, ZeroHedge reported that U.S. banks are experiencing ongoing deposit outflows to money market funds, while lending by small banks is collapsing. According to a Hoover Institution report by Stanford Finance Professor Amit Seru et al., around 2,315 banks—more than half of all banks in the U.S.—are sitting on assets worth less than their liabilities, due to the radical increase in interest rates over the past year. As a result, the banks are “potentially insolvent.”

In fact, as economist Murray Rothbard pointed out decades ago, all banks are technically insolvent, due to their standard business model. They “borrow short to lend long” — borrow from depositors who expect to get their money back “on demand” and use the funds to back long-term loans. If the depositors all come for their money at once, the liquidity (readily available funds) would not be there to repay them; but the model works because most people leave their money in the bank. The banks are “sound” so long as no one shouts “fire!” and drives the depositors to all run for the exits at the same time.

For decades, the reserve requirement—the funds a bank must hold in reserve to meet sudden withdrawals—stood at around 10% of deposits. In March 2020, due to the Covid crisis, the Fed dropped the reserve requirement to zero, where it remains today. But bankers still assume they need to keep about 10% of their deposits in reserve in order to meet transfers and withdrawals. That works in “ordinary” times; but even with 10% in reserve, a bank would fail if more than 20% of its deposits were withdrawn in a single day, and that is what happened to Silicon Valley Bank on March 9. According to written testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on May 16 by Gregory W. Becker, Former Chief Executive Officer of Silicon Valley Bank:

By the end of the day on March 9, $42 billion in deposits were withdrawn from SVB in ten hours, or roughly $1 million every second.

As the bank run was ongoing, we were working to access additional liquidity when I was informed the morning of March 10 that the FDIC would be taking possession of SVB. That day, another roughly $100 billion in deposits were requested to be withdrawn, bringing the total actual and requested deposit outflow to roughly $142 billion, or about 80 percent of total deposits, over two days.

Four major banks have failed in the last two months – Silvergate Bank, Silicon Valley Bank, Signature Bank, and First Republic. Why those four? As explained in my last article, the first three were “crypto” banks, which have been under attack by government agencies. First Republic was not in that category, but it was considered “crypto friendly” – you could deposit funds in a cryptocurrency exchange through the bank.

What rendered First Republic insolvent, however, was a business model that entailed offering very cheap loans to wealthy clients for commercial real estate. The loans were made at a time when the bank itself could borrow nearly interest-free, so interest-only loans seemed reasonable. The spread between the 0.12% at which the bank borrowed and the 3% at which it was lending was essentially free money to the bank, the principal balance to be collected after a lengthy interest-only period. The model worked until interest rates shot up and the bank could no longer borrow cheaply to fund the loans.

For the depositors of Silicon Valley Bank and Signature, the FDIC came to the rescue, returning not just the insured deposits (those in accounts under the $250,000 insurance cap) but all of the deposits. This move was justified as avoiding the “systemic risk” of triggering bank runs elsewhere. For First Republic, the FDIC arranged a sale on quite favorable terms to Chase Manhattan Bank. Silvergate wound itself down voluntarily.

The FDIC rescues cost the agency an estimated $35.5 billion, taking a major chunk out of the $128.2 billion in its insurance fund; but at least, it was thought, the banking crisis was over. So it was thought, until a handful of vulnerable banks including Pacific West and Western Alliance showed similar distress, losing between 45% and 60% of their year-to-date stock value versus a 27% decline in the regional bank index.

Attacked by the Shorts

Many banks have major unrealized losses on their balance sheets, yet they have not been subjected to runs by depositors. The runs on First Republic and Silicon Valley Bank were evidently triggered by targeted short selling of their stocks. In the week leading up to its failure, First Republic was one of the most heavily shorted U.S. bank stocks, with one-third of its outstanding shares shorted. As of March 31, it held the second-largest short position of any U.S. bank, with Silvergate Bank claiming the largest.

After J.P. Morgan bought First Republic out of receivership, the share prices of other mid-sized banks dropped during most of the rest of the week. They were easy targets for short sellers. An article by Matt Levin titled “When Short Sellers Bet Against Banks” aptly described the situation: “basically, it was like shooting fish in a barrel.”

A May 8 article in American Banker observed that the KBW NASDAQ bank index fell by 7.6% over the week. But Western Alliance was down 28% and PacWest was down 43%. Concerns over apparent market manipulation prompted Rob Nichols, CEO of the American Bankers Association, to write a letter to the SEC seeking an investigation. He said:

“Since the two bank failures in March, some of our members have experienced significant short sales of their publicly traded equity securities that do not appear to reflect the issuers’ financial status or general industry conditions — indeed, short sales have followed relatively favorable earnings reports from some of the banks in question and from peer institutions.

“We have also observed extensive social media engagement about the health of various banks and the sector generally that appears disconnected from the underlying financial realities. We urge the SEC to investigate this behavior.”

The Consumer Bankers Association also issued a statement, urging policymakers to call out what it called “unethical behavior.” The concern is that “rock-bottom share prices could spark large deposit outflows, undermining the health of otherwise solid banks.”

Other banking experts, including Chase CEO Jamie Dimon, have called for an outright ban on short sales of bank stocks.

U.S. Bans on Short Selling Historically 

Bans on short sales are not new. Napoleon not only outlawed the practice but had perpetrators imprisoned. In the first half of the 19th century, short selling was banned in the U.S. due to speculation regarding the War of 1812. The ban remained in place until the 1850s.

After the market crash of 1929, short selling was restricted again. During the four-year industry-wide bear raid initiating the Great Depression, the Dow Jones Industrial Average was reduced to 10 percent of its former value. Whenever the market decline slowed, speculators would step in to sell millions of dollars’ worth of stock they did not own but had ostensibly borrowed just for purposes of sale. Concerned about reports of bear raids by short sellers, Congress gave the newly created Securities Exchange Commission (SEC) power to regulate the practice. Today short selling is not illegal, but market manipulation – intentional conduct aimed at deceiving investors by artificially affecting stock prices – is.

When Lehman Brothers went bankrupt in September 2008, some analysts thought the investment firm’s

condition was no worse than its competitors’. What brought it down was not undercapitalization but a massive bear raid on 9/11 of that year, when its stock price dropped by 41% in a single day. In 2008, the SEC took temporary emergency action to prohibit short selling in financial companies. But research by the Fed showed that the ban had little impact on stock prices, while it increased trading costs.

As posited by Matt Levine, banning short sales in a particular stock could itself trigger a run:

“Depositors might deduce that the state of the banking industry is pretty bad if the government is stopping people from betting that First Republic might fail, and they would withdraw whatever is left of their deposits.”

For that reason, a temporary ban on particular stocks might be counterproductive. But what about banning short sales altogether?

A Blanket Ban on Short Selling?

The SEC’s mandate includes preventing fraud in securities transactions, and short selling is inherently fraudulent without the express consent of the stock’s true owners. It is a fraud on the owners, who bought the stock because they believed in the company and wanted to see its business thrive, not dive.

They may have checked the box that said they had read and agreed to the obscure terms in the multi-page contract involved in signing up for a brokerage account; but even if they did actually read it, they probably did not understand what they were agreeing to. As explained by securities fraud attorney Jeff Sonn:

[Y]our brokerage firm cannot lend out your stocks without your permission. However, you may have signed a customer agreement that explicitly allows your broker to lend out your securities.

This clause is often tucked deep within the customer agreement, and few investors pay much attention to it. In many cases, investors who have a margin account with their brokerage firm will be asked to sign a hypothecation agreement. This agreement generally gives the brokerage firm the right to lend shares of securities that you own.

The brokers can “rent” the stock in a margin account for a substantial fee—sometimes as much as 30% interest for a stock in short supply. But the real shareholders get none of this tidy profit, and they can be seriously harmed by the practice.

Many investors protect themselves from sudden drops in price by placing a standing “stop loss” order, which is activated if the market price falls below a certain price. Short sellers need only trigger these orders to initiate a cascade of selling. The stop loss orders act like a pre-programmed panic button, which can trigger further selling and more downward pressure on the stock price.

Some of the damage caused by short selling was blunted by the Securities Act of 1933, which imposed an “uptick” rule and forbade “naked” short selling. But both of these regulations have been circumvented today.

Short selling is sometimes justified as being necessary to keep a brake on the “irrational exuberance” that might otherwise drive popular stocks into dangerous “bubbles.” But if that were a necessary feature of functioning markets, short selling would also be happening in the markets for cars, television sets and computers, which it obviously isn’t. The reason it isn’t is that these goods can’t be “hypothecated” or duplicated on a computer screen the way stock shares can. Short selling is made possible because the brokers are not dealing with physical things but are simply moving numbers around on a computer monitor.

Short selling is market manipulation for private profit, intended to drive down targeted stock prices. It was banned early in U.S. history and a good case can be made that it should be banned again.

The Public Banking Option

While we’re waiting for federal action, there is a way that states can protect themselves from this sort of instability in the banking sector. The stellar model is North Dakota, where headlines claim “ND Financial Institutions Assert Good Health in Wake of Bank Failures Elsewhere.” North Dakota has its own “mini-Fed,” the Bank of North Dakota (BND). The bank is wholly owned by the state and is not publicly listed, so its shares cannot be shorted by speculators; and the vast majority of its deposits are state revenues, so there is no fear of a run on the bank.

Local North Dakota banks partner with the BND and can sell a portion of their loans to it if they need liquidity. The BND also guarantees many of the loans in which it takes a partnership interest. By increasing lending, the BND has increased the local money supply and stabilized the entire North Dakota economy, so there has been no decline to trigger a run on the banks.

As detailed by Stacy Mitchell, co-director of the Institute for Local Self-Reliance, North Dakota has six times as many locally owned financial institutions per person as the rest of the nation. These local banks and credit unions control fully 83% of deposits in the state — more than twice the 30% market share that small and mid-sized financial institutions have nationally. The state-owned BND backstops the local banks that service the economy, keeps North Dakota’s money local, augments the local money supply, and provides an additional source of revenue for the state.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

]]> https://www.radiofree.org/2023/05/20/squeezed-by-the-shorts-time-to-ban-short-selling/feed/ 0 396414 https://www.radiofree.org/2023/05/19/toxic-contagion-funds-food-and-pharma/ https://www.radiofree.org/2023/05/19/toxic-contagion-funds-food-and-pharma/#respond Fri, 19 May 2023 22:59:31 +0000 https://dissidentvoice.org/?p=140327 In 2014, the organisation GRAIN revealed that small farms produce most of the world’s food in its report “Hungry for land: small farmers feed the world with less than a quarter of all farmland.” The report “Small-scale Farmers and Peasants Still Feed the World” (ETC Group, 2022) confirmed this.    

Small farmers produce up to 80% of the food in the non-industrialised countries. However, they are currently squeezed onto less than a quarter of the world’s farmland. The period 1974-2014 saw 140 million hectares – more than all the farmland in China – being taken over for soybean, oil palm, rapeseed and sugar cane plantations.  

GRAIN noted that the concentration of fertile agricultural land in fewer and fewer hands is directly related to the increasing number of people going hungry every day. While industrial farms have enormous power, influence and resources, GRAIN’s data showed that small farms almost everywhere outperform big farms in terms of productivity. 

In the same year, policy think tank the Oakland Institute released a report stating that the first years of the 21 century will be remembered for a global land rush of nearly unprecedented scale. An estimated 500 million acres, an area eight times the size of Britain, were reported bought or leased across the developing world between 2000 and 2011, often at the expense of local food security and land rights. 

Institutional investors, including hedge funds, private equity, pension funds and university endowments, were eager to capitalise on global farmland as a new and highly desirable asset class.  

This trend was not confined to buying up agricultural land in low-income countries. Oakland Institute’s Anuradha Mittal argued that there was a new rush for US farmland. One industry leader estimated that $10 billion in institutional capital was looking for access to this land in the US.   

Although investors believed that there is roughly $1.8 trillion worth of farmland across the US, of this between $300 billion and $500 billion (2014 figures) is considered to be of “institutional quality” – a combination of factors relating to size, water access, soil quality and location that determine the investment appeal of a property.  

In 2014, Mittal said that if action is not taken, then a perfect storm of global and national trends could converge to permanently shift farm ownership from family businesses to institutional investors and other consolidated corporate operations. 

Why this matters 

Peasant/smallholder agriculture prioritises food production for local and national markets as well as for farmers’ own families, whereas corporations take over fertile land and prioritise commodities or export crops for profit and markets far away that tend to cater for the needs of more affluent sections of the global population.  

In 2013, a UN report stated that farming in rich and poor nations alike should shift from monocultures towards greater varieties of crops, reduced use of fertilisers and other inputs, increased support for small-scale farmers and more locally focused production and consumption of food. The report stated that monoculture and industrial farming methods were not providing sufficient affordable food where it is needed.  

In September 2020, however, GRAIN showed an acceleration of the trend that it had warned of six years earlier: institutional investments via private equity funds being used to lease or buy up farms on the cheap and aggregate them into industrial-scale concerns. One of the firms spearheading this is the investment asset management firm BlackRock, which exists to put its funds to work to make money for its clients.  

BlackRock holds shares in a number of the world’s largest food companies, including Nestlé, Coca-Cola, PepsiCo, Walmart, Danone and Kraft Heinz and also has significant shares in most of the top publicly traded food and agriculture firms: those which focus on providing inputs (seeds, chemicals, fertilisers) and farm equipment as well as agricultural trading companies, such as Deere, Bunge, ADM and Tyson (based on BlackRock’s own data from 2018). 

Together, the world’s top five asset managers – BlackRock, Vanguard, State Street, Fidelity and Capital Group – own around 10–30% of the shares of the top firms in the agrifood sector.  

The article “Who is Driving the Destructive Industrial Agriculture Model?” (2022) by Frederic Mousseau of the Oakland Institute showed that BlackRock and Vanguard are by far the biggest shareholders in eight of the largest pesticides and fertiliser companies: Yara, CF Industries Holdings K+S Aktiengesellschaft, Nutrien, The Mosaic Company, Corteva and Bayer.  

These companies’ profits were projected to double, from US$19 billion in 2021 to $38 billion in 2022, and will continue to grow as long as the industrial agriculture production model on which they rely keeps expanding. Other major shareholders include investment firms, banks and pension funds from Europe and North America. 

Through their capital injections, BlackRock et al. fuel and make huge profits from a globalised food system that has been responsible for eradicating indigenous systems of production, expropriating seeds, land and knowledge, impoverishing, displacing or proletarianizing farmers and destroying rural communities and cultures. This has resulted in poor-quality food and illness, human rights abuses and ecological destruction.  

Systemic compulsion 

Post-1945, the Rockefeller Chase Manhattan bank with the World Bank helped roll out what has become the prevailing modern-day agrifood system under the guise of a supposedly ‘miraculous’ corporate-controlled, chemical-intensive Green Revolution (its much-heralded but seldom challenged ‘miracles’ of increased food production are nothing of the sort; for instance, see the “What the Green Revolution Did for India” and “New Histories of the Green Revolution“).  

Ever since, the IMF, the World Bank and the WTO have helped consolidate an export-oriented industrial agriculture based on Green Revolution thinking and practices. A model that uses loan conditionalities to compel nations to ‘structurally adjust’ their economies and sacrifice food self-sufficiency.  

Countries are placed on commodity crop production treadmills to earn foreign currency (US dollars) to buy oil and food on the global market (benefitting global commodity traders like Cargill, which helped write the WTO trade regime – the Agreement on Agriculture), entrenching the need to increase cash crop cultivation for exports.  

Today, investment financing is helping to drive and further embed this system of corporate dependency worldwide. BlackRock is ideally positioned to create the political and legislative framework to maintain this system and increase the returns from its investments in the agrifood sector.  

The firm has around $10 trillion in assets under its management and has, according to William Engdahl, positioned itself to effectively control the US Federal Reserve, many Wall Street mega-banks and the Biden administration: a number of former top people at BlackRock are in key government positions, shaping economic policy. 

So, it is no surprise that we are seeing an intensification of the lop-sided battle being waged against local markets, local communities and indigenous systems of production for the benefit of global private equity and big agribusiness.  

For example, while ordinary Ukrainians are currently defending their land, financial institutions are supporting the consolidation of farmland by rich individuals and Western financial interests. It is similar in India (see the article “The Kisans Are Right: Their Land Is at Stake“) where a land market is being prepared and global investors are no doubt poised to swoop.  

In both countries, debt and loan conditionalities on the back of economic crises are helping to push such policies through. For instance, there has been a 30+ year plan to restructure India’s economy and agriculture. This stems from the country’s 1991 foreign exchange crisis, which was used to impose IMF-World Bank debt-related ‘structural adjustment’ conditionalities. The Mumbai-based Research Unit for Political Economy locates agricultural ‘reforms’ within a broader process of Western imperialism’s increasing capture of the Indian economy. 

Yet ‘imperialism’ is a dirty word never to be used in ‘polite’ circles. Such a notion is to be brushed aside as ideological by the corporations that benefit from it. Instead, what we constantly hear from these conglomerates is that countries are choosing to embrace their entry and proprietary inputs into the domestic market as well as ‘neoliberal reforms’ because these are essential if we are to feed a growing global population. The reality is that these firms and their investors are attempting to deliver a knockout blow to smallholder farmers and local enterprises in places like India. 

But the claim that these corporations, their inputs and their model of agriculture is vital for ensuring global food security is a proven falsehood. However, in an age of censorship and doublespeak, truth has become the lie and the lie is truth. Dispossession is growth, dependency is market integration, population displacement is land mobility, serving the needs of agrifood corporations is modern agriculture and the availability of adulterated, toxic food as part of a monoculture diet is feeding the world. 

And when a ‘pandemic’ was announced and those who appeared to be dying in greater numbers were the elderly and people with obesity, diabetes and cardio-vascular disease, few were willing to point the finger at the food system and its powerful corporations,  practices and products that are responsible for the increasing prevalence of these conditions (see campaigner Rosemary Mason’s numerous papers documenting this on Academia.edu). Because this is the real public health crisis that has been building for decades.   

But who cares? BlackRock, Vanguard and other institutional investors? Highly debatable because if we turn to the pharmaceuticals industry, we see similar patterns of ownership involving the same players.   

A December 2020 paper on ownership of the major pharmaceuticals companies, by researchers Albert Banal-Estanol, Melissa Newham and Jo Seldeslachts, found the following (reported on the website of TRT World, a Turkish news media outlet): 

Public companies are increasingly owned by a handful of large institutional investors, so we expected to see many ownership links between companies — what was more surprising was the magnitude of common ownership… We frequently find that more than 50 per cent of a company is owned by ‘common’ shareholders who also own stakes in rival pharma companies.

The three largest shareholders of Pfizer, J&J and Merck are Vanguard, SSGA and BlackRock.  

In 2019, the Centre for Research on Multinational Corporations reported that pay outs to shareholders had increased by almost 400 per cent — from $30 billion in 2000 to $146 billion in 2018. Shareholders made $1.54 trillion in profits over that 18-year period.

So, for institutional investors, the link between poor food and bad health is good for profit. While investing in the food system rakes in enormous returns, you can perhaps double your gains if you invest in pharma too.

These findings predate the 2021 documentary Monopoly: An Overview of the Great Reset, which also shows that the stock of the world’s largest corporations are owned by the same institutional investors. ‘Competing’ brands, like Coke and Pepsi, are not really competitors, since their stock is owned by the same investment companies, investment funds, insurance companies and banks. 

Smaller investors are owned by larger investors. Those are owned by even bigger investors. The visible top of this pyramid shows only Vanguard and Black Rock.  

A 2017 Bloomberg report states that both these companies in the year 2028 together will have investments amounting to $20 trillion.    

While individual corporations – like Pfizer and Monsanto/Bayer, for instance – should be (and at times have been) held to account for some of their many wrongdoings, their actions are symptomatic of a system that increasingly leads back to the boardrooms of the likes of BlackRock and Vanguard.  

Prof Fabio Vighi of Cardiff University says: 

Today, capitalist power can be summed up with the names of the three biggest investment funds in the world: BlackRock, Vanguard and State Street Global Advisor. These giants, sitting at the centre of a huge galaxy of financial entities, manage a mass of value close to half the global GDP, and are major shareholders in around 90% of listed companies.

These firms help shape and fuel the dynamics of the economic system and the globalised food regime, ably assisted by the World Bank, the IMF, the WTO and other supranational institutions. A system that leverages debt, uses coercion and employs militarism to secure continued expansion.  

This content originally appeared on Dissident Voice and was authored by Colin Todhunter.

]]> https://www.radiofree.org/2023/05/19/toxic-contagion-funds-food-and-pharma/feed/ 0 396354 https://www.radiofree.org/2023/05/10/senate-finance-chief-blasts-clarence-thomas-billionaire-friend-for-obstructing-gift-probe/ https://www.radiofree.org/2023/05/10/senate-finance-chief-blasts-clarence-thomas-billionaire-friend-for-obstructing-gift-probe/#respond Wed, 10 May 2023 11:00:08 +0000 https://www.commondreams.org/news/wyden-clarence-thomas-billionaire-friend

The Democratic chair of the Senate Finance Committee said Tuesday that billionaire GOP megadonor Harlan Crow is trying to obstruct the panel's investigation into his gifts to Supreme Court Justice Clarence Thomas, who is facing growing calls to resign for failing to disclose luxury vacations and other largesse from an individual with business before the high court.

Sen. Ron Wyden (D-Ore.) had asked Crow to provide the Senate Finance Committee with a "full accounting" of the gifts he provided to Thomas and the justice's family, but the billionaire made clear this week that he does not intend to voluntarily comply with Wyden's investigation.

In a letter to Wyden earlier this week, an attorney for Crow claimed that the Senate finance chief's April request for detailed information about the gifts to Thomas raise "substantial separation of powers concerns"—an argument that Donald Trump's legal team used in its ultimately unsuccessful effort to stop Congress from obtaining years of the former president's tax returns.

Crow's lawyer also insisted that the Senate Finance Committee has no legislative purpose for its probe, again echoing the Trump team's case.

"I was disappointed but unsurprised by billionaire Republican activist Harlan Crow's refusal to respond to my questions about the gifts he's lavished on Justice Clarence Thomas and his family over the bulk of Thomas' tenure on the Supreme Court," Wyden said in a statement Tuesday. "Mr. Crow is relying on the same baseless arguments that failed Donald Trump in his attempt to stonewall congressional oversight."

"I have used my chairmanship of the committee to shine a bright light on tax schemes undertaken by the ultra-wealthy, including untaxed transfers of wealth," the Oregon Democrat continued. "The assertion that the Finance Committee lacks a legislative basis for an investigation of the abuse of gift taxes by the wealthy is simply preposterous."

Wyden said Crow "takes this position to an even more absurd level" in his response to the finance panel, suggesting that "the specter of public corruption created by his own unreported gifts to Justice Thomas somehow insulates the details of those gifts from congressional investigation."

"This argument is, on its face, a joke," said Wyden, arguing that Congress "needs to evaluate compliance with the gift tax" and strongly consider "stiffening reporting requirements for gifts given to public officials."

"The bottom line is that nobody can expect to get away with waving off finance committee oversight, no matter how wealthy or well-connected they may be," Wyden added. "I will send a full response to Mr. Crow's attorney in the coming days. I'm also going to discuss with my committee colleagues how best to compel answers to the questions I put forward last month, including by using any of the tools at our disposal."

As Politiconoted Tuesday, the finance committee's "next steps could include subpoenaing Crow for the requested records or using a section of the tax code that vests the chairs of Congress' tax committees with the authority to obtain a private citizen's tax returns directly from Treasury—a power that House Democrats used last year to publish the taxes of former President Donald Trump."

\u201cUnsurprisingly, Harlan Crow has refused to respond to my questions about his lavish gifts to Clarence Thomas. Mr. Crow is relying on the same baseless arguments that failed Donald Trump in his attempt to stonewall Congressional oversight.\u201d

— Ron Wyden (@Ron Wyden) 1683660268

Wyden's response to Crow came amid an ongoing firestorm over what experts and lawmakers have described as Thomas' blatant ethics violations and unabashed corruption.

Since reporting last month that Thomas "has accepted luxury trips virtually every year from the Dallas businessman without disclosing them," ProPublica has revealed that Crow covered private-school tuition for Thomas' grandnephew and purchased property from the justice and his family, heightening calls for Thomas' resignation or impeachment.

On Tuesday, Citizens for Responsibility and Ethics in Washington (CREW) sent a letter to Thomas urging him to step down for "likely violat[ing] civil and criminal laws and... creat[ing] the impression that access to and influence over Supreme Court justices is for sale."

"We know of no other modern justice who has engaged in such extreme misconduct," said Noah Bookbinder, the president of CREW. "Justice Thomas' actions are so far beyond what most would consider acceptable, that by continuing to sit on the highest court in the land, Thomas does nothing but further diminish the court's credibility."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

]]> https://www.radiofree.org/2023/05/10/senate-finance-chief-blasts-clarence-thomas-billionaire-friend-for-obstructing-gift-probe/feed/ 0 393730 https://www.radiofree.org/2023/05/04/senate-finance-chief-vows-to-use-all-tools-at-his-disposal-to-get-answers-on-thomas-corruption/ https://www.radiofree.org/2023/05/04/senate-finance-chief-vows-to-use-all-tools-at-his-disposal-to-get-answers-on-thomas-corruption/#respond Thu, 04 May 2023 20:51:22 +0000 https://www.commondreams.org/news/ron-wyden-thomas-corruption

U.S. Sen. Ron Wyden on Thursday said he will use his authority as chair of the Senate Finance Committee to get answers from Republican megadonor Harlan Crow about his financial ties to Supreme Court Justice Clarence Thomas.

The Oregon Democrat said after ProPublicapublished the latest revelations about financial gifts Crow provided to the right-wing justice that he is giving Crow "until May 8th to provide a full account of the gifts he provided to Justice Thomas' family."

ProPublica revealed Thursday morning that Crow paid for Thomas' grandnephew, Mark Martin, who the justice raised "as a son" from the time Martin was six years old, to attend a private school in Georgia where tuition was $74,000 per year. Thomas did not include the payments on federal disclosure forms as required by law.

Last month, the outlet reported that Crow footed the bill for Thomas to take numerous luxury vacations for two decades and that the Texas billionaire bought property from the justice's family and acted as Thomas' mother's landlord—none of which was previously disclosed to the government.

Since Thomas was confirmed to the high court in 1991, several right-wing groups with ties to Crow have been involved in cases that were argued before the Supreme Court, and his own real estate company was directly involved in a case regarding the pandemic-era federal eviction moratorium in 2021.

"With every new revelation in this case, it becomes clearer that Harlan Crow has been subsidizing an extravagant lifestyle that Justice Thomas and his family could not otherwise afford," said Wyden. "This is a foul breach of ethics standards, which are already far too low when it comes to the Supreme Court."

The chairman added that he "will explore using other tools at the committee's disposal to obtain this critical information."

\u201cFor everyone asking: I'm pushing Harlan Crow for answers on his lavish gifts to Clarence Thomas. If he doesn't comply by May 8, I will absolutely explore other tools at the Finance Committee's disposal to shed more light on what appears to be blatant corruption.\u201d

— Ron Wyden (@Ron Wyden) 1683219032

The Democratic Party holds a majority of seats on the panel, giving Wyden subpoena power.

Wyden previously wrote to Crow late last month, demanding a "complete account" of his gifts to Thomas and inquiring whether the real estate magnate treated Thomas' travel on his yacht and private jets as a business expense in order to benefit from a tax write-off.

"The secrecy surrounding your dealings with Justice Thomas is simply unacceptable," he wrote to Crow in April. "The American public deserves a full accounting of the full extent of your largesse towards Justice Thomas, including whether these gifts complied with all relevant federal tax and ethics laws."

This content originally appeared on Common Dreams and was authored by Julia Conley.

]]> https://www.radiofree.org/2023/05/04/senate-finance-chief-vows-to-use-all-tools-at-his-disposal-to-get-answers-on-thomas-corruption/feed/ 0 392638 https://www.radiofree.org/2023/05/02/the-end-of-an-era/ https://www.radiofree.org/2023/05/02/the-end-of-an-era/#respond Tue, 02 May 2023 13:44:54 +0000 https://dissidentvoice.org/?p=139803 Why do the International Monetary Fund (IMF), the World Trade Organization (WTO) and the World Bank– three of the most highly regarded international economic organizations-project a bleak road ahead for the global economy?

Ominously, the World Bank warns of the possibility of a coming “lost decade” for economic growth.

In January of this year, the World Bank dropped its global growth projection for 2023 to 1.7% from its June of 2022 projection of 3%. To put some perspective on the number, during the era of high globalization before the 2007-9 crash, global growth averaged 3.5%. Since the crisis, growth has averaged 2.8%. And just three months after the January projection, the World Bank warns of an entire decade of lowered growth expectations. As quoted in the Wall Street Journal: “it will take a herculean collective policy effort to restore growth in the next decade to the average of the previous one.”

Likewise, the WTO projects the volume of world merchandise trade to expand at only 1.7% this year from the 2.8% average growth experienced since 2008.

On the heels of the April World Bank alarm, the IMF has announced its worst medium-term growth forecast since 1990.

Accordingly, all three major international organizations have offered challenging, if not dire predictions for the global economy.

Clearly, the capitalist ship that has been buffeted by a global pandemic, raging inflation, a European war, and bank failures is taking on water. While there is no reason to expect the ship to sink, serious alarm bells are going off.

The pundits, policy-makers, and economics professors assured us that the orgy of price increases battering household budgets was only temporary, due to disruptions in global supply chains caused first by the pandemic, then by the war in Ukraine. Those promises were made over two years ago.

Since then, explanations have given way to prayer. The policy tools– a bitter potion of Central Bank interest rate hikes– have proven less effective against inflation than promised. The previous long decade of unusually low interest rates encourages consumers to freely use credit when income is under stress, as it is with rampant inflation. As interest rates soar, those same consumers are slow to recognize their exploding debt load from high interest payments, adding to an already deteriorating standard of living. Reliance on credit thwarts the dampening effects of interest-rate increases upon consumer demand.

Media Pollyannas rejoiced over the March Consumer Price Index numbers, with growth down to 5% over the level of the year earlier (the Fed target is 2%). While the drop is significant, the media neglected to mention that they had been persistently reminding us that the Federal Reserve relies on the core rate over the overall rate in its policy decisions. That rate— the core CPI– actually rose in March (its components– core services and core goods– were both up from February). So much for the power of faith.

Thus, the Federal Reserve will likely raise interest rates again in May, further increasing the cost of newly incurred debt.

And why would inflation ease when consumers are still rushing towards Armageddon by continuing to tolerate price increases? Proctor and Gamble, one of global economy’s biggest consumer-product monopolies (Tide, Charmin, Gillette, Crest, etc.) has raised prices by 10% with little loss in sales volume and with growing dollar revenue. P&G has no incentive to stop or slow price increases as long as revenue (and profits) continue to grow. In fact, why would they? They are in business to make money.

Simple as it may seem, that’s the answer behind the “puzzle” of inflation: “‘The only way to explain this in relation to what we’ve seen in some of the commodity price indices for food is that margins are being expanded,’ said Claus Vistesen, an economist at Pantheon Macroeconomics” as quoted in the Wall Street Journal. Yes, that’s price gouging.

It’s not a “wage-price spiral” as corporate flacks like to opine. Instead, as Fabio Panetta, European Central Bank board member, confesses, it’s “opportunistic behavior” capped by “a profit-price spiral.”

Liberal and social democratic economists decry the Federal Reserve’s strategy of putting a wet blanket on consumption to discourage price rises, but they have no alternatives to offer. They are content to leave the management of the capitalist economy to the capitalists, while denouncing their remedies.

Similarly, the once loud advocates of Modern Monetary Theory (MMT) are strangely quiet. During the pandemic, the idea of running large, stimulative deficits without fear of igniting inflation became popular. Left-wing pundits thought that they had found a pain-free method of funding social reforms without tapping the accumulated wealth of the obscenely rich– a magical political elixir. The arrival of spiraling inflation has stifled that talk.

If three major capitalist institutions are foretelling economic uncertainty and instability, it is because we are exiting a distinctive era of capitalist restructuring. Associated with the popular term of “globalization,” the accelerating mobility of capital, the opening up of new areas of capital penetration; a revolution in financial instruments; the release of huge new low-wage, skilled-labor reservoirs; modern, efficient shipping techniques; the removal of trade barriers and the streamlining of regulation; new formerly public areas opened to private development; and the adoption of trade agreements embodying these changes are among the more important and novel features of the era that we are leaving.

That era gave capitalism a new lease on life, with growing profits, hyper-accumulation, and vastly expanded speculative investments. Little of that enrichment was shared with the masses, resulting in unprecedented inequalities of income and wealth.

The great economic collapse of 2007-2009 exhausted the vitality of the epoch of globalism– capitalist internationalism– that lasted over two decades. Vast sums of hyper-accumulated capital channeled into riskier and riskier speculation, a process that eventually collapsed from its own arrogance.

Rather than surrender to the inevitability of the “creative destruction” that always naturally follows a crash– the natural process of sweeping away the toxic “assets” left in the wake of a crash– the great financial wizards in the financial centers of New York, London, Paris, Zurich, etc. sought to isolate, protect, and sustain the garbage of the disaster and “inflate” a deflated economy through “creative restoration.”

Popularized by economist Joseph Schumpeter, the term “creative destruction” refers to the wreckage left after an economic crash– the deflated and fictitious “values” associated with bank and enterprise failures, overpriced, unrealized goods and services, lost jobs, bad investments, ruined securities, etc. For Schumpeter and his followers, this destruction was essential for a reset of the economy, a new, fresh beginning, sweeping away the waste products of the crash.

Historically, the pain of a crisis is borne excessively by poor and working people, but the rich and powerful and the corporations are set back as well. The more severe the downturn, the less able the elites are to push all of the consequences onto those less powerful and more vulnerable. And the worse the downturn, the greater the political resistance to business-as-usual.

But after 2007-2009, working people’s institutions were extraordinarily weak, the mainstream party systems offered little advocacy for the victims of the crash, and the policy makers were determined and confident that they could avoid or buffer the period of creative destruction. They believed that they possessed the financial tools that would stabilize and resuscitate the global economy without a period of retrenchment and the accompanying economic setbacks. Central banks spent trillions to buy the worthless “assets” and place them in a lockbox until values could be restored and sold back into markets. And they embarked on an unprecedented decade of free money (ultra-low interest rates) to allow sickly, unprofitable, and marginal enterprises to live on life support and to compete another day. The discipline of the market– of winners and losers– gave way to state intervention to keep everyone in the game.

They only succeeded in postponing the inevitable. Today, the effort to forego creative destruction is failing and global institutions know and recognize that failure with their dire projections.

What will follow the collapse of globalism remains a matter of conjecture.

However, we can see that we are entering a period of growing uncertainty and conflict. The rise of rightwing populism has spawned a strong dissatisfaction with conventional answers and a rise in nationalism and protectionism. Governments in Europe (Hungary, Poland, Italy, the Baltics, etc.) in Asia (India, Turkey, Taiwan, Japan, etc.) have taken a decidedly rightward turn, embracing militarization, sectarianism, anti-liberalism, and nationalism. The US and its allies are no longer the champions of free markets, employing tariffs, sanctions, and other aggressive, winner-take-all measures.

The alliances and the rules of the game that were established in the 1990s and the first decade of the twenty-first century are now crumbling. Global leadership is now contested, with the war dangers that ensue. The win-win illusions of globalization are mutating into the voracity of grab-whatever-you-can.

We have not seen in memory a period where the US and its allies simply steal the financial assets of a country like Venezuela or Russia with impunity. All signs point to not a world order, but a world disorder, with alliances coming and going between old allies and old enemies. Turkey can attack Russian planes over Syria and sell drones to Russia to use against Ukraine. Saudi Arabia can assist fundamentalists in killing Russians in Syria and then broker a global oil deal with Russia. Russia can sell weapons to both Peoples’ China and India, as tensions rise between the two. The US can destroy pipelines that offer cheap Russian energy to Germany with impunity, while the UAE sells sanctioned Russian oil back to Germany. And so it goes. Increasingly, the only principle behind international relations is absence of principle.

Understandably, the highly-educated– normally Pollyannaish– minds diligently working for The World Bank, the IMF, and WTO foresee a rough road ahead for global capitalism. The rest of us should take notice.

This content originally appeared on Dissident Voice and was authored by Greg Godels.

]]> https://www.radiofree.org/2023/05/02/the-end-of-an-era/feed/ 0 391877 https://www.radiofree.org/2023/04/27/ban-on-campaign-spending-by-multinational-corporations-about-to-become-law-in-minnesota/ https://www.radiofree.org/2023/04/27/ban-on-campaign-spending-by-multinational-corporations-about-to-become-law-in-minnesota/#respond Thu, 27 Apr 2023 16:14:11 +0000 https://www.commondreams.org/news/democracy-for-the-people-act

Campaign finance reform advocates on Thursday cheered final passage by legislators in Minnestoa of a bill prohibiting multinational corporations from spending money on state elections.

In a late-night 34-33 vote, the Minnesota Senate on Wednesday approved the Democracy for the People Act, an omnibus democracy bill that will ban companies with at least a 5% ownership stake by multiple foreign owners or a 1% stake by a single foreign owner from making political contributions in Minnesota state and municipal elections. The legislation also prohibits such companies from making "dark money" donations to super PACs.

"If there was a Mount Rushmore for electoral reform bills in the history of Minnesota... this would be on it," said Minnesota Secretary of State Steve Simon, a Democrat.

\u201c\ud83c\udf89 Huge victory in Minnesota last night!\n\nThe Democracy for the People Act:\n\n\ud83d\uddf3\ufe0f Registers up to 450,000 new voters\n\ud83c\udfe6 Limits corporate spending in elections\n\ud83d\udce3 Expands language access\n\u2696\ufe0f Protects voters from intimidation\nand more!\u201d

— Stand Up America (@Stand Up America) 1682600164

The measure—which was approved 70-57 along party lines by the state House of Representatives earlier this month—now heads to the desk of Gov. Tim Walz, a Democrat who has promised to sign it into law "to put up a firewall to keep Minnesota's elections safe, free, and fair."

"Multinational corporations are corrupting representative democracy by drowning out the voices of the people," said Alexandra Flores-Quilty, campaign director at Free Speech For People, whose model legislation heavily influenced the bill. "The Democracy for the People Act will help put power back in the hands of citizens."

\u201cTwo proud and tired authors after the Democracy for the People Act just passed the #mnleg Senate. It\u2019s on the way to Governor Walz\u2019s desk! \u2705\ud83d\uddf3\ufe0f\ud83d\udc4f\u201d

— Emma Greenman (@Emma Greenman) 1682573413

According to the Center for American Progress (CAP):

This legislation will close a dangerous loophole opened by the U.S. Supreme Court's decision in Citizens United v. Federal Election Commission and reduce foreign influence in Minnesota's elections. It contains additional important measures to strengthen the freedom to vote and modernize the state's campaign finance system, including establishing automatic voter registration, enabling voters to opt in to automatically receive a mail-in ballot for each election, preregistering 16- and 17-year-olds to vote upon turning 18, prohibiting intimidation and interference with the voting process, and increasing disclosure of secret political spending.

"Today, Minnesota took a giant step forward to strengthening free and fair elections, setting a strong example for the nation," CAP senior fellow Michael Sozan said in a statement following the state Senate vote.

\u201cGood morning!\n\nIt's Thursday, April 27th and the Democracy for the People Act is going to be signed into law soon!\n\nThanks to the @LizBoldonMN @emmagreenman and countless leaders who showed up throughout the session to ensure we protect and expand our democracy. \n\n#mnleg\u201d

— We Choose Us (@We Choose Us) 1682606221

"At a time when many states are passing laws to suppress voters or subvert elections, Minnesota has become a national leader in protecting elections and empowering voters," Sozan added. "The provision to stop political spending by foreign-influenced U.S. corporations will limit the ability of foreign entities to spend money in Minnesota's elections and strengthen the ability of Minnesotans to chart their state's future."

There has been some momentum toward enacting similar legislation at the national level in recent years, including Sen. Elizabeth Warren's (D-Mass.) Anti-Corruption and Public Integrity Act, and Rep. Jamie Raskin's (D-Md.) Get Foreign Money Out of U.S. Elections Act.

This content originally appeared on Common Dreams and was authored by Brett Wilkins.

]]> https://www.radiofree.org/2023/04/27/ban-on-campaign-spending-by-multinational-corporations-about-to-become-law-in-minnesota/feed/ 0 390875 https://www.radiofree.org/2023/03/29/credit-suisse-complicit-in-massive-conspiracy-to-help-rich-americans-dodge-taxes-senate-report/ https://www.radiofree.org/2023/03/29/credit-suisse-complicit-in-massive-conspiracy-to-help-rich-americans-dodge-taxes-senate-report/#respond Wed, 29 Mar 2023 15:51:59 +0000 https://www.commondreams.org/news/credit-suisse-tax-dodging

The Senate Finance Committee on Thursday published the results of a two-year investigation showing that the scandal-plagued Swiss bank Credit Suisse has been complicit in a "massive, ongoing conspiracy" to help wealthy U.S. citizens dodge taxes.

Spearheaded by Sen. Ron Wyden (D-Ore.), the chair of the Senate panel, the probe found that Credit Suisse violated the terms of a 2014 plea agreement with the U.S. Department of Justice (DOJ) that required the bank to crack down on tax dodging by its U.S. clients.

As part of the 2014 deal, according to the Justice Department, Credit Suisse admitted to "knowingly and willfully" helping U.S. clients hide offshore assets and income from the Internal Revenue Service (IRS).

The Senate Finance Committee report states that it obtained "voluminous records detailing the role Credit Suisse employees played in assisting U.S. businessman Dan Horsky in concealing over $220 million in offshore accounts from the IRS."

"The committee's investigation also uncovered almost two dozen additional large, potentially undeclared accounts held by Credit Suisse belonging to ultra-high net worth U.S. persons," the report continued. "In 2022, Credit Suisse disclosed to the committee that in connection with its ongoing cooperation with DOJ, it had identified 10 additional large client relationships involving U.S. persons, with each client holding accounts in excess of $20 million."

Wyden said in a statement Wednesday that "at the center of this investigation are greedy Swiss bankers and catnapping government regulators, and the result appears to be a massive, ongoing conspiracy to help ultrawealthy U.S. citizens to evade taxes and rip off their fellow Americans."

"Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore up and down they'd get out of the business of defrauding the United States," the Oregon senator continued. "This investigation shows Credit Suisse did not make good on that promise."

"Republican budget cuts have decimated the IRS's ability to root out this kind of offshore tax evasion scheme, but Democrats are committed to stepping up enforcement against wealthy tax cheats."

The report was published days after the Switzerland-based investment banking giant UBS agreed to purchase Credit Suisse for more than $3 billion as the latter firm faced growing questions about its financial health amid fears of a broader banking crisis.

Wyden said Wednesday that Credit Suisse's "pending acquisition does not wipe the slate clean," urging the U.S. Justice Department to follow through on its pledge to "crack down on corporate offenders, particularly repeat offenders like Credit Suisse."

"In addition to a significant penalty for the bank, the individual bankers involved in these schemes must also face criminal investigation," Wyden added. "It simply makes no sense to allow the bankers who have their hands on these hidden accounts and enable tax evasion to get away scot-free. Finally, the cases detailed in this investigation are textbook examples of why Democrats gave the IRS new funding for enforcement. Republican budget cuts have decimated the IRS's ability to root out this kind of offshore tax evasion scheme, but Democrats are committed to stepping up enforcement against wealthy tax cheats."

In total, the Senate Finance Committee said it found evidence that Credit Suisse helped potentially more than two dozen American families hide upwards of $700 million at the bank after the 2014 plea agreement with the Justice Department.

Citing two former Credit Suisse employees, CNBCreported Wednesday that "although the bank did disclose and close many American accounts after its 2014 plea agreement, some bankers worked with high net worth clients to keep certain Americans at the bank, by changing the nationalities listed on their accounts and ignoring evidence that the account holders were Americans."

"In other cases, they helped American clients move money to other banks, without reporting those transfers to U.S. authorities," the outlet added.

This content originally appeared on Common Dreams and was authored by Jake Johnson.

]]> https://www.radiofree.org/2023/03/29/credit-suisse-complicit-in-massive-conspiracy-to-help-rich-americans-dodge-taxes-senate-report/feed/ 0 383169 https://www.radiofree.org/2023/03/29/credit-suisse-complicit-in-massive-conspiracy-to-help-rich-americans-dodge-taxes-senate-report-2/ https://www.radiofree.org/2023/03/29/credit-suisse-complicit-in-massive-conspiracy-to-help-rich-americans-dodge-taxes-senate-report-2/#respond Wed, 29 Mar 2023 15:51:59 +0000 https://www.commondreams.org/news/credit-suisse-tax-dodging

The Senate Finance Committee on Thursday published the results of a two-year investigation showing that the scandal-plagued Swiss bank Credit Suisse has been complicit in a "massive, ongoing conspiracy" to help wealthy U.S. citizens dodge taxes.

Spearheaded by Sen. Ron Wyden (D-Ore.), the chair of the Senate panel, the probe found that Credit Suisse violated the terms of a 2014 plea agreement with the U.S. Department of Justice (DOJ) that required the bank to crack down on tax dodging by its U.S. clients.

As part of the 2014 deal, according to the Justice Department, Credit Suisse admitted to "knowingly and willfully" helping U.S. clients hide offshore assets and income from the Internal Revenue Service (IRS).

The Senate Finance Committee report states that it obtained "voluminous records detailing the role Credit Suisse employees played in assisting U.S. businessman Dan Horsky in concealing over $220 million in offshore accounts from the IRS."

"The committee's investigation also uncovered almost two dozen additional large, potentially undeclared accounts held by Credit Suisse belonging to ultra-high net worth U.S. persons," the report continued. "In 2022, Credit Suisse disclosed to the committee that in connection with its ongoing cooperation with DOJ, it had identified 10 additional large client relationships involving U.S. persons, with each client holding accounts in excess of $20 million."

Wyden said in a statement Wednesday that "at the center of this investigation are greedy Swiss bankers and catnapping government regulators, and the result appears to be a massive, ongoing conspiracy to help ultrawealthy U.S. citizens to evade taxes and rip off their fellow Americans."

"Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore up and down they'd get out of the business of defrauding the United States," the Oregon senator continued. "This investigation shows Credit Suisse did not make good on that promise."

"Republican budget cuts have decimated the IRS's ability to root out this kind of offshore tax evasion scheme, but Democrats are committed to stepping up enforcement against wealthy tax cheats."

The report was published days after the Switzerland-based investment banking giant UBS agreed to purchase Credit Suisse for more than $3 billion as the latter firm faced growing questions about its financial health amid fears of a broader banking crisis.

Wyden said Wednesday that Credit Suisse's "pending acquisition does not wipe the slate clean," urging the U.S. Justice Department to follow through on its pledge to "crack down on corporate offenders, particularly repeat offenders like Credit Suisse."

"In addition to a significant penalty for the bank, the individual bankers involved in these schemes must also face criminal investigation," Wyden added. "It simply makes no sense to allow the bankers who have their hands on these hidden accounts and enable tax evasion to get away scot-free. Finally, the cases detailed in this investigation are textbook examples of why Democrats gave the IRS new funding for enforcement. Republican budget cuts have decimated the IRS's ability to root out this kind of offshore tax evasion scheme, but Democrats are committed to stepping up enforcement against wealthy tax cheats."

In total, the Senate Finance Committee said it found evidence that Credit Suisse helped potentially more than two dozen American families hide upwards of $700 million at the bank after the 2014 plea agreement with the Justice Department.

Citing two former Credit Suisse employees, CNBCreported Wednesday that "although the bank did disclose and close many American accounts after its 2014 plea agreement, some bankers worked with high net worth clients to keep certain Americans at the bank, by changing the nationalities listed on their accounts and ignoring evidence that the account holders were Americans."

"In other cases, they helped American clients move money to other banks, without reporting those transfers to U.S. authorities," the outlet added.

This content originally appeared on Common Dreams and was authored by Jake Johnson.

]]> https://www.radiofree.org/2023/03/29/credit-suisse-complicit-in-massive-conspiracy-to-help-rich-americans-dodge-taxes-senate-report-2/feed/ 0 383170 https://www.radiofree.org/2023/03/29/playing-with-financial-fire/ https://www.radiofree.org/2023/03/29/playing-with-financial-fire/#respond Wed, 29 Mar 2023 13:11:35 +0000 https://dissidentvoice.org/?p=139146 Capitalism, Marx said, is unceasingly prone to crisis. His observation applies as much to financial capital as to industrial capital, as the recent collapse of Silicon Valley Bank and Signature Bank of New York attest. In their pursuit of profits, banks make loans that borrowers cannot repay or back the loans with assets that lose value. Why has this scenario become so deeply rooted in American capitalism and what is the state’s role in restabilizing the financial system once the house of cards begins to tremble?

This banking crisis seems to have ebbed as federal regulators decided to guarantee all deposits, regardless of the usual FDIC limits, at these two banks. Meanwhile, the US Federal Reserve Board carefully punted on its recent interest rate hike, hoping to locate a sweet spot between a higher anti-inflationary rate and the need to stabilize a quaking banking system with a lower one. It settled for a modest 0.25% increase. These federal actions are band aids on a gushing wound. Before considering steps government should be taking to avert future banking crises, we need to understand why they happen. The foundation of finance capital is loan credit. This means not only that finance capital and all the economic activities that it supports depend on a faith that mounting loans and debts will be repaid, but that the intangible financial assets used to repay the loans will retain enough of their value to keep the system going. In Silicon Valley’s case, for example, the long-term low-interest government bonds it used to back up its capital lost their value as the Fed raised interest rates to battle inflation and triggered a run on the bank. Put simply, newer government bonds paid more interest so old ones lost value. Depositors followed the money.

Karl Marx brilliantly explained how contradictions of capitalist production fueled emergent crises. For example, as capital replaced labor with technology, both surplus value and the rate of demand for goods would fall, raising barriers to further accumulation. And when capitalists stop accumulating capital, the system grinds to a horrific halt. Think 1929. Frederick Engels drew on Marx’s work to reveal much about the financial aspects of business as usual in Vols 2 & 3 of Capital that he edited, but Marx’s work on this score remained under-developed. Analysis of finance capitalism, a capitalism led by banks and financiers, not industrial corporations, awaited its fuller development in the early 20th century. Rudolf Hilferding’s path breaking work Finance Capital dissected the case of banker dominance in Imperial Germany. For the American variant, however, there was no more acute guide than Thorstein Veblen. His Theory of Business Enterprise (1904) and Absentee Ownership (1923) remain invaluable guides to our current situation. Together, these books clearly chart the transformation from corporate to financial governance of the capitalist class and its changing system of industrial-pecuniary relations. With the advent of the increasingly monopolistic, cartel-like structure of “key industries” such as steel, oil, communications, and automobiles plus establishment of the Federal Reserve Board in 1913, in the two decades that span his analysis, we can see how and why Veblen was impressed by the enhanced governing capacity to manage money values achieved by an informal alliance of extraordinarily concentrated public and private powers, “the general staff of financial strategy.”

But – and this qualification is critical as we stumble in the dark of financial uncertainty in days and months ahead – the impressive growth in finance capital’s governing capacity is and never can be equal to the ephemeral, intangible, and unstable make-believe of asset values. All the computers of all the financial kings’ math whizzes cannot put finite, predictable quantities to values that elude tangible measurement. As Veblen explained:

…The fabric of credit and capitalization is essentially a fabric of concerted make-believe resting on the routine credulity of the business community. It is…conditioned on the continued preservation of this…credulity in a state of unimpaired tensile strength, which calls for eternal vigilance on the part of its keepers. The fabric, therefore, is always in a state of unstable equilibrium, liable to derangement and extensive disintegration…at any point.

In plain language, Veblen summed up his point this way: modern finance is, at its core, “a confidence game…to be played according to the rules governing games of that psychological nature,” like Three-Card Monte on financial steroids played by guys in expensive suits. The only certainty in finance capital is the absence of certainty. Its illusory quality both allows for the grossest forms of sheer inequality and disallows effective governance of the system that fuels such inequality. The only way to manage that contradiction, at least within the terms of capital itself, is to require banks to serve production, not their own financial interests. We need regulations to make banks serve the public, not themselves. That includes a stronger version of the Glass-Steagall rules that Congress adopted in 1935 and then abandoned in 1999, a decision whose effects were soon felt in the tech stock collapse of 2000, in the far greater housing value collapse of 2007-2008, and now again in our more recent financial rumblings and quakes. If we continue to let the financiers play with financial fire, we will all be burned again. This is finance capital’s other great certainty.

This content originally appeared on Dissident Voice and was authored by Bill Scheuerman and Sid Plotkin.

]]> https://www.radiofree.org/2023/03/29/playing-with-financial-fire/feed/ 0 383085 https://www.radiofree.org/2023/03/18/two-sessions-summary/ https://www.radiofree.org/2023/03/18/two-sessions-summary/#respond Sat, 18 Mar 2023 13:19:28 +0000 https://dissidentvoice.org/?p=138937 This week’s News on China in 2 minutes.

• Two Sessions Summary
• New National Data Office
• China’s Historical Mediation between Iran and Saudi Arabia
• Modern Feminism in China

The post Two Sessions Summary first appeared on Dissident Voice.

This content originally appeared on Dissident Voice and was authored by Dongsheng News.

]]> https://www.radiofree.org/2023/03/18/two-sessions-summary/feed/ 0 380444 https://www.radiofree.org/2023/03/15/new-report-commitment-to-end-international-finance-for-fossil-fuels-is-shifting-billions-but-key-countries-breaking-promises-missing-in-action/ https://www.radiofree.org/2023/03/15/new-report-commitment-to-end-international-finance-for-fossil-fuels-is-shifting-billions-but-key-countries-breaking-promises-missing-in-action/#respond Wed, 15 Mar 2023 12:30:11 +0000 https://www.commondreams.org/newswire/new-report-commitment-to-end-international-finance-for-fossil-fuels-is-shifting-billions-but-key-countries-breaking-promises-missing-in-action

Promise Breakers, a report released today by Oil Change International, reveals that the Glasgow Statement, a joint commitment forged at the 2021 UN climate summit (COP26), is already shifting an estimated USD 5.7 billion per year out of fossil fuels and into clean energy, with the potential of a further 13.7 billion per year if all Glasgow Statement signatories fulfill their commitments.

At COP26 in Glasgow, 39 countries and institutions pledged to end international public finance for fossil fuels by the end of 2022 and shift this money to clean energy. This report is the first international assessment of signatories’ implementation of the commitment since the passing of the end of 2022 deadline.

The report reveals that while some high-income countries have kept their Glasgow commitment, a group of major providers of international public finance have broken their promise, including Germany, Italy, and the United States.

The report’s key findings include that out of sixteen high-income signatories that provide significant levels of international public finance:

• Eight have adopted policies that broadly meet the promise they made in Glasgow (Canada, the European Investment Bank, the United Kingdom, France, Finland, Sweden, Denmark, and New Zealand), shifting an estimated USD 5.7 billion per year out of fossil fuels and showing that the Glasgow Statement is having a real-world impact;
• Four signatories (Belgium, Switzerland, the Netherlands, and Spain) have new policies that further restrict fossil fuel support but leave major loopholes and/or do not meet the end of 2022 deadline;
• Four signatories (Germany, Italy, Portugal, and the United States) have yet to publish new or updated policies. The United States has reportedly adopted a policy, but is refusing to publish it. Ongoing policy debates in Germany and Italy suggest that these countries are likely to introduce loopholes in any forthcoming policies that allow continued fossil fuel financing;
• Just days after this report was finalized, it appears Canada’s export credit agency, Export Development Canada is already in breach of their policy by approving four international oil and gas transactions totaling at least USD 5.5 million in 2023.

The report contains a detailed report card on each signatories’ policies, with recommendations for improvement. It highlights key opportunities for signatories to increase their clean energy finance levels, work together to reiterate and strengthen their commitment to end international finance for fossil fuels at the Japan-led G7 in May and negotiate oil and gas export finance restrictions at the OECD.

The International Energy Agency (IEA) has repeatedly stated that clean energy, not fossil fuels, are the solution for energy affordability, security and climate and development goals. Unless countries meet and expand their commitments to end international public finance for fossil fuels in 2023, climate, development and security goals will be pushed further beyond reach.

Previous Oil Change International research shows that international public finance still heavily favors fossil fuels. Oil Change International’s Public Finance for Energy Database shows that from 2016 – the year after the Paris Agreement was signed – until 2021, USD 422 billion in international public finance has gone to fossil fuels compared to just USD 173 billion for clean energy.

Adam McGibbon, a lead author and Public Finance Strategist at Oil Change International, said: “Our research shows that while the Glasgow Statement is a success story that’s having a real-world impact in shifting finance away from fossil fuels, some countries like the US, Germany and Italy have broken their promise.

These countries must immediately implement policies to keep the promise they made in Glasgow, phasing out international public finance for fossil fuels, or face growing international scrutiny as promise-breakers on climate policy.”

Regine Richter, Senior Energy and Finance campaigner at Urgewald said: “Continuously supporting the fossil fuel industry with public money will obstruct the ecological transition that Chancellor Scholz otherwise declares as most important for the country. He needs to choose his camp: promoting the transition or hampering it.”

Kate DeAngelis, International Finance Program Manager at Friends of the Earth U.S., said: “The United States has long claimed to be a world leader in climate action, yet fails to back this up with meaningful action or policy. U.S. agencies like the U.S. Export-Import Bank and U.S. International Development Finance Corporation continue to be piggy banks for fossil fuel projects from Mexico to South Africa to Indonesia, as these nations suffer from climate change.

President Biden must make his administration’s policy public, which would catalyze other countries to stop providing billions of dollars to polluting projects all over the world. True leaders do not blink when faced with a global climate crisis.”

Simone Ogno, Climate and Finance campaigner at ReCommon, said: “Italy is already three months late for implementing the Glasgow Statement. Through its export credit agency SACE, Italy has become the 1st European fossil fuel financier, enabling the development of strategic oil & gas projects for the Russian Federation, not to mention LNG projects in Mozambique and oil refineries in Egypt.

On top of that, we’re forced to endure SACE chairing even the OECD Working Party on Export Credit and Credit Guarantees, the entity entitled to discuss the restrictions on export credit support for oil & gas. The time has come for Italy and SACE to end this tragic record once and for all.”

Constantin Zerger, Head of Energy and Climate Protection at the Deutsche Umwelthilfe, said: “Instead of providing gigantic sums of public funds for fossil fuel projects that are incompatible with the Paris Agreement, we urge German Chancellor Olaf Scholz to ensure that the Kreditanstalt für Wiederaufbau adheres to the Glasgow Statement. The government-owned development bank needs to officially commit that it will end its support for financial fossil fuel projects abroad and in Germany. Chancellor Scholz, it is time to become a real climate leader!”

Notes:

• In addition to the authoring organizations, the report has also been endorsed by 49 other organizations from across the world.
• The Glasgow Statement was launched at the UN climate talks in Glasgow (COP26). The 39 signatories aim to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022” and instead “prioritise our support fully towards the clean energy transition.”
• The Glasgow Statement has 39 signatories. This includes 19 high-income countries (Belgium, Canada, Denmark, Finland, France, Germany, Republic of Ireland, The Holy See [Vatican City State], Iceland, Italy, the Netherlands, New Zealand, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States), 15 low- and middle-income countries (Albania, Burkina Faso, Costa Rica, El Salvador, Ethiopia, Fiji, Gabon, The Gambia, Jordan, Mali, Marshall Islands, Moldova, South Sudan, Sri Lanka, Zambia), and 5 public finance institutions (Agence Française de Développement [AFD], Banco de Desenvolvimento de Minas Gerais, the East African Development Bank, the European Investment Bank [EIB], and Financierings-Maatschappij voor Ontwikkelingslanden N.V. [FMO])
• In its latest report, the IPCC highlighted public finance for fossil fuels as ‘severely misaligned’ with reaching the Paris goals, but that if shifted, it would play a critical role in closing the mitigation finance gap, enabling emission reductions and a just transition. More background on the role international public finance plays in shaping energy systems is available in this Oil Change International briefing.
• A legal opinion by Professor Jorge E Viñuales from the University of Cambridge and Barrister Kate Cook of Matrix Chambers argues that governments and public finance institutions that continue to finance fossil fuel infrastructure are potentially at risk of climate litigation.
• The report urges signatories to table and back a proposal for oil and gas export finance restrictions at the OECD as soon as possible. A proposal to end export finance support for oil and gas has been endorsed by over 175 organizations.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

]]> https://www.radiofree.org/2023/03/15/new-report-commitment-to-end-international-finance-for-fossil-fuels-is-shifting-billions-but-key-countries-breaking-promises-missing-in-action/feed/ 0 379732 https://www.radiofree.org/2023/03/15/new-report-commitment-to-end-international-finance-for-fossil-fuels-is-shifting-billions-but-key-countries-breaking-promises-missing-in-action-2/ https://www.radiofree.org/2023/03/15/new-report-commitment-to-end-international-finance-for-fossil-fuels-is-shifting-billions-but-key-countries-breaking-promises-missing-in-action-2/#respond Wed, 15 Mar 2023 12:30:11 +0000 https://www.commondreams.org/newswire/new-report-commitment-to-end-international-finance-for-fossil-fuels-is-shifting-billions-but-key-countries-breaking-promises-missing-in-action

Promise Breakers, a report released today by Oil Change International, reveals that the Glasgow Statement, a joint commitment forged at the 2021 UN climate summit (COP26), is already shifting an estimated USD 5.7 billion per year out of fossil fuels and into clean energy, with the potential of a further 13.7 billion per year if all Glasgow Statement signatories fulfill their commitments.

At COP26 in Glasgow, 39 countries and institutions pledged to end international public finance for fossil fuels by the end of 2022 and shift this money to clean energy. This report is the first international assessment of signatories’ implementation of the commitment since the passing of the end of 2022 deadline.

The report reveals that while some high-income countries have kept their Glasgow commitment, a group of major providers of international public finance have broken their promise, including Germany, Italy, and the United States.

The report’s key findings include that out of sixteen high-income signatories that provide significant levels of international public finance:

• Eight have adopted policies that broadly meet the promise they made in Glasgow (Canada, the European Investment Bank, the United Kingdom, France, Finland, Sweden, Denmark, and New Zealand), shifting an estimated USD 5.7 billion per year out of fossil fuels and showing that the Glasgow Statement is having a real-world impact;
• Four signatories (Belgium, Switzerland, the Netherlands, and Spain) have new policies that further restrict fossil fuel support but leave major loopholes and/or do not meet the end of 2022 deadline;
• Four signatories (Germany, Italy, Portugal, and the United States) have yet to publish new or updated policies. The United States has reportedly adopted a policy, but is refusing to publish it. Ongoing policy debates in Germany and Italy suggest that these countries are likely to introduce loopholes in any forthcoming policies that allow continued fossil fuel financing;
• Just days after this report was finalized, it appears Canada’s export credit agency, Export Development Canada is already in breach of their policy by approving four international oil and gas transactions totaling at least USD 5.5 million in 2023.

The report contains a detailed report card on each signatories’ policies, with recommendations for improvement. It highlights key opportunities for signatories to increase their clean energy finance levels, work together to reiterate and strengthen their commitment to end international finance for fossil fuels at the Japan-led G7 in May and negotiate oil and gas export finance restrictions at the OECD.

The International Energy Agency (IEA) has repeatedly stated that clean energy, not fossil fuels, are the solution for energy affordability, security and climate and development goals. Unless countries meet and expand their commitments to end international public finance for fossil fuels in 2023, climate, development and security goals will be pushed further beyond reach.

Previous Oil Change International research shows that international public finance still heavily favors fossil fuels. Oil Change International’s Public Finance for Energy Database shows that from 2016 – the year after the Paris Agreement was signed – until 2021, USD 422 billion in international public finance has gone to fossil fuels compared to just USD 173 billion for clean energy.

Adam McGibbon, a lead author and Public Finance Strategist at Oil Change International, said: “Our research shows that while the Glasgow Statement is a success story that’s having a real-world impact in shifting finance away from fossil fuels, some countries like the US, Germany and Italy have broken their promise.

These countries must immediately implement policies to keep the promise they made in Glasgow, phasing out international public finance for fossil fuels, or face growing international scrutiny as promise-breakers on climate policy.”

Regine Richter, Senior Energy and Finance campaigner at Urgewald said: “Continuously supporting the fossil fuel industry with public money will obstruct the ecological transition that Chancellor Scholz otherwise declares as most important for the country. He needs to choose his camp: promoting the transition or hampering it.”

Kate DeAngelis, International Finance Program Manager at Friends of the Earth U.S., said: “The United States has long claimed to be a world leader in climate action, yet fails to back this up with meaningful action or policy. U.S. agencies like the U.S. Export-Import Bank and U.S. International Development Finance Corporation continue to be piggy banks for fossil fuel projects from Mexico to South Africa to Indonesia, as these nations suffer from climate change.

President Biden must make his administration’s policy public, which would catalyze other countries to stop providing billions of dollars to polluting projects all over the world. True leaders do not blink when faced with a global climate crisis.”

Simone Ogno, Climate and Finance campaigner at ReCommon, said: “Italy is already three months late for implementing the Glasgow Statement. Through its export credit agency SACE, Italy has become the 1st European fossil fuel financier, enabling the development of strategic oil & gas projects for the Russian Federation, not to mention LNG projects in Mozambique and oil refineries in Egypt.

On top of that, we’re forced to endure SACE chairing even the OECD Working Party on Export Credit and Credit Guarantees, the entity entitled to discuss the restrictions on export credit support for oil & gas. The time has come for Italy and SACE to end this tragic record once and for all.”

Constantin Zerger, Head of Energy and Climate Protection at the Deutsche Umwelthilfe, said: “Instead of providing gigantic sums of public funds for fossil fuel projects that are incompatible with the Paris Agreement, we urge German Chancellor Olaf Scholz to ensure that the Kreditanstalt für Wiederaufbau adheres to the Glasgow Statement. The government-owned development bank needs to officially commit that it will end its support for financial fossil fuel projects abroad and in Germany. Chancellor Scholz, it is time to become a real climate leader!”

Notes:

• In addition to the authoring organizations, the report has also been endorsed by 49 other organizations from across the world.
• The Glasgow Statement was launched at the UN climate talks in Glasgow (COP26). The 39 signatories aim to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022” and instead “prioritise our support fully towards the clean energy transition.”
• The Glasgow Statement has 39 signatories. This includes 19 high-income countries (Belgium, Canada, Denmark, Finland, France, Germany, Republic of Ireland, The Holy See [Vatican City State], Iceland, Italy, the Netherlands, New Zealand, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States), 15 low- and middle-income countries (Albania, Burkina Faso, Costa Rica, El Salvador, Ethiopia, Fiji, Gabon, The Gambia, Jordan, Mali, Marshall Islands, Moldova, South Sudan, Sri Lanka, Zambia), and 5 public finance institutions (Agence Française de Développement [AFD], Banco de Desenvolvimento de Minas Gerais, the East African Development Bank, the European Investment Bank [EIB], and Financierings-Maatschappij voor Ontwikkelingslanden N.V. [FMO])
• In its latest report, the IPCC highlighted public finance for fossil fuels as ‘severely misaligned’ with reaching the Paris goals, but that if shifted, it would play a critical role in closing the mitigation finance gap, enabling emission reductions and a just transition. More background on the role international public finance plays in shaping energy systems is available in this Oil Change International briefing.
• A legal opinion by Professor Jorge E Viñuales from the University of Cambridge and Barrister Kate Cook of Matrix Chambers argues that governments and public finance institutions that continue to finance fossil fuel infrastructure are potentially at risk of climate litigation.
• The report urges signatories to table and back a proposal for oil and gas export finance restrictions at the OECD as soon as possible. A proposal to end export finance support for oil and gas has been endorsed by over 175 organizations.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

Technically, the cutoff for SIFIs is $250 billion in assets. However, the reason they are called “systemically important” is not their asset size but the fact that their failure could bring down the whole financial system. That designation comes chiefly from their exposure to derivatives, the global casino that is so highly interconnected that it is a “house of cards.” Pull out one card and the whole house collapses. SVB held $27.7 billion in derivatives, no small sum, but it is only .05% of the $55,387 billion ($55.387 trillion) held by JPMorgan, the largest U.S. derivatives bank.

SVB could be the canary in the coal mine foreshadowing the fate of other over-extended banks, but its collapse is not the sort of “systemic risk” predicted to trigger “contagion.” As reported by CNN:

Despite initial panic on Wall Street, analysts said SVB’s collapse is unlikely to set off the kind of domino effect that gripped the banking industry during the financial crisis.

“The system is as well-​capitalized and liquid as it has ever been,” Moody’s chief economist Mark Zandi said. “The banks that are now in trouble are much too small to be a meaningful threat to the broader system.”

No later than Monday morning, all insured depositors will have full access to their insured deposits, according to the FDIC. It will pay uninsured depositors an “advance dividend within the next week.”

The FDIC, Federal Reserve and U.S. Treasury have now agreed on an interim fix that will the subject of another article. Meanwhile, this column focuses on derivatives and is a followup to my Feb. 23  column on the “bail in” provisions of the 2010 Dodd Frank Act, which eliminated taxpayer bailouts by requiring insolvent SIFIs to recapitalize themselves with the funds of their creditors. “Creditors” are defined to include depositors, but deposits under $250,000 are protected by FDIC insurance. However, the FDIC fund is sufficient to cover only about 2% of the $9.6 trillion in U.S. insured deposits. A nationwide crisis triggering bank runs across the country, as happened in the early 1930s, would wipe out the fund. Today, some financial pundits are predicting a crisis of that magnitude in the quadrillion dollar-plus derivatives market, due to rapidly rising interest rates. This column looks at how likely that is and what can be done either to prevent it or dodge out of the way.

“Financial Weapons of Mass Destruction”

In 2002, mega-investor Warren Buffett wrote that derivatives were “financial weapons of mass destruction.” At that time, their total “notional” value (the value of the underlying assets from which the “derivatives” were “derived”) was estimated at $56 trillion. Investopedia reported in May 2022 that the derivatives bubble had reached an estimated $600 trillion according to the Bank for International Settlements (BIS), and that the total is often estimated at over $1 quadrillion.  No one knows for sure, because most of the trades are done privately.

As of the third quarter of 2022, according to the “Quarterly Report on Bank Trading and Derivatives Activities” of the Office of the Comptroller of the Currency (the federal bank regulator),  a total of 1,211 insured U.S. national and state commercial banks and savings associations held derivatives, but 88.6% of these were concentrated in only four large banks: J.P. Morgan Chase ($54.3 trillion), Goldman Sachs ($51 trillion), Citibank ($46 trillion), Bank of America ($21.6 trillion), followed by Wells Fargo ($12.2 trillion). A full list is here. Unlike in 2008-09, when the big derivative concerns were mortgage-backed securities and credit default swaps, today the largest and riskiest category is interest rate products.

The original purpose of derivatives was to help farmers and other producers manage the risks of dramatic changes in the markets for raw materials. But in recent times they have exploded into powerful vehicles for leveraged speculation (borrowing to gamble). In their basic form, derivatives are just bets – a giant casino in which players hedge against a variety of changes in market conditions (interest rates, exchange rates, defaults, etc.). They are sold as insurance against risk, which is passed off to the counterparty to the bet. But the risk is still there, and if the counterparty can’t pay, both parties lose. In “systemically important” situations, the government winds up footing the bill.

Like at a race track, players can bet although they have no interest in the underlying asset (the horse). This has allowed derivative bets to grow to many times global GDP and has added another element of risk: if you don’t own the barn on which you are betting, the temptation is there to burn down the barn to get the insurance. The financial entities taking these bets typically hedge by betting both ways, and they are highly interconnected. If counterparties don’t get paid, they can’t pay their own counterparties, and the whole system can go down very quickly, a systemic risk called “the domino effect.”

That is why insolvent SIFIs had to be bailed out in the Global Financial Crisis (GFC) of 2007-09, first with $700 billion of taxpayer money and then by the Federal Reserve with “quantitative easing.” Derivatives were at the heart of that crisis. Lehman Brothers was one of the derivative entities with bets across the system. So was insurance company AIG, which managed to survive due to a whopping $182 billion bailout from the U.S. Treasury; but Lehman was considered too weakly collateralized to salvage. It went down, and the Great Recession followed.

Risks Hidden in the Shadows

Derivatives are largely a creation of the “shadow banking” system, a group of financial intermediaries that facilitates the creation of credit globally but whose members are not subject to regulatory oversight. The shadow banking system also includes unregulated activities by regulated institutions. It includes the repo market, which evolved as a sort of pawn shop for large institutional investors with more than $250,000 to deposit. The repo market is a safe place for these lenders, including pension funds and the U.S. Treasury, to park their money and earn a bit of interest. But its safety is insured not by the FDIC but by sound collateral posted by the borrowers, preferably in the form of federal securities.

As explained by Prof. Gary Gorton:

This banking system (the “shadow” or “parallel” banking system) – repo based on securitization – is a genuine banking system, as large as the traditional, regulated banking system. It is of critical importance to the economy because it is the funding basis for the traditional banking system. Without it, traditional banks will not lend and credit, which is essential for job creation, will not be created.

While it is true that banks create the money they lend simply by writing loans into the accounts of their borrowers, they still need liquidity to clear withdrawals; and for that they largely rely on the repo market, which has a daily turnover just in the U.S. of over $1 trillion. British financial commentator Alasdair MacLeod observes that the derivatives market was built on cheap repo credit. But interest rates have shot up and credit is no longer cheap, even for financial institutions.

According to a December 2022 report by the BIS, $80 trillion in foreign exchange derivatives that are off-balance-sheet (documented only in the footnotes of bank reports) are about to reset (roll over at higher interest rates). Financial commentator George Gammon discusses the threat this poses in a podcast he calls, “BIS Warns of 2023 Black Swan – A Derivatives Time Bomb.”

Another time bomb in the news is Credit Suisse, a giant Swiss derivatives bank that was hit with an $88 billion run on its deposits by large institutional investors late in 2022. The bank was bailed out by the Swiss National Bank through swap lines with the U.S. Federal Reserve at 3.33% interest.

The Perverse Incentives Created by “Safe Harbor” in Bankruptcy

In The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences, Prof. David Skeel refutes what he calls the “Lehman myth”—the widespread belief that Lehman’s collapse resulted from the decision to allow it to fail. He blames the 2005 safe harbor amendment to the bankruptcy law, which says that the collateral posted by insolvent borrowers for both repo loans and derivatives has “safe harbor” status exempting it from recovery by the bankruptcy court. When Lehman appeared to be in trouble, the repo and derivatives traders all rushed to claim the collateral before it ran out, and the court had no power to stop them.

So why not repeal the amendment? In a 2014 article titled “The Roots of Shadow Banking,” Prof. Enrico Perotti of the University of Amsterdam explained that the safe harbor exemption is a critical feature of the shadow banking system, one it needs to function. Like traditional banks, shadow banks create credit in the form of loans backed by “demandable debt”—short-term loans or deposits that can be recalled on demand. In the traditional banking system, the promise that the depositor can get his money back on demand is made credible by government-backed deposit insurance and access to central bank funding. The shadow banks needed their own variant of “demandable debt,” and they got it through the privilege of “super-priority” in bankruptcy. Perotti wrote:

Safe harbor status grants the privilege of being excluded from mandatory stay, and basically all other restrictions. Safe harbor lenders, which at present include repos and derivative margins, can immediately repossess and resell pledged collateral.

This gives repos and derivatives extraordinary super-priority over all other claims, including tax and wage claims, deposits, real secured credit and insurance claims. [Emphasis added.]

The dilemma of our current banking system is that lenders won’t advance the short-term liquidity needed to fund repo loans without an ironclad guarantee; but the guarantee that makes the lender’s money safe makes the system itself very risky. When a debtor appears to be on shaky ground, there will be a predictable stampede by favored creditors to grab the collateral, in a rush for the exits that can propel an otherwise-viable debtor into bankruptcy; and that is what happened to Lehman Brothers.

Derivatives were granted “safe harbor” because allowing them to fail was also considered a systemic risk. It could trigger the “domino effect,” taking the whole system down. The error, says Prof. Skeel, was in passage of the 2005 safe harbor amendment. But the problem with repealing it now is that we will get the domino effect, in the collapse of both the quadrillion dollar derivatives market and the more than trillion dollars traded daily in the repo market.

The Interest Rate Shock

Interest rate derivatives are particularly vulnerable in today’s high interest rate environment. From March 2022 to February 2023, the prime rate (the rate banks charge their best customers) shot up from 3.5% to 7.75%, a radical jump. Market analyst Stephanie Pomboy calls it an “interest rate shock.” It won’t really hit the market until variable-rate contracts reset, but $1 trillion in U.S. corporate contracts are due to reset this year, another trillion next year, and another trillion the year after that.

A few bank bankruptcies are manageable, but an interest rate shock to the massive derivatives market could take down the whole economy. As Michael Snyder wrote in a 2013 article titled “A Chilling Warning About Interest Rate Derivatives:”

Will rapidly rising interest rates rip through the U.S. financial system like a giant lawnmower blade? Yes, the U.S. economy survived much higher interest rates in the past, but at that time there were not hundreds of trillions of dollars worth of interest rate derivatives hanging over our financial system like a Sword of Damocles.

… [R]ising interest rates could burst the derivatives bubble and cause “massive bankruptcies around the globe” [quoting Mexican billionaire Hugo Salinas Price]. Of course there are a whole lot of people out there that would be quite glad to see the “too big to fail” banks go bankrupt, but the truth is that if they go down, our entire economy will go down with them. … Our entire economic system is based on credit, and just like we saw back in 2008, if the big banks start failing, credit freezes up and suddenly nobody can get any money for anything.

There are safer ways to design the banking system, but they are not likely to be in place before the quadrillion dollar derivatives bubble bursts. Snyder was writing 10 years ago, and it hasn’t burst yet; but this was chiefly because the Fed came through with the “Fed Put” – the presumption that it would backstop “the market” in any sort of financial crisis. It has performed as expected until now, but the Fed Put has stripped it of its “independence” and its ability to perform its legislated duties. This is a complicated subject, but two excellent books on it are Nik Bhatia’s Layered Money (2021) and Lev Menand’s The Fed Unbound: Central Banking in a Time of Crisis (2022).

Today the Fed appears to be regaining its independence by intentionally killing the Fed Put, with its push to raise interest rates. (See my earlier article here.) It is still backstopping the offshore dollar market with “swap lines,” arrangements between central banks of two countries to keep currency available for member banks,  but the latest swap line rate for the European Central Bank is a pricey 4.83%. No more “free lunch” for the banks.

Alternative Solutions

Alternatives that have been proposed for unwinding the massive derivatives bubble include repealing the safe harbor amendment and imposing a financial transaction tax, typically a 0.1% tax on all financial trades. But those proposals have been around for years and Congress has not taken up the call. Rather than waiting for Congress to act, many commentators say we need to form our own parallel alternative monetary systems.

Crypto proponents see promise in Bitcoin; but as Alastair MacLeod observes, Bitcoin’s price is too volatile for it to serve as a national or global reserve currency, and it does not have the status of enforceable legal tender. MacLeod’s preferred alternative is a gold-backed currency, not of the 19^th century variety that led to bank runs when the banks ran out of gold, but of the sort now being proposed by Sergey Glazyev for the Eurasian Economic Union. The price of gold would be a yardstick for valuing national currencies, and physical gold could be used as a settlement medium to clear trade balances.

Lev Menand, author of The Fed Unbound, is an Associate Professor at Columbia Law School who has worked at the New York Fed and the U.S. Treasury. Addressing the problem of the out-of-control unregulated shadow banking system, he stated in a July 2022 interview with The Hill, “I think that one of the great possible reforms is the public banking movement and the replication of successful public bank enterprises that we have now in some places, or that we’ve had in the past.”

Certainly, for our local government deposits, public banks are an important solution. State and local governments typically have far more than $250,000 deposited in SIFI banks, but local legislators consider them protected because they are “collateralized.” In California, for example, banks taking state deposits must back them with collateral equal to 110% of the deposits themselves. The problem is that derivative and repo claimants with “supra-priority” can wipe out the entirety of a bankrupt bank’s collateral before other “secured” depositors have access to it.

Our tax dollars should be working for us in our own communities, not capitalizing failing SIFIs on Wall Street. Our stellar (and only) state-owned model is the Bank of North Dakota, which carried North Dakota through the 2008-09 financial crisis with flying colors. Post-GFC (the Global Financial Crisis of ’07-’09), it earned record profits reinvesting the state’s revenues in the state, while big commercial banks lost billions in the speculative markets. Several state legislatures currently have bills on their books following the North Dakota precedent.

For a federal workaround, we could follow the lead of Jesse Jones’ Reconstruction Finance Corporation, which funded the New Deal that pulled the country out of the Great Depression. A bill for a national investment bank currently in Congress that has widespread support is based on that very effective model, avoiding the need to increase taxes or the federal debt.

All those alternatives, however, depend on legislation, which may be too late. Meanwhile, self-sufficient “intentional” communities are growing in popularity, if that option is available to you. Community currencies, including digital currencies, can be used for trade. They can be “Labor Dollars” or “Food Dollars” backed by the goods and services for which the community has agreed to accept them. (See my earlier article here.) The technology now exists to form a network of community cryptocurrencies that are asset-backed and privacy-protected, but that is a subject for another column.

The current financial system is fragile, volatile and vulnerable to systemic shocks. It is due for a reset, but we need to ensure that the system is changed in a way that works for the people whose labor and credit support it. Our hard-earned deposits are now the banks’ only source of cheap liquidity. We can leverage that power by collaborating in a way that serves the public interest.

This content originally appeared on Dissident Voice and was authored by Ellen Brown.

Tennessee joins Alabama, Arkansas, Arizona, South Dakota, Tennessee, and Utah in outlawing or restricting gender-affirming care for trans youth—and, in the case of Alabama, anyone under age 19. Federal judges have blocked Alabama and Arkansas from implementing their bans. Meanwhile this year, at least 24 states have introduced legislation to prohibit or restrict such care.

Lambda Legal—which along with the ACLU and ACLU of Tennessee announced its intent to sue—accused Lee and Republican lawmakers of "taking away the freedom of families of transgender youth to seek critical healthcare" and "putting the government in charge of making vital decisions traditionally reserved to parents in Tennessee."

"They've chosen fearmongering, misrepresentations, intimidation, and extremist politics over the rights of families and the lives of transgender youth in Tennessee."

"We will not allow this dangerous law to stand," the groups said in a joint statement. "Certain politicians and Gov. Lee have made no secret of their intent to discriminate against youth who are transgender or their willful ignorance about the lifesaving healthcare they seek to ban."

"Instead, they've chosen fearmongering, misrepresentations, intimidation, and extremist politics over the rights of families and the lives of transgender youth in Tennessee," the groups added. "We are dedicated to overturning this unconstitutional law and are confident the state will find itself completely incapable of defending it in court. We want transgender youth to know they are not alone and this fight is not over."

Ivy Hill, director of gender justice for the Campaign for Southern Equality, said in a statement after the bill passed that "my heart is breaking for transgender youth all across the country and throughout the South."

"We've known for years that it's never been easy to access gender-affirming care in states like Tennessee and the passage of this bill will only make it harder," they added. "But the trans and queer community across the South will do what we've always done: come together, support each other, and chart new systems that help people live authentic, thriving lives where they know they are loved and supported."

Dr. Allison Stiles, a Memphis physician, said that "this bill, I feel, was born out of fearmongering—out of false rhetoric that we are doing sex-change operations on our children."

"The hate has grown, and we now have a bill that could get parents arrested for taking their gender-dysphoric child to the physician, and their physicians for taking care of them," she asserted.

"There are at least four human beings that I have touched with my hands who are this side of the grave because of the gender-affirming care."

"Just to throw in a little science here... there are four independent aspects to our sexuality," Stiles added. "Our genetics—which could be XX, XO, XY, XXY, XYY—there is our outward appearance, our gender identity, and our sexual preference. The XX and XY fetus are identical, actually, until six weeks of gestation."

Proponents of gender-affirming care noted it saves lives.

"There are at least four human beings that I have touched with my hands who are this side of the grave because of the gender-affirming care," Rev. Dawn Bennett of the Table Nashville, a faith group that centers the LGBTQ+ community, recently asserted.

According to the ACLU, Republican lawmakers in more than 20 states are trying to ban gender-affirming care for trans youth—and in some cases, even adults.

Lee also signed a bill on Thursday making Tennessee the first state to criminalize public drag shows. The governor signed the measure amid allegations of hypocrisy following the revelation that he dressed in drag at least once while in high school in the 1970s.

"Drag is not a threat to anyone. It makes no sense to be criminalizing or vilifying drag in 2023," Lawrence La Fountain-Stokes, a professor of culture and gender studies at the University of Michigan who has performed in drag, told the Associated Press.

"It is a space where people explore their identities," La Fountain-Stokes continued. "But it is also a place where people simply make a living. Drag is a job. Drag is a legitimate artistic expression that brings people together, that entertains, that allows certain individuals to explore who they are and allows all of us to have a very nice time. So it makes literally no sense for legislators, for people in government, to try to ban drag."

Other GOP-run states—including Idaho, Kentucky, Montana, North Dakota, and Oklahoma—are considering similar drag bans.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

Tennessee joins Alabama, Arkansas, Arizona, South Dakota, Tennessee, and Utah in outlawing or restricting gender-affirming care for trans youth—and, in the case of Alabama, anyone under age 19. Federal judges have blocked Alabama and Arkansas from implementing their bans. Meanwhile this year, at least 24 states have introduced legislation to prohibit or restrict such care.

Lambda Legal—which along with the ACLU and ACLU of Tennessee announced its intent to sue—accused Lee and Republican lawmakers of "taking away the freedom of families of transgender youth to seek critical healthcare" and "putting the government in charge of making vital decisions traditionally reserved to parents in Tennessee."

"They've chosen fearmongering, misrepresentations, intimidation, and extremist politics over the rights of families and the lives of transgender youth in Tennessee."

"We will not allow this dangerous law to stand," the groups said in a joint statement. "Certain politicians and Gov. Lee have made no secret of their intent to discriminate against youth who are transgender or their willful ignorance about the lifesaving healthcare they seek to ban."

"Instead, they've chosen fearmongering, misrepresentations, intimidation, and extremist politics over the rights of families and the lives of transgender youth in Tennessee," the groups added. "We are dedicated to overturning this unconstitutional law and are confident the state will find itself completely incapable of defending it in court. We want transgender youth to know they are not alone and this fight is not over."

Ivy Hill, director of gender justice for the Campaign for Southern Equality, said in a statement after the bill passed that "my heart is breaking for transgender youth all across the country and throughout the South."

"We've known for years that it's never been easy to access gender-affirming care in states like Tennessee and the passage of this bill will only make it harder," they added. "But the trans and queer community across the South will do what we've always done: come together, support each other, and chart new systems that help people live authentic, thriving lives where they know they are loved and supported."

Dr. Allison Stiles, a Memphis physician, said that "this bill, I feel, was born out of fearmongering—out of false rhetoric that we are doing sex-change operations on our children."

"The hate has grown, and we now have a bill that could get parents arrested for taking their gender-dysphoric child to the physician, and their physicians for taking care of them," she asserted.

"There are at least four human beings that I have touched with my hands who are this side of the grave because of the gender-affirming care."

"Just to throw in a little science here... there are four independent aspects to our sexuality," Stiles added. "Our genetics—which could be XX, XO, XY, XXY, XYY—there is our outward appearance, our gender identity, and our sexual preference. The XX and XY fetus are identical, actually, until six weeks of gestation."

Proponents of gender-affirming care noted it saves lives.

"There are at least four human beings that I have touched with my hands who are this side of the grave because of the gender-affirming care," Rev. Dawn Bennett of the Table Nashville, a faith group that centers the LGBTQ+ community, recently asserted.

According to the ACLU, Republican lawmakers in more than 20 states are trying to ban gender-affirming care for trans youth—and in some cases, even adults.

Lee also signed a bill on Thursday making Tennessee the first state to criminalize public drag shows. The governor signed the measure amid allegations of hypocrisy following the revelation that he dressed in drag at least once while in high school in the 1970s.

"Drag is not a threat to anyone. It makes no sense to be criminalizing or vilifying drag in 2023," Lawrence La Fountain-Stokes, a professor of culture and gender studies at the University of Michigan who has performed in drag, told the Associated Press.

"It is a space where people explore their identities," La Fountain-Stokes continued. "But it is also a place where people simply make a living. Drag is a job. Drag is a legitimate artistic expression that brings people together, that entertains, that allows certain individuals to explore who they are and allows all of us to have a very nice time. So it makes literally no sense for legislators, for people in government, to try to ban drag."

Other GOP-run states—including Idaho, Kentucky, Montana, North Dakota, and Oklahoma—are considering similar drag bans.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

Over the past two years, the State Financial Officers Foundation (SFOF)―a dark money group supported by climate-denying organizations, such as the Heartland Institute and the American Legislative Exchange Council (ALEC)―has organized Republicans to attack climate financial regulation, defeat the nominations of key Biden regulators, anddivest state money from BlackRock in retaliation for its climate commitments. This year alone, Republicans have introduced more than 100 bills in 23 states that are designed to punish financial companies for taking action on climate.

This is the latest evolution of the GOP’s decades-long strategy to slow the transition off fossil fuels―an all-out attack on financial institutions they claim are “boycotting” fossil fuels. And it’s working. The world’s largest banks and investors have been falling over themselves to pledge loyalty to the fossil fuel industry.

Given this change of political terrain, the climate movement’s strategy to end fossil financing needs to evolve. Every year since 2017, there have been national days of actions targeting banks funding fossil fuels. During the height of the resistance to Line 3, there were actions at the banks financing the pipeline in over one hundred cities on a single day. Protestors have shut down streets and banking centers in New York, San Francisco, and Seattle time and time again. There is still a need for these kinds of awareness-raising actions—and if you’re not already plugged into Third Act’s national day of action on March 21st, you should find an action near you and get involved.

Shareholders, after all, are literally the people who own the company.

But alone, these kinds of actions aren’t enough. In response to an organized and strategic opposition, we need to refocus our strategy in several key ways. The most pressing of which is right around the corner: shareholder season.

Shareholder season is the time of year when every publicly-traded company in America has their Annual General Meeting (AGM). At AGMs investors vote on a variety of proposals introduced by fellow shareholders. Proposals can be about anything related to the way a company runs its business―executive pay, board diversity, the gender pay gap. In recent years, banks have faced shareholder proposals around their financing of fossil fuels. And 2023 will be no different.

In April and May, investors in Wall Street banks will vote on at least three shareholder proposals related to climate. One will call for a time-bound phase-out of financing for companies engaged in fossil fuel expansion. New York City and New York State have filed a series of anti-greenwashing resolutions that would push banks to use “absolute emissions” metrics when setting their climate targets for the energy sector, rather than the weaker “carbon intensity” metrics they’ve been using. The third resolution will push banks to create a comprehensive plan to achieve the 2030 emissions reduction targets they’ve already set.

These votes are some of the most important climate votes that you’ve never heard of. How they pan out will go a long way to determining how quickly big banks wind down their financing for coal, oil, and gas. Shareholders, after all, are literally the people who own the company.

This spring, it’s the climate movement’s job to organize constituents and pension fund members across the country to make sure that public money casts its vote for climate justice...

Unfortunately, in these elections, it’s not a democratic system where one person gets one vote. But there is one clear way that we can help influence the vote: public pensions.

Public pensions are some of the biggest investors in the country. California’s state pensions alone manage over $740 billion. Last year, the public pensions in many Democratic states, including the trifecta states of California, Washington, Colorado, New Jersey, Maryland, New Mexico, and Maine, voted against a resolution at US banks calling for an end to financing of fossil fuel expansion. Those six pension funds alone represent more than $1.2 trillion in investment capital, a significant percentage of the vote at many companies.

The good news? Public pensions manage public money. They are often overseen by elected officials. That means that they are accountable to their constituents and to everyday members of the pension fund: the teachers, public employees, and firefighters whose interests they are supposed to represent when casting their votes. This spring, it’s the climate movement’s job to organize constituents and pension fund members across the country to make sure that public money casts its vote for climate justice this shareholder season.

This content originally appeared on Common Dreams and was authored by Alec Connon.

Each arms shipment is made and justified on the basis of Ukraine’s civilizational imperative, proclaimed as not merely European but global. It is a spectacular refit verging on pantomime. But occasionally, a few cracks in the show appear. For one, Zelensky’s desperate effort to make his impoverished and war ravaged country appealing to investors, and who that message is being sold to, is telling.

In his January 23 address to the National Association of State Chambers, the Ukrainian President rubs and massages the US ego with stretchy analogies. He links the creation of a business with defending Ukraine. It seems that fighting and dying in the Ukraine War “is like starting your own business and working day from morning till night, every day, so that one day you can see how your dream is becoming true – when you finally have your own operating business.” (Someone really ought to furnish him with Arthur Miller’s sober corrective Death of a Salesman.)

Ukraine is held out as a receptacle awaiting the joyful stuffing of cash and capital. “We have already managed to attract attention and have cooperation with such giants of the international financial and investment world as Black Rock, J.P. Morgan and Goldman Sachs. Such American brands as Starlink or Westinghouse have already become part of our, Ukrainian, way.”

Zelensky does little to differentiate civilian and military enterprises, though it is clear he would, at this point, prefer the immediate reward of weapons rather than US banking and financial services. These are all part of that anti-democratic continuum that is the military industrial complex. “Your brilliant defence systems – such as HIMARS or Bradleys – are already uniting our history of freedom with your enterprises. We are waiting for Patriots. We are looking closely at Abrams.”

While he calls the Russian effort predatory in nature, he ignores the predatory corporate nature of those companies he praises and embraces. Goldman Sachs has an extensive record of undermining civil society in a number of countries, leaving a trail of unaccountable financial devastation. It remains, to use Matt Taibbi’s famous description, “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”.

Most recently, its lengthy involvement in the looting of the 1Malaysia Development Berhad (IMDB) led to the conviction of one single junior partner, a lamentable effort suggesting that white collar crime not only pays but pays handsomely.

Dennis M. Kelleher, President and Chief Executive Office of Better Markets, offers a summary that cannot be bettered. “Without Goldman’s imprimatur and management of the private placement of $6.5 billion of bonds in three offerings in less than a year, there would have been no money to launder or loot, no money to bribe, buy votes and corrupt democracy and justice, and no murder of a prosecutor investigating those activities.”

Of that amount, the then Malaysian Prime Minister Najib Razak and his cronies were most grateful, reportedly making off with half the stash. Goldman’s own reward for engineering the entire, jaw dropping steal: $600 million.

These are warnings best heeded in the corridors of Kyiv. But Zelensky is no mood for lessons in US corporate history and its extensive record of global pillaging. Last October, he held a meeting with representatives of the Great Vampire Squid. Goldman Sachs Executive Vice President John Rogers and Co-Head of the Office of Applied Innovation and President of Global Affairs Jared Cohen were on hand to smell out opportunities, blood funnel at the ready. Gullibly, the president told them of his appreciation “when such people are not afraid and come to Ukraine to support us.” Such companies would “bring something new and create jobs for Ukrainians. That is what we need.”

Charmingly, Zelensky wished to convince both Rogers and Cohen that measures were needed to counter the spread of disinformation. Perhaps this was not the strangest briefing: the investment bank is infamous for its own brand of disinformation in cooking the books.

In his National Association of State Chambers address, the Ukrainian president insists that “everyone can become a big business by working with Ukraine”, covering “all sectors – from weapons and defence to construction, from communications to agriculture, from transport to IT, from banks to medicine.” A country weakened and depleted by war is a potential bankster’s playground, offering a chance for cheap pickings, low-cost investment efforts for high returns and minimum regulations to police abuse. And a few lucky politicians can get wealthy along the way too.

Names such as Goldman Sachs and J.P. Morgan, far from being paragons of democracy, malign it. The boardroom member and shareholder are not electors of political representatives, even if they manipulate electoral outcomes and the decisions of governments. Many Ukrainians are in for a nasty surprise.

This content originally appeared on Dissident Voice and was authored by Binoy Kampmark.

“George Santos has lied about nearly every aspect of his life, and as more evidence comes to light, it’s become increasingly clear that he violated campaign finance laws.

“Yet, Speaker McCarthy has refused to hold him accountable for his lies and misdeeds. Even as McCarthy has blocked trusted public servants from returning to their roles on the Intelligence Committee, McCarthy has empowered Santos by seating him on two committees and gutting the Office of Congressional Ethics that should be tasked with investigating Santos. Once again, McCarthy is putting his personal power ahead of what’s best for the American people.

“Santos has proven he is wholly unfit for office, and his violations of our laws and public trust cannot go unanswered. Congress should investigate his unethical and likely illegal actions and expel Santos from the House.”

Stand Up America members have sent nearly 10,000 emails to their representatives in Congress, urging them to ensure that Santos is investigated and expelled from the House of Representatives for his lies and potential crimes. Stand Up America is also running national digital ads demanding the House investigate and expel Santos.

This content originally appeared on Common Dreams and was authored by Newswire Editor.

This content originally appeared on CounterPunch.org and was authored by Dan Glazebrook.

Top banks in the United States and around the world have made a show of embracing net-zero emissions pledges, portraying themselves as allies in the fight against the global climate emergency.

But a new analysis published Tuesday by a group of NGOs makes clear that the world's leading financial institutions—including major Wall Street banks such as Citigroup, JPMorgan Chase, and Bank of America—are still pumping money into fossil fuel expansion, bolstering the industry that is primarily responsible for worsening climate chaos.

According to the report, 56 of the largest banks in the Net-Zero Banking Alliance (NZBA)—a coalition convened by the United Nations—have provided nearly $270 billion in the form of loans and underwriting to more than 100 "major fossil fuel expanders," from Saudi Aramco to ExxonMobil to Shell.

Additionally, 58 of the biggest members of the Net-Zero Asset Managers (NZAM) initiative—including the investment behemoths BlackRock and Vanguard—held at least $847 billion worth of stocks and bonds in more than 200 large fossil fuel developers as of September.

Both the NZBA and the NZAM are under the umbrella of the Glasgow Financial Alliance for Net-Zero (GFANZ), a campaign launched in 2021 with the goal of expanding "the number of net zero-committed financial institutions." Climate advocates have long argued that net-zero pledges are fundamentally inadequate to the task of stopping runaway warming.

"The science is very clear: we need to stop developing new coal, oil, and gas projects as soon as possible if we want to meet our climate goals and avoid a worst-case scenario," said Lucie Pinson, the executive director and founder of the watchdog group Reclaim Finance. "Yet, it is business as usual for most banks and investors who continue to support fossil fuel developers without any restrictions, despite their high-profile commitments to carbon neutrality."

"Their greenwashing is all the more damaging as it casts doubt on the sincerity of all net-zero commitments and undermines the efforts of those who are truly acting for the climate," Pinson added.

The groups found that the U.S.-based Wall Street giants Citigroup, JPMorgan Chase, Bank of America, Morgan Stanley, and Wells Fargo provided nearly $90 billion in total financing for fossil fuel expansion between the dates they joined the NZBA and August 2022.

Citigroup, which touts its net-zero commitments on its website, led the pack with $30.5 billion in fossil fuel financing from April 2021 to August 2022.

"The U.S. financial sector cannot be taken seriously on climate change until it stops investing in new fossil fuel projects," said Adele Shraiman, a representative for the Sierra Club's Fossil-Free Finance campaign. "We need an urgent transition to a green economy and the financial sector must help deliver that."

Overall, according to the new report, "229 of the world's largest fossil fuel developers received finance from the 161 GFANZ members covered... which will support them to develop new coal power plants, mines, ports, and other infrastructure, as well as new oil and gas fields and pipelines and LNG terminals."

"These new fossil fuel projects are incompatible with the objective of limiting global warming to 1.5°C, as confirmed in the latest International Energy Agency's World Energy Outlook published in October 2022," the report states. "They will lock in greenhouse gas emissions for decades, despite the adoption of decarbonization targets by some GFANZ members."

Paddy McCully, a senior analyst at Reclaim Finance, said in a statement that "GFANZ members are acting as climate arsonists."

"They've pledged to achieve net-zero but are continuing to pour hundreds of billions of dollars into fossil fuel developers," said McCully. "GFANZ and its member alliances will only be credible once they up their game and insist that their members help bring a rapid end to the era of coal, oil, and fossil gas expansion."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

When you consider all the ways “we the people” are being bullied, beaten, bamboozled, targeted, tracked, repressed, robbed, impoverished, imprisoned and killed by the government, one can only conclude that you shouldn’t trust the government with your privacy, your property, your life, or your freedoms.

Consider for yourself.

Don’t trust the government with your privacy, digital or otherwise. In the two decades since 9/11, the military-security industrial complex has operated under a permanent state of emergency that, in turn, has given rise to a digital prison that grows more confining and inescapable by the day. Wall-to wall surveillance, monitored by AI software and fed to a growing network of fusion centers, render the twin concepts of privacy and anonymity almost void. By conspiring with corporations, the Department of Homeland Security “fueled a massive influx of money into surveillance and policing in our cities, under a banner of emergency response and counterterrorism.” For instance, all across the country, police are installing Flock Safety license plate readers as part of a public-private partnership program between police and the surveillance industry. These cameras, which upload data in real time to fusion crime centers, signal a turning point in the transition from a police state to a police-driven surveillance state.

Don’t trust the government with your property. In yet another effort to legitimize warrantless searches, police are employing “hit-and-hold” tactics in which police enter a home, carry out an initial sweep of the property, handcuff the occupants, then wait for official search warrants to be secured and applied retroactively. In the meantime, police have managed to bypass the Fourth Amendment. The rationale, to prevent possible destruction of evidence, is the same one used to deadly effect with no-knock raids. If government agents can invade your home, break down your doors, kill your dog, damage your furnishings and terrorize your family, your property is no longer private and secure—it belongs to the government. Hard-working Americans are having their bank accounts, homes, cars electronics and cash seized by police under the assumption that they have allegedly been associated with some criminal scheme.

Don’t trust the government with your finances. The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are being forced to foot the bill for the government’s fiscal insanity. The national debt is $31.3 trillion and growing, and we’re paying more than $300 billion in interest every year on that public debt, yet there seems to be no end in sight when it comes to the government’s fiscal insanity. According to Forbes, Congress has raised, extended or revised the definition of the debt limit 78 times since 1960 in order to allow the government to essentially fund its existence with a credit card.

Don’t trust the government with your health. For all intents and purposes, “we the people” have become lab rats in the government’s secret experiments, which include MKULTRA and the U.S. military’s secret race-based testing of mustard gas on more than 60,000 enlisted men. Indeed, you don’t have to dig very deep or go very back in the nation’s history to uncover numerous cases in which the government deliberately conducted secret experiments on an unsuspecting populace—citizens and noncitizens alike—making healthy people sick by spraying them with chemicals, injecting them with infectious diseases and exposing them to airborne toxins. Unfortunately, the public has become so easily distracted by the political spectacle out of Washington, DC, that they are altogether oblivious to the grisly experiments, barbaric behavior and inhumane conditions that have become synonymous with the U.S. government, which has meted out untold horrors against humans and animals alike.

Don’t trust the government with your life: At a time when growing numbers of unarmed people have been shot and killed for just standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety, even the most benign encounters with police can have fatal consequences. The number of Americans killed by police continues to grow, with the majority of those killed as a result of police encounters having been suspected of a non-violent offense or no crime at all, or during a traffic violation. According a report by Mapping Police Violence, police killed more people in 2022 than any other year within the past decade. In 98% of those killings, police were not charged with a crime.

Don’t trust the government with your freedoms. For years now, the government has been playing a cat-and-mouse game with the American people, letting us enjoy just enough freedom to think we are free but not enough to actually allow us to live as a free people. Freedom no longer means what it once did. This holds true whether you’re talking about the right to criticize the government in word or deed, the right to be free from government surveillance, the right to not have your person or your property subjected to warrantless searches by government agents, the right to due process, the right to be safe from militarized police invading your home, the right to be innocent until proven guilty and every other right that once reinforced the founders’ belief that this would be “a government of the people, by the people and for the people.” On paper, we may be technically free, but in reality, we are only as free as a government official may allow.

Whatever else it may be—a danger, a menace, a threat—the U.S. government is certainly not looking out for our best interests, nor is it in any way a friend to freedom.

Remember the purpose of a good government is to protect the lives and liberties of its people.

Unfortunately, what we have been saddled with is, in almost every regard, the exact opposite of an institution dedicated to protecting the lives and liberties of its people.

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, “we the people” should have learned early on that a government that repeatedly lies, cheats, steals, spies, kills, maims, enslaves, breaks the laws, overreaches its authority, and abuses its power at almost every turn can’t be trusted.

This content originally appeared on Dissident Voice and was authored by John W. Whitehead and Nisha Whitehead.