In February 2025, Dr Diana Sarfati resigned, not unexpectedly, as Director-General of Health after only two years into her five-year term.

As a medical specialist, and in her role as developing the successful cancer control agency, she had extensive experience in New Zealand’s health system.

However, she did not conform to the privately expressed view of Prime Minister Christopher Luxon: That the problem with the health system is that it is led by health.

• READ MORE: Health workers call for NZ government to join global demands for ambulance massacre inquiry
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Responsibility for the appointment of public service chief executives rests with the Public Service Commissioner.

In carrying out this function, Brian Roche had two choices for the process of selecting Sarfati’s replacement — run a contestable hiring process (the usual method) or appoint someone without this process.

With the required approval of Attorney-General Judith Collins and Health Minister Simeon Brown, Roche opted for the exception rather than the rule.

This suggests a degree of pre-determination to appoint someone without the “hindrance” of health system experience, consistent with Luxon’s view.

An appointment from outside health
Consequently, on April 1, Audrey Sonerson was appointed the new Director-General of Health for a five-year term.

She had been the Ministry of Transport chief executive (including when Brown was transport minister). She also had senior positions in the Ministry of Foreign Affairs and Trade and in the Police and Treasury.

Though she had been part of the Treasury’s health team and has a master’s in health economics, her only health system experience was in the brief hiatus between Sarfati’s resignation when acting director-general and becoming the confirmed replacement.

‘For a minister with no experience of the complexity of health care delivery to choose a director-general who herself has no health experience is extremely concerning.’

— Dr David Galler, former intensive care specialist

This is unprecedented for the director-general position. Sonerson is the 18th person to hold this position. The first 10 had been medical doctors. In 1992, the first non-doctor holder was appointed (a Canadian with some health management experience).

The subsequent six appointees all had extensive health system experience. Three were medical doctors (two in population health), two had been district health board chief executives, and one had been the director-general in Scotland and a medical geographer.

Dr David Galler is well-placed to comment on the significance of this extraordinary change of direction. He is a retired intensive care specialist and former President of the Association of Salaried Medical Specialists.

He held the unique position of principal medical adviser to the health minister, the ‘eyes and ears’ of the health system for three health ministers in the mid to late 2000s. He also worked closely with two director-generals.

Drawing on this experience, Galler observes that: “Director-generals of health must be respected, influential, knowledgeable, connected and trusted, to ensure that good policy goes into practice and good practice informs policy . . .  For a minister with no experience of the complexity of health care delivery to choose a director-general who herself has no health experience is extremely concerning.”

Breadth of the health system
As the director-general heads up the Health Ministry, she is responsible for being the “steward” of our health system. In this context she is the lead adviser to the government on health. In the context of seeking to improve and protect the health and wellbeing of New Zealanders, the organisation Sonerson now leads is responsible for:

• the stewardship and leadership of the health system; and
• advising her minister and government on health and disability matters.

These responsibilities have to be considered in the context of how extensive the health system is beginning with its complexity, highly specialised range of health professional occupational groups, and its breadth.

This breadth ranges from community healthcare (predominantly general practices), local 24/7 acute hospitals, tertiary hospitals (lower volume, high complexity) and quaternary care services (national services for very uncommon or highly complex even lower volume procedures and treatments, including experimental medicine, uncommon surgical procedures, and advanced trauma care).

Another way of looking at this breadth is that it ranges in treatment from medical to surgical to mental health to diagnostic. And then there is population health such as epidemiology.

Population health and the Health Act
However, responsibility extends further to specific obligations under the Health Act 1956, many of which are operational. Although it is nearly 60 years old, this act has been updated by legislative amendments many times and as recently as 2022 with the passing of the Pae Ora Act that disestablished district health boards and established Health New Zealand.

The Health Act gives Sonerson’s health ministry the function of improving, promoting and protecting public health (as distinct from personal diagnostic and treatment health). Public health is legislatively defined as meaning either the health of all New Zealanders or a population group, community, or section of people within New Zealand.

A critical part of this role is the responsibility for ensuring that local government authorities improve, promote, and protect public health within their districts in appointing key positions (such as medical officers of health, environmental health officers and health protection officers); food and water safety; regular inspections for any nuisances, or any conditions likely to be injurious to health or offensive and, where necessary, secure their abatement or removal; make bylaws for the protection of public health; and provide reports on diseases and sanitary conditions within each district.

The population function under the Health Act of improving, promoting, and protecting public health means that how well the health ministry under Sonerson’s leadership performs directly affects the health and wellbeing of all New Zealanders.

This is an immense responsibility that cannot be minimised.

Understanding universal health systems
Universal health systems such as ours are characterised by being highly complex, adaptive and labour intensive and innovative (innovation primarily comes from its workforce). They provide a public good (rather than commodities) and their breadth is considerable.

But, despite appearances to the contrary, the different parts of this breadth don’t function separately from each other. They are not just interconnected; they are interdependent.

As a result, each part makes up a highly integrated system. Consequently, relationships are critical. The more relational the culture, the better the system will perform; the more contractual the culture, the poorer it will perform.

Galler’s experience-based above-mentioned observation needs to be seen in the context of the challenging nature of universal health systems.

In a wider discussion on health system leadership, Auckland surgeon Dr Erica Whineray Kelly got to the core of the issue very well: “You’d never have a conductor of an orchestra who’d never played an instrument.”

Audrey Sonerson comes into the director-general position with a deficit. It will help her performance if she first recognises that there are many unknowns for her and then proceeds to listen to those within the system who possess the experience of knowing well these unknowns.

It might go some way to alleviating the legitimate concerns of Galler and Whineray Kelly and many others.

Ian Powell is a progressive health, labour market and political “no-frills” forensic commentator in New Zealand. A former senior doctors union leader for more than 30 years, he blogs at Second Opinion and Political Bytes. This article was first published by Newsroom and is republished with permission.

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

The press conference after his meeting with Italian Prime Minister Giorgia Meloni revealed the extent of his descent into a chaotic state ─ he hardly knew she was there.

Usually, the press conference that occurs after a meeting between two “heads of state” concentrates on the results of the discussion between the two executives. The U.S. president may field most of the questions, but a healthy, alert, and empathetic executive makes certain that the foreign minster is also addressed and is given equal time to reply to questions. Not with Trump; he continually answered questions, while Giorgia Meloni sat quietly aside until an Italian correspondent asked a question of the Italian Prime Minister. Trump unashamedly lied and insulted people in Ms. Meloni’s presence; displaying characteristics that shock foreign dignitaries and embarrass the American people.

A question on price rises from a CNN reporter stirred Trump into his act. After berating the reporter with an abusive remark, “if you were truthful, which you are not,” Mr. Veracity casually stated, “I learned that gasoline hit $1.98 in some states.” Knowing that the lowest charge in my area is about $3.30/gallon, I hastened to ask Gemini to tell me the state with the lowest gas price. Answer: Mississippi at $2.53/gallon and national average at $3.34/gallon. Mr. Veracity continued with his audacious remarks, careless statements, and mathematical ignorance.

“When I came into office they hit me with the price of eggs. Fake news like you, you’re fake. Eggs had gone up 87 percent and we did an unbelievable job and eggs are now down 92 percent.” Medium sized eggs had a price tag of $5-$6/dozen, which by Trump’s figures would now be about 40 cents to 55 cents for a dozen, a price from 50 years ago.

“Tariffs are making us rich, losing trillions and now we are making money, taking in billions of dollars. I took in more than 700 billions of dollars from China.” The economic whiz still does not know that the importer pays the tariff and always increases the price and passes the duty charge on to the consumer. (Note: In rare cases, over a long time, tariffs may increase the value of the currency and indirectly lower the price the importer pays for the merchandise. In this case the importer might not raise the price. This rarity has not happened.) Nobody asked how he (personally) “took in more than 700 billions of dollars from China,” when the total income from tariffs was only $80B in 2019 and not all were duties on goods from China.

Trump’s obsession with Joe Biden grows and grows. “We’re getting criminals out of this country who Biden allowed to enter. Hundreds of thousands of criminals and murders, drug dealers. Opened jails all over the world and they came here. Biden did that.” The disturbing fixation on Biden continued.

“When Biden came in, oil went through the roof. That is what caused the problem. If Biden were in power, oil would be 7 or 8 dollars/gallon.“ Not only does former U.S. President, Joe Biden, have the keys to the jails in Latin America, he controls OPEC and determines the price of oil. Seems Trump’s mental gymnastics confused the price of oil with the price of gasoline.

All Biden’s administration was good at was “stealing elections.” No need to be concerned, now, “We have a real president who understands what it is all about. I had the strongest economy by far.”

In Donald Trump’s world, the meager GDP growth during his term in office represented the best U.S. economy of all time. COVID-19 in the year 2020 reduced the average GDP, but the other years did not show spectacular growth.

Bill Clinton 1993–2001 4.0%
George W. Bush 2001–2009 2.4%
Barack Obama 2009–2017 2.3%
Donald Trump 2017–2021 2.3% (2.46% in 2017, 2.97% in 2018 2.47% in 2019)
Joe Biden 2021–2025 3.2%

Driven by animosity and never by charity, the “liar-in-chief” ridiculed federal laws, created an unnecessary upheaval in the financial community, undermined an agency that gains credibility by having a neutral appearance, and insulted an independent agency’s leader who was not there to defend himself.

In response to a question regarding Federal Reserve actions, Trump replied:

I don’t think he (Federal Reserve Chairperson Jerome Hayden “Jay” Powell) is doing the job, too late, always too late…. If I ask Powell to leave, he’ll be out of there, real fast….Only things gone up are interest rates because they are playing politics; Federal Reserve are not smart people.

“Didn’t you nominate him,” asked a press member. “I can’t complain because we had the greatest economy,” the wise man answered.

Trump later retracted his remark of having the capability of firing Powell, who, by a previous Supreme Court decision ─ the 1935 Humphrey’s Executor decision from the Supreme Court, finding the president cannot fire leaders of independent federal agencies over policy disagreements ─ challenged Trump’s statement. He could not retract the obvious attempt to force an independent agency to behave as if dependent upon him and to have the public lose faith in the agency that regulates the money supply and has its name on all currency.

After disposing of the people that most annoy him, Trump turned to the nation that most annoys him ─ Iran ─ with his biggest whopper, deciphered by anyone who can read. “I terminated the Iran deal and you can see they haven’t been able to do anything.” Yes, it is true, Iran has not been able to do “anything”; they have been able to do “everything.”

Trump withdrew the United States from the Iran nuclear deal in 2018, claiming “it failed to curtail Iran’s missile program and regional influence.” Formally known as the Joint Comprehensive Plan of Action (JCPOA), the 2015 agreement reached between Iran and the major world powers prevented the Islamic State from developing the centrifuges to enrich uranium for nuclear weapons. Imposing restrictions on its nuclear activities and allowing international inspections of the nuclear facilities froze Iran’s nuclear activities for ten years

The treaty would have expired in 2025 and been either renegotiated or Iran could re-start its nuclear activities. After JCPOA was scrapped, Iran developed a massive number of ballistic missiles, increased its regional influence, allied with Russia and China, and enriched trace amounts of uranium to nearly weapons-grade levels. Iran has done everything that Trump claimed he would prevent. In the year 2025, they were not starting from scratch but, due to Donald Trump, were nearly finished having atomic weapons. Added benefits ─ Iran is able to negotiate with increased leverage and does not have to give up anything ─ let the powers bomb the facilities and suffer a little destruction in the process.

The serial mendacities, self-aggrandizements, character assassinations, and petty resentments, where Trump elevates himself by judging and demeaning others, type him as slightly deranged. His relation to the eccentric scriptwriter in Mario Vargas Llosa’s novel made its complete appearance, with Pedro Camacho Trump showing he had gone berserk by vilifying an admired and deceased president. The real life Pedro Camacho Trump recited the most sickening, psychopathic, and unhinged statement ever uttered in normal society: “Carter died a happy man, know why, because he was not the worst president, Joe Biden was.”

The men in white would have done the nation a favor by hauling the soon-to-be ex-president away to his preferred rest home ─ Mar-a-Lago. Hm, Italian Prime Minister Giorgia Meloni wore white for the occasion.

This content originally appeared on Dissident Voice and was authored by Dan Lieberman.

Photograph Source: The White House – Public Domain

As of market close April 21, major US stock indices have fallen by double-digit percentages since the beginning of the year, while bond yields — the interest rates the US government owes on money it borrows — continue to rise. But US president Donald Trump wants the Federal Reserve to cut interest rates and bears an ongoing grudge against the central bank’s chair, Jerome Powell, for refusing to do so.

In Trump’s view,  “Mr. Too Late, a major loser” should, but isn’t, “pre-emptively” acting with sufficient alacrity to rescue the American economy from the consequences of Trump’s own economic idiocy.

Powell makes a convenient scapegoat, especially since he can’t be fired (though Trump occasionally pretends otherwise) and has more than a year left in his term. So until May of 2026, Trump can just continue blaming Powell for America’s economic pain instead of admitting that his tariff and trade war antics, spendthrift budget plans, etc. don’t, won’t, and can’t produce good results.

Powell and his co-conspirators at the Fed aren’t innocent bystanders. To the extent that inflation “is always and everywhere a monetary phenomenon,” as Milton Friedman correctly put it, they have plenty to answer for.

That said, the perpetual Trump-Powell boxing match misses the real problem.

The Fed shouldn’t lower — or raise — interest rates.

The Fed should dissolve, or be dissolved, and the job of “creating money” should be left entirely to a free market.

There’s simply not enough room in an op-ed column to explain the intricate processes through which the Fed has debased the value of American money over the last 112 years, but lengthy explanations aren’t really necessary. The results of giving a banking cartel a monopoly on the creation of “money,” the power to create that “money” from thin air, and a mandate to loan that “money” to politicians who can borrow as much as they want as often as they want, were predictable from the start.

When we look at the three main functions of money — medium of exchange, unit of account, and store of value — the Federal Reserve system’s product fails on two of the three.

Sure, the dollar serves as a convenient unit of account, but it’s continually and consistently worth less and less in exchange and as savings. And these days, near-instant information transfer makes it easy to compare units of account. There’s no particular reason why a troy ounce of gold or silver, a Bitcoin, or any fraction of any of those three, or any number of other instruments, can’t serve the unit of account function at least as well as the dollar, while holding their value far better in exchange and savings.

The dollar — like many other government and government-sponsored projects — continues to circle the drain, and WILL eventually go down that drain.

Expecting Trump, Congress, et al. to give up their tickets on the “free money” gravy train before the train wreck is unrealistic. But YOU can, and should, get as much of your wealth and economic activity as possible off that train.

The post Why the Trump v. Powell Fight is a Sideshow appeared first on CounterPunch.org.

This content originally appeared on CounterPunch.org and was authored by Thomas Knapp.

Even before the global imposition of Donald Trump’s tariff-driven bonanza and his public bruising of Federal Reserve chairman, Jerome Powell, the world’s dominant currency was already being moved on.  Since 2014, the Chinese and Russian central banks have tried to move out of US Treasury holdings, preferring the magic of gold.  In 2022, the latter went so far as to link its currency, the ruble, to gold.

For all that, something far more dramatic would be needed to upset the status of the dollar, and certainly the authority of its “exorbitant privilege”, to use that apt term coined in the 1960s by the then French Minister of Finance, Valéry Giscard d’Estaing.  Only “serious economic and financial mismanagement by the United States”, proposed economics professor Barry Eichengreen in 2010, “could precipitate flight from the dollar.”

In the autumn leading to the 2024 presidential election, there was little to suggest any such flight.  The dollar had markedly appreciated, boosted by the statistical astrology of US economic growth.  This continued after Trump’s victory in November.  The promise of a vigorous tariff policy, one potentially inflationary, also charmed investors keen to make greater returns from their dollars, assuming a raise of interest rates by the Federal Reserve.

The tariff policy well and truly arrived on “Liberation Day” (April 2), proving to be erratic, arbitrarily derived and often economically illiterate in application.  The precipitated fall of the greenback shocked the currency pundits.  “For several years, the market’s been buying this US growth story, the US stock market’s been outperforming other stock markets, and suddenly you had economists thinking tariffs would push the US into recession,” remarks Jane Foley, head of foreign exchange (FX) strategy at Rabobank.  Additionally, the tariff regime has encouraged countries with current account surpluses denoted in US assets to consider returning them back to domestic markets, something that will further weaken the dollar.

Trump has also lost patience with Powell, petulantly ventilating on Truth Social that the Federal Reserve chair impose pre-emptive cuts to interest rates, given the White House’s own assessment that the US faces no inflation.  There would be, declared Trump in a post, a “SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”  While Europe continued to lower its rates, Powell had proved himself slow on the draw, “except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected.”

In the angry mist, the President floated the possibility that the central banker might be removed.  His “termination” could not “come fast enough.”  He also charged his advisors to distribute poisoned packages of speculation as to what he intended to do with the recalcitrant Powell.  White House National Economic Council Director Kevin Hassett obliged, telling reporters that, “The President and his team will continue to study that matter [of removing Powell].”

Then, in true seesaw fashion, the President claimed the opposite of what he meant, a move that also sent the market into another galloping spree.  “I have no intention of firing him,” Trump told reporters on April 22. “I would like to see him be a little more active in terms of his idea to lower interest rates.”

In the tumult of it all, investors are scouring other havens, shunning the status quo and traditional sensibility of the dollar.  The Japanese yen and Swiss franc are returning to favour.  As is the euro.  While an economist’s word should never be taken as gospel, chief currency analyst at ForexLive, Adam Button offers his view: “The market wants to invest in the fastest growing places, and the US administration is showing that it is not trying to maximize growth, or they have a different idea about how to get there.  And I think that’s rattled the market.”

Curious events are unfolding as a result of Trump’s carnivalesque approach to trade and markets.  While the value of the greenback has fallen, the returns from 10-year US government bonds have risen.  This is the sort of thing common in new, emerging markets, where capital is susceptible to flight amidst conditions of volatility. In the US, this is the fifth time it has happened in three decades.  Even with the rise in bond yields, the dollar’s slide has not been arrested.

For the easily panicked, a particular safe haven – and one already identified by central bankers and investors – is gold.  With US government debt no longer attractive for traders, the yellow metal has outperformed most major assets with its giddying rise.  Having passed $US3,500-an-ounce on April 22, the favouring of gold is merely one aspect of a market narrative that has turned the Trump Tariff Wall into the Selling of America.

Crystal ball gazing is a mug’s game in economics, but countries wishing to see the defanging of dollar diplomacy and greenback bullying long used by Washington to maintain power will see flashes of opportunity.  The dollar’s privilege may no longer be exorbitant.

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

The 1981 Springbok Tour was one of the most controversial events in Aotearoa New Zealand’s history. For 56 days, between July and September, more than 150,000 people took part in more than 200 demonstrations in 28 centres.

It was the largest protest in the country’s history.

It caused social ruptures within communities and families across the country. With the National government backing the tour, protests against apartheid sport turned into confrontations with both police and pro-tour rugby fans — on marches and at matches.

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The success of these mass protests was that this was the last tour in either country between the two teams with the strongest rivalry among rugby playing nations.

This deeply rooted antipathy towards the racism of apartheid helps provide context to today’s growing opposition by New Zealanders to the horrific actions of another apartheid state.

Understanding apartheid
Apartheid is a humiliating, repressive and brutal legislated segregation through separation of social groups. In South Africa, this segregation was based on racism (white supremacy over non-whites; predominantly Black Africans but also Asians).

For nearly three centuries before 1948, Africans had been dispossessed and exploited by Dutch and British colonists. In 1948, this oppression was upgraded to an official legal policy of apartheid.

Apartheid does not have to be necessarily by race. It could also be religious based. An earlier example was when Christians separated Jews into ghettos on the false claim of inferiority.

In August 2024, Le Monde Diplomatic published article (paywalled) by German prize-winning journalist and author Charlotte Wiedemann on apartheid in both Israel and South Africa under the heading “When Apartheid met Zionism”:

She asked the pointed question of what did it mean to be Jewish in a country that saw Israel through the lens of its own experience of apartheid?

It is a fascinating question making her article an excellent read. Le Monde Diplomatic is a quality progressive magazine, well worth the subscription to read many articles as interesting as this one.

Relevant Wiedemann observations
Wiedemann’s scope is wider than that of this blog but many of her observations are still pertinent to my analysis of the relationship between the two apartheid states.

Most early Jewish immigrants to South Africa fled pogroms and poverty in tsarist Lithuania. This context encouraged many to believe that every human being deserved equal respect, regardless of skin colour or origin.

Blatant widespread white-supremacist racism had been central to South Africa’s history of earlier Dutch and English colonialism. But this shifted to a further higher level in May 1948 when apartheid formally became central to South Africa’s legal and political system.

Although many Jews were actively opposed to apartheid it was not until 1985, 37 years later, that Jewish community leaders condemned it outright. In the words of Chief Rabbi Cyril Harris to the post-apartheid Truth and Reconciliation Commission:

“The Jewish community benefited from apartheid and an apology must be given … We ask forgiveness.”

On the one hand, Jewish lawyers defended Black activists, But, on the other hand, it was a Jewish prosecutor who pursued Nelson Mandela with “extraordinary zeal” in the case that led to his long imprisonment.

Israel became one of apartheid South Africa’s strongest allies, including militarily, even when it had become internationally isolated, including through sporting and economic boycotts. Israel’s support for the increasingly isolated apartheid state was unfailing.

Jewish immigration to South Africa from the late 19th century brought two powerful competing ideas from Eastern Europe. One was Zionism while the other was the Bundists with a strong radical commitment to justice.

But it was Zionism that grew stronger under apartheid. Prior to 1948 it was a nationalist movement advocating for a homeland for Jewish people in the “biblical land of Israel”.

Zionism provided the rationale for the ideas that actively sought and achieved the existence of the Israeli state. This, and consequential forced removal of so many Palestinians from their homeland, made Zionism a “natural fit” in apartheid South Africa.

Nelson Mandela and post-apartheid South Africa
Although strongly pro-Palestinian, post-apartheid South Africa has never engaged in Holocaust denial. In fact, Holocaust history is compulsory in its secondary schools.

Its first president, Nelson Mandela, was very clear about the importance of recognising the reality of the Holocaust. As Charlotte Wiedemann observes:

“Quite the reverse . . .  In 1994 Mandela symbolically marked the end of apartheid at an exhibition about Anne Frank. ‘By honouring her memory as we do today’ he said at its opening, ‘we are saying with one voice: never and never again!’”

In a 1997 speech, on the International Day of Solidarity with the Palestinian People, Mandela also reaffirmed his support for Palestinian rights:

“We know too well that our freedom is incomplete without the freedom of the Palestinians.”

There is a useful account of Mandela’s relationship with and support for Palestinians published by Middle East Eye.

Mandela’s identification with Palestine was recognised by Palestinians themselves. This included the construction of an impressive statue of him on what remains of their West Bank homeland.

Comparing apartheid in South Africa and Israel
So how did apartheid in South Africa compare with apartheid in Israel. To begin with, while both coincidentally began in May 1948, in South Africa this horrendous system ended over 30 years ago. But in Israel it not only continues, it intensifies.

Broadly speaking, this included Israel adapting the infamously cruel “Bantustan system” of South Africa which was designed to maintain white supremacy and strengthen the government’s apartheid policy. It involved an area set aside for Black Africans, purportedly for notional self-government.

In South Africa, apartheid lasted until the early 1990s culminating in South Africa’s first democratic election in 1994.

Tragically, for Palestinians in their homeland, apartheid not only continues but is intensified by ethnic cleansing delivered by genocide, both incrementally and in surges.

Apartheid Plus: ethnic cleansing and genocide
Israel has gone further than its former southern racist counterpart. Whereas South Africa’s economy depended on the labour exploitation of its much larger African workforce, this was relatively much less so for Israel.

As much as possible Israel’s focus was, and still is, instead on the forcible removal of Palestinians from their homeland.

This began in 1948 with what is known by Palestinians as the Nakba (“the catastrophe”) when many were physically displaced by the creation of the Israeli state. Genocide is the increasing means of delivering ethnic cleansing.

Ethnic cleansing is an attempt to create ethnically homogeneous geographic areas by deporting or forcibly displacing people belonging to particular ethnic groups.

It can also include the removal of all physical vestiges of the victims of this cleansing through the destruction of monuments, cemeteries, and houses of worship.

This destructive removal has been the unfortunate Palestinian experience in much of today’s Israel and its occupied or controlled territories. It is continuing in Gaza and the occupied West Bank.

Genocide involves actions intended to destroy, in whole or in part, a national, ethnic, racial, or religious group.

In contrast with civil war, genocide usually involves deaths on a much larger scale with civilians invariably and deliberately the targets. Genocide is an international crime, according to the Convention on the Prevention and Punishment of the Crime of Genocide (1948).

Today the Israeli slaughter and destruction in Gaza is a huge genocidal surge with the objective of being the “final solution” while incremental genocide of Palestinians speeds up in the occupied West Bank.

Notwithstanding the benefits of the recent ceasefire, it freed up Israel to militarily focus on repressing West Bank Palestinians.

Meanwhile, Israel’s genocide in Gaza during the current vulnerable hiatus of the ceasefire has shifted from military action to starvation.

The final word
One of the encouraging features has been the massive protests against the genocide throughout the world. In a relative context, and while not on the same scale as the mass protests against the racist South African rugby tour in 1981, this includes New Zealand.

Many Jews, including in New Zealand and in the international protests such as at American universities, have been among the strongest critics of the ethnic cleansing through genocide of the apartheid Israeli state.

They have much in common with the above-mentioned Bundist focus on social justice in contrast to the dogmatic biblical extremism of Zionism.

Amos Goldberg, professor of genocidal studies at the Hebrew University in Jerusalem is one such Jew. Let’s leave the final word to him:

“It’s so difficult and painful to admit it, but we can no longer avoid this conclusion. Jewish history will henceforth be stained.”

This is a compelling case for the New Zealand government to join the many other countries in formally recognising the state of Palestine.

Ian Powell is a progressive health, labour market and political “no-frills” forensic commentator in New Zealand. A former senior doctors union leader for more than 30 years, he blogs at Second Opinion and Political Bytes, where this article was first published. Republished with the author’s permission.

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

The attack on UNRWA also came with a contemporaneous legal effort, this time from South Africa.  Pretoria had already made its wishes clear on December 28, 2023 in filing an application in the International Court of Justice alleging “violations by Israel regarding the [United Nations] Convention on the Prevention and Punishment of the Crime of Genocide […] in relation to Palestinians in the Gaza Strip.”  Acts and omissions by Israel, argued the South African government, were alleged to be of a “genocidal” nature, “committed with the requisite specific intent … to destroy the Palestinians in Gaza as part of the broader Palestinian national, racial and ethnical group”.

By May 10, South Africa had filed four requests seeking additional provisional measures with modifications to the original provisional measures laid down by the ICJ.  The momentum, and frequency of the actions, even gave certain commentators room to wonder: Was Israel’s own due process rights regarding judicial equality and the right to be heard compromised?  Israel had promised to submit written observations by May 15 to the ICJ when faced with the sudden announcement on May 12 that the court would be holding an oral hearing instead.

These debates have been taking place before the concerted, dedicated, enthusiastic pulverisation of Gaza, and the ongoing killing, terrorisation and displacement of Palestinians in the West Bank.  In these cases, due process remains fantasy and distant speculation, especially concerning civilians.  With increasing regularity, there is chilling evidence that Israeli units have a programmatic approach to destroying a viable infrastructure and means of living on the strip.

On October 22, the Israeli human rights organisation B’Tselem expressed horror at the sheer scale “of the crimes Israel is currently committing in the northern Gaza Strip in its campaign to empty it of however many residents are left […] impossible to describe, not just because hundreds of thousands of people enduring starvation, disease without access to medical care and incessant bombardments and gunfire defies comprehension, but because Israel has cut them off from the world.”

In a chilling overview of the exploits of the IDF’s 749 Combat Engineering Battalion written by Younis Tirawi and Sami Vanderlip for Drop Site News, a record of systematic elimination of cultural, structural and intellectual life in the Gaza Strip is evident.  As members of the battalion’s official D9 company stated: “Our job is to flatten Gaza.”  In an operation that saw the destruction of the Al-Azhar University, First Sergeant David Zoldan, operational officer of Company A of the battalion, delights with fellow soldiers on seeing the explosion: “Hiroshima and Nagasaki combined, did you see?!”

Statements of this sort are frequent and easily found up the chain of command.  They are also uttered with ease at the highest levels of government.  On October 21, Israeli Minister for National Security Itamar Ben-Gvir had told a “settlement” conference held in a restricted military zone that Gaza’s inhabitants would be given the chance to “leave from here to other countries”.  His reasoning for this ethnic cleansing has remained biblically consistent: “The Land of Israel is ours.”

In a media statement from its Department of International Relations and Cooperation dated October 28, the South African government announced its filing of a Memorial to the ICJ pertaining to its ongoing case against Israel.  The Memorial itself runs into 750 pages, with 4000 pages of supporting exhibits and annexes.  (Its December 2023 application had run into 84 pages.)  “The problem we have is that we have too much evidence,” remarked South Africa’s representative to The Hague, Ambassador Vusimuzi Madonsela to Al Jazeera.

Zane Dangor, director- general of the Department of International Relations and Cooperation, was more practical.  Israel might well inflate its dossier of bloody misdeeds, but some line had to be drawn in the submissions.  “The legal team will always say we need more time, there’s more facts coming.  But we have to say you have to stop now.  You [have] got to focus on what you have.”

While the formal contents of the Memorial remain confidential, the clues are thickly obvious.  It contains, for instance, evidence that Israel “has violated the genocide convention by promoting the destruction of Palestinians living in Gaza, physically killing them with an assortment of destructive weapons, depriving them access to humanitarian assistance, causing conditions of life which are aimed at their physical destruction and ignoring and defying several provisional measures of the International Court of Justice, and using starvation as a weapon of war to further Israel’s aims to depopulate Gaza through mass death and forced displacement of Palestinians.”

Despite that comprehensive assortment of alleged crimes, the legal commentariat wonder how far this latest effort will necessarily go in linking the decisions of Israeli officialdom with genocidal intent.  That Israel is committing war crimes and violating humanitarian law is nigh impossible dispute.  The threshold in proving genocide, as international jurisprudence has repeatedly shown over the years, is a high one indeed.  The dolus specialis – that specific intent to destroy in whole or in part the protected group – is essential to prove.

Cathleen Powell of University of Cape Town, for instance, has her reservations.  “If they can find genocidal statements from state officials and show that that directly led to a particular programme that led to the destruction on the ground, then that’s probably a very strong case,”.  But making that link would be “very difficult”.

Dangor has no doubts.  “Genocidal acts without intent can be crimes against humanity.  But here, the intent is just front and centre.”  Suffice to say that Israeli lawmakers and officials, aided by the exploits of the IDF, are making proving such intent an easier prospect with each passing day.

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

Photograph Source: Owain.davies – CC BY-SA 4.0

Nigel Farage has always been a bigoted posh boy with the gift of the gab. Raised in the rolling hills of Downe on the outskirts of London — a village most famous for its association with Charles Darwin — Farage attended Eden Park Preparatory School in the 1970s. His wealthy parents then paid for his attendance at one of South London’s most prestigious old boys’ clubs, Dulwich College. Farage’s germinal racism was public even at this early age, and in 1981, his fascist mannerisms were played down as ordinary “naughtiness” by his college’s “Master” when he chose to make him a prefect – a position Farage attained not because of his open racism but probably because of his sporting skills. (Farage happened to be part of the “three-man Dulwich team who in 1981 reached the finals of the national Schools Golf Championship in Surrey.”)

Among his many unusual schoolboy pranks, Farage took to signing his initials in the style of the neo-Nazi NF, seemingly reveling in the violence that the National Front had unleashed upon local ethnic minorities in neighboring Brixton in the wake of Enoch Powell’s “river of blood speech”. It is fitting that during his final weeks of sixth form (in 1982), Farage gained a new hero in the form of Enoch Powell, who had been invited to address Dulwich’s posh boys with his cultured racism. Farage would later recall that Powell’s visit had “dazzled me for once into awestruck silence”.

Schoolboy Farage was not isolated at the time, especially at Dulwich College. Throughout the 1970s London’s institutionally racist police force was relentlessly attacking black communities, famously leading up to the Brixton riots of April 1981. During these riots the local police had been granted permission to use the ample green spaces of Dulwich College’s grounds for one of their operational bases.

We should also remember that the main reason why the National Front grew in the first place was because the two leading parliamentary parties were themselves full of bigots. Both parties’ overriding concern (then as now) was quelling working class resistance to capitalist exploitation, not opposing oppression. The far right of the Tories leadership were busy organizing themselves within the Conservative Monday Club and willingly threw their political and financial muscle behind efforts to repatriate immigrants, while the Labour Party as ever, proved themselves more concerned with purging socialists from their ranks than in opposing the divisive lies of the Right.

But back then, ordinary members of the Labour Party were able to exert a moderating influence over the worst excesses of their Party’s pro-capitalist and racist leadership. One example of this can be seen by the party’s position on European integration. When Labour found themselves out of government (in the late 1970s and 1980s), its party leaders were forced to publicly oppose entry into the undemocratic bosses’ club that was the European Union. Given the dominance of right-wing Euroscepticism today, it needs to be understood that integration into the European Economic Community was fiercely opposed by the workers’ movement at the time, not on provincial grounds, but because of the disastrous role the EEC played in fostering a race to the bottom mindset on pay and conditions for working people. This socialist-inspired opposition to membership in the EEC even led Enoch Powell to endorse Labour’s manifesto commitments in a speech he delivered in Westminster in February 1982. However, Labour’s class-based position on the European project would soon be reversed under the leadership of Neil Kinnock, a disastrous u-turn which would help pave the way for the populists like Farage to seize the Eurosceptic terrain from the workers’ movement.

Trading in King and Country

When Farage left school in 1982, most of his chums progressed to graduate studies at either Oxford or Cambridge University. However, Farage took a different path. His desire to make it rich in Margaret Thatcher’s brave new world of deregulation and privatisation, Farage donned a pinstriped jacket and followed in his father’s footsteps became in becoming a commodities trader who made his living by swindling others. As luck would have it, a connection from the golfing world provided Farage with his first job opportunity and he landed on his feet when he joined Maclaine Watson, a traditional English commodities brokerage owned by the Wall Street giant Drexel Burnham Lambert. Later in the 80s, he moved on to R J Rouse & Co, which was acquired by the French bank Crédit Lyonnais. Farage was eventually sacked from this trader after “taking a drunken friend on to the floor” of the London Metal Exchange. After this inopportune event, Farage sought true independence and in 1994 he formed his own business, Farage Futures.

By the late 80s Farage had two children with his first wife, and ever the patriotic historian and political drinker, he also formed a social group called Farage’s Foragers which involved his organising alcohol fuelled trips with his macho friends to First World War battlefields in France and Flanders. One of his chums partaking in such boozy jaunts included Godfrey Bloom who would go on to win a seat for UKIP in 2004 in the European elections. Bloom’s causal sexism and bigotry eventually saw UKIP remove the whip from him in late 2013 (but not Bloom’s membership) partly as he was prone to speak his mind. Bloom famous referred to foreign countries in receipt of British aid as “Bongo Bongo Land” and demanded that the unemployed and public sector workers should not have the right to vote. Farage was quick to Bloom’s defence, saying that “he is not a racist, he’s not an extremist or any of those things and he’s not even anti-women, but he has a sort-of-rather old-fashioned territorial army sense of humour which does not translate very well in modern Britain.” Supporting the reasoning behind this line of defence, the Eurosceptic journalist Richard North has asserted that Farage himself, with whom he had worked closely within UKIP, “was racist in a Churchillian sense” as he “believed in the superiority of the white Englishman” – as North put it, Farage was “a white supremacist on a King and Country basis, rather than overt hatred of coloured people.”

But old-fashioned racism was always central to Farage’s life. In 1989 the city trader founded another social grouping called the Column Club which met monthly to drink and discuss Eurosceptic politics. And rather unsurprisingly “some members of Farage’s Column Club were on the extreme right of politics, sympathisers with or members of the British National Party.”

A Superstate Looms Large and an Independence Party is Born

Around roughly the same time that Farage’s unsavory Column Club were colluding, and his Forager’s were holidaying and slurping fine liquor, all hell broke loose politically speaking on a national and international plane. In November 1990 Margaret Thatcher was forced to resign as the Conservative’s leader because a mass movement of ordinary people — led by the Militant Tendency, a predecessor organisation of Socialist Alternative – had mounted a popular revolt against her hated poll tax. The following month the Berlin Wall was torn down, while soon after the USSR collapsed. With their old class enemies much diminished in strength and the Soviet bogey man now vanquished, conservatives of all stripes quickly had to recalibrate their propaganda to focus on a new external enemy. One new enemy thus came in the form of the European project. And as this political project was now fully embraced by the Labour Party, it served as a handy target for populist ire, alongside the Tories staple preference for immigration fearmongering.

One significant precursor for the building of this germinal movement against the EEC was the founding of the Bruges Group. The Bruges Club was a right wing thinktank launched in February 1989 by Lord Harris of High Cross (who at the time was a board member of Rupert Murdoch’s Times company) and Oxford University student Patrick Robertson, a former boarder at Dulwich College. The ignominious members of this group rapidly attracted more than a hundred backbench MPs and were soon joined by Margaret Thatcher herself, who became their honorary president just months after resigning as Prime Minister. Another intellectual godfather of the Bruges Group was Professor Norman Stone, a right wing stalwart at Oxford who had actively mentored Robertson and other Tories in their Euroscepticism. Much needed financial backing for this new think tank arrived courtesy of the billionaire Sir James Goldsmith. Robertson soon persuaded their new financier, who had always maintained a propensity for supporting far right intrigues, to launch his short-lived but highly effective Referendum Party in 1994.

However, the first political party to be formed in opposition to the EEC was Professor Alan Sked’s Anti-Federalist League (AFL) in 1991, which was shortly followed by the UK Independence Party (UKIP) in 1993. The AFL had stood in their first general election in 1992. Shortly after, Sked became enthralled by Farage at a meeting of the Bruges Group. Things moved quite slowly to start with, but when Sked stood in a by-election in May 1993, Farage was recruited to the canvassing team and was tasked with driving his hero Enoch Powell to a public meeting.

Powell’s connection to the AFL was temporary, and Sked sought other ways to popularise his new party, one of which was to adopt a catchier name, hence the party’s rebirth as UKIP. Farage quickly became the power behind the throne of this then generally poorly funded party, and in the wake of the 1994 European elections, UKIP faced fierce opposition when Sir James Goldsmith announced that he would be stumping up tens of millions of pounds to establish the Referendum Party, which as its name suggested called for a referendum on whether the UK would remain in the now named European Union (EU). Notably, by this time Goldsmith had already been elected to the European Parliament in France on a right wing ticket. The French right, then as today, always seemed one step ahead when it came to bashing immigrants and growing their forces.

Goldsmith’s Referendum Party, like UKIP, succeeded in many ways, but most of all it succeeded in attracting reactionaries and racists into its leadership. This was in keeping with the ultra-conservativism of its founder who had naturally employed many of his friends and employees in his undemocratic organisation. Thus the job of “field organiser” for the Referendum Party was delivered to Marc Gordon whose prior experience had consisted of acting as the Director of the London office of the International Freedom Foundation — a think-tank which served as a South African military intelligence front to shore up support for the apartheid regime. Bearing this in mind, socialist commentator Derek Wall made a valid point when he compares Goldsmith’s political activism to that of George Soros. Both appeared to follow a strategy which was to…

“…make mega-billions as a completely unproductive finance capitalist and then challenge capitalism. Like Soros, the Goldsmiths [Sir James and his brother Teddy] have done the work when it comes to ideas and politics: from the unsustainability of ever-increasing economic growth to the dangers of nuclear power, they have laid the intellectual groundwork for environmental campaigners, funded action and organised politically.

“Their politics, although a radical challenge to the conventional wisdom, have never been of the left. They are rightwing anti-capitalists in a far-from-self-interested way. Capitalism is hostile to the conservatism and functionalism they espouse.”

A Leadership of Cranks… Racist Cranks

Primarily by virtue of big money, the Referendum Party was able to dominate UKIP in the 1997 general election, obtaining 812,000 votes to UKIP’s 106,000. But when Goldsmith died of cancer in the same year, UKIP found greater possibilities for growth. This was especially so in the wake of New Labour’s 1999 introduction of proportional representation in European elections.

UKIP now set about popularising their anti-EU messaging in a way that differentiated themselves from their extreme right rivals, the British National Party (BNP), winning three MEP seats in the 1999 elections. This attempt at political segregation however never proved a particularly easy task to achieve in practice. A good example was provided in 1995 when Professor Sked recruited a student activist named Mark Deavin onto UKIP’s National Executive Committee. The naïve Professor had been wowed by the university student’s research skills, and Deavin had apparently never let on to his new friends that he was a BNP member. Thus Deavin was able to serve on UKIP’s leading body for two years before being kicked out, with his expulsion only arising when The Cook Report exposed his sinister secret in a documentary that aired on ITV shortly after the European elections.

In the coming years UKIP would have many electoral successes, but perhaps their greatest achievement lay in the fact that their mainstream political opponents chose to respond to their propaganda by largely accommodating themselves to UKIP’s populist priorities. Thus, particularly with the open embrace of neoliberal politics by so-called Social Democratic parties across the world, along with their active denigration of socialist ideas, far right talking points have now come to dominate the policies of most political parties. While political debate has certainly shifted to the right, these ideas have been actively resisted by masses of the population, even if not by the majority of parliamentarians. This can be seen by the immense popularity of the socialist policies that were promoted by even a moderate Social Democratic leader like Jeremy Corbyn, and in the reverse, by the immense hatred that was directed against Corbyn by all parts of the capitalist establishment.

In the case of the UK, the Labour Party’s ditching of the traditional politics of class struggle (most clearly seen in their failure to back the miners’ strike in the 80s) acted to create a political void that far right populists have now been able to fill. Therefore, unlike in the distant past (when the far right came to dominate Nazi Germany), UKIP’s primary concern has not been with crushing the workers movement, but instead with presenting themselves as an ordinary party that would be willing to fight to help ordinary people — as a respectable party quite unlike that of the Nazi-infected BNP. But for all their huffing and puffing about unwanted fascist infiltrators, UKIP’s pipedream of ideological purity was never going to be fulfilled, especially given that their political priorities have always meshed with those of so many reactionaries. This overlap was made harder to ignore by UKIP’s seeming perpetual love affair and willing embrace of former members of the far right, which involved their recruiting one-time leaders of the New Britain Party into their governing structures — an odious group which advocated the voluntary repatriation of immigrants.

Notable far right activists who were recruited into UKIP’s upper echelons included Michael Nattrass and Bryan Smalley, former NEC members of the New Britain Party who went on to serve respectively as UKIP’s national chair between 2000 and 2002 and as UKIP’s Secretary in 2000. Another important joiner around this time was Jeffrey Titford who spent a short time with the New Britain Party when the Referendum Party had folded, before going on to join UKIP, a party which Titford led from 2000 to 2002. Likewise, the example of Martyn Heale provides another revealing case. In the late 1970s Heale had served as a London branch organiser for the National Front, later becoming the chair of the West London branch of the New Britain Party. In 2003 Heale then became the chair of UKIP’s Thanet South branch. In fact, in 2015 when Farage stood in this parliamentary seat, Heale was still serving as the Thanet South branch chair!

A further illustrative demonstration of UKIP’s unprincipled relationship to the BNP milieu can be seen by the party’s flagrant mismanagement of their relations with one of their rank-and-file members, an activist named Trevor Agnew. In 1999, Agnew had been expelled from UKIP while standing in a local election because it was found out that he had ties to the BNP. But for reasons unknown he was subsequently allowed to rejoinUKIP. Then in 2003 he was expelled (again) for campaigning in support of both the BNP and UKIP – with the latter being the party he was standing for. Further internal investigations (undertaken in 2003) led UKIP’s bosses to conclude that a leading UKIP activist in the same region, a man named Peter Troy, was the underlying cause of the problem as he had been deliberately actively recruiting BNP supporters into UKIP and even paying their membership fees for them. Yet despite this finding, the following year during the 2004 European elections Troy was selected to stand at the top of UKIP’s list in Scotland.

As if that was not enough, UKIP has even more controversial cases on their books. A prime example here is provided by Alastair Harper, whose long and highly visible career had been committed to spreading neo-Nazi hate. For example, Harper had not only cofounded the fascist Northern League in 1957, but in 1990 had been spotted attending a secretive fascist conference in London which was attended by the likes of Robert Steukers, a leading figure of the Belgian extreme right. Harper was then somehow allowed to join UKIP and stand as their candidate in Dunfermline West, after which, in a fairly natural progression, he went on to become the BNP’s assistant organiser in Fife.

Another related case is Alistair McConnachie, who had been UKIP’s organiser in Scotland at the same time as Harper. McConnachie’s was famously “suspended from [UKIP’s] National Executive Committee for a year in February 2001 after he questioned the extent of the Holocaust.” As McConnachie wrote at the time: “I don’t accept that gas chambers were used to execute Jews for the simple fact there is no direct physical evidence to show that such gas chambers ever existed.” And to top off all these troubling tales of extremism, one of the coauthors of UKIP’s 2001 manifesto, a man named Dr Aidan Rankin, was part of a far-right group called Third Way – itself a spinoff from the National Front.

A Fleeting Racist TV Star

Evidently UKIP has never been too picky about weeding out reactionaries when it comes to political representatives. Quite the opposite. In 2004, the controversial day-time television presenter Robert Kilroy-Silk was headhunted to join UKIP’s ranks, shortly that is after he had been sacked from the BBC for promoting racism in his newspaper column. But the BBC had hardly been principled in dispensing of their famed host, as Kilroy-Silk had proudly exhibited his journalistic bigotry for years. For example, in 1991 he wrote in the Daily Express that: “They [Muslims] are backward and evil and if it is racist to say so… then racist I must be – and happy and proud, to be so”. In 2002, writing in the Sunday Express he said: “The indigenous population is not responsible. The diseases [like HIV] are being brought here by refugees, immigrants and tourists… It is the foreigners that we have to focus on.”

Another horrific gem (and there are too many to discuss) was penned by Kilroy-Silk in 2002, when, again in the pages of the Daily Express, he told his readers how he would solve unwanted immigration. “We station paratroopers a mile from the British end of the [Channel] Tunnel… The paras herd the immigrants together and cart them off to Dover where they are dumped on a secure slow boat to – wherever.” In the end, the newspaper article that led to his sacking was no worse than any of his normal fare – the only difference being that the BBC felt compelled to enforce a new rule that they had introduced which banned their employees from publishing racist diatribes in freelance columns.

The BBC’s loss became UKIP’s gain, and Farage and friends seized upon the chance to stand a well-known and outspoken racist as their headlining candidate in the 2004 European elections – which coincidentally happened to be the first election in which curbing immigration was foregrounded in UKIP’s campaigning literature. With UKIP’s populist profile on the rise, Kilroy-Silk was duly elected (along with 11 other MEPs), but when the television star realised that he couldn’t wrest complete control of UKIP from Farage and company, the celebrity bigot stormed off to form his own short-lived political party.

Preparing the Streets for Rivers of Blood

After the 2004 European elections Farage’s ties to the Europe’s ever growing far right became more openly pronounced, especially when he became the joint president of the new Independence/Democracy group of populists. UKIP profited enormously from the EU bureaucracy, mainly by forming a group with some of Europe’s leading anti-Semites. At the same time, and much closer to home, fresh controversies of racism soon made the press. David Abbott who had joined UKIP’s NEC in 2006 featured in a Daily Telegraph reportthat pointed out that he had given donations to the American Friends of BNP and had met with the BNP leader Nick Griffin at a meeting organised by the white supremacist group American Renaissance. As it turned out UKIP already knew about these issues, as they had first been raised in the British press in 2004 when Abbott had stood as one of their parliamentary candidates. But despite this seeming problem, UKIP had ignored his indiscretions and brought him on to their NEC.

All this was happening with New Labour in power, at a time when Tony Blair was doing his damnedest to misdirect working class anger away from the ruling class. Throwing fuel on UKIP’s fearmongering, a then so-called moderate set about promoting the idea that Britain faced a crisis in multiculturalism. This individual was Trevor Phillips, who in 2005, while serving as the chairman of the Commission for Equalities and Human Rights, channelled Enoch Powell when he warned of an “increasing ‘race segregation’ which would bring ‘civil strife’ and ‘fire’ to the streets of British society.” Contributing towards a developing climate of racism, things only got worse in 2008 when the BBC broadcast a television series entitled ‘White Season’ which focused on the marginalisation of the white working class. The “Rivers of Blood” episode in particular was well received by the BNP leader Nick Griffin who said if he had the chance to make a documentary on Powell “it wouldn’t have differed too much from this”.

With the political mainstream moving ever rightwards, UKIP were further emboldened to intensify their hate. Farage was working hard to court far right audiences; in December 2009, he gave his first interview to America’s leading libertarian conspiracist, Alex Jones. As was his wont, Farage used this interview to rail the formation of a one world government and against what he said was a “very, very questionable concept of global warming caused by C02 emissions.”

Ever the reactionary networker, in 2012 Farage developed a friendship with the dark darling of the American far right, Steve Bannon – a former banker with Goldman Sachs who cofounded Breitbart News in 2007. A few years after their first meeting, Bannon launched a London base for Breitbart, which was established (in 2014) by James Delingpole and Raheem Kassam. The latter individual remains the most relevant to Farage’s story, as in the same year that Kassam started working with Breitbart he was appointed as Farage’s “chief of staff” – a position he held until late 2015. With strong ambitions for assuming UKIP’s reins of power, Kassam, while remaining close to Farage, continued working for Bannon, who at the time was in the process of overseeing Donald Trump’s Presidential victory. The far right was now really in business, and shortly after Trump’s victory, Farage accompanied by Kassam, had flown to America to further consolidate Farage’s special relationship with the new orange leader of the free world.

Kassam would famously feature in The Brink, a fly-on-the-wall documentary about Bannon’s attempts (with the aid of Kassam and Farage) to build a far-right group called “The Movement.” In the documentary we see the exact moment (in October 2017) when Bannon, sitting across a table from Farage, said he wanted to work together with him to “knit together the populist nationalist movement throughout the world,” with the ideal of it becoming a “convening authority” for the far right. Farage eagerly agreed with Bannon’s proposal, even if he expressed concerns that he was already pressed for time.

Here it seems that one reason why Farage was already very busy was because UKIP’s leadership was in turmoil, with many of the party’s top dogs believing that their party should take an even harder line on Muslims. One example of this was a proposal that UKIP could achieve this aim by working more closely with Tommy Robinson, the high-profile former leader of the street-fighting English Defence League. Indeed, in June 2018 Kassam had even managed to position himself at the forefront of a 10,000-people strong “Free Tommy” demonstration in London. At this time Kassam then used his authority to promote “The Movement,” saying it had the potential to include UKIP in efforts to “unite what we think of as patriotic, populist nationalist parties across the continent”. But by this stage it seems that Farage was not happy about UKIP’s slightly altered political trajectory under Gerald Batten’s new leadership. Apparently, Farage thought UKIP was putting too much emphasis on fighting the so-called evil of Islam rather than concentrating on the bread-and-butter issue of getting Brexit done — a priority that was seemingly consolidated in Farage’s eyes when Batten had appointed Robinson as his personal adviser on “rape gangs and prison conditions and prison reform.” It is, on the other hand, also possible that Farage was annoyed that his own media profile might get sidelined as new political developments strayed beyond his immediate control. Either way, another leading UKIPPer who disagreed with Batten was Catherine Blaiklock, the party’s new spokesperson on economics. This led Farage to work closely with her to secretly plan the formation of a new political party, The Brexit Party — a party which was officially launched by Farage to everyone’s surprise (including that of Blaiklock) in January 2019.

Taking Back Control, and the ‘Marxist’ Enemy Within 

Fed up with a nominally democratic membership, which had the potential to shape UKIP as an organisation, The Brexit Party was created as a new beast. Farage had seemingly taken inspiration from the lack of democratic structures exhibited by the Referendum Party and ensured that his new party would remain fully in his personal control. Instead of members The Brexit Party would have registered supporters. But even with such safeguards in place, no sooner had his party been launched then it became clear that the Party’s other cofounders had to be dismissed to save the party. The first to go was the main organiser behind The Brexit Party, Blaiklock, who despite howling that she had previously been married to a Nepalese gentleman and was then happily married to a Jamaican, was correctly exposed in the media as being a racist.

Indicative of Blaiklock’s reactionary views, the Brexit Party’s cofounder had retweeted a number of posts made by Tommy Robinson, but more damming were the forty-five messages she had retweeted from the former BNP activist, Mark Collett (now the leader of the ethnonationalist Patriotic Alternative). One of these retweets from 2018 showed a picture of a multiracial primary school class with the caption: “This is a British school. This is white genocide.” (These retweets had evidently been made from Blaiklock’s old twitter account — an account that had been recently deleted to help hide her racist views from the world.)

Then, just weeks after Blaiklock’s dismissal, Farage’s friend, Michael McGough, who had been anointed treasurer of The Brexit Party, was ditched for similar reasons. Apparently, McGough was of the old school type that Farage tended to be acquainted with, the type that talked about “bingo bongo land”, and thought it was fair game to promote anti-Semitism. In referring to the Labour Party’s Miliband brothers, who are Jewish, McGough had stated that they had “shallow UK roots”. He then made similar comments about Peter Mandelson – whose father was Jewish – saying that he was likewise “devoid of UK roots”.

Of course, these high-profile dismissals did nothing to combat racist attitudes within Farage’s new party. The firings simply helped Farage pretend to the public that he wasn’t really a creature of the far right, which he most certainly was. I make this point here because Farage was promoting the same types of toxic conspiratorial nonsense as his disgraced cofounders, and doing so in media outlets that were far more visible. In an May 2018 interview conducted by Tucker Carlson that aired on Fox News – Carlson himself being a leading booster of the Great Replacement conspiracy, the racist fiction that non-white people are being brought into countries to replace white indigenous voters – Farage promoted his dog whistle politics stating:

“George Soros’ Open Society Foundation, which he has of course poured billions of dollars into, I mean this is the biggest political campaigning organisation in the world. He wants to break down the fundamental values of our society and, in the case of Europe, he doesn’t want Europe to be based on Christianity.”

The following month Farage was once again interviewed on Fox News, but in a discussion that centred upon Hungary’s “STOP Soros package of bills,” which in the words of Victor Orban’s far right government were being introduced “to stop Hungary becoming a country of immigrants.” Farage knew full well that Orban was mounting an anti-Semitic campaign that centred on Soros himself, but Farage still chose to respond to his interviewer like this.

“What Soros has done is that he is actually encouraging people to come across the Mediterranean, to flood Europe… This is an organised attempt, on a huge scale, to undermine nation states, to undermine democracy, and to fundamentally change the makeup, demographically, of the whole of the European continent, and thank goodness that Viktor Orban and Hungary has got the courage to stand up against him. But I tell you something, if you criticise Soros, his media friends accuse you of being an anti-Semite. It is quite extraordinary, and I really feel that Soros in many ways is the biggest danger to the entire Western world.”

Leaving aside Farage’s hypocrisy, there can be no doubting that his scapegoating rhetoric, in lieu of their being any other sensible socialist alternative being promoted in the mainstream, was going down well with the public. This became more evident in May 2019 when The Brexit Party took a massive 29 of the possible 73 seats up for grabs in the European elections, obtaining 30.5 per cent of the total votes cast. Keen to make the most of this success, Farage then tried to persuade his new batch of MEPs to join the freshly launched Identity and Democracy grouping – a group which included both Marine Le Pen’s Rassemblement National (National Rally) and Germany’s far right counterpart Alternative für Deutschland (AfD). Yet despite his best efforts, Farage remained unable to bully his parliamentarians into his attempt to jump into bed with two of Europe’s most notorious far right parties.

In January 2020 Brexit was completed and the UK was formerly separated from the European Union. The following January, Farage’s party was renamed Reform UK. Within a few months Farage handed over formal leadership of the party to Richard Tice, and Farage became Reform’s honorary president, which meant he could devote his time to building the so-called popular revolt and propagandising against the pandemic lockdowns. His role as a mouthpiece for the far right had been aided by his hosting a talk radio show on LBC from 2017 through to June 2020. But in mid-2021 Farage was then able to intensify his propaganda war as the host of a new Sunday morning show on GB News (UK’s new equivalent to Fox News).

Full of bilious hot air as ever, in August 2020 Farage made his regular pilgrimage to the Conservative Political Action Conference – a political gathering of the international far right – where once again he upped his fearmongering game. During the speech Farage delivered we see the real Farage when he warned:

“We are under attack as never before, and that threat is not external… The biggest threat we face is from within. The biggest threat we face is the fifth column inside all of our countries which is attempting to destroy the family unit, attempting to destroy our Judeo-Christian culture, attempting to destroy our Constitution, attempting to destroy our history, our pride in who we are and what we are, and the way they are doing it, the waying they’re doing it is predominantly through the educational institutions… Our children are being indoctrinated. Our universities have become madrassas of Marxism and it’s got to change… and the same goes for the media… This is not accidental. What is going on, and it is happening in the US, it is happening in Canada, it’s happening in the UK, and it’s happening in Australia, it is happening in New Zealand. It is the English-speaking countries that have got this terrible virus worse than anywhere else in the world. This is a Marxist attempt to break Western civilisation. A Marxist attempt to destroy everything that we are, and we are going to fight back hard against it.”

This is far right conspiracy mongering to the core, a line of attack which frames “cultural Marxism” as an evil plot to disenfranchise ordinary people, with this fictious Marxist takeover being portrayed as a dastardly virus, which as Farage stated, was not even being opposed by conservatives. This is why he ended his speech with a rallying cry for the far right “foot soldiers” of the world “to stand up against the establishment, to stand up against the deep state, and to stand up against all these things the globalists try to impose upon us.”

2024 and the Rise of Reform

In late May when the UK’s weak and faltering Conservative government presented the public with an early general election to be held on July 4, initially it wasn’t clear what role Farage would play. All we did know is that his input to the election would be divisive. This was more than evident when Farage lined up an interview on Sky New’s with Trevor Phillips (on May 26), where he made it absolutely clear that a political priority for Reform UK would involve a vicious scapegoating of Muslims. Shortly after this, on June 3, Farage then announced he was now Reform’s leader, surprising many when he stated that he was planning to stand in the parliamentary seat of Clacton.

But before Farage’s surprise announcement, Reform already had a parliamentary candidate for Clacton, a man named Tony Mack, whom was unceremoniously and undemocratically swept aside. This caused much annoyance to Mack, who then ditched Reform so he could stand against Farage as an independent. Mack was no angel. Much like Farage himself, Mack is a racist who vehemently denies being a racist, with most of his misinformed hate directed against Muslims. For example, on March 6 Mack tweeted that Islam is “basically an evil mysoginistic oppressive [sic] ideology opposed to everything I hold dear” while shortly after being replaced by Farage he made it a political priority to retweet a post made by Tommy Robinson (also someone who is apparently not a racist).

During Farage’s grandstanding electioneering in Clacton, Reform attracted unwanted attention when a Channel 4 reporter made an undercover film which exposed extremely racist remarks made by Reform campaigners. Most of the subsequent coverage of this matter then focused on the bigoted comments made by a single campaign volunteer (Andrew Parker), which were disregarded by Farage who alleged (with little pushback) that the individual had been an actor and so the damming footage must have been manufactured as some form of elaborate psi-op (as Farage put it, “a total and utter set-up”). Yet the subsequent focus on this volunteer missed the point completely, as another more significant person who featured in the footage was George Jones, who was introduced as being “a veteran” of UKIP and The Brexit Party who was “running events for Farage.”

Although Jones is no longer working for Reform, in the covertly recorded footage he asserted that Farage had chosen Clacton to stand because it “was proper England… proper English… not like in London when you’re a foreigner in your own country.” And later, while drinking outside a pub, Jones identifies a Pride flag on a passing police car and comments: “You see that fucking degenerate flag on the front bonnet? What are the old bill doing promoting that crap? They should be out catching nonces not promoting the fuckers.” Jones is then captured boasting that under Reform’s leadership “our police officers will be paramilitaries, they won’t be police” before ominously adding that “we’re going to bring back the noose”.

The plain bigotry of those involved with Reform, as illustrated by the reactionary views presented by Tony Mack, Andrew Parker, and George Jones, remain typical for many of the leading members of Farage’s party. Indeed, we could look at just a few of Reform’s parliamentary candidates who were subsequently dropped when their toxic political views were exposed to public scrutiny. (They were however ditched too late for their names to be removed from the ballot papers as Reform candidates.) Such individuals include former BNP member Raymond Saint, who was chosen to be Reform’s candidate in Basingstoke; Grant StClair-Armstrong, their candidate in North West Essex, who had previously written a blog post calling for people to “vote BNP”; and Leslie Lilley, Reform’s candidate for Southend East and Rochford. The latter candidate penned a social media post in response to the news of a small boat arriving in Dover which said: “I hope I’m near one of the scumbags one day I won’t run away I’ll slaughter them then have their family taken out”.

Another Reform candidate who was dropped because of his extreme views was an elderly bigot named Hugo Miller. Yet not only was Miller selected to be Reform’s parliamentary candidate for Horsham – but he had longstanding ties to Farage’s crew, as he had stood as UKIP’s parliamentary candidate in the same seat in 1997, 2001 and 2005. Just one example of Miller’s troubling views was illustrated by a Facebook post he wrote in 2020 which highlighted his thoughts on the history of racism in America. Miller observed: “As slaves, they [African Americans] fitted in well, but as equals – well, that was asking too much.” In the same post he added: “I believe that the Negroes in America are very fortunate indeed, in that the White population has (eventually) allowed them to fully integrate into society…”

Farage’s Victory: Before the Storm

Independence Day has come and gone, and with the July 4^th election now over, Labour has won by a landslide. This hollow victory however has nothing to do with Labour’s popularity, but the total collapse of support for the Conservative Party, who obtained their “worst-ever result” with 7 million votes, while Labour, even with their landslide, failed to breach the 10 million mark. It was therefore not Labour but Reform who were the main beneficiaries of the Conservative’s implosion. Reform totted up a massive 4 million votes, which represents Farage’s highest ever electoral vote – a huge vote, which is not reflected in parliamentary positions owing to the undemocratic nature of the first past-the-post electoral system. Hence despite this success Reform only secured five parliamentary seats. But bums in parliament is not all that matters in politics, as one of the main achievements of Farage’s decades of electioneering has been his ability to drag the political priorities of all the mainstream parties to the far right.

We should also remember that UKIP had previously gained a similar sized vote in 2015, when they received just short of 4 million votes. But by 2019, with Brexit largely done, and with the Tories lurching ever further to the right, the vote for Farage’s newly christened electoral vehicle (The Brexit Party) plummeted to twenty-odd thousand votes. This makes Reform’s current results all the more remarkable.

Also significant is that Labour won this year’s general election with a vote count that was 3 million short of the 13 million votes obtained under Jeremy Corbyn’s socialist leadership in 2017. Moreover, even in 2019, Corbyn’s Labour still gained more votes than Starmer! Again this was a remarkable achievement on Corbyn’s part given that the then right wing dominated parliamentary Labour Party (with Sir Keir Starmer to the fore) were doing everything in their power to stop their own party winning. But if we were to believe Starmer and his capitalist cronies, they had to drop all of Corbyn’s socialist policy commitments because they were so unpopular with the public. Nothing could be further from the truth. This is reflected by the fact that Corbyn was forced to stand as an “independent” and still beat Labour; it was also evident by the declining support for Starmer himself who saw his personal vote drop from 36,641 in 2019 to 18,884 this year.

The danger that lies ahead is that with the ongoing decline of the Conservative Party (a potentially terminal process), and if Labour fails to take immediate measures to better the lot of the electorate, it is Reform that is best positioned to mount a serious challenge for political power. Judging by the Tory-lite content of Labour’s election manifesto, Starmer’s Labour are not going to suddenly start promoting the sort of the socialist changes that are needed to address the multiple crises facing the working class. There was a good reason why one of the Labour Party’s main funders, Unite the union, refused to endorse Labour’s election manifesto. It is also why in the weeks before the election the same union argued:

“Labour need to make government count. They can and need to make real change. The rise of the far right throughout the west should send alarm bells ringing in Westminster. People want to see tangible results and politicians must listen to workers and communities.”

Yes, alarm bells should have been ringing loudly, but unfortunately they have not been. This is because the few bell ringers who might have existed before the election have now been silenced: Labour’s purge of even moderate socialists (like Corbyn) is now largely completed, their overwhelming priority seems to be assuringthe leaders of the billionaire-class that they will be prioritising them over the needs of voters.

Ironically, Labour could learn a thing or two (but won’t) from Douglas Carswell, the former Conservative Party MP for Clacton who defected to UKIP in August 2014, then becoming UKIP’s first elected MP when he triggered a by-election later that year. Carswell subsequently ditched UKIP in 2017 and later resigned from parliamentary politics to pursue more intellectual pursuits. So, in the first instance, just a few weeks after quitting UKIP he published a book entitled Rebel: How to Overthrow an Emerging Oligarchy. And while Carswell’s hard right politics dictate that his preferred rebellion is very different to what might be proposed by a socialist, his book still makes a few interesting, if perhaps obvious, observations. “A mood of populist revolt is taking hold. Across Britain, the United States and much of Europe, a new radicalism is on the rise,” he explains. There is “an intense, simmering feeling of frustration” amongst voters — an “insurgent anger” being “aimed at what they perceive to be the political clique – that cosy knot of professional politicians and pundits who get to decide where the boundaries of the politically possible lie.” He goes on:

“So, they cheer when candidates like Trump or Farage come along and say things beyond those boundaries. They do so, not necessarily because they want to shift the boundaries, or, indeed, because they agree with what is being said, but because they so deeply resent the way that the political cliques – elites – have patronized them and treated them with such disdain.”

This is true. But like other libertarian commentators, Carswell’s ultimate solution is to dream of creating a purer form of capitalism, one unencumbered by government regulation. So when it comes to dealing with growing inequality, he understands that it is increasing but believes that it is wrong to assert that the growing gap between ordinary people and “the emergence of a class of super-remunerated corporate ‘fat cats’… is a natural consequence of capitalism.” Instead, he insists capitalism has just “been corrupted”. “What we need to do,” he proposes, “is not further restrict the free market, but sweep away the corporatist constraints that vested interests have imposed upon it.” This however is just another delusional libertarian dream.

But what we do know is that at the time of publishing Rebel, Carswell had clearly become frustrated with his fellow patriots on the right, noting that many of their movements were little more than “personality cults” “led by charlatans.” He railed against the “pound-shop populism of Nigel Farage or Donald Trump” and argued that such leaders should engage in less fearmongering and instead take his advice and adopt a more positive program that would allow capitalism to work its magic.

Rebuilding the Left. We Need a Party of Struggle

Carswell, Farage and Trump all understand what Starmer does not: “From the US Democrats, to UK’s Labour, to the French Socialists, everywhere the left seems to be in trouble as their vote slips away from them,” as Carswell puts it. This can be seen with the almost certain return to power of Trump, and the huge gains that have been made by the far right in France. In the UK, Labour may have won, but it was a victory based on a dwindling vote. Carswell like other right populists fails to recognise the most basic fact explaining why so-called ‘Left’ politicians are seeing their votes slip away, which is that their policies no longer even pretend to prioritise the welfare of the majority of their electorate.

It is not just that the so-called ‘Left’ politicians are elitist and patronising, it is that they have totally ditched any semblance of socialism. In the US this has never been different, as there has never been a party that represents the working class. And while in the UK the Labour Party has always supported capitalism to some extent, the difference was that until the 1980s, it was still a party that was forced to listen and respond to the political views of its working class members. This limited form of interaction ended with Neil Kinnock’s leadership, but then had a partial but insufficient reversal when Jeremy Corbyn led the party.

In his 2017 book, Rebel, Carswell makes one other straightforward point when he states: “Perhaps the most important reform we could introduce to break the stranglehold of the parties on politics is a proper right of recall.” And yes, socialist agree that the public should have the right to recall their elected representatives, as it is a critical means of holding them democratically accountable. But Carswell, as the quote makes clear, isn’t too keen on political party’s full stop. In keeping with his libertarianism, he believes the problems facing politics cannot be solved by creating a new party, but “It’s to do politics without one.” Socialists disagree, and we believe it is essential that our class has politicians who represent their interests on the streets and in parliament.

This means the task at hand will involve us creating political parties afresh, all over the world – creating parties that are democratic, and that promote the type of transformative politics that can realistically meet the living needs of ordinary working-class people. Such parties will need to be living breathing organisations of struggle, that work alongside militant trade unions and their members to engage in a bold socialist fight to take the wealth and big companies out of the hands of the billionaires.

These parties must be committed to creating secure jobs that pay a real living wage, they must be committed to launching a mass council house building program to provide high quality affordable housing for all, and committed to building the types of mass movements that can shut down the capitalist war machine. There are many more far-reaching and inspiring policies that we need to fight for, but another significant socialist one is to fight to nationalise the banks and the big corporate monopolies so that they are brought under democratic workers’ control and management. Only if we take such bold approach to fighting capitalist exploitation the world over will we, the global working class, be able to undercut the support of scapegoating far right populist elites, whether they be Reform UK in the UK or the National Rally in France.

The post Racism in the Life of Farage: From Enoch Powell to Reform UK appeared first on CounterPunch.org.

This content originally appeared on CounterPunch.org and was authored by Michael Barker.

There is a reported apparent rift within cabinet between Foreign Minister Nanaia Mahuta and Defence Minister Andrew Little over Aotearoa New Zealand’s position in the widening conflict between the United States and China.

While at its core it is over relative economic power, the conflict is manifested by China’s increased presence in the Pacific Ocean, including military, and over Taiwan. Both countries have long Pacific coastlines.

However, the United States has a far greater and longstanding economic and military presence (including nuclear weapons in South Korea) in the Pacific.

• READ MORE: Other China-US geopolitics reports

Despite this disparity, the focus is on China as being the threat. Minister Mahuta supports continuing the longstanding more independent position of successive Labour and National-led governments.

This goes back to the adoption of the nuclear-free policy and consequential ending of New Zealand’s military alliance with the United States in the mid-1980s.

On the other hand, Minister Little’s public utterances veer towards a gradual shift away from this independent position and towards a stronger military alignment with the United States.

This is not a conflict between socialist and capitalist countries. For various reasons I struggle with the suggestion that China is a socialist nation in spite of the fact that it (and others) say it is and that it is governed by a party calling itself communist. But that is a debate for another occasion.

Core and peripheral countries
This conflict is often seen as between the two strongest global economic powers. However, it is not as simple as that.

Whereas the United States is an imperialist country, China is not. I have discussed this previously in Political Bytes (31 January 2022): Behind the ‘war’ against China.

In coming to this conclusion I drew upon work by Minqi Li, professor of economics at the University of Utah, who focussed on whether China is an imperialist country or not.

He is not soft on China, acknowledging that it  ” . . . has developed an exploitative relationship with South Asia, Africa, and other raw material exporters”.

But his concern is to make an objective assessment of China’s global economic power. He does this by distinguishing between core, semi-periphery, and periphery countries:

“The ‘core countries’ specialise in quasi-monopolistic, high-profit production processes. This leaves ‘peripheral countries’ to specialise in highly competitive, low-profit production processes.”

This results in an “…unequal exchange and concentration of world wealth in the core.”

Minqi Li describes  China’s economy as:

“. . . the world’s largest when measured by purchasing power parity. Its rapid expansion is reshapes the global geopolitical map leading western mainstream media to begin defining China as a new imperialist power.”

Consequently he concludes that China is placed as a semi-peripheral county which predominately takes “. . . surplus value from developed economies and giving it to developing economies.”

In my January 2022 blog, I concluded that:

“Where does this leave the ‘core countries’, predominately in North America and Europe? They don’t want to wind back capitalism in China. They want to constrain it to ensure that while it continues to be an attractive market for them, China does not destablise them by progressing to a ‘core country’.”

Why the widening conflict now?
Nevertheless, while neither socialist nor imperialist, China does see the state playing a much greater role in the country’s economy, including increasing its international influence. This may well explain at least some of its success.

So why the widening conflict now? Why did it not occur between the late 1970s, when China opened up to market forces, and in the 1990s and 2000s as its world economic power increased? Marxist economist and blogger Michael Roberts has provided an interesting insight: The ‘New Washington Consensus’.

Roberts describes what became known as the “Washington Consensus” in the 1990s. It was a set of economic policy prescriptions considered to constitute the “standard” reform package promoted for economically struggling developing countries.

The name is because these prescriptions were developed by Washington DC-based institutions such as the International Monetary Fund, World Bank and the United States Treasury.

The prescriptions were based on so-called free market policies such as trade and finance liberalisation and privatisation of state assets. They also entailed fiscal and monetary policies intended to minimise fiscal deficits and public spending.

But now, with the rise of China as a rival economic global power globally and the failure of the neoliberal economic model to deliver economic growth and reduce inequality among nations and within nations, the world has changed.

What World Bank data reveals
Roberts draws upon World Bank data to highlight the striking nature of this global change. He uses a “Shares in World Economy” table based on percentages of gross domestic production from 1980 to 2020.

Whereas the United States was largely unchanged (25.2 percent to 24.7 percent), over the same 40 years, China leapt from 1.7 percent to 17.3 percent. China’s growth is extraordinary. But the data also provides further insights.

Economic blocs are also compared. The G7 countries declined from 62.5 percent to 47.2 percent while the Organisation for Economic Cooperation and Development (OECD) also fell — from 78 percent to 61.7 percent.

Interestingly while experiencing a minor decline, the United States increased its share within these two blocs — from 40.3 percent to 52.3 percent in G7 and from 32.3 percent to 40 percent in OECD. This suggests that while both the G7 and OECD have seen their economic power decline, the power of the United States has increased within the blocs.

Roberts use of this data also makes another pertinent observation. Rather than a bloc there is a grouping of “developing nations” which includes China. Over the 40 year period its percentage increased from 21.5 percent to 36.4 percent.

But when China is excluded from the data there is a small decline from 19.9 percent to 19.1 percent. In other words, the sizeable percentage of growth of developing countries is solely due to China, the other developing countries have had a small fall.

In this context Roberts describes a “New Washington Consensus” aimed at sustaining the “. . . hegemony of US capital and its junior allies with a new approach”.

In his words:

“But what is this new consensus? Free trade and capital flows and no government intervention is to be replaced with an ‘industrial strategy’ where governments intervene to subsidise and tax capitalist companies so that national objectives are met.

“There will be more trade and capital controls, more public investment and more taxation of the rich. Underneath these themes is that, in 2020s and beyond, it will be every nation for itself — no global pacts, but regional and bilateral agreements; no free movement, but nationally controlled capital and labour.

“And around that, new military alliances to impose this new consensus.”

Understanding BRICS
This is the context that makes the widening hostility of the United States towards China highly relevant. There is now an emerging potential counterweight of “developing countries” to the United States’ overlapping hegemons of G7 and the OECD.

This is BRICS. Each letter is from the first in the names of its current (and founding) members — Brazil, Russia, India, China and South Africa. Around 40 countries have expressed interest in joining this new trade bloc.

These countries broadly correspond with the semi-periphery countries of Minqi Li and the developing countries of Roberts. Predominantly they are from Africa, Asia, Middle East, and Central and South America.

Geoffrey Miller of the Democracy Project has recently published (August 21) an interesting column discussing whether New Zealand should develop a relationship with BRICS: Should New Zealand build bridges with BRICS?

Journalist Julian Borger, writing for The Guardian (August 22), highlights the significant commonalities and differences of the BRICS nations at its recent trade summit: Critical BRICS trade summit in South Africa.

Al Jazeera (August 24)has updated the trade summit with the decision to invite Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates to join BRICS next January: The significance of BRICS adding six new members .

Which way New Zealand?
This is the context in which the apparent rift between Foreign Minister Nanaia Mahuta and Defence Minister Andrew Little should be seen.

It is to be hoped that that whatever government comes into office after October’s election, it does not allow the widening conflict between the United States and China to water down Aotearoa’s independent position.

The dynamics of the G7/OECD and BRICS relationship are ongoing and uncertainty characterises how they might play out. It may mean a gradual changing of domination or equalisation of economic power.

After all, the longstanding British Empire was replaced by a different kind of United States empire. It is also possible that the existing United States hegemony continues albeit weakened.

Regardless, it is important politically and economically for New Zealand to have trading relations with both G7 and developing countries (including the expanding BRICS).

Ian Powell is a progressive health, labour market and political “no-frills” forensic commentator in New Zealand. A former senior doctors union leader for more than 30 years, he blogs at Second Opinion and Political Bytes, where this article was first published. Republished with the author’s permission.

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

The post Progressives Need Their Own “Powell Memo” appeared first on CounterPunch.org.

This content originally appeared on CounterPunch.org and was authored by Bill Wolfe.

The post Progressives Need Their Own “Powell Memo” appeared first on CounterPunch.org.

This content originally appeared on CounterPunch.org and was authored by Bill Wolfe.

Progressive economists on Wednesday welcomed newly released U.S. inflation data as further evidence that price increases can be brought under control without crushing the labor market and throwing millions out of work.

But they also warned that the still-strong job market could falter, with devastating consequences for workers, if the Federal Reserve keeps raising interest rates in the coming months.

"The verdict is in: We don't have to choose between low prices and low unemployment. We can have both," said the Groundwork Collaborative's Lindsay Owens after the Labor Department released new data showing that the Consumer Price Index (CPI) rose 4.9% in April compared with the previous year—a cooler figure than analysts expected.

"Today's inflation numbers show 10 straight months of falling inflation on the heels of a 53-year record low unemployment rate," Owens said, referring to last week's better-than-anticipated jobs report. "The only thing left to do now is to ensure that [Fed Chair Jerome] Powell doesn't screw it up with needless rate hikes that would accelerate instability in financial markets and jeopardize our strong labor market."

Heidi Shierholz, president of the Economic Policy Institute, called the new CPI data "good news for working people," noting that "inflation is nearly back to pre-recession rates, while the unemployment rate is at 50-year lows."

The new CPI figures came a week after the Federal Reserve imposed its 10th consecutive interest rate increase since March 2022, ignoring repeated warnings from outside experts, lawmakers, and even the Fed's own economists that the aggressive attempt to slow the economy and tamp down inflation risks a disastrous recession and mass job loss.

During a press conference last week, Powell left the door open to a pause of interest rate hikes at the Fed's June meeting but did not make a firm commitment, pledging only to "be driven by incoming data meeting by meeting."

Progressives advocates and experts, including Owens, have consistently argued for more than a year that interest rate increases—which target economic demand by raising borrowing costs—are the wrong response to inflation driven by many factors beyond the Fed's direct control, from pandemic-induced supply chain snags to corporate profiteering.

While prominent pundits have dismissed the notion that corporate profit-seeking during the pandemic helps explain persistently high inflation in the U.S. and across the globe, mainstream publications such as The Wall Street Journal have determined that progressive economists were right to emphasize big business pricing power as a significant culprit.

"There are signs that companies are doing more than covering their costs," the Journalreported last week. "According to economists at the [European Central Bank], businesses have been padding their profits. That, they said, was a bigger factor in fueling inflation during the second half of last year than rising wages were."

Major companies have used the windfalls from their price hikes to reward investors. The watchdog group Accountable.US noted in a report released Wednesday that Mondelez, which owns Belvita and Chips Ahoy!, "saw a shocking 142% increase in quarterly earnings after announcing price hikes, which empowered it to spend $928 million in dividends and stock buybacks for their wealthiest shareholders."

"It shouldn't come as a shock that Chair Powell’s actions have eroded public trust in the central bank."

A Gallup poll released Tuesday showed that just 36% of U.S. adults have either a "great deal" or a "fair amount" of confidence in Powell, a former private equity executive first nominated to the Fed chairmanship by former President Donald Trump.

President Joe Biden renominated Powell to the critical post in late 2021 despite outspoken opposition from some Democratic lawmakers, including Sen. Elizabeth Warren (D-Mass.).

"The 36% rating for Powell is the lowest Gallup has measured for him during his six years as Fed chair. It is also the lowest reading Gallup has had for any prior Fed chair," the polling organization noted in a summary of its findings.

Owens said in response to the survey that "it shouldn't come as a shock that Chair Powell's actions have eroded public trust in the central bank."

"Instead of fighting for a strong labor market and securing our banking system, Chair Powell has enacted 10 consecutive rate hikes and put us at risk of a recession," said Owens. "Americans want a Fed that is on their side, not the side of big banks."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

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This content originally appeared on CounterPunch.org and was authored by Eve Ottenberg.

Ten lawmakers including progressive Sens. Elizabeth Warren and Bernie Sanders implored the Federal Reserve to impose a pause on interest rate hikes during its Wednesday meeting, warning that further financial tightening in the name of fighting inflation would risk a brutal, job-killing recession.

In a Tuesday letter to Fed Chair Jerome Powell, the members of Congress expressed deep concern that "the Fed risks throwing millions of Americans out of work in its drive to raise interest rates even higher—even as Fed staff have already projected a recession this year amid financial market headwinds and even as you have acknowledged that inflation can slow without destroying the labor market, that the most significant drivers of inflation are not demand-based, and that the economy has not yet experienced the full impact of its earlier rate increases."

"We strongly urge you to respect the Fed's dual mandate, pause your rate hikes, and avoid engineering a recession that destroys jobs and crushes small businesses," they wrote.

The letter was sent amid further evidence that the Fed's aggressive interest rate increases—which are aimed at curbing economic demand by making borrowing more expensive—are taking their toll on the economy, with wage and job growth slowing and layoffs increasing. Recent turmoil in the banking industry, including the failure of several mid-sized banks, has also been tied to the Fed's nine consecutive rate hikes.

On top of worsening economic conditions at home and abroad, the lawmakers wrote in their letter to Powell that "it is even more difficult to justify such aggressive rate hikes at the moment given that inflation over the past six months has already declined significantly, averaging just 3.6% at an annualized rate, compared to 6.4% for the previous six months."

"While the Fed should remain flexible to incoming data as it assesses the economy's progress toward achieving lower inflation, the evidence to date suggests that progress can continue to be made without slamming the brakes on the economy and costing millions of Americans their jobs," the lawmakers continued. "Your recent comments, however, suggest that you remain committed to the idea that millions of workers must lose their jobs in order to bring inflation to heel."

The letter cites Powell's claim during a recent press conference that the economy can't "have a sustainable return to 2% inflation"—the Fed's arbitrary target—"without a better balance in the labor market," Fed-speak for more layoffs.

"Continuing to raise interest rates would be an abandonment of the Fed's dual mandate to achieve both maximum employment and price stability."

Powell has suggested that the Fed can prevent unemployment from rising to disastrous levels, but experts have warned that it is difficult to prevent mass layoffs from spreading once they begin.

The members of Congress echoed that fear in their letter to Powell, writing that "history casts doubt on the Fed's ability to engineer an unemployment rate that just 'rise[s] a bit.'"

"Since World War II, the unemployment rate has never increased by one percentage point within a year outside of a recession: the unemployment rate has increased by one percentage point 12 times since 1945, and in all 12 times that increase has been in the context of a recession," they noted. "And every time the unemployment rate increased by a full percentage point, it continued to increase far beyond that level. The Fed's projections that unemployment will essentially stay level in 2024 after pushing the economy into a recession in 2023, warns an economist concerned with maintaining full employment, 'amounts to a convenient delusion.'"

Warren (D-Mass.), Sanders (I-Vt.), Rep. Pramila Jayapal (D-Wash.), Rep. Brendan Boyle (D-Pa.), and the other letter signatories argued that rate hikes are not the solution to inflationary pressures caused by many factors beyond excessive economic demand—including supply chain shocks and corporate profiteering.

"Continuing to raise interest rates," they wrote, "would be an abandonment of the Fed's dual mandate to achieve both maximum employment and price stability and show little regard for the small businesses and working families that will get caught in the wreckage."

Despite such urgent warnings, the Fed is widely expected to raise interest rates by 25 basis points on Wednesday.

"At the end of its two-day gathering," the Financial Times reported Tuesday, "the Federal Open Market Committee is expected to raise its benchmark policy rate to a new target range of 5-5.25%, the highest level since mid-2007."

Fed-induced economic fears have been compounded by House Republicans' refusal to lift the debt ceiling, obstruction that is pushing the U.S. and global economies to the brink of a devastating crisis.

Rakeen Mabud, chief economist of the Groundwork Collaborative, said Tuesday that "Chair Powell and the Fed have made it clear that high interest rates are here to stay, even if it means trampling on one of the strongest labor markets in history."

"The Fed's actions are heightening the risk of a painful recession and causing instability in financial markets," said Mabud. "If the Fed insists on raising rates again this week, it is jeopardizing the progress we have made towards building a healthier and more inclusive economy for all."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

Sen. Elizabeth Warren said Friday that Federal Reserve Chair Jerome Powell and other officials "must be held accountable" after an internal Fed investigation found that deregulation and major supervisory lapses were partly to blame for the market-rattling failure of Silicon Valley Bank last month.

The findings of the investigation led by Fed Vice Chair for Supervision Michael Barr were detailed in a 118-page report that Warren (D-Mass.) applauded as "an unflinching assessment of SVB's implosion."

"The investigation clearly identifies how the 2018 legislation that weakened our bank rules and the Fed's 'tailoring' in response to that legislation were major contributors to SVB's failure," said Warren, who has introduced a bill that would repeal the GOP-authored deregulation law.

"The report reveals failures at every level: by SVB's executives and board, bank supervisors, and the Federal Reserve Board itself," the senator added. "Those responsible for these failures must be held accountable, including Chair Powell who failed in his responsibility to supervise and regulate banks that posed a systemic risk to our economy."

Powell, who presided over the Fed's weakening of regulations for mid-sized banks such as SVB in 2019, welcomed the Barr report in a statement and said he agrees with its call to enhance the central bank's regulatory practices, even though the chair has previously resisted efforts to connect SVB's collapse to deregulation.

The report describes the failure of SVB, which prompted an extraordinary federal rescue effort, as a textbook case of mismanagement by the bank and chastised its leadership's failure to "manage basic interest rate and liquidity risk."

But Barr also argues that SVB's collapse highlighted "weaknesses in regulation and supervision that must be addressed," an implicit criticism of Randal Quarles, Barr's Trump-appointed predecessor.

"Regulatory standards for SVB were too low, the supervision of SVB did not work with sufficient force and urgency, and contagion from the firm's failure posed systemic consequences not contemplated by the Federal Reserve's tailoring framework," the report reads.

Barr specifically singles out the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act, which loosened post-financial crisis regulations for banks with between $50 billion and $250 billion in assets—a category that included SVB. Powell publicly endorsed the changes, which Congress approved with bipartisan support.

Following the passage of the 2018 measure, the Fed enacted rules ostensibly aimed at "tailoring" the central bank's "regulations for domestic and foreign banks to more closely match their risk profiles."

But as then-Fed Governor Lael Brainard warned at the time, the central bank's changes went well beyond what the 2018 law required and weakened "safeguards at the core of the system," threatening the stability of the banking sector.

Barr's report notes that "over the same period that Silicon Valley Bank was growing rapidly in size and complexity, the Federal Reserve shifted its regulatory and supervisory policies due to a combination of external statutory changes and internal policy choices."

"For Silicon Valley Bank, this resulted in lower supervisory and regulatory requirements, including lower capital and liquidity requirements," the report states. "While higher supervisory and regulatory requirements may not have prevented the firm's failure, they would likely have bolstered the resilience of Silicon Valley Bank."

The report makes a number of broad policy recommendations, including calling for a "simpler and stronger oversight program and tailoring framework."

"We plan to revisit the tailoring framework, including to reevaluate a range of rules for banks with $100 billion or more in assets," Barr writes.

Liz Zelnick, director of the Economic Security and Corporate Power program at Accountable.US, said in response to Barr's report that "the rash of recent mid-sized bank troubles is a story that can't be told without one of its main characters, former Trump Fed official Randal Quarles, who instilled a culture of hands-off banking supervision that invited banks to make risky bets beyond their means."

"Congressional Republicans in the pocket of the financial industry played their part when they watered down risk assessment rules and shifted oversight powers to the Trump administration that shared their loyalties to Wall Street," Zelnick said. "Trump officials like Mr. Quarles used their newfound 'discretion' to assure mid-size banks there were no federal consequences to worry about if they gambled with other peoples' money in pursuit of profit—even if they couldn't afford to lose."

"Letting the financial industry write their own rules has led to instability and economic harm time and again, yet alarmingly, the MAGA House Majority sees the latest consequences of right-wing deregulation as an excuse to gut financial safeguards even further," she added.

Revolving Door Project executive director Jeff Hauser, for his part, faulted the new report for not specifically naming the individual Fed officials responsible for decisions that contributed to SVB's collapse.

"If there is a problem coming from the top, an independent, thorough report would have named who at the top is to blame," Hauser said. "Readers can strongly infer that former Vice Chair for Supervision Randal Quarles was a major player, and we echo Accountable.US's calls for him to testify before Congress. But the vice chair for supervision does not manage the staff of the Federal Reserve without the chair's approval, meaning Jerome Powell is ultimately responsible."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

The post Can Jerome Powell Pivot on Interest Rates, Again? appeared first on CounterPunch.org.

This content originally appeared on CounterPunch.org and was authored by Dean Baker.

The Federal Reserve raised interest rates by another quarter point yesterday, despite recent bank failures that undermined public faith in the financial system. The Fed, which failed to properly supervise these banks, will now make things harder on working people. Why? To address inflation which has been caused by the war in Ukraine, supply-chain disruptions, excesses in profit-taking, and the slight additional effect of government efforts to minimize public suffering during a pandemic.

The government stopped aid to working people, which was only a minor factor in any case, but has done nothing about the other inflationary forces. That tells us something about its priorities.

Here are five observations about these events for your consideration:

1. Every bank is now too big to fail.

We know that ex-politico Barney Frank, among others, promoted raising the size at which certain bank regulations take effect. Signature Bank, where Frank is on the board, and Silicon Valley Bank then slipped under the radar. That's important (not least because it erodes the credibility of people like Barney Frank).

But we now seem to live in a world where nobank is small enough to fail. The key word is contagion—or, if you prefer, panic. SVB wasan outlier in its combination of poor investments and (supposedly) uninsured deposits. But our world is more interconnected than ever. That means panic can spread more quickly than ever. One email seems to have set off a run on SVB, and the combined failure of SVB and Signature—another small-ish bank—was apparently enough to imperil the entire financial system.

That tells us that bank runs can be triggered much more easily now. It also tells us that multiple failures among smaller banks could have the same overall effect as the failure of one large bank—perhaps not as we currently understand "systemic risk," but as the flashpoint that could trigger a panic. That panic, in turn, can threaten the whole system.

That could happen more easily than some might think. A recent paper on bank fragility concluded that "the U.S. banking system's market value of assets is $2 trillion lower than suggested by their book value." This is because "marked-to-market bank assets have declined by an average of 10% across all the banks, with the bottom 5th percentile experiencing a decline of 20%." They add that 10 percent of banks had larger unrecognized losses than SVB's and 10 percent of banks had lower capitalization.

And, while SVB had an unusually large percentage of uninsured deposits, they found that nearly 190 banks are at risk of being unable to cover insured deposits if—as the result of panic or something else—a mere half of uninsured deposits are withdrawn. Even a small wave of "fire sale" withdrawals could endanger substantially more than 190 banks.

They conclude that "recent declines in bank asset values very significantly increased the fragility of the US banking system to uninsured depositor runs."

Banking has become something like public health. A single bank can become a vector. If the infection spreads, the entire population is endangered. That means the health of each individual must be carefully monitored for the safety of all.

2. The Federal Reserve cannot be trusted.

The Fed defended its supervision of these failed banks again this week and insisted that it had things under control. "The banking system is sound, it's resilient," said Fed chair Jerome Powell, adding that current "weaknesses" do not pervade the entire "banking system."

In response, banking stocks plunged. That's because investors don't trust the Federal Reserve. You shouldn't, either. It serves the interests of the financial class and the wealthy, using the ideologically blinkered "science" of orthodox economics to underpin its decisions.

As evidence of this, it should be noted that the CEO of Silicon Valley Bank was on the board of the San Francisco Fed until shortly before his bank collapsed. That's not unusual. In 2012 we reported that Jamie Dimon, CEO of JPMorgan Chase, sat on the Fed's Management and Budget Committee. I stand by my assessment that Chase is worse than Enron. Dimon's committee supervised the pay of senior Fed executives and approved the self-evaluation of senior Fed executives. That, in practice, meant giving senior leadership its performance reviews.

Investors don't trust the Federal Reserve. You shouldn't, either.

That committee also reviews and approves the Fed's overall budget, including the budget for auditing bankers like ... Jamie Dimon. Its other main responsibility was to "review and endorse the Bank's strategic plan"—a plan that's worked out well for bankers but not so well for the rest of us.

While Dimon has thankfully departed, the five-person committee currently includes two bank CEOs, a real estate executive, and a health insurance CEO.

3. We need a "People's Fed."

That must change. I proposed something called a "People's Fed" in 2014, which would include representation from all regions, economic sectors, and demographics. But my thinking didn't go nearly far enough. Bankers need to be excluded from any but advisory roles, with guardrails constructed to prevent revolving door behavior.

The Fed's actions, combined with those taken by Congressional Republicans and collaborating Democrats, hit vulnerable Americans especially hard. Regulations were eased under Trump so that affected banks could stop including race and gender in the data they provide to regulators. That made it harder to identify discrimination in lending, for both racial minorities and women. This, despite a century of race-based discrimination in banking; and despite an Urban Institute study which found that single women in the United States had been systematically charged more for mortgages than single men, even though they were better about paying them.

(As I reported then, "three of the senators who backed this bill received $10,754,752 from 'Women's Issues' groups like Emily's List, which Open Secrets describes as 'promot(ing) the social and economic rights of women.'")

The Fed's defenders—the few that remain—love to tout its supposed independence. But independence from whom? Not from bankers or other financial interests, certainly. It is a public institution, created by an act of Congress. But the people who are supposedly represented by that Congress don't seem to have much of a voice there. That must change.

4. Biden had to rescue SVB, but that should piss you off. So should these politicians.

Like most other observers I've read, I don't think Biden had a choice: he had to rescue SVB's depositors, including the uber-rich ones. The actions of past years made this collapse, or something like it, inevitable. It's the hand the White House, and we, were dealt. It was dealt by Republicans—and by too many Democrats—when they watered down the already lukewarm reforms in Dodd-Frank.

It's bad enough when democracy goes on sale, but somehow it hurts even more when it's sold so cheaply.

Politicians should be named and shamed for their votes in (among other bills) the weakening of bank oversight that led to SVB's failure. I named many of the bought-off Dems in 2018 when I wrote "The $24 Million Reasons These Dems Backed America's Worst Banks," including Sens. Michael Bennet, Tim Kaine, and then-reigning bank-money champion Mark Warner. (I haven't checked those stats lately.)

Don't believe money talks? Read a 2020 working paper from Thomas Ferguson et al. at the Institute for New Economic Thinking (INET). The authors write, "For every $100,000 that Democratic representatives received from finance, the odds they would break with their party's majority support for the Dodd-Frank legislation increased by 13.9 percent."

They add, "Democratic representatives who voted in favor of finance often received $200,000–$300,000 from that sector, which raised the odds of switching by 25–40 percent."

That's an incredible return on investment for the banking industry. It's bad enough when democracy goes on sale, but somehow it hurts even more when it's sold so cheaply.

A nonpartisan council set up to prevent future financial crises wrote back then that "if the Dodd-Frank reforms were to be recalibrated, minimum capital requirements should be higher, not lower." They did the opposite. Now, after weakening the rules for bankers, they're strengthening protections for them. As Ferguson and INET head Rob Johnson recently wrote, "authorities are reinstating the financial equivalent of Medicare for All (for financiers only)."

(That's probably unfair to Medicare for All, which addresses genuine human needs, but it makes the point. A better term might be "government-run greed insurance.")

5. The best mousetrap is no mousetrap at all.

If you're putting out mousetraps, mice have gotten into the house. You'll play a losing game until you find their point of entry. The only permanent way to stop mice from robbing your pantry is not to have mice at all.

If you're putting out mousetraps, mice have gotten into the house. You'll play a losing game until you find their point of entry.

Our system for regulating banks relies on the economy's "mice." We defer many of our regulatory functions to the Federal Reserve and then give bankers undue power over it. We rely on bankers to self-report certain behaviors. Politicians ask bankers for campaign contributions while they're in office and want cushy board memberships when they leave. The economists who justify bankers' actions look to them for well-paying gigs—or, perhaps, for professional recognition.

I'm not saying this mouse-centric "regulatory system" does nothing for the public. They'll close the pantry door from time to time. But they won't lock it—and they certainly won't give you the key. Why would they? They're mice, and mice gotta mouse. Besides, not just any old food satisfies a luxury-class rodent.

That's why the best mousetrap is no mousetrap. That means it's in a house without mice. It's time to mouseproof the economy.

This content originally appeared on Common Dreams and was authored by Richard Eskow.

Progressive economists and other experts blasted Federal Reserve leadership on Wednesday for raising interest rates yet again despite concerns about recent bank failures and how the quarter-point increase will impact the U.S. and global economies.

"Once again, interest rate hikes are going to fall hardest on low-wage workers and the poor—the same people who have already been hurt the most by rising prices," tweeted University of California, Berkeley professor and former Labor Secretary Robert Reich. "Higher rates could also imperil more banks, and risk even more financial chaos. The Fed is playing with fire."

Fed Chair Jerome Powell told reporters Wednesday that although the Federal Open Market Committee "did consider" a pause on rate increases following the Silicon Valley Bank (SVB) and Signature Bank failures, officials ultimately decided to raise the federal funds rate to a range of 4.75-5%, the highest level since 2007.

"The Fed under Chair Powell made a mistake not pausing its extreme interest rate hikes," declared Sen. Elizabeth Warren (D-Mass.) a fierce critic of nine consecutive rate hikes since last March as well as the Fed's regulatory rollbacks that proceeded the bank collapses.

"I've warned for months that the Fed's current path risks throwing millions of Americans out of work. We have many tools to fight inflation without pushing the economy off a cliff," added Warren, who has repeatedly called for ousting Powell.

Patriotic Millionaires chair Morris Pearl—a bank bailout expert and former managing director at BlackRock—similarly contended that "the Fed's decision to keep pushing forward with rate hikes no matter the circumstances is a dangerous mistake."

Describing such hikes as "a blunt instrument," he stressed that high interest rates "are not well suited to the economic realities the country now faces—and will inevitably end up doing more harm than good."

Pearl continued:

In our modern economy, high interest rates are simply not an effective way to fight inflation. Rate hikes have disproportionately hurt just a few sectors, like housing, automobiles, and some banks and investors, while leaving many of the nation's largest employers relatively unscathed.

Rising interest rates do nothing to address a major cause of inflation, corporate price gouging, and actually make another long-term cause, lack of investment in new housing, worse. Instead, the Fed is betting that lowering employment and cooling wage growth is the best solution to inflation.

Higher interest rates may be a cure for inflation, but if they end up causing another banking crisis, or pushing the economy into a recession, the cure may be worse than the disease.

An analysis released Wednesday by Accountable.US explained that "SVB's failure was partly due partly to a 'plunge' in bond value and $1.8 billion in 'paper losses' amid the Fed's rate hikes. By the end of 2022, the Federal Deposit Insurance Corporation (FDIC) had warned that U.S. banks were 'sitting on $620 billion in unrealized losses' that may make their balance sheets appear healthier than they really are."

The watchdog group found that "at the end of 2022, the five biggest U.S. banks—JPMorgan Chase, Bank Of America, Citigroup, Wells Fargo, and U.S. Bank—reported a total of $233 billion in unrealized losses on held-to-maturity securities, including $54 billion in unrealized losses on Treasury securities. These same banks reported a combined $39.4 billion in unrealized losses on available-for-sale securities, including $12.7 billion in losses on available-for-sale U.S. Treasuries."

Liz Zelnick, director of economic security and corporate power at Accountable.US, warned Wednesday that "hiking interest rates, even if more slowly, will devastate Main Street and Wall Street alike by wiping out millions of jobs while sending Treasury securities into a downward spiral," acknowledging that the recent bank turmoil prevented an even bigger increase than 25 basis points.

"A recession and broken financial system are not worth the price of higher interest rates that have failed miserably to curb the corporate greed epidemic helping to drive up costs," Zelnick added. "To date, the Federal Reserve and Chairman Jerome Powell have been more than willing to let average American families bear the brunt of their job-killing strategy—but are they also willing to let their banker friends on Wall Street go down with the ship?"

The Hill highlighted that ahead of Wednesday's announcement, influential figures such as economist Paul Krugman and analysts for Goldman Sachs—in a Monday letter to investors—had advocated for pausing rate hikes.

"Bank stress calls for a pause," wrote Goldman Sachs analysts. "Banking is not just another sector of the economy because financial intermediation is vital to every sector. As a result, addressing stress in the banking system is the most immediate concern and must take priority over other less urgent goals for the moment. We expect that policymakers and staff economists at the Fed will have the same view."

During his Wednesday press conference, Powell insisted that "our banking system is sound and resilient with strong capital and liquidity. We will continue to closely monitor conditions in the banking system and are prepared to use all of our tools as needed to keep it safe and sound."

While Powell also emphasized the Fed's commitment to learning from the recent SVB and Signature failures to prevent repeat events, both the bank collapses and a year of rate hikes have fueled calls for his ouster.

Asked by CNN's Jake Tapper on Wednesday whether she had ever directly told President Joe Biden that he should fire Powell, Warren said she wouldn't talk about private conversations "but what I will say is I've made it very clear as publicly as humanly possible that I didn't think that he should be reconfirmed as chair of the Fed. And I think he's doing a really terrible job."

"And he's doing a terrible job on both fronts," she said, referring to the Fed's dual mandate. In terms of oversight, Powell "has spent five years weakening regulations over these multibillion-dollar banks," and on monetary policy, he is "risking pushing our economy into a recession."

"What he's trying to do is get two million people laid off, and one of the things that we need to understand: He wants to raise the unemployment rate by more than a point within a single 12-month period. We have done that before in this country. In fact, we have done it 12 times before. And out of all 12 times, how many times has it resulted in a recession?" she said. "The answer is 12."

This content originally appeared on Common Dreams and was authored by Jessica Corbett.

Federal Reserve policymakers convened Tuesday for a two-day meeting that will culminate in a decision with major implications for the U.S. and global economies, which have been jarred by recent banking sector chaos and growing fears of a broader financial crisis.

The Fed is widely, though not universally, expected to raise interest rates by 25 basis points on Wednesday despite concerns that the central bank's tightening of monetary policy over the past year is at least partially responsible for the collapse of Silicon Valley Bank (SVB), a top lender to tech startups and venture capital firms.

Rakeen Mabud, chief economist at the Groundwork Collaborative, warned Tuesday that another rate increase would be a huge mistake with potentially devastating consequences that will fall most heavily on vulnerable workers.

The Fed's own projections indicate that millions of additional U.S. workers could face unemployment by the end of the year as the central bank continues to raise borrowing costs and tamp down economic demand.

"While the Federal Reserve wasted no time protecting wealthy venture capitalists and startup CEOs last weekend, it has shown little concern for the millions of people who could lose their jobs as a result of its aggressive rate hikes," said Mabud, who argued another rate hike would "be the straw that breaks the camel's back, sending our economy into a painful—and completely avoidable—recession."

"After the SVB fiasco," Mabud added, Fed Chair Jerome Powell "should not touch rate hikes with a ten-foot pole."

Josh Bivens, chief economist at the Economic Policy Institute, also called for a pause, arguing Monday that the case for halting rate hikes was clear even before SVB failed earlier this month, given recent signs that inflation and wages are cooling substantially.

"It is a genuine problem that interest rate hikes of nearly 5% in a year cause this much distress in the financial sector, indicating a clear failure of bank management and supervision," wrote Bivens, who noted that banks typically benefit from higher interest rates.

"These failures should be addressed going forward," Bivens continued. "But they exist today and the fallout of them clearly provides another argument for standing pat on further rate increases."

"Higher rates reduce inflation only by creating financial crises that crash the economy."

The Fed's policy meeting comes as it is facing mounting criticism over its role in the collapse of SVB and Signature Bank, with lawmakers and experts pointing to the central bank's rollback of post-financial crisis regulations that imposed tougher liquidity requirements on financial institutions with between $50 billion and $250 billion in assets.

"The Federal Reserve is irreparably broken and can no longer be trusted to go it alone on monetary policy," Lindsay Owens, the executive director of the Groundwork Collaborative, said last week. "As Congress works to re-regulate mid-size banks after the misguided 2018 rollbacks... they should also address the rot at the Fed."

In concert with the U.S. Treasury Department and other central banks, the Fed has worked to stem the fallout from the recent bank failures by launching liquidity operations and new lending programs aimed at backstopping the financial industry at home and abroad.

But experts have cautioned that the Fed's efforts to shore up the banking system will be undermined by further interest rate increases, which have proven to be a destabilizing force.

"The Fed has never managed to engineer a soft landing," Yeva Nersisyan, associate professor of economics at Franklin & Marshall College, and L. Randall Wray, professor of economics and senior scholar at the Levy Economics Institute of Bard College, wrote in an op-ed for The Hill late last week.

"The reason is simple: higher rates reduce inflation only by creating financial crises that crash the economy," Nersisyan and Wray explained. "After more than a decade of near-zero interest rates, the Fed hiked rates extremely quickly—by 400 basis points (4 percentage points). All balance sheets that had been built during the period of low rates immediately became toxic."

"What is missing from the debates over monetary policy today is the understanding that the Fed was not established to control inflation," they continued. "It was created to prevent financial crises by acting as a lender of last resort in times of distress. Indeed, that's exactly what the Fed is doing now—opening up its lending facilities to banks in need. But rather than focus on maintaining financial stability, the Fed has become obsessed with controlling inflation, something it cannot really do without causing either a recession or a financial crisis (or both)."

"Put on the crash helmets," the pair concluded. "It's going to be a bumpy landing."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

Sen. Elizabeth Warren this weekend called on federal officials to investigate the causes of recent bank failures and urged President Joe Biden to fire Federal Reserve Chair Jerome Powell, whom she has criticized for intensifying financial deregulation and imposing job- and wage-destroying interest rate hikes.

Asked on Sunday by Chuck Todd of NBC's "Meet the Press" about the possibility of Powell imposing yet another interest rate hike despite ongoing market turmoil, Warren (D-Mass.) said, "I've been in the camp for a long time that these extraordinary rate increases that he has taken on, these extreme rate increases, are something that he should not be doing."

Powell "has a dual mandate," said Warren. "Yes, he is responsible for dealing with inflation, but he is also responsible for employment. And what Chair Powell is trying to do, and he has said fairly explicitly, is that they are trying to, in effect, slow down the economy so that, this is by the Fed's own estimate, two million people will lose their jobs. And I believe that is not what the chair of the Federal Reserve should be doing."

Since the Covid-19 pandemic and Russia's invasion of Ukraine disrupted international supply chains—rendered fragile by decades of neoliberal globalization—powerful corporations in highly consolidated industries have taken advantage of these and other crises such as the bird flu outbreak to justify profit-boosting price hikes that far outpace the increased costs of doing business.

"Raising interest rates doesn't do anything to solve" a cost-of-living crisis driven primarily by "price gouging, supply chain kinks, [and] the war in Ukraine," Warren said Sunday. "All it does is put millions of people out of work."

"Jay Powell... has had two jobs. One is to deal with monetary policy, one is to deal with regulation. He has failed at both."

Powell, an ex-investment banker, was first appointed by then-President Donald Trump in 2018 and reappointed by Biden in 2021. Warren noted that she opposed Powell's nomination in both cases "because of his views on regulation and what he was already doing to weaken regulation."

"But I think he's failing in both jobs, both as the oversight and manager of these big banks, which is his job, and also what he's doing with inflation," said Warren.

Asked by Todd if Biden should fire Powell, Warren said: "My views on Jay Powell are well-known at this point. He has had two jobs. One is to deal with monetary policy, one is to deal with regulation. He has failed at both."

"Would you advise President Biden to replace him?" Todd inquired.

"I don't think he should be Chairman of the Federal Reserve," the Massachusetts Democrat responded. "I have said it as publicly as I know how to say it. I've said it to everyone."

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Meanwhile, in a Saturday letter, Warren asked Richard Delmar, Tyler Smith, and Mark Bialek—respectively the deputy inspector general of the Treasury Department, acting inspector general of the Federal Deposit Insurance Corporation (FDIC), and inspector general of the Fed's board of governors—to "immediately open a thorough, independent investigation of the causes of the bank management and regulatory and supervisory problems that resulted in this month's failure of Silicon Valley Bank (SVB) and Signature Bank (Signature) and deliver preliminary results within 30 days."

Until the Treasury Department, the Fed, and the FDIC "intervened to guarantee billions of dollars of deposits," the second- and third-biggest bank failures in U.S. history "threatened economic contagion and severe damage to the banking and financial systems," Warren noted. "The bank's executives, who took unnecessary risks or failed to hedge against entirely foreseeable threats, must be held accountable for these failures."

"But this mismanagement was allowed to occur because of a series of failures by lawmakers and regulators," Warren continued.

In 2018, several Democrats joined Republicans in approving Sen. Mike Crapo's (R-Idaho) Economic Growth, Regulatory Relief, and Consumer Protection Act, which weakened the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in the wake of the 2008 financial crisis. Crapo's deregulatory measure, signed into law by Trump, loosened federal oversight of banks with between $50 billion and $250 billion in assets—a category that includes SVB and Signature.

"As officials sought to develop a plan responding to SVB's failure, Chair Powell muzzled regulators from any public mention of the regulatory failures that occurred under his watch."

Moreover, the Fed under Powell's leadership "initiated key regulatory rollbacks," Warren wrote Saturday, echoing criticisms that she and financial industry watchdogs voiced earlier in the week. "And the banks' supervisors—particularly the Federal Reserve Bank of San Francisco, which oversaw SVB—missed or ignored key signals about their impending failure."

It is "critical that your investigation be completely independent and free of influence from the bank executives or regulators that were responsible for action that led to these bank failures," Warren stressed. "I am particularly concerned that you avoid any interference from Fed Chair Jerome Powell, who bears direct responsibility for—and has a long record of failure involving—regulatory and supervisory matters involving these two banks."

"I have already asked Chair Powell to recuse himself from the Fed's internal investigation of this matter, but he has not yet responded to this request," wrote Warren. The progressive lawmaker said "this silence is troubling" in light of recent reporting that "as officials sought to develop a plan responding to SVB's failure, Chair Powell muzzled regulators from any public mention of the regulatory failures that occurred under his watch."

"Bank regulators and Congress must move quickly to close the gaps that allowed these bank failures to happen, and your investigation will provide us important insight as we take steps to do so," added Warren, who has introduced legislation to repeal a vital provision of the Trump-era bank deregulation law enacted five years ago with bipartisan support.

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In appearances on three Sunday morning talk shows, Warren doubled down on her demands for an independent investigation into recent bank failures, stronger financial regulations, and punishing those responsible.

After lawmakers from both parties helped Trump fulfill his campaign promise to weaken federal oversight of the banking system, Powell "took a flamethrower to the regulations, saying, 'I'm doing this because Congress let me do it,'" Warren told ABC's "This Week" co-anchor Jonathan Karl. "And what happened was exactly what we should have predicted, and that is the banks, these big, multi-billion-dollar banks, loaded up on risk; they boosted their short-term profits; they gave themselves huge bonuses and big salaries; and they exploded their banks."

"When you explode a bank, you ought to be banned from banking forever."

"When you explode a bank, you ought to be banned from banking forever," said Warren, who acknowledged that criminal charges could be coming. "The Department of Justice has opened an investigation. I think that's appropriate for them to do. We'll see where the facts take them. But we've got to take a close look at this."

Not only did former SVB chief executive officer Greg Becker, who lobbied aggressively for the 2018 bank deregulation law, sell millions of dollars of shares as recently as late last month, but until federal regulators took control of the failed bank on March 10, he was on the board of directors at the San Francisco Fed—the institution responsible for overseeing SVB.

On Saturday, Independent Sen. Bernie Sanders of Vermont announced that he plans to introduce legislation "to end this conflict of interest by banning big bank CEOs from serving on Fed boards."

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"We've got to say overall that we can't keep repeating this approach of weakening the regulation over the banks, then stepping in when these giant banks get into trouble," Warren said Sunday, arguing for stronger federal oversight to prevent the need for bailouts.

This content originally appeared on Common Dreams and was authored by Kenny Stancil.

The Federal Reserve was the primary regulator of both Silicon Valley Bank and Signature Bank, whose back-to-back collapses sparked panic in financial markets and concerns about cascading impacts on the U.S. economy.

But despite immediate questions about the possible supervisory failures that allowed the banks' crises to fester, Fed Chair Jerome Powell personally intervened over the weekend to block any mention of regulatory slipups in a joint statement on the federal government's response to the situation.

The New York Timesreported late Thursday that some Biden administration officials "wanted to include that lapses in bank regulation and supervision had contributed to the problems that helped fell" Silicon Valley Bank, whose collapse marked the second-largest bank failure in U.S. history.

But Powell, an ex-investment banker originally nominated by former President Donald Trump, "pushed to take the line on regulation out of the statement because he wanted to focus on the actions being taken to shore up the financial system," according to the Times, which cited an unnamed person familiar with the matter.

The resulting statement issued Sunday by the Fed, the Treasury Department, and the Federal Deposit Insurance Corporation (FDIC) appeared to conform to Powell's demand, not mentioning what Sen. Elizabeth Warren (D-Mass.) and watchdogs have described as glaring failures in supervision by the central bank.

The joint statement vaguely highlights "reforms that were made after the financial crisis that ensured better safeguards for the banking industry"—but neglects to mention that the Fed and Congress rolled back some of those rules in subsequent years, decisions that experts say set the stage for SVB and Signature Bank's collapse.

"That sounds a lot like putting the institutional interests of Fed and personal interests of the chair above financial stability," Americans for Financial Reform (AFR) said in response to news of Powell's intervention, which—according toThe American Prospect's David Dayen—ended up delaying the release of the statement for "an indeterminate period of time."

Dayen also reported Friday that the Fed "tried to influence" President Joe Biden's statement on the bank failures and bailout that followed.

Jeff Hauser, director of the Revolving Door Project, wrote on Twitter that "Biden should have never renominated Powell," calling the Fed chair "an abomination."

While Biden's Sunday statement doesn't specifically mention regulatory failures, the president—who renominated Powell in late 2021—said in prepared remarks the following day that "there are important questions of how these banks got into these circumstances in the first place."

"During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank Law, to make sure the crisis we saw in 2008 would not happen again," Biden said. "Unfortunately, the last administration rolled back some of these requirements. I'm going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure will happen again and to protect American jobs and small businesses."

Biden was referring to a 2018 measure passed by the then-Republican-controlled Congress with the support of dozens of Democrats—and with a public endorsement from Powell.

Emboldened by the Republican-authored law—which weakened regulations for banks with between $50 billion and $250 billion in assets—the Fed under Powell's leadership proceeded to go well beyond the measure's mandates "by relaxing regulatory requirements for domestic banking institutions that have assets in the $250 to $700 billion range," then-central bank governor Lael Brainard noted in October 2018.

Brainard went on to caution, presciently, that the Fed's deregulatory actions would "weaken the buffers that are core to the resilience of our system" and result in "increased risk to financial stability and the taxpayer."

"Make no mistake: your decisions aided and abetted this bank failure, and you bear your share of responsibility for it."

As Dayen wrote Friday, "Silicon Valley Bank had billions in unrealized losses on its balance sheet that it hoped to avoid having to surface."

"It also had a tightly correlated, mostly uninsured depositor base, all largely from one industry and connected to each other, that represented significant flight risk if there were any signs of trouble," he added. "The rapid growth at the bank and its significant mismatch for liquidity purposes should have had the system flashing red."

Dennis Kelleher, the president of Better Markets, expressed a similar sentiment earlier this week, noting that "the Fed has much more and superior knowledge, information, expertise, and access to banks than short sellers, rating agencies, and the media, yet they all appear to have done a much better job at identifying the very serious risks at SVB than the Fed."

In a letter to Powell on Thursday, Warren—one of the Fed chair's most outspoken critics in Congress—laid out in detail what she characterized as the central bank's "astonishing list of failures" that contributed to the collapse of Silicon Valley Bank and Signature Bank.

"As chair of the Fed, you have led and vigorously supported efforts to weaken the regulations that would have subjected banks like SVB and Signature to stronger liquidity requirements, more robust stress testing, and routine resolution planning obligations," the Massachusetts Democrat wrote. "Make no mistake: your decisions aided and abetted this bank failure, and you bear your share of responsibility for it."

In response to the Times' reporting, Warren tweeted Friday that "the Fed chair's outrageous attempt to muzzle the rest of the government about his role in contributing to this current crisis is completely inappropriate—and it won't work."

"Congress needs to step in to fix these mistakes before things get even worse," added Warren, who introduced legislation earlier this week that would repeal a key section of the 2018 bank deregulation law.

This story has been updated to include Sen. Elizabeth Warren's reaction to the reporting on Fed Chair Jerome Powell's intervention.

This content originally appeared on Common Dreams and was authored by Jake Johnson.

I hadn't intended to spend so much time this week on the banking crisis. I'm old enough to remember a time when banking was boring. But since the 1980s, banking has become hugely profitable for bankers and wildly dangerous for the rest of the economy. This week shows why.

At this moment, the Federal Reserve Bank is sitting on the horns of a dilemma.

On one horn are legitimate fears that smaller banks won't have enough capital to meet their depositors' needs if the Fed continues to raise interest rates when it meets next week.

Raising rates will slow the economy and possibly imperil banks—especially those that used depositors' money to purchase long-term bonds when interest rates were lower, as did Silicon Valley Bank.

In other words, raising interest rates next week could cause an even bigger run on the banks.

Besides, inflation is receding, albeit slowly. So why take the risk?

But on the other horn are the Fed's legitimate fears about inflation becoming entrenched in the economy, requiring more interest rate hikes.

But the two objectives—avoiding a bank run and raising rates—are in conflict. As the song goes, Something's got to give. What will it be?

On top of this, 11 of America's biggest banks yesterday agreed to contribute a total of $30 billion to prop up First Republic Bank, another smaller bank caught in the turmoil. This "show of support" (as it was billed, without irony) elicited a cheer from the Fed's Jerome Powell and Treasury Secretary Janet Yellen, who called it "most welcome." (Of course it was welcome. They probably organized it.)

But consumers and depositors are still worried.

Meanwhile, on the other side of the Atlantic, the European Central Bank has raised interest rates by half a percentage point, saying it's as committed as ever to fighting inflation.

Yet rising interest rates are shaking banks in Europe as well. Just hours before the European Central Bank's announcement, the banking giant Credit Suisse got a $54 billion lifeline from Switzerland's central bank.

The financial system is facing a crisis of confidence. Finance ultimately depends on confidence—confidence that prices are under control, and confidence that banks are sound.

But ever since the near meltdown of Wall Street in 2008, followed by the milquetoast Dodd-Frank regulation of 2010 and the awful 2018 law exempting smaller banks, confidence in America's banks has been shaky.

November's revelation that the bitcoin giant FTX was nothing but a Ponzi scheme has contributed to the fears. Where were the regulators? Last Friday's revelation that Silicon Valley Bank didn't have enough capital to pay its depositors has added to the anxieties. Where were the regulators?

Credit Suisse has been battered by years of mistakes and controversies. It is now on its third CEO in three years. Why? Swiss banking regulations are notoriously lax, but American bankers have also pushed Europeans to relax their financial regulations, setting off a race to the bottom where the only winners are the bankers. As Lloyd Blankfein, then CEO of Goldman Sachs, warned Europeans, "operations can be moved globally and capital can be accessed globally."

One advantage of being a bank (whether headquartered in Silicon Valley or Switzerland) is you get bailed out when you make dumb bets. Another is you can choose where around the world to make dumb bets. Which is why central banks and bank regulators around the world must coordinate with each other to ensure that instead of a race to the bottom, it's a race to protect the public.

**

Banking is a confidence game. If the public loses confidence in banks, the financial system can't function.

In the Panic of 1907, when major New York banks were heading toward bankruptcy, Secretary of the Treasury George B. Cortelyou deposited $35 million of federal money in the banks. It was one of the earliest bank bailouts, designed to restore confidence.

But it wasn't enough. J.P. Morgan (the man who founded the bank) organized the nation's leading financiers to devise a private bailout of the banks, analogous to yesterday's. They redirected money between banks, secured further international lines of credit, and bought up the plummeting stocks of healthy corporations.

Confidence was restored, but the underlying weaknesses of the financial system remained. Those weaknesses became painfully and irrevocably apparent in the Great Crash of 1929.

This content originally appeared on Common Dreams and was authored by Robert Reich.

The collapse of Silicon Valley Bank (SVB), for a period of time the preferred bank for start-ups, is the bitter fruit of that harvest. Three days prior to the second-largest failure of a US financial institution since the implosion of Washington Mutual (Wamu) in 2008, lobbyists for the banking sector had reason to gloat. They had the ears of a number of GOP lawmakers and were pressing the case that Federal Reserve Chair Jerome Powell had little reason to sharpen regulations in the industry.

As a matter of fact, the converse case was put: the financial environment was proving too stringent, and needed easing up. This effort built on gains made during the Trump administration, which saw the passing of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Then House majority leader Kevin McCarthy was particularly keen on winding back elements of the Dodd-Frank banking measures introduced in the wake of the 2008 financial crisis. In 2018, he got much of what he wished for.

Lobbyists for SVB were particularly aggressive in that endeavour, and even went so far as to seek exemptions from the Federal Deposit Insurance Corporation (FDIC), the body responsible for insuring bank deposits in times of crisis and institutional oversight. Two former staffers for McCarthy so happen to be registered lobbyists for SVB, a fact that shows how the US revolving door between politics and business continues to whirr at some speed. The SVB lobby list also includes figures who found employment under former President Bill Clinton, former Senator Mike Enzi (R-My), former Senator Tom Coburn (R-Okla.) and former Senator Arlen Specter (D-Pa.), just to name a few.

The crisis duly came. On March 9, startups and venture capitalists made a run on SVB as its share price took a tumble. SVB had sold its available-for-sale (AFS) portfolio for US$21 billion at a US$1.8 billion loss. In a patch-up, capital raising response, SVB then announced that it would sell US$2.25 billion in new shares.

By the next day, the FDIC had placed SVB into receivership. The corporation promised that insured depositors would have access to their insured deposits on March 13; uninsured depositors would have to wait a bit longer, expecting an “advance within the next week.” But given that 90% of the bank’s deposits exceeded the amount guaranteed by the FDIC, the prospects for adequate recovery proved uncertain, at least till the FDIC, Federal Reserve and US Treasury promised protection for them.

Deputy Treasury Secretary Wally Adeyemo proved rather green in suggesting that the financial system, as things stood, would be resilient enough to hold off any contagion. “Federal regulators are paying attention to this particular financial institution,” he told CNN, “and when we think about the broader financial system, we’re very confident in the ability and the resilience of the system.”

This is bound to be misplaced. It’s certainly not the view held by former FDIC head, Sheila Blair, who argues that there are other banks in the system with large amounts of uninsured deposits and unrealised losses. “These banks that have large amounts of institutional uninsured money … that’s going to be hot money that runs if there’s a sign of trouble.”

David Sacks of Craft Ventures is also of the view that immediate intervention at the government level was required. “Where is Powell?” he wondered. “Where is [US Secretary of the Treasury Janet] Yellen? Stop this crisis NOW.” SVB, he proposed, should be placed with a top four bank. “Do this before Monday open or there will be contagion and the crisis will spread.”

Questions are being asked whether the anti-regulatory bug has gotten to the various authorities and agencies. Mike Novogratz, founder of Galaxy Digital, pondered whether all banks were now being treated like hedge funds. “Seems like a policy mistake.”

Economists such as Peter Schiff are even more damning, claiming that the entire US banking sector is set for a cathartic clean-up that will be greater than that following 2008. US banks were holding “long-term paper at extremely low interest rates. They can’t compete with short-term Treasuries.” In such an environment, depositors, in the pursuit of higher yields, would initiate mass withdrawals, resulting in a tidal wave of bank collapses.

Blame for the SVB debacle has been extensive. “This was a hysteria-induced bank run caused by VCs [venture capitalists],” opined Ryan Falvey, a fintech investor based at Restive Ventures. “This is going to be remembered as one of the ultimate cases of an industry cutting off its nose to spite its face.”

The oversight advocates are bound to agree. Dennis Kelleher, CEO of the non-profit Better Markets, is certainly one. “SVB’s stunningly quick collapse should put an end to the nonstop attempts by banks, lobbyists and their political allies to weaken capital and other financial regulations that protect depositors, consumers, investors and financial stability.”

This is likely to prove to be a flight of fancy. The banking lobbyists have destructive form and staying power. In 2019, the International Monetary Fund published a working paper noting that bank lobbying, in general, produced “regulatory capture, which lessens the support for tighter rules and enforcement. This, in turn, allows riskier practices and worse economic outcomes.”

As the great financial crisis showed, financial regulation is often the antidote to banditry. The pillaging and frontier types will always resist such tendencies. Again, they have been found wanting, and again, the harmful consequences of their ideas are going to prove deep and extensive.

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

Sen. Elizabeth Warren on Tuesday accused Federal Reserve Chair Jerome Powell of unnecessarily risking large-scale layoffs and an economic recession by continuing to raise interest rates, a policy decision that the Massachusetts Democrat slammed as badly misguided and destructive.

During a Senate Banking Committee hearing, Warren asked Powell to address the roughly two million people in the U.S. who would be out of a job if the Fed's projected unemployment rate of 4.6% by the end of the year turned out to be accurate.

"What would you say to them?" Warren asked. "How would you explain your view that they need to lose their jobs?"

Insisting that a surge in job losses is "not an intended consequence" of the Fed's rate increases, Powell said he would "explain to people more broadly that inflation is extremely high, and it's hurting the working people of this country badly—all of them, not just 2 million of them."

Powell, who signaled during his opening statement at Tuesday's hearing that the Fed is prepared to return to larger rate hikes if they're deemed necessary, also told Warren that an unemployment rate of 4.5%—up from the current rate of 3.4%—"is well better than most of the time for the last 75 years."

The Fed chair's answers did not satisfy Warren, who said Powell appears to view throwing two million people out of work as "just part of the cost" of bringing inflation down.

Watch the exchange:

Echoing expert critics of the Fed's aggressive rate hikes, Warren expressed concern that the central bank won't be able to stop unemployment from rising beyond the projected 4.6% rate once it starts increasing.

"History suggests that the Fed has a terrible track record of containing modest increases in the unemployment rate," Warren said. "In 11 out of the 12 times that the unemployment rate increased by a full percentage point within one year, unemployment went on to rise another full percentage point on top of that."

"If that happens this time, we'd be looking at at least three and a half million people who would lose their jobs," the senator continued. "Chair Powell, you are gambling with people's lives. And there's a pile of data showing that price gouging, and supply chain kinks, and the war in Ukraine are driving up prices. You cling to the idea that there's only one solution: lay off millions of workers."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

Survey data released Monday shows that a majority of U.S. voters want the Federal Reserve to stop raising interest rates before it plunges the economy into recession, a position that aligns with the view of many economists and lawmakers who fear the central bank is on the verge of needlessly throwing millions out of work.

Conducted by Lake Research Partners and published by the Groundwork Collaborative, the new poll found that 56% of U.S. voters believe the Fed should bring its rate hikes to a halt as top central bankers indicate that more increases are coming in the near future—even though rates are already at their highest level in 15 years.

"Our new poll makes it clear that people across the country want the Federal Reserve to stop raising interest rates before it pushes us toward a devastating and completely avoidable recession," said Rakeen Mabud, chief economist at the Groundwork Collaborative.

"People understand that pushing millions of workers out of a job is a terrible way to address inflation and will do nothing to address root causes of inflation like supply-chain interruptions, the war in Ukraine, and big corporations manipulating the market to increase profits," Mabud added. "And they want a Federal Reserve that prioritizes workers and families, not Wall Street and Big Business."

The survey, which reached 1,240 registered voters nationwide, found that just 14% believe the Fed is on the side of "average Americans." Nearly 40% said they feel the central bank serves the interests of big businesses or banks.

"Voters believe overwhelmingly that the Federal Reserve is on the side of Big Business, banks, and Wall Street," Celinda Lake, the president and founder of Lake Research Partners, said during a press call Monday.

The findings were released a day ahead of Federal Reserve Chair Jerome Powell's scheduled appearance before the Senate Banking, Housing, and Urban Affairs Committee, where he will likely face sharp questioning from central bank policy critics such as Sens. Sherrod Brown (D-Ohio) and Elizabeth Warren(D-Mass.).

On Wednesday, Powell is set to testify before the House Financial Services Committee.

The Fed is widely expected to raise interest rates again during its policy meeting later this month, even with inflation easing and despite mounting calls for a pause as previous increases—which are taking a toll on wage growth and the housing market—work their way through the economy.

Powell and other central bankers have repeatedly claimed that the U.S. labor market—which has thus far remained strong in the face of the Fed's rate increases—is running too hot and must be weakened in order to curtail inflation, sparking accusations that the Fed is prioritizing just one side of its dual mandate and "trying to engineer a recession."

The latest U.S. job figures are set to be released on Friday.

Critics have said the Fed's chosen policy approach—aggressive attempts to curb demand—is misguided and will do little to tackle the primary drivers of inflation, including corporate concentration and profit-seeking price increases.

During Monday's press call, economist J.W. Mason argued that "it's absolutely possible for inflation to drop without much job destruction."

"Over the past few months, we've seen a substantial fall in inflation without significant job destruction," said Mason. "You can have disinflation without falling wages and without unemployment. The question is: Are higher interest rates really a tool that can deliver that? I think the answer is no."

The new polling shows that an overwhelming majority of U.S. voters—77%—believe that "we should be focusing on the legislative tools Congress can use to fight inflation instead of simply relying on the Federal Reserve to raise interest rates."

While the survey doesn't mention specific legislative fixes, campaigners and experts have floated a range of proposals over the past year, from a crackdown on Big Oil profiteering to targeted price controls.

Pointing to the public earnings calls of major corporations, Mabud noted Monday that "you don't actually have to look too hard to hear the CEOs being pretty crystal clear that they're jacking up their profit margins by raising prices on consumers."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

Survey data released Monday shows that a majority of U.S. voters want the Federal Reserve to stop raising interest rates before it plunges the economy into recession, a position that aligns with the view of many economists and lawmakers who fear the central bank is on the verge of needlessly throwing millions out of work.

Conducted by Lake Research Partners and published by the Groundwork Collaborative, the new poll found that 56% of U.S. voters believe the Fed should bring its rate hikes to a halt as top central bankers indicate that more increases are coming in the near future—even though rates are already at their highest level in 15 years.

"Our new poll makes it clear that people across the country want the Federal Reserve to stop raising interest rates before it pushes us toward a devastating and completely avoidable recession," said Rakeen Mabud, chief economist at the Groundwork Collaborative.

"People understand that pushing millions of workers out of a job is a terrible way to address inflation and will do nothing to address root causes of inflation like supply-chain interruptions, the war in Ukraine, and big corporations manipulating the market to increase profits," Mabud added. "And they want a Federal Reserve that prioritizes workers and families, not Wall Street and Big Business."

The survey, which reached 1,240 registered voters nationwide, found that just 14% believe the Fed is on the side of "average Americans." Nearly 40% said they feel the central bank serves the interests of big businesses or banks.

"Voters believe overwhelmingly that the Federal Reserve is on the side of Big Business, banks, and Wall Street," Celinda Lake, the president and founder of Lake Research Partners, said during a press call Monday.

The findings were released a day ahead of Federal Reserve Chair Jerome Powell's scheduled appearance before the Senate Banking, Housing, and Urban Affairs Committee, where he will likely face sharp questioning from central bank policy critics such as Sens. Sherrod Brown (D-Ohio) and Elizabeth Warren(D-Mass.).

On Wednesday, Powell is set to testify before the House Financial Services Committee.

The Fed is widely expected to raise interest rates again during its policy meeting later this month, even with inflation easing and despite mounting calls for a pause as previous increases—which are taking a toll on wage growth and the housing market—work their way through the economy.

Powell and other central bankers have repeatedly claimed that the U.S. labor market—which has thus far remained strong in the face of the Fed's rate increases—is running too hot and must be weakened in order to curtail inflation, sparking accusations that the Fed is prioritizing just one side of its dual mandate and "trying to engineer a recession."

The latest U.S. job figures are set to be released on Friday.

Critics have said the Fed's chosen policy approach—aggressive attempts to curb demand—is misguided and will do little to tackle the primary drivers of inflation, including corporate concentration and profit-seeking price increases.

During Monday's press call, economist J.W. Mason argued that "it's absolutely possible for inflation to drop without much job destruction."

"Over the past few months, we've seen a substantial fall in inflation without significant job destruction," said Mason. "You can have disinflation without falling wages and without unemployment. The question is: Are higher interest rates really a tool that can deliver that? I think the answer is no."

The new polling shows that an overwhelming majority of U.S. voters—77%—believe that "we should be focusing on the legislative tools Congress can use to fight inflation instead of simply relying on the Federal Reserve to raise interest rates."

While the survey doesn't mention specific legislative fixes, campaigners and experts have floated a range of proposals over the past year, from a crackdown on Big Oil profiteering to targeted price controls.

Pointing to the public earnings calls of major corporations, Mabud noted Monday that "you don't actually have to look too hard to hear the CEOs being pretty crystal clear that they're jacking up their profit margins by raising prices on consumers."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

Surprising most analysts and forecasters, employers added a whopping 517,000 jobs in January, according to Friday morning’s monthly labor report from the Bureau of Labor Statistics. This was almost twice the growth from December’s 260,000 jobs. The unemployment rate fell to 3.4 percent, the lowest since 1969.

What does this mean?

It may mean very little. The Bureau of Labor Statistics’s monthly report can bounce around a lot, depending on seasonal weights and samples. Next month’s job number could be far lower.

Also, keep your eye on wage growth. Average hourly earnings climbed in January at a slower pace than in December — by an annualized 4.4 percent, down from 4.8 percent in December. With prices still rising faster than wages, most workers continue to suffer declining real wage – that is, declining purchasing power.

But the strength of the labor market is likely to worry the Fed, which last Wednesday raised interest rates for the eighth time in a year – although only by a quarter of a percentage point this time.

“The labor market continues to be out of balance,” Jerome Powell, the Fed chair, said earlier this week. He stressed that we won’t have a return to his target 2 percent inflation in the service sector “without a better balance in the labor market,” adding “I don’t know what that will require in terms of increased unemployment.”

As I’ve said many times over the past year, this worry is misplaced. Most of the upward pressure on prices domestically is coming from big corporations with the market power to raise prices faster than their costs are rising. Much of the rest is coming from continuing supply shocks abroad, including Putin’s war’s effects on global energy and food prices, and China’s lockdowns followed by COVID.

And, as Friday’s report shows, wage gains are slowing and they lag behind price increases.

The basic reality is American workers don’t have the power to raise their wages. Big American corporations have the power to raise their prices. The Fed should not be aiming to increase unemployment as a means of slowing prices.

This content originally appeared on Common Dreams and was authored by Robert Reich.

Progressive economists and advocates on Wednesday blasted the U.S. Federal Reserve for hiking the federal funds rate an eighth consecutive time despite fears of a recession and impacts on working people.

"With today's rate hike, the Fed is pushing us dangerously close to an unnecessary recession that would spell disaster for low-wage workers, workers of color, and vulnerable communities," the Groundwork Collaborative declared. "Workers and families shouldn't have to pay the price for inflation."

The Federal Open Market Committee rose the benchmark interest rate to a range of 4.5%-4.75%. The 25-basis-point increase was the smallest hike since March and came amid signs that the U.S. economy is cooling off.

"Chair Powell should pause his interest rate hikes and remember his dual mandate: Fight inflation without throwing millions out of work."

Fed Chair Jerome Powell said that "while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path," so "we expect ongoing hikes will be appropriate."

U.S. Sen. Elizabeth Warren (D-Mass.), a major critic of the wave of increases, tweeted that "we want to bring down inflation, but that means landing the plane not crashing it. Chair Powell should pause his interest rate hikes and remember his dual mandate: Fight inflation without throwing millions out of work."

University of California, Berkeley professor and former Labor Secretary Robert Reich explained in a recent video that "the Fed is wrongly obsessing about a wage-price spiral—wage gains pushing up prices—when it should be worried about a profit-price spiral—corporate profits driving up prices."

Longtime opponents of the Fed's strategy on Wednesday renewed calls for not only the U.S. central bank to halt its hikes but also federal lawmakers to get to work battling corporate greed.

Liz Zelnick, director of the Economic Security and Corporate Power program at Accountable.Us, warned that "while the Fed continues to stick to their obsession with job-killing interest rate hikes, the livelihoods of working families are on the line."

"Key indicators show inflation is slowing as our economic recovery remains fragile, which means the Fed's higher rates are only pushing the economy closer to a recession," she said. "Meanwhile, Fed economists have admitted corporations are the real culprit of high costs yet have still refused to relax rate hikes. It's time for the Fed to back down and let policymakers rein in corporate greed rather than risk it all on another rate increase."

Patriotic Millionaires chair Morris Pearl, former managing director at BlackRock, offered a similar critique of Fed policy.

"Today's interest rate hike by the Fed is bad news for the American economy. It's true that raising rates is meant to solve inflation, but that doesn't mean it's the correct course to take right now. Raising rates may cool inflation, but it does so by making everything from mortgages to credit card payments more expensive, which hurts those already suffering the most in today's cost-of-living crisis," he said. "In this case, the cure may be worse than the disease."

"If the federal government is truly committed to slowing inflation without heaping extra pain on the vulnerable, they should go after greedy, ultraprofitable corporations and their C-suite executives," he argued. "Many corporations have used the hype over inflation in recent months to raise prices on consumers and line their pockets. Why else would corporate profits be at a 70-year high?"

"Many corporations have used the hype over inflation in recent months to raise prices on consumers and line their pockets."

Pearl pointed out that "everyone's been complaining lately about how expensive eggs are. The fact that Cal-Maine, the largest egg producer in the U.S., experienced a 10-fold increase in their profits over the last year might just have something to do with it."

As Common Dreamsreported last month, Farm Action raised concerns about "apparent price gouging, price coordination, and other unfair or deceptive acts or practices by dominant producers of eggs" and urged the Federal Trade Commission to investigate the sector, "prosecute any violations of the antitrust laws it finds within, and ultimately, get the American people their money back."

Pearl said Wednesday that "the Fed raising interest rates won't do anything to stop corporations like Cal-Maine from exploiting American consumers, unless they raise them so much as to cause a massive rise in unemployment."

"It is hard to see a scenario where this kind of action does not cause immense pain to the worst off in America," he added. "The Fed needs to back off, and let Congress step in to tackle corporate greed."

This content originally appeared on Common Dreams and was authored by Jessica Corbett.

As the Federal Reserve kicked off its first policy meeting of the new year on Tuesday, economists and progressive advocates reiterated their now-familiar call for the central bank to stop raising interest rates amid growing evidence that hiring, wage growth, and inflation are slowing significantly.

"Pushing millions of people out of work is not the answer to tackling inflation," Rakeen Mabud, chief economist at the Groundwork Collaborative, said in a statement. "Additional rate hikes could jeopardize our strong labor market—and low-wage workers and Black and brown workers would suffer the biggest economic consequences."

"There's a clear path forward to avoiding a devastating and completely avoidable recession: Chair Powell and the Fed should stop raising interest rates," Mabud added.

The latest push for an end to interest rate increases came as fresh data released by the U.S. Bureau of Labor Statistics (BLS) on Tuesday showed that wage growth continued to cool at the tail-end of 2022, an outcome that Federal Reserve Chair Jerome Powell has explicitly been aiming for even as experts have rejected the notion that wages are responsible for current inflation levels.

According to the BLS Employment Cost Index (ECI)—a measure watched closely by Fed policymakers—wage growth climbed just 1% in the final three months of 2022 compared to the previous quarter, a slower pace than analysts expected.

"The Fed has lost its excuse for a recession," Mike Konczal, director of macroeconomic analysis at the Roosevelt Institute, tweeted in response to the new BLS figures. "Over the last three months, inflation has come down exactly as a soft landing would predict, wage growth didn't persist but moderated with the reopening to solidly high levels within late 1990s ranges, and the economy added 750,000 new jobs."

"Too many hard-working families have everything to lose if the Fed stays the course with higher rates that only push the economy closer to a recession."

Though Powell has insisted that Fed decision-making will be driven by economic data, he made clear last month that the nation's central bankers don't think inflation has slowed enough to justify a rate-hike pause or reversal, brushing aside the recessionary risks of more monetary tightening.

On Wednesday, the Fed is widely expected to institute a 25-basis-point rate increase followed by another of the same size at its March meeting, bringing the total number of rate hikes to nine since early 2022.

Even the central bank's own models predict a sharp increase in the unemployment rate—and potentially millions of lost jobs—if Fed policymakers drive interest rates up to their desired range of between 5% and 5.25%.

Recent layoffs across the tech industry as well as data signaling a hiring deceleration have also intensified fears of a Fed-induced economic crisis.

"The Fed has every reason to halt further job-killing interest rate hikes as key indicators show inflation is slowing while the economic recovery remains fragile," said Liz Zelnick, director of the Economic Security and Corporate Power program at Accountable.US. "Too many hard-working families have everything to lose if the Fed stays the course with higher rates that only push the economy closer to a recession."

"Repeated interest rate hikes have done little to curb corporate greed that even Fed economists admit is what's really driving high costs on everything from groceries to gas," Zelnick continued. "The Fed faces a choice: back down and let policy and lawmakers continue to take impactful steps to rein in corporate profiteering—or keep needlessly threatening jobs and an economic downturn with further rate hikes.”

For months, economists and lawmakers have vocally questioned the Fed's aggressive rate hikes and laser focus on the labor market given the myriad causes of the 2021 inflation spike, from pandemic-induced supply chain snags to corporate profiteering to Russia's war on Ukraine to the climate crisis.

Some experts, however, have argued that the Fed's seemingly misguided approach is perfectly understandable when considering that a central goal of the institution is to help the rich "conserve and increase their concentrated wealth."

"Chair Jerome Powell and the Fed are willing to impose significant costs on workers and families in order to reduce inflation," Gerald Epstein and Aaron Medlin of the University of Massachusetts Amherst wrote in The American Prospect earlier this month. "This focus on inflation, by promoting high unemployment, contradicts the dual mandate given to the Fed by Congress."

"Why does the Federal Reserve treat its high-employment mandate so cavalierly when inflation is above 2%?" the pair continued. "The answer stems from the fact that since its founding, Fed officials have seen the world through 'finance-colored' glasses. Financiers do not like high inflation. Like all creditors who lend money today to be paid back in the future, financiers hate getting paid back in dollars that are worth less than the dollars they lent out in the first place."

In a blog post on Monday, Economic Policy Institute research director Josh Bivens noted that the Fed's dual mandate is "meant to balance the risks of inflation versus the benefits of fast growth and low unemployment."

"Right now, the benefits of low unemployment are enormous, and the risks of inflation are retreating rapidly," Bivens wrote. "If the Fed lets the current recovery continue apace by not raising interest rates further at this week’s meeting, 2023 could turn out to be a great year for the economic fortunes of American families."

"The Fed should stand pat on interest rate increases," he added. "If they instead insist on raising rates, this will pose a dire threat to what could be an excellent 2023 for the economic prospects of America's working families."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

On 14 December 2022 German police arrested 25 people over what was called the “Reichsburger plot”. Two days later The Observer published an article by Philip Oltermann posing the question of whether this was a far-right “…sinister plan to overthrow the German state or just a rag-tag revolution?”

Although a long way away from our shores, this bizarre event has implications for New Zealand which should not be ignored. It got me to thinking about the attempted coups by electorally defeated presidents in the United States and Brazil.

This then led on to considering the occupation of Parliament grounds in early 2022 and a recent sighting in a tiny community about seven km away from my home on the Kāpiti Coast.

In the midst of writing this all up, came the unexpected resignation of Prime Minister Jacinda Ardern last week. Then union leader Robert Reid popped up with a pertinent observation. But first, Germany.

German coup-plotters
Along with 25 other German co-conspirators, one Maximilian Eder was arrested. They were accused of planning to overthrow the state by violent means and install a shadow government headed by a minor German aristocrat.

Few of these coup plotters were well-known public figures. But they included some with a military background, doctors, judges, gourmet chefs and opera singers, a Lower Saxony civil servant at the criminal police office, and “…several of the ragtag bunch of wannabe revolutionaries seemed to have been radicalised in the comfortably well-off, respectable centre of society.”

Eder was a genuine commander of one of Germany’s armoured infantry battalions between 1998 and 2000. He had served in Kosovo and Afghanistan and was a founding member of Germany’s special forces command.

What further rattled Germany’s cage was the inclusion of a former member of the federal parliament from the far-right AfD party. She had knowledge of security arrangements and special access privileges to the complex of parliamentary buildings in the heart of Berlin.

Eccentrics or serious threat?
The plotters’ potential targets included seven members of Germany’s Parliament, including the Foreign Minister, conservative opposition, and two leaders of the governing Social Democrat party.

German police found weapons in 50 of the 150 properties linked to the co-conspirators (there may have been other weapons stashed away elsewhere). This was an insufficient arsenal to overthrow the government of a country with a population of 83 million. However, it was enough to carry out a targeted terror attack killing and maiming many.

The question remains unanswered as to whether these conspirators really did seriously threaten German democracy as it presently exists or were they “…just a  bunch of eccentrics with a hyperactive imagination…”

One of  the difficulties in making this call is that previously the growth of the German far-right had been under-estimated. The relatively recent electoral success of the AfD party was unexpected. Oltermann concluded his interesting article by citing a German terrorism expert who noted that while he didn’t believe the coup-plotters would have overthrown the government, the question that remained was how much damage they would have caused in trying to.

Washington DC and Brasilia
While we await a fuller analysis of the extent to which these coup-plotters were a threat to German democracy, we know enough to make some conclusions, especially in an international context.

The German coup-plotters may have included eccentrics. But their defining characteristic was that they were from that part of the extreme far-right of politics which was prepared to use violence to achieve their objectives.

There are similarities with two actual attempted coups seeking to overturn election results and putting back into power two far-right presidents who were defeated at the polls. These occurred in the respective capitals of the United States (Washington) in January 2001 and Brazil (Brasilia) two years later.

These attempts to put Donald Trump and Jair Bolsonaro back in power were both far-right led and involved short violent destructive occupations of their parliaments. The major difference was significant high-level military involvement in the attempted Brazilian coup.

Far-right levering off anti-vaccination protests
In February-March 2022 there was an anti-vaccination occupation of New Zealand’s Parliament Grounds. Last February I published a Political Bytes blog on the far-right agenda  in this occupation.

My essential point was that the susceptibility, to say the least, of many of these protesters was fertile territory for far-right leaders to exploit, influence and shape its more violent direction. This was well-highlighted in the excellent Fire & Fury podcast documentary published by Stuff.

Fire & Fury: Who’s driving a violent, misinformed New Zealand – and why?      Video: Stuff

The documentary has come under some peculiar criticism from those who believe it should have given similar or greater blame for the actions of Parliament’s Speaker in trying to dissuade the occupiers from continuing the protest.

However, aside from overstating his impact, this criticism misses the whole point of the documentary. Its focus was on what was behind the occupation and related protests, including the significant far-right influence and support.

One of the biggest beneficiaries of these protests was the far-right Counterspin Media online outlet. It reported the occupation virtually non-stop, quickly becoming the main source of news for the occupiers and their supporters.

Run by local far-right leaders, Counterspin Media relies on a far-right media outlet in the United States for support (Trump confidant Steve Bannon is in its central leadership). From a very small base its viewing numbers have rocketed upwards.

The occupation also accelerated the use of two new terms to designate some people within the far-right – “sovereign citizens” and “sheriffs”. The former believe they are not bound by laws unless they personally consent to them. They carry out violence although this is largely verbal.

The latter, sheriffs, believe they can take the law into their own hands, including apprehending, violence and even execution. In other words, those holding either designation are vigilantes.

Now to Peka Peka
This leads on to the peacefully seaside locality Peka Peka on the Kāpiti Coast of the lower North Island with a population of around 700. As it happens, it is seven km from where I live. I frequently cycle through it and walk dogs on its beautiful beach.

Its name is derived from a native New Zealand bat, the Pekapeka, which represents the interwoven nature of the spirit world and the world of the living — the seen and the unseen.

But following the end of the occupation of Parliament Grounds a small group of occupiers moved on to the land of a supportive local farmer. While numbers have diminished there are still there.

While driving past earlier this month I noticed a conspicuous vehicle parked outside on the road as photographs I took show. The vehicle belongs to Counterspin Media.

The issue at hand was the far-right’s support for the parents of a critically ill baby who tried to deny him access to a life-saving blood transfusion because overwhelmingly donors are vaccinated. They and Counterspin Media have also denied the right of their baby to privacy by breaching a court order for name suppression. [The matter was resolved by the court overruling the parents which enabled a successful transfusion that saved the baby’s life.]

What was particularly relevant to this blog, however, was the fact that the far-right Counterspin Media was present visiting the small group who among them are believed to include sovereign citizens and a sheriff or two.

It is a very long bow to suggest that the occupation of Parliament Grounds was responsible for Prime Minister Jacinda Ardern’s dramatic resignation last week. Nevertheless its ferocity (including intimidation and threats of execution) and duration rattled her government’s cage and confidence.

Many are attributing Arden’s resignation to the volume and viciousness of the personal attacks on her, much of which was misogynous. They are right to make this conclusion but it is much deeper than this. To begin with, had her government been more successful in policy development and implementation or been doing better in the polls, she was less likely to have resigned.

Former Prime Minister Helen Clark (1999-2008) also came under vicious misogynous attacks but, as she has acknowledged, the attacks on Ardern far exceed those on her. What is the difference? First, social media’s influence in Clark’s time was much less than Ardern’s.

Second, the far-right was politically much less influential than now. We now have far-right governments in countries such as Italy, Poland, Hungary and India. There are strong far-right movements threatening countries like France and Spain. Both the United States and Brazil have had single term far-right presidents.

Germany had a follow-up from the December coup-plotters this week with five more far-right activists arrested for a second alleged coup plot, including kidnapping the health minister, to overthrow the government which The Guardian reported on January 23.

In New Zealand, the far-right’s levering off the anti-vaccination protests has led to an environment of threats through a sense of deluded entitlement, as Stuff reported on January 20, of a magnitude far greater than Clark and her government ever experienced.

Union leader Robert Reid was as close to getting it right as one can get in a Facebook post on January 20. He observed that, on the one hand, unlike the United States and Brazil, New Zealand was able to keep right-wing and fascist mobs from storming their parliaments.

However, on the other hand, in New Zealand they “…scored their first victory of bringing down the political leader of the country. Not a good feeling.”

I agree with Reid but would make the qualification that these far-right influenced and led “mobs” significantly contributed to bringing down a political leader.

Sociopaths and psychopaths
Soon after commencing working for the Association of Salaried Medical Specialists over three decades ago, I asked a leading psychiatrist, Dr Allen Fraser, what was the difference between sociopaths and psychopaths (Dr Fraser was the union’s first elected vice-president and second president).

His response, which I have never forgotten, was to repeat what he advised medical students and doctors-in-training: Sociopaths believe in castles in the sky; psychopaths live in castles in the sky

In other words, while Helen Clark was threatened by sociopaths, Jacinda Ardern was threatened by psychopaths. The transition from the former to the latter was the increasing influence of the far-right.

Robert Reid is right; it is not a good feeling. He is a master of the understatement.

Ian Powell is a progressive health, labour market and political “no-frills” forensic commentator in New Zealand. A former senior doctors union leader for more than 30 years, he blogs at Second Opinion and Political Bytes, where this article was first published. Republished with the author’s permission.

This content originally appeared on Asia Pacific Report and was authored by Pacific Media Watch.

Photograph Source: The Library of Congress – Public Domain

It was good seeing CounterPunch publish an article on what is known as the “Powell Memo” by Brad Wolf.  He rightfully notes, “Powell expressed his grave concern that American business and free enterprise were under full-scale attack from “leftists” and might altogether collapse unless drastic steps were taken.”  However, far more was at stake.

Lewis Powell was a Virginia attorney, tobacco-industry lobbyist and future Supreme Court Judge.  He can be credited with helping launch the conservative social wars of the last half-century.  In 1971 he delivered a secret study for the Chamber of Commerce entitled, “Attack on the American Free Enterprise System.”  His advice to the business community was simple:

Business must learn the lesson . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business.

He took special care to note:

There should be no hesitation to attack the [Ralph] Naders, the [Herbert] Marcuses and others who openly seek destruction of the system. There should not be the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it.

He called for business leaders and conservatives to aggressively fight for political power.

Jane Mayer noted in her essential work, Dark Money, referred to the memo in the following terms:  “In the spirit of Hannibal, it called for a devastating surprise attack on the bloated and self-satisfied establishment, which regarded itself as nonpartisan but which the conservatives regarded as liberal.”

As the historian Benjamin Waterhouse observes, Powell articulated a deeply shared belief that “anti-capitalist forces — from the universities to the pulpits to public-interest law firms — were waging a cultural assault on business, and that groups such as the Chamber of Commerce had no choice but to become politically active.”  Powell argued that, as Waterhouse notes, “Business-people had to become more involved in national politics.”

Influential Americans took Powell’s warning to heart.  In February ‘73, three of the nation’s richest conservatives – Joseph Coors, Richard Mellon Scaife and H. L. Hunt — backed Paul Weyrich and the creation of the Heritage Foundation.  In May, the National Council of Catholic Bishops spun off its National Right to Life Committee (NRLC) into a separate, activist anti-abortion organization.  And in September, the American Legislative Exchange Council (ALEC) was founded as the Conservative Caucus of State Legislators.

Powell’s memo came at a propitious moment. The nation faced mounting international tensions and Nixon’s foreign-policy tsar, Henry Kissinger, worried that America’s global fortunes were faltering.  The Soviet Union was growing in power and international influence; independence movements were spreading throughout the third world; and Europe and Japan were resurging. In response, Nixon visited China in February ’72, signaling its entry onto the world stage; the CIA backed the bloody coup in Chile; and the disastrous, nearly-two-decade long Vietnam War dragged on.

Nixon’s veto of the Comprehensive Child Development Act of 1971 was most telling. Promoted by Pat Buchanan, Nixon claimed the act was “a long leap into the dark” that would “commit the vast moral authority of the National Government to the side of communal approaches to child rearing over against the family-centered approach.”  It was a first-strike assault against Roosevelt’s New Deal and Johnson’s Great Society.

That same year, religious conservatives were particularly offended by an IRS ruling in which Christian academies that enforced segregation violated their non-profit tax status, thus threatening the then-heavily segregated evangelical educational infrastructure.  The ruling was based on two earlier Supreme Court decisions that had refashioned the nation’s religious landscape.  In Engel v. Vitale (1962), the Court ended school prayer and in School District of Abington Township v Schempp (1963) it prohibited mandatory bible reading. An increasingly secular curriculum, grounded in Darwinian evolution and “subversive” liberal thought, challenged long-established traditionalist teachings.

The following year, Phyllis Schlafly, a conservative lawyer and writer, began a successful campaign to block the adoption of the Equal Rights Amendment (ERA). Schlafly was a devoutly Catholic, rightwing activist and militant anticommunist long affiliated with the John Birch Society.  Often unappreciated, her “STOP-ERA” campaign became more than a single-issue “war,” more than an effort to block a proposed constitutional amendment.  It set the agenda for an awakened grass-roots conservativism, the remaking of the Republican Party and social struggle for decades to come.

Today’s social wars over values and politics are a long festering reaction to the social disruption that was the tremulous 1960s.  After more than a decade of struggle, the civil-rights movement achieved the passage of major voter-rights legislation, but, in 1968, the nation was wracked by awave of riots following the assassination of Martin Luther King.  In 1968, half a million U.S. soldiers were at war in Vietnam and Southeast Asia; in May ’70, U.S. forces expanded the war from Vietnam to Cambodia. In response, major protests erupted at Ohio’s Kent State University (National Guardsmen killed four students and wounding nine) and Mississippi’s Jackson State (city and state police killed two students and injuring twelve).  When the U.S. withdrew its military from Vietnam in 1973, 58,000 Americans had died as well as an untold number of Vietnamese.

The ‘60s was a decade that saw the widespread popularity of the counterculture.  This was a subculture that championed sex, drugs & rock-and-roll that became widespread and redefined popular culture.  It saw the emergence of second-wave feminism and the gay liberation movement.  It also saw the rise of consumer activists and the early ecology movement.

Over the following half-century, the culture wars were relatively contained by neo-liberal social policies, a moderate Supreme Court and a marketplace that encouraged a “freer,” more sexual popular culture.  Those days are over, and the Christian right and conservative business class have come back with a militant vengeance.  The Powell memo reveals how these values wars got started?

This content originally appeared on CounterPunch.org and was authored by David Rosen.

Federal data released Thursday showed that the U.S. inflation rate declined in December and slowed to its lowest level in more than a year, prompting a fresh round of calls for the Federal Reserve to pause its interest rate hikes before it needlessly induces mass layoffs.

"Inflation has slowed for six months, providing families more breathing room," said Sen. Elizabeth Warren (D-Mass.), one of the most outspoken critics of Fed policy in Congress. "The Fed needs to take this data into account and not drive the economy off a cliff with more extreme interest rate hikes."

According to the new consumer price index (CPI) figures published by the Bureau of Labor Statistics, inflation fell 0.1% in December compared to the previous month as prices continued to drop or moderate across a variety of sectors, from groceries to used vehicles. (Housing inflation, a lagging indicator, remained elevated in December, but experts expect it to fall in the coming months as the Fed's rate hikes take their toll on the economy.)

At an annualized rate, CPI climbed 6.5% through December, down from 7.1% in November.

"There is no period in which the Fed pursued a deflationary policy in which low-income people won."

"We always need caution when looking at a single month's report, but the good December CPI report follows several months in which inflation has slowed sharply from the pace earlier in the year. All the evidence suggests that the economy is still growing at solid pace," Dean Baker, senior economist at the Center for Economic and Policy Research, wrote in a blog post Thursday.

Baker pointed out that with the latest data, the annualized inflation rate over the last three months was just 1.8%—within the Fed's target rate of 2%.

"It looks like the Fed has largely accomplished its mission of taming inflation, without bringing on a recession," Baker added. "Plenty of things can mess up this picture, like another surge of Covid or an escalation of the war in Ukraine, but for now, the economy is looking very good."

There's also the risk that the Fed—not satisfied with the rate of inflation's decline—continues to aggressively raise interest rates, slamming the brakes on the still-strong economy and potentially throwing millions out of work without tackling many of the primary drivers of price increases, including corporate profiteering.

Rakeen Mabud, chief economist at the Groundwork Collaborative, pointed to that possibility in a statement Thursday, arguing that Fed Chair Jerome Powell "should stop further rate hikes before he engineers a totally unnecessary recession."

"Today's CPI report makes it crystal clear that we don't need mass joblessness to bring down inflation," said Mabud. "Further interest rate hikes will only weaken our economy, and the most vulnerable workers will be the ones to pay the biggest price."

If the minutes from last month's Fed meeting and recent remarks from Powell are any indication, central bank policymakers have no intention of pausing rate hikes at their early February meeting even as their own projections signal potentially massive job losses in the near future—though some officials have expressed support for smaller rate hikes in the coming months.

In a speech on Tuesday, Powell—who has explicitly said he's trying to weaken the labor market and cut workers' wages—declared that "restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy."

Such comments and the policy steps the Fed has over the past year—rapidly driving up interest rates to their highest level in 15 years—have analysts convinced that the central bank is "trying to engineer a recession," which would have disproportionate impacts on low-income workers.

Wage growth and hiring have both slowed in recent months, according to Labor Department data.

"Though they may proclaim otherwise, the Fed is aiming for a recessionary labor market," Alex Williams, a senior economist at Employ America, wrote Monday.

"They might not succeed, they might change their minds, but buried in the Fed's latest projections is a definite—albeit obscured—statement of intent," Williams continued. "The Fed is projecting that the unemployment rate—which reached a low of 3.5% in December—will increase by at least a percentage point (to 4.6%!) by the end of 2023 under 'appropriate monetary policy.' The unemployment rate has only increased by 1% within a year twelve times since World War II. Every time, (1) we saw a recession, (2) the unemployment rate continued to increase far beyond the initial 1%."

"Simple back-of-the-envelope math says that a 1% increase in the unemployment rate represents a net loss of nearly 1.5 million jobs over one year, assuming the Labor Force Participation Rate (LFPR) holds steady," Williams added. "If LFPR falls with employment, as it traditionally has during recessions, the Fed could plausibly be targeting as many as 2 million jobs lost or foregone."

William Spriggs, the AFL-CIO's chief economist, toldThe New York Times Magazine earlier this week that "if you become unemployed" as a result of the Fed's efforts to tamp down price increases, "then all bets are off, because you can't afford anything."

"There is no period in which the Fed pursued a deflationary policy in which low-income people won," Spriggs said. "The median income of Black families falls, and it takes years to come back. Child poverty spikes."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

The U.S. Labor Department released data Friday showing that wage and job growth slowed in December as the Fed explicitly targets the labor market and worker pay in its push to tamp down inflation, which has been cooling in recent months.

According to the new figures, wages grew at a slower-than-expected rate of 0.3% last month, and November's hourly earnings number was revised down from 0.6% to 0.4%—a trend that one observer called "bad news for workers."

Pointing to the "huge downward revision to November wage growth," Dean Baker of the Center for Economic and Policy Research wrote, "Hold the rate hikes please."

"Hold the rate hikes please." —Dean Baker, CEPR

While CEO pay has continued to surge, many ordinary workers across the U.S. have seen their wages lag behind inflation as living costs have risen sharply over the past two years.

Elise Gould, an economist at the Economic Policy Institute (EPI), said slowing wage growth is critical for Fed policymakers to consider as they mull additional interest rate hikes, which risk unnecessarily hurling the economy into recession.

"Wage growth decelerated in December no matter how it's measured," Gould noted. "Annualized wage growth between November and December was 3.4%. It is decidedly not driving inflation."

Gould's EPI colleague Heidi Shierholz agreed, describing recent wage growth as "completely non-inflationary."

"By this measure, the Fed's work is done," she wrote on Twitter.

\u201cWhen Wall Street is betting against workers, it's even more proof that the stock market is absolutely not the economy. #WeAreTheEconomy\u201d

— Groundwork Collaborative (@Groundwork Collaborative) 1673018030

Job growth, meanwhile, remained strong in December even as it cooled compared to the torrid pace of early 2022. The Bureau of Labor Statistics said the U.S. added a better-than-anticipated 223,000 jobs in the last month of 2022, the fifth consecutive month of slowing growth.

The new jobs data comes days after the Fed released the minutes of its mid-December meeting, after which the central bank raised interest rates to their highest level in 15 years despite growing warnings from a range of experts about the potential for a damaging recession and mass layoffs.

According to the minutes, Fed officials are not yet satisfied with evidence showing that inflation is slowing significantly and intend to stay the course with higher rates. Central bankers also suggested they believe the labor market is still too tight and wage growth is too strong, reiterating their goal of "bringing down" the latter even as they admitted there are "few signs of adverse wage-price dynamics."

"You know the Fed's priorities are warped when they suggest too many Americans have jobs," Liz Zelnick, director of the Economic Security and Corporate Power program at the watchdog group Accountable.US, said Friday. "It seems the more Americans find work, the more the Fed embraces job-killing interest rate hikes that disproportionately hurt low-income workers and struggling mom-and-pop shops. And for what?"

"The Fed's single-minded strategy has done little to blunt the real driver of inflation—corporate greed," Zelnick added. "Across industries, corporations continue to mark up prices on working families despite posting record profits and rewarding wealthy investors with billions in giveaways. Raising interest rates only hurts American families in the long run by pushing the economy toward a cliff. Recession is not inevitable, but that depends largely on deliberate decisions made by the Federal Reserve and Chairman Jerome Powell."

Michael Mitchell, director of policy and research at the Groundwork Collaborative, echoed that warning ahead of Friday's jobs report, cautioning that "as workers and families are struggling with higher prices, Chair Powell is hell-bent on bringing down wages and pushing more people out of work with his aggressive interest rate hikes."

"If the Fed continues with its dangerous interest rate hikes," Mitchell said, "we should brace ourselves for more hardship for working people and an unnecessarily painful recession."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

The U.S. Labor Department released data Friday showing that wage and job growth slowed in December as the Fed explicitly targets the labor market and worker pay in its push to tamp down inflation, which has been cooling in recent months.

According to the new figures, wages grew at a slower-than-expected rate of 0.3% last month, and November's hourly earnings number was revised down from 0.6% to 0.4%—a trend that one observer called "bad news for workers."

Pointing to the "huge downward revision to November wage growth," Dean Baker of the Center for Economic and Policy Research wrote, "Hold the rate hikes please."

"Hold the rate hikes please." —Dean Baker, CEPR

While CEO pay has continued to surge, many ordinary workers across the U.S. have seen their wages lag behind inflation as living costs have risen sharply over the past two years.

Elise Gould, an economist at the Economic Policy Institute (EPI), said slowing wage growth is critical for Fed policymakers to consider as they mull additional interest rate hikes, which risk unnecessarily hurling the economy into recession.

"Wage growth decelerated in December no matter how it's measured," Gould noted. "Annualized wage growth between November and December was 3.4%. It is decidedly not driving inflation."

Gould's EPI colleague Heidi Shierholz agreed, describing recent wage growth as "completely non-inflationary."

"By this measure, the Fed's work is done," she wrote on Twitter.

Job growth, meanwhile, remained strong in December even as it cooled compared to the torrid pace of early 2022. The Bureau of Labor Statistics said the U.S. added a better-than-anticipated 223,000 jobs in the last month of 2022, the fifth consecutive month of slowing growth.

The new jobs data comes days after the Fed released the minutes of its mid-December meeting, after which the central bank raised interest rates to their highest level in 15 years despite growing warnings from a range of experts about the potential for a damaging recession and mass layoffs.

According to the minutes, Fed officials are not yet satisfied with evidence showing that inflation is slowing significantly and intend to stay the course with higher rates. Central bankers also suggested they believe the labor market is still too tight and wage growth is too strong, reiterating their goal of "bringing down" the latter even as they admitted there are "few signs of adverse wage-price dynamics."

"You know the Fed's priorities are warped when they suggest too many Americans have jobs," Liz Zelnick, director of the Economic Security and Corporate Power program at the watchdog group Accountable.US, said Friday. "It seems the more Americans find work, the more the Fed embraces job-killing interest rate hikes that disproportionately hurt low-income workers and struggling mom-and-pop shops. And for what?"

"The Fed's single-minded strategy has done little to blunt the real driver of inflation—corporate greed," Zelnick added. "Across industries, corporations continue to mark up prices on working families despite posting record profits and rewarding wealthy investors with billions in giveaways. Raising interest rates only hurts American families in the long run by pushing the economy toward a cliff. Recession is not inevitable, but that depends largely on deliberate decisions made by the Federal Reserve and Chairman Jerome Powell."

Michael Mitchell, director of policy and research at the Groundwork Collaborative, echoed that warning ahead of Friday's jobs report, cautioning that "as workers and families are struggling with higher prices, Chair Powell is hell-bent on bringing down wages and pushing more people out of work with his aggressive interest rate hikes."

"If the Fed continues with its dangerous interest rate hikes," Mitchell said, "we should brace ourselves for more hardship for working people and an unnecessarily painful recession."

This content originally appeared on Common Dreams and was authored by Jake Johnson.

The corporate takeover of American politics started with a man and a memo you’ve probably never heard of.

In 1971, the U.S. Chamber of Commerce asked Lewis Powell, a corporate attorney who would go on to become a Supreme Court justice, to draft a memo on the state of the country.

Powell’s memo argued that the American economic system was “under broad attack” from consumer, labor, and environmental groups.

In reality, these groups were doing nothing more than enforcing the implicit social contract that had emerged at the end of the Second World War. They wanted to ensure corporations were responsive to all their stakeholders — workers, consumers, and the environment — not just their shareholders.

But Powell and the Chamber saw it differently. In his memo, Powell urged businesses to mobilize for political combat, and stressed that the critical ingredients for success were joint organizing and funding.

The Chamber distributed the memo to leading CEOs, large businesses, and trade associations — hoping to persuade them that Big Business could dominate American politics in ways not seen since the Gilded Age.

It worked.

The Chamber’s call for a business crusade birthed a new corporate-political industry practically overnight. Tens of thousands of corporate lobbyists and political operatives descended on Washington and state capitals across the country.

I should know — I saw it happen with my own eyes.

In 1976, I worked at the Federal Trade Commission. Jimmy Carter had appointed consumer advocates to battle big corporations that for years had been deluding or injuring consumers.

Yet almost everything we initiated at the FTC was met by unexpectedly fierce political resistance from Congress. At one point, when we began examining advertising directed at children, Congress stopped funding the agency altogether, shutting it down for weeks.

I was dumbfounded. What had happened?

In three words, The Powell Memo.

Lobbyists and their allies in Congress, and eventually the Reagan administration, worked to defang agencies like the FTC — and to staff them with officials who would overlook corporate misbehavior.

Their influence led the FTC to stop seriously enforcing antitrust laws — among other things — allowing massive corporations to merge and concentrate their power even further.

Washington was transformed from a sleepy government town into a glittering center of corporate America — replete with elegant office buildings, fancy restaurants, and five-star hotels.

Meanwhile, Justice Lewis Powell used the Court to chip away at restrictions on corporate power in politics. His opinions in the 1970s and 80s laid the foundation for corporations to claim free speech rights in the form of financial contributions to political campaigns.

Put another way — without Lewis Powell, there would probably be no Citizens United — the case that threw out limits on corporate campaign spending as a violation of the “free speech” of corporations.

These actions have transformed our political system. Corporate money supports platoons of lawyers, often outgunning any state or federal attorneys who dare to stand in their way. Lobbying has become a $3.7 billion dollar industry.

Corporations regularly outspend labor unions and public interest groups during election years. And too many politicians in Washington represent the interests of corporations — not their constituents. As a result, corporate taxes have been cut, loopholes widened, and regulations gutted.

Corporate consolidation has also given companies unprecedented market power, allowing them to raise prices on everything from baby formula to gasoline. Their profits have jumped into the stratosphere — the highest in 70 years.

But despite the success of the Powell Memo, Big Business has not yet won. The people are beginning to fight back.

First, antitrust is making a comeback. Both at the Federal Trade Commission and the Justice Department we’re seeing a new willingness to take on corporate power.

Second, working people are standing up. Across the country workers are unionizing at a faster rate than we’ve seen in decades — including at some of the biggest corporations in the world — and they’re winning.

Third, campaign finance reform is within reach. Millions of Americans are intent on limiting corporate money in politics – and politicians are starting to listen.

All of these tell me that now is our best opportunity in decades to take on corporate power — at the ballot box, in the workplace, and in Washington.

Let’s get it done.

This content originally appeared on Common Dreams and was authored by Robert Reich.

"There is no sense that inflation is coming down," said Federal Reserve Chairman Jerome Powell at a November 2 press conference—this despite eight months of aggressive interest rate hikes and "quantitative tightening." On November 30, the stock market rallied when he said smaller interest rate increases are likely ahead and could start in December. But rates will still be increased, not cut. "By any standard, inflation remains much too high," Powell said. "We will stay the course until the job is done."

The Fed is doubling down on what appears to be a failed policy, driving the economy to the brink of recession without bringing prices down appreciably. Inflation results from "too much money chasing too few goods," and the Fed has control over only the money—the "demand" side of the equation. Energy and food are the key inflation drivers, and they are on the supply side. As noted by Bloomberg columnist Ramesh Ponnuru in The Washington Post in March:

Fixing supply chains is of course beyond any central bank's power. What the Fed can do is reduce spending levels, which would in turn exert downward pressure on prices. But this would be a mistaken response to shortages. It would answer a scarcity of goods by bringing about a scarcity of money. The effect would be to compound the hit to living standards that supply shocks already caused.

So why is the Fed forging ahead? Some pundits think Chairman Powell has something else up his sleeve.

The Problem With "Demand Destruction"

First, a closer look at the problem. Shrinking demand by reducing the money supply—the money available for people to spend—is considered the Fed's only tool for fighting inflation. The theory behind raising interest rates is that it will reduce the willingness and ability of people and businesses to borrow. The result will be to shrink the money supply, most of which is created by banks when they make loans. The problem is that shrinking demand means shrinking the economy—laying off workers, cutting productivity, and creating new shortages—driving the economy into recession.

Demand has indeed been shrinking, as evidenced in a November 27 article on ZeroHedge titled: "The Consumer Economy Has Completely Collapsed—'It's A Ghost Town' for Holiday Shopping Everywhere." But retailers have cut their prices about as far as they can go. While the rate of increase in producer costs is slowing, those costs are still rising; and retailers have to cover their costs to stay in business, whether or not they have customers at their doors. Rather than lowering their prices further, they will be laying off workers or closing up shop. Layoffs are on the rise, and data reported on December 1 showed that U.S. factory activity is contracting for the first time since the lockdowns of the Covid-​19 pandemic.

It is not just activity in shopping malls and factories that has taken a hit. The housing market has fallen sharply, with pending home sales dropping 32% year-over-year in October. The stock market is also sinking, and the cryptocurrency market has fallen off a cliff. Worse, interest on the federal debt is shooting up. For years, the government has been able to borrow nearly for free. By 2025 or 2026, according to Moody's Analytics, interest payments could exceed the country's entire defense budget, which hit $767 billion in fiscal 2022. That means major cuts will be needed to some federal programs.

Breaking the "Fed Put"

In the face of all this economic strife, why is the Fed not reversing its aggressive interest rate hikes, as investors have come to expect? Former British diplomat and E.U. foreign policy adviser Alastair Crooke suggests that the Fed's goal is something else:

The Fed… may be attempting to implement a contrarian, controlled demolition of the U.S. bubble economy through interest rate increases. The rate rises will not slay the inflation "dragon" (they would need to be much higher to do that). The purpose is to break a generalized "dependency habit" on free money.

Danielle DiMartino Booth, former adviser to Dallas Federal Reserve President Richard Fisher, agrees. She stated in an interview with financial journalist and podcaster Julia LaRoche:

Maybe Jay Powell is trying to kill the "Fed put." Maybe he's trying to break the back of speculation once and for all, so that it's the Fed—truly an independent apolitical entity—that is making monetary policy, and not speculators making monetary policy for the Fed.

The "Fed put" is the general idea that the Federal Reserve is willing and able to adjust monetary policy in a way that is bullish for the stock market. As explained in a Fortune magazine article titled "The Stock Market Is Freaking Out Because of the End of Free Money—It All Has to Do with Something Called 'The Fed Put'":

For decades, the way the Fed enacted policy was like a put option contract, stepping in to prevent disaster when markets experienced serious turbulence by cutting interest rates and "printing money" through QE [quantitative easing].

…Since the beginning of the pandemic, the Fed had supported markets with ultra-​accommodative monetary policy in the form of near-​zero interest rates and quantitative easing (QE). Stocks thrived under these loose monetary policies. As long as the central bank was injecting liquidity into the economy as an emergency lending measure, the safety net was laid out for investors chasing all kinds of risk assets.

…The idea that the Fed will come to stocks' aid in a downturn began under Fed Chair Alan Greenspan. What is now the "Fed put" was once the "Greenspan put," a term coined after the 1987 stock market crash, when Greenspan lowered interest rates to help companies recover, setting a precedent that the Fed would step in during uncertain times.

But the "free money" era seems to be over:

The regime change has left markets effectively on their own and led risk assets, including stocks and cryptocurrencies, to crater as investors grapple with the new norm. It's also left many wondering whether the era of the so-​called Fed put is over.

Killing the Parasite That Is Killing the Host

The Fed put favors the rich—investors in the stock market, the speculative real estate market, the multitrillion-dollar derivatives market. It favors what economist Michael Hudson calls the "financialized" or "rentier" economy—"money making money," formerly called "unearned income"—which drives up prices without adding productive value to the "real" economy. Hudson calls it a parasite, which is sucking out profits that should be going toward building more factories and other economic development.

By backstopping the financialized economy, the Fed has been instrumental in widening the income gap of the last two decades, pushing housing prices to heights that are unaffordable for first-time homebuyers, driving up rents and educational costs, and crushing entrepreneurs. DiMartino Booth explains:

Fed policy feeds passive investing… because you don't have to carefully allocate your resources. You simply have to be long the NASDAQ and sit there with your money. What does that feed? It feeds the monopolization of America. The largest companies, the companies such as Google and Microsoft… if there is a competitor in their world they simply absorb them. They acquire them, which quashes… the entrepreneurial spirit that made this country so great.… If the Fed succeeds, Main Street will be the main winner.

… [T]he trick here is for the Fed to not break anything big, and that's the delicate balancing act,… if… they can slowly, methodically take the rot out of the system without breaking anything big that forces them to pull back.

The "rot" in the system is particularly evident in the housing market:

Since the financial crisis, there's been a lot of private equity that's entered the space and snapped up all these homes and they're renting them… It's definitely exacerbated this housing cycle. It's added an element of speculation because so many of them are all cash buyers. Don't get me wrong, they're levered—it is borrowed money—but they're coming in as all cash buyers, and that I think created a lot of these massive bidding wars…

DiMartino Booth discusses the risk of derivatives contagion using the example of AIG, a giant insurance company brought down by derivatives exposure in 2008:

During the financial crisis… we rescued AIG because we didn't want to actually see what it looked like on the other side of that cliff had derivatives actually been unwound, and what that contagion might have looked like.… We never tested the derivatives market, so that risk continues to lurk out there…. I'm not a cheerleader for there being some kind of a systemic risk event, and I do hope again that the Fed succeeds in managing this unwind, in seeing risk pulled out of the system, but one company at a time, not something that makes the global financial system implode.

Financial blogger Tom Luongo takes this argument further. He maintains that Fed Chair Powell is out to break the offshore eurodollar market—the speculative, unregulated offshore money market where the World Economic Forum and "old European money" (including mega-funds Blackrock and Vanguard) get the cheap credit funding their massive spending power. That is a complicated subject, which will have to wait for another article; but the principle is the same. Without the backstop of the Fed's virtually free dollars to satisfy a surge in demand for them, these highly leveraged dollar investments will collapse. ("Leverage" is an investment strategy that uses borrowed capital to increase potential returns. The risk is that if the investment sours, losses are also increased.)

Pushing "Until Something Breaks"

Whether or not popping these raging speculative bubbles is the goal, the Fed's interest rate hikes are having that effect. According to a November 25, 2022 article on CNBC.com, "Interest rate hikes have choked off access to easy capital …." As a result, "Investors have lost roughly $7.4 trillion, based on the 12-month drop in the Nasdaq."

House prices are also tumbling. The third quarter of 2022 saw the biggest home equity drop ($1.3 trillion) ever recorded. Fortune magazine quotes Moody's Analytics: "Before prices began to decline, we were overvalued [nationally] by around 25%. Now, this means prices will normalize. Affordability will be restored."

In 2021, 25% of all real estate purchases were being made by institutional investors. In the third quarter of 2022, investor buying of homes tumbled 30%. Blackstone, a real estate income trust notorious for buying up homes and turning them into rentals, was reported on December 2 to be limiting withdrawals from its $125 billion property fund as investors rush for the exits. George Cipolloni, portfolio manager at Penn Mutual Asset Management, said the U.S. Federal Reserve's sharp interest rate increases have not "worked all the way through the economy yet," and that he expects to see "more Blackstone-type news events coming forward in the next year."

In May 2022, BlackRock stock (BLK) was down 30% for the year. And by November, the cryptocurrency market cap had plummeted from $3 trillion to $900 billion, with Bitcoin, its largest component, down 77% year-over-year.

Currently featured in the news is the crypto exchange FTX and its 30-year-old billionaire owner Sam Bankman-Fried. FTX was exposed as a Ponzi scheme by the receding tide of dollar liquidity, catching Bankman-Fried and team "swimming naked when the tide went out." According to Swiss bank UBS' chief of investment, "FTX's collapse shows Federal Reserve tightening is crushing speculative assets." Outing FTX is thought to be only the beginning of a succession of exposures of financial frauds to come.

The Delicate Balancing Act

DiMartino Booth said in a live Twitter presentation on December 8, "If Jay Powell breaks the Fed put and takes away the unfair ability of private capital to rape and pillage the system, he will have finally addressed income inequality in America."

Looked at in that light, it sounds like a good idea. But can the Fed put be broken without breaking the whole economy? More reputable establishments than FTX are at risk. Rate hikes seriously impact local retailers and wholesalers. In September, risky leveraged bets brought U.K. pension funds near to collapse, forcing the Bank of England to reverse course and lower its interest rates. And there is the stress in the U.S. Treasury, which is dealing with an enormous interest tab on its debt.

Other disturbing outcomes are being envisioned. One podcaster posits that the economy is intentionally being driven to collapse, at which point the government will declare a "bank holiday" as President Franklin D. Roosevelt did in 1933. When the banks reopen, he says, we will have a "currency reset" in the form of a central bank digital currency (CBDC). The concern is that it will be a "programmable" currency, one that can be regulated or turned off altogether based on the user's "social credit" score, as is already happening in China.

Alarmed observers note that the New York Fed recently embarked on a pilot project for a CBDC (Central Bank Digital Currency). But defenders point out that it is a "wholesale" CBDC, used just for transfers between banks, particularly overseas transfers. Settlement times of foreign exchange transactions typically take two days. Project Cedar, the New York Innovation Center's pilot project, found that settlement for foreign exchange transactions using distributed ledger technology can happen in 10 seconds or less, significantly reducing risks. Whether that technology will be developed and used by the Fed has not yet been determined. DiMartino Booth observes that Powell and other Fed officials have frequently questioned the need for a "retail" CBDC, in which Fed accounts would be opened directly with the public. In a Substack article titled "A Grand Unified Theory of the FTX Disaster," author and educator Matthew Crawford lays out a darker possibility—that the end goal of the powerful network of players behind the FTX scheme is not just a U.S. CBDC but a "Global Digital Central Bank" run by international power brokers. Whether or not the Federal Reserve intended it, aggressive interest rate hikes could expose this sort of parasitic corruption and remove the money machine that is its power source.

Rising From the Ashes

Meanwhile, the supply-side issues inflating the prices of food, energy, and other key resources need to be addressed. Those are matters for federal and state legislatures, not the Fed. In the 1930s, a federal financial institution called the Reconstruction Finance Corporation pulled the economy out of the Great Depression, put people back to work, and crisscrossed the country with new infrastructure, including the dams and power lines that brought electricity to rural America. (See my earlier article here.) The government acted quickly and decisively because times were desperate.

A bill for a National Infrastructure Bank modeled on the Reconstruction Finance Corporation is now before Congress, H.R. 3339. For a local government bank, a viable model is the publicly-owned Bank of North Dakota, which pulled that state out of a regional agricultural depression in the 1920s. (See here.) As an iconic Depression-era poster declared, "We can do it!" We just need to roll up our sleeves and get to work.

This content originally appeared on Common Dreams - Breaking News & Views for the Progressive Community and was authored by Ellen Brown.

The Fed is doubling down on what appears to be a failed policy, driving the economy to the brink of recession without bringing prices down appreciably. Inflation results from “too much money chasing too few goods,” and the Fed has control over only the money – the “demand” side of the equation. Energy and food are the key inflation drivers, and they are on the supply side. As noted by Bloomberg columnist Ramesh Ponnuru in the Washington Post in March:

Fixing supply chains is of course beyond any central bank’s power. What the Fed can do is reduce spending levels, which would in turn exert downward pressure on prices. But this would be a mistaken response to shortages. It would answer a scarcity of goods by bringing about a scarcity of money. The effect would be to compound the hit to living standards that supply shocks already caused.

So why is the Fed forging ahead? Some pundits think Chairman Powell has something else up his sleeve.

The Problem with “Demand Destruction”

First, a closer look at the problem. Shrinking demand by reducing the money supply – the money available for people to spend – is considered the Fed’s only tool for fighting inflation. The theory behind raising interest rates is that it will reduce the willingness and ability of people and businesses to borrow. The result will be to shrink the money supply, most of which is created by banks when they make loans. The problem is that shrinking demand means shrinking the economy – laying off workers, cutting productivity, and creating new shortages – driving the economy into recession.

Demand has indeed been shrinking, as evidenced in a November 27 article on ZeroHedge titled: “The Consumer Economy Has Completely Collapsed – ‘It’s A Ghost Town’ for Holiday Shopping Everywhere.” But retailers have cut their prices about as far as they can go. While the rate of increase in producer costs is slowing, those costs are still rising; and retailers have to cover their costs to stay in business, whether or not they have customers at their doors. Rather than lowering their prices further, they will be laying off workers or closing up shop. Layoffs are on the rise, and data reported on December 1 showed that U.S. factory activity is contracting for the first time since the lockdowns of the Covid-​19 pandemic.

It is not just activity in shopping malls and factories that has taken a hit. The housing market has fallen sharply, with pending home sales dropping 32% year-over-year in October. The stock market is also sinking, and the cryptocurrency market has fallen off a cliff. Worse, interest on the federal debt is shooting up. For years, the government has been able to borrow nearly for free. By 2025 or 2026, according to Moody’s Analytics, interest payments could exceed the country’s entire defense budget, which hit $767 billion in fiscal 2022. That means major cuts will be needed to some federal programs.

Breaking the “Fed Put”

In the face of all this economic strife, why is the Fed not reversing its aggressive interest rate hikes, as investors have come to expect? Former British diplomat and EU foreign policy advisor Alastair Crooke suggests that the Fed’s goal is something else:

The Fed … may be attempting to implement a contrarian, controlled demolition of the U.S. bubble-economy through interest rate increases. The rate rises will not slay the inflation “dragon” (they would need to be much higher to do that). The purpose is to break a generalized “dependency habit” on free money.

Danielle DiMartino Booth, former advisor to Dallas Federal Reserve President Richard Fisher, agrees. She stated in an interview with financial journalist and podcaster Julia LaRoche:

Maybe Jay Powell is trying to kill the “Fed put.” Maybe he’s trying to break the back of speculation once and for all, so that it’s the Fed – truly an independent apolitical entity – that is making monetary policy, and not speculators making monetary policy for the Fed.

The “Fed put” is the general idea that the Federal Reserve is willing and able to adjust monetary policy in a way that is bullish for the stock market. As explained in a Fortune Magazine article titled “The Stock Market Is Freaking Out Because of the End of Free Money – It All Has to Do with Something Called ‘The Fed Put’”:

For decades, the way the Fed enacted policy was like a put option contract, stepping in to prevent disaster when markets experienced serious turbulence by cutting interest rates and “printing money” through QE [quantitative easing] .

… Since the beginning of the pandemic, the Fed had supported markets with ultra-​accommodative monetary policy in the form of near-​zero interest rates and quantitative easing (QE). Stocks thrived under these loose monetary policies. As long as the central bank was injecting liquidity into the economy as an emergency lending measure, the safety net was laid out for investors chasing all kinds of risk assets.

… The idea that the Fed will come to stocks’ aid in a downturn began under Fed Chair Alan Greenspan. What is now the “Fed put” was once the “Greenspan put,” a term coined after the 1987 stock market crash, when Greenspan lowered interest rates to help companies recover, setting a precedent that the Fed would step in during uncertain times.

But the “free money” era seems to be over:

The regime change has left markets effectively on their own and led risk assets, including stocks and cryptocurrencies, to crater as investors grapple with the new norm. It’s also left many wondering whether the era of the so-​called Fed put is over.

Killing the Parasite That Is Killing the Host

The Fed put favors the rich – investors in the stock market, the speculative real estate market, the multi-trillion dollar derivatives market. It favors what economist Michael Hudson calls the “financialized” or “rentier” economy – “money making money,” formerly called “unearned income” – which drives up prices without adding productive value to the “real” economy. Hudson calls it a parasite, which is sucking out profits that should be going toward building more factories and other economic development.

By backstopping the financialized economy, the Fed has been instrumental in widening the income gap of the last two decades, pushing housing prices to heights that are unaffordable for first-time homebuyers, driving up rents and educational costs, and crushing entrepreneurs. DiMartino Booth explains:

Fed policy feeds passive investing … because you don’t have to carefully allocate your resources. You simply have to be long the NASDAQ and sit there with your money. What does that feed? It feeds the monopolization of America. The largest companies, the companies such as Google and Microsoft … if there is a competitor in their world they simply absorb them. They acquire them, which quashes … the entrepreneurial spirit that made this country so great.… If the Fed succeeds, Main Street will be the main winner.

… [T]he trick here is for the Fed to not break anything big, and that’s the delicate balancing act, … if … they can slowly, methodically take the rot out of the system without breaking anything big that forces them to pull back.

The “rot” in the system is particularly evident in the housing market:

Since the financial crisis, there’s been a lot of private equity that’s entered the space and snapped up all these homes and they’re renting them … It’s definitely exacerbated this housing cycle. It’s added an element of speculation because so many of them are all cash buyers. Don’t get me wrong, they’re levered — it is borrowed money — but they’re coming in as all cash buyers, and that I think created a lot of these massive bidding wars …

DiMartino Booth discusses the risk of derivatives contagion using the example of AIG, a giant insurance company brought down by derivatives exposure in 2008:

During the financial crisis … we rescued AIG because we didn’t want to actually see what it looked like on the other side of that cliff had derivatives actually been unwound, and what that contagion might have looked like.… We never tested the derivatives market, so that risk continues to lurk out there…. I’m not a cheerleader for there being some kind of a systemic risk event, and I do hope again that the Fed succeeds in managing this unwind, in seeing risk pulled out of the system, but one company at a time, not something that makes the global financial system implode.

Financial blogger Tom Luongo takes this argument further. He maintains that Fed Chair Powell is out to break the offshore eurodollar market – the speculative, unregulated offshore money market where the World Economic Forum and “old European money” (including mega-funds Blackrock and Vanguard) get the cheap credit funding their massive spending power. That is a complicated subject, which will have to wait for another article; but the principle is the same. Without the backstop of the Fed’s virtually free dollars to satisfy a surge in demand for them, these highly-leveraged dollar investments will collapse. (“Leverage” is an investment strategy that uses borrowed capital to increase potential returns. The risk is that if the investment sours, losses are also increased.)

Pushing “Until Something Breaks”

Whether or not popping these raging speculative bubbles is the goal, the Fed’s interest rate hikes are having that effect. According to a November 25, 2022 article on CNBC.com, “Interest rate hikes have choked off access to easy capital ….” As a result, “Investors have lost roughly $7.4 trillion, based on the 12-month drop in the Nasdaq.”

House prices are also tumbling. The third quarter of 2022 saw the biggest home equity drop ($1.3 trillion) ever recorded. Fortune Magazine quotes Moody’s Analystics: “Before prices began to decline, we were overvalued [nationally] by around 25%. Now, this means prices will normalize. Affordability will be restored.”

In 2021, 25% of all real estate purchases were being made by institutional investors. In the third quarter of 2022, investor buying of homes tumbled 30%. Blackstone, a real estate income trust notorious for buying up homes and turning them into rentals, was reported on December 2 to be limiting withdrawals from its $125 billion property fund as investors rush for the exits. George Cipolloni, portfolio manager at Penn Mutual Asset Management, said the U.S. Federal Reserve’s sharp interest rate increases have not “worked all the way through the economy yet,” and that he expects to see “more Blackstone-type news events coming forward in the next year.”

In May 2022, BlackRock stock (BLK) was down 30% for the year. And by November, the cryptocurrency market cap had plummeted from $3 trillion to $900 billion, with Bitcoin, its largest component, down 77% year-over-year.

Currently featured in the news is the crypto exchange FTX and its 30-year-old billionaire owner Sam Bankman-Fried. FTX was exposed as a Ponzi scheme by the receding tide of dollar liquidity, catching Bankman-Fried and team “swimming naked when the tide went out.” According to Swiss bank UBS’ chief of investment, “FTX’s collapse shows Federal Reserve tightening is crushing speculative assets.” Outing FTX is thought to be only the beginning of a succession of exposures of financial frauds to come.

The Delicate Balancing Act

Looked at in that light, breaking the Fed put sounds like a good idea. But can it be done without breaking the whole economy? More reputable establishments than FTX are at risk. Rate hikes seriously impact local retailers and wholesalers. In September, risky leveraged bets brought UK pension funds near to collapse, forcing the Bank of England to reverse course and lower its interest rates. And there is the stress in the U.S. Treasury, which is dealing with an enormous interest tab on its debt.

Other disturbing outcomes are being envisioned. One podcaster posits that the economy is intentionally being driven to collapse, at which point the government will declare a “bank holiday”as Pres. Roosevelt did in 1933. When the banks reopen, he says, we will have a “currency reset” in the form of a central bank digital currency (CBDC). The concern is that it will be a “programmable” currency, one that can be regulated or turned off altogether based on the user’s “social credit” score, as is already happening in China.

Alarmed observers note that the New York Fed recently embarked on a pilot project for a CBDC (Central Bank Digital Currency). But defenders point out that it is a “wholesale” CBDC, used just for transfers between banks, particularly overseas transfers. Settlement times of foreign exchange transactions typically take two days. Project Cedar, the New York Innovation Center’s pilot project, found that settlement for foreign exchange transactions using distributed ledger technology can happen in 10 seconds or less, significantly reducing risks. Whether that technology will be developed and used by the Fed has not yet been determined. DiMartino Booth observes that Powell and other Fed officials have frequently questioned the need for a “retail” CBDC, in which Fed accounts would be opened directly with the public.In a Substack article titled “A Grand Unified Theory of the FTX Disaster,” author and educator Matthew Crawford lays out a darker possibility – that the end goal of the powerful network of players behind the FTX scheme is not just a U.S. CBDC but a “Global Digital Central Bank” run by international powerbrokers. Whether or not the Federal Reserve intended it, aggressive interest rate hikes could expose this sort of parasitic corruption and remove the money machine that is its power source.

Rising from the Ashes

Meanwhile, the supply-side issues inflating the prices of food, energy and other key resources need to be addressed. Those are matters for federal and state legislatures, not the Fed. In the 1930s, a federal financial institution called the Reconstruction Finance Corporation pulled the economy out of the Great Depression, put people back to work, and crisscrossed the country with new infrastructure, including the dams and power lines that brought electricity to rural America. (See my earlier article here.) The government acted quickly and decisively because times were desperate.

A bill for a National Infrastructure Bank modeled on the Reconstruction Finance Corporation is now before Congress, H.R. 3339. For a local government bank, a viable model is the publicly-owned Bank of North Dakota, which pulled that state out of a regional agricultural depression in the 1920s. (See here.) As an iconic Depression-era poster declared, “We can do it!” We just need to roll up our sleeves and get to work.

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

Justice, it seems, is hard to find. Thousands of grassroots organizations across the country seek justice for their concerns. In the US, over 13,785 nonprofits work for civil rights and social justice. Organizations focused on international justice such as peace, refugees, and international aid number 23,532. Environmental groups number 27,402.

From peace to prison, the environment to economic inequality, many Americans fight for their cause, plead for justice. The dynamic is similar in other countries.

Who, or what, are the forces behind so much injustice and suffering? Is there a common culprit, a common thread or threat?

In 1971, Lewis Powell, soon to be placed on the Supreme Court by Richard Nixon, was a high-powered corporate lawyer sitting on the boards of almost a dozen corporations when he penned the Powell Memo, a letter directed to the Director of the US Chamber of Commerce. Powell expressed his grave concern that American business and free enterprise were under full-scale attack from “leftists” and might altogether collapse unless drastic steps were taken.

Powell identified academia, the news media, television, artists, preachers, teachers, Ralph Nader specifically, and certain politicians as being the most articulate and attractive purveyors of this “chorus of criticism” designed to bring down all of American business. Action must be taken, and now.

Citizens were challenging big business, holding them accountable, demanding governmental oversight, exercising their democratic rights. To Powell, the corporate lawyer and perennial corporate board member, this was a bridge too far. The chorus must be killed, power returned to the kings.

The future Supreme Court Justice went on to outline in detail how the corporate world must retake control and influence over every aspect of American life.

Academia must be seeded with professors sympathetic to big business, textbooks reviewed and evaluated, guest speakers deployed on campuses to counter the narrative. Powell wrote that corporations provide lucrative contracts and benefits to colleges and universities, and these should be used to influence precisely what occurs on a college campus.

Powell made a similar argument about the media. News organizations are owned by corporations, and they too must be persuaded to realize that their corporate profits hang in the balance if they continue to publish stories unfavorable to American business. Stories about consumer rights and environmental rights must stop. The same for television, a medium Powell highlighted as perhaps the most effective source of information, or disinformation.

The political arena must not be neglected, said Powell, because “political power is necessary; such power must be assiduously cultivated; and when necessary, it must be used aggressively and with determination — without embarrassment and without the reluctance which has been so characteristic of American business.” In other words, no holds barred. Lean on public servants in a way they have never experienced.

Paid advertisements, the courts, stockholders, lobbyists, writers, think tanks, and the Chamber of Commerce itself with its hundreds of chapters across the country must all be utilized, weaponized in this war against the chorus of critics.

To read the Powell Memo today is deeply disturbing, not just because it was written by a future Supreme Court Justice who was advocating a corporate takeover of American democracy, but also because the actions detailed were so successfully deployed and completed. Powell was prescient. His plan worked. And the average American pays the heavy price today.

In the United States, power no longer lies within the halls of Congress or the White House, but within the corporate temples.

Our foreign policy, our diplomacy, our war-fighting strategy, are all influenced and dependent upon corporate weapons manufacturers with their legions of lobbyists depositing $285 million into the campaign war chests of candidates across the country, spending a total of $2.5 billion in lobbying over the last twenty years. The US Supreme Court opened the doors to such unlimited corporate campaign spending in its Citizens United decision.

Fossil fuel companies turn up the heat on all of humanity such that we literally boil from climate catastrophe, all so they can rake in record profits. Working hand in glove with weapons manufactures and the media, they foster war and generate enormous revenue for each, using lawyers and lobbyists to implement their cancerous policies.

Many colleges no longer teach or even believe in a broad-based liberal arts education, but rather are technical training schools for investment banks, marketing firms, law firms, accounting firms, weapons manufacturers, and conservative or military think tanks. With the funding of buildings, research grants, and faculty chairs, the corporate takeover of our intellectual life is virtually complete. Students travel through four years of college without a course in American government, history, or literature, resulting in a woefully uninformed electorate.

Prisons are privatized and corporatized thereby influencing criminal justice reform. Schools are privatized and corporatized thereby influencing the development of young minds. Our media, and more importantly now, our social media, is owned by corporate oligarchs who influence the narrative fed to us each day, a narrative designed to keep people scared and pitted against each other.

Thanks to Powell and his colleagues, the planet now faces multiple crises, and perhaps extinction, by way of corporate hand. The danger is real, existential, measurable. The dead can be counted. The homeless, the hungry, the drought stricken, and the war-ravaged form a chorus of suffering. Corporate profits, CEO salaries, lobbying expenditures, and tax cuts reveal the why and how.

ExxonMobil, Shell, Raytheon, Lockheed Martin, Vanguard, Blackrock, Northrop Grumman, CoreCivic, and all their kin have staged a hostile takeover of government and the daily life of its people. They hold the reigns. They are the common thread and threat. Until corporate monoliths are disassembled and defanged, justice will be hard to find.

This content originally appeared on CounterPunch.org and was authored by Brad Wolf.

Justice, it seems, is hard to find. Thousands of grassroots organizations across the country seek justice for their concerns. In the US, over 13,785 nonprofits work for civil rights and social justice. Organizations focused on international justice such as peace, refugees, and international aid number 23,532. Environmental groups number 27,402.

From peace to prison, the environment to economic inequality, many Americans fight for their cause, plead for justice. The dynamic is similar in other countries.

Who, or what, are the forces behind so much injustice and suffering? Is there a common culprit, a common thread or threat?

In 1971, Lewis Powell, soon to be placed on the Supreme Court by Richard Nixon, was a high-powered corporate lawyer sitting on the boards of almost a dozen corporations when he penned the Powell Memo, a letter directed to the Director of the US Chamber of Commerce. Powell expressed his grave concern that American business and free enterprise were under full-scale attack from “leftists” and might altogether collapse unless drastic steps were taken.

Powell identified academia, the news media, television, artists, preachers, teachers, Ralph Nader specifically, and certain politicians as being the most articulate and attractive purveyors of this “chorus of criticism” designed to bring down all of American business. Action must be taken, and now.

Citizens were challenging big business, holding them accountable, demanding governmental oversight, exercising their democratic rights. To Powell, the corporate lawyer and perennial corporate board member, this was a bridge too far. The chorus must be killed, power returned to the kings.

The future Supreme Court Justice went on to outline in detail how the corporate world must retake control and influence over every aspect of American life.

Academia must be seeded with professors sympathetic to big business, textbooks reviewed and evaluated, guest speakers deployed on campuses to counter the narrative. Powell wrote that corporations provide lucrative contracts and benefits to colleges and universities, and these should be used to influence precisely what occurs on a college campus.

Powell made a similar argument about the media. News organizations are owned by corporations, and they too must be persuaded to realize that their corporate profits hang in the balance if they continue to publish stories unfavorable to American business. Stories about consumer rights and environmental rights must stop. The same for television, a medium Powell highlighted as perhaps the most effective source of information, or disinformation.

The political arena must not be neglected, said Powell, because “political power is necessary; such power must be assiduously cultivated; and when necessary, it must be used aggressively and with determination — without embarrassment and without the reluctance which has been so characteristic of American business.” In other words, no holds barred. Lean on public servants in a way they have never experienced.

Paid advertisements, the courts, stockholders, lobbyists, writers, think tanks, and the Chamber of Commerce itself with its hundreds of chapters across the country must all be utilized, weaponized in this war against the chorus of critics.

To read the Powell Memo today is deeply disturbing, not just because it was written by a future Supreme Court Justice who was advocating a corporate takeover of American democracy, but also because the actions detailed were so successfully deployed and completed. Powell was prescient. His plan worked. And the average American pays the heavy price today.

In the United States, power no longer lies within the halls of Congress or the White House, but within the corporate temples.

Our foreign policy, our diplomacy, our war-fighting strategy, are all influenced and dependent upon corporate weapons manufacturers with their legions of lobbyists depositing $285 million into the campaign war chests of candidates across the country, spending a total of $2.5 billion in lobbying over the last twenty years. The US Supreme Court opened the doors to such unlimited corporate campaign spending in its Citizens United decision.

Fossil fuel companies turn up the heat on all of humanity such that we literally boil from climate catastrophe, all so they can rake in record profits. Working hand in glove with weapons manufactures and the media, they foster war and generate enormous revenue for each, using lawyers and lobbyists to implement their cancerous policies.

Many colleges no longer teach or even believe in a broad-based liberal arts education, but rather are technical training schools for investment banks, marketing firms, law firms, accounting firms, weapons manufacturers, and conservative or military think tanks. With the funding of buildings, research grants, and faculty chairs, the corporate takeover of our intellectual life is virtually complete. Students travel through four years of college without a course in American government, history, or literature, resulting in a woefully uninformed electorate.

Prisons are privatized and corporatized thereby influencing criminal justice reform. Schools are privatized and corporatized thereby influencing the development of young minds. Our media, and more importantly now, our social media, is owned by corporate oligarchs who influence the narrative fed to us each day, a narrative designed to keep people scared and pitted against each other.

Thanks to Powell and his colleagues, the planet now faces multiple crises, and perhaps extinction, by way of corporate hand. The danger is real, existential, measurable. The dead can be counted. The homeless, the hungry, the drought stricken, and the war-ravaged form a chorus of suffering. Corporate profits, CEO salaries, lobbying expenditures, and tax cuts reveal the why and how.

ExxonMobil, Shell, Raytheon, Lockheed Martin, Vanguard, Blackrock, Northrop Grumman, CoreCivic, and all their kin have staged a hostile takeover of government and the daily life of its people. They hold the reigns. They are the common thread and threat. Until corporate monoliths are disassembled and defanged, justice will be hard to find.

This content originally appeared on CounterPunch.org and was authored by Brad Wolf.

Justice, it seems, is hard to find. Thousands of grassroots organizations across the country seek justice for their concerns. In the US, over 13,785 nonprofits work for civil rights and social justice. Organizations focused on international justice such as peace, refugees, and international aid number 23,532. Environmental groups number 27,402.

Until corporate monoliths are disassembled and defanged, justice will be hard to find.

From peace to prison, the environment to economic inequality, many Americans fight for their cause, plead for justice. The dynamic is similar in other countries. 

Who, or what, are the forces behind so much injustice and suffering? Is there a common culprit, a common thread or threat?

In 1971, Lewis Powell, soon to be placed on the Supreme Court by Richard Nixon, was a high-powered corporate lawyer sitting on the boards of almost a dozen corporations when he penned the Powell Memo, a letter directed to the Director of the US Chamber of Commerce. Powell expressed his grave concern that American business and free enterprise were under full-scale attack from "leftists" and might altogether collapse unless drastic steps were taken.

Powell identified academia, the news media, television, artists, preachers, teachers, Ralph Nader specifically, and certain politicians as being the most articulate and attractive purveyors of this "chorus of criticism" designed to bring down all of American business. Action must be taken, and now. 

Citizens were challenging big business, holding them accountable, demanding governmental oversight, exercising their democratic rights. To Powell, the corporate lawyer and perennial corporate board member, this was a bridge too far. The chorus must be killed, power returned to the kings.

The future Supreme Court Justice went on to outline in detail how the corporate world must retake control and influence over every aspect of American life.

Academia must be seeded with professors sympathetic to big business, textbooks reviewed and evaluated, guest speakers deployed on campuses to counter the narrative. Powell wrote that corporations provide lucrative contracts and benefits to colleges and universities, and these should be used to influence precisely what occurs on a college campus.

Powell made a similar argument about the media. News organizations are owned by corporations, and they too must be persuaded to realize that their corporate profits hang in the balance if they continue to publish stories unfavorable to American business. Stories about consumer rights and environmental rights must stop. The same for television, a medium Powell highlighted as perhaps the most effective source of information, or disinformation.

The political arena must not be neglected, said Powell, because "political power is necessary; such power must be assiduously cultivated; and when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business." In other words, no holds barred. Lean on public servants in a way they have never experienced.

Paid advertisements, the courts, stockholders, lobbyists, writers, think tanks, and the Chamber of Commerce itself with its hundreds of chapters across the country must all be utilized, weaponized in this war against the chorus of critics.

To read the Powell Memo today is deeply disturbing, not just because it was written by a future Supreme Court Justice who was advocating a corporate takeover of American democracy, but also because the actions detailed were so successfully deployed and completed. Powell was prescient. His plan worked. And the average American pays the heavy price today.

In the United States, power no longer lies within the halls of Congress or the White House, but within the corporate temples.

Our foreign policy, our diplomacy, our war-fighting strategy, are all influenced and dependent upon corporate weapons manufacturers with their legions of lobbyists depositing $285 million into the campaign war chests of candidates across the country, spending a total of $2.5 billion in lobbying over the last twenty years. The US Supreme Court opened the doors to such unlimited corporate campaign spending in its Citizens United decision.

Fossil fuel companies turn up the heat on all of humanity such that we literally boil from climate catastrophe, all so they can rake in record profits. Working hand in glove with weapons manufactures and the media, they foster war and generate enormous revenue for each, using lawyers and lobbyists to implement their cancerous policies.

Many colleges no longer teach or even believe in a broad-based liberal arts education, but rather are technical training schools for investment banks, marketing firms, law firms, accounting firms, weapons manufacturers, and conservative or military think tanks. With the funding of buildings, research grants, and faculty chairs, the corporate takeover of our intellectual life is virtually complete. Students travel through four years of college without a course in American government, history, or literature, resulting in a woefully uninformed electorate.

Prisons are privatized and corporatized thereby influencing criminal justice reform. Schools are privatized and corporatized thereby influencing the development of young minds. Our media, and more importantly now, our social media, is owned by corporate oligarchs who influence the narrative fed to us each day, a narrative designed to keep people scared and pitted against each other.

Thanks to Powell and his colleagues, the planet now faces multiple crises, and perhaps extinction, by way of corporate hand. The danger is real, existential, measurable. The dead can be counted. The homeless, the hungry, the drought stricken, and the war-ravaged form a chorus of suffering. Corporate profits, CEO salaries, lobbying expenditures, and tax cuts reveal the why and how.

ExxonMobil, Shell, Raytheon, Lockheed Martin, Vanguard, Blackrock, Northrop Grumman, CoreCivic, and all their kin have staged a hostile takeover of government and the daily life of its people. They hold the reigns. They are the common thread and threat. Until corporate monoliths are disassembled and defanged, justice will be hard to find.

This content originally appeared on Common Dreams - Breaking News & Views for the Progressive Community and was authored by Brad Wolf.

Federal Reserve Chair Jerome Powell fielded questions for around 40 minutes on Wednesday following the central bank's decision to impose another large interest rate hike, but not a single reporter asked about the extent to which record-high corporate profits are fueling inflation even as companies openly boast about their pricing power.

Progressive economists have estimated that corporate profits are to blame for at least 40% of price increases during the recovery from the pandemic-induced downturn, a disproportionate contribution to the stubbornly high inflation that is eating away at workers' wages. Some have put the number at over 50%.

"Ignoring the role of profits makes inflation analyses a lot weaker."

The notion that corporate price hikes are putting upward pressure on inflation—which has myriad causes—is hardly fringe. Lael Brainard, the Fed's vice chair, acknowledged in a speech last month that "since the pandemic, significant supply and demand imbalances have coincided with large increases in retail trade margins in several sectors."

"In some sectors, the increase in the retail trade margin exceeds the contemporaneous increase in wages paid to the workers engaged in retail trade, although this is not true in food and apparel," Brainard said. "The return of retail margins to more normal levels could meaningfully help reduce inflationary pressures in some consumer goods, considering that gross retail margins are about 30 percent of total sales dollars overall."

But corporations' conscious decisions to raise consumer prices well beyond the actual costs of their goods and services didn't receive any attention during Powell's press conference.

Instead, the Fed chair and reporters from corporate outlets such as The Wall Street Journal, Fox Business, The Washington Post, and The New York Times focused on workers' wages and the labor market, which Powell is explicitly trying to weaken. Reporters also pushed Powell on the risks of recession, which he admitted are growing, and the stock market's reaction to the Fed's latest announcement.

"Despite the slowdown in growth, the labor market remains extremely tight, with the unemployment rate at a 50-year low, job vacancies still very high, and wage growth elevated," the Fed chair said during his opening statement. "Although job vacancies have moved below their highs and the pace of job gains has slowed from earlier in the year, the labor market continues to be out of balance, with demand substantially exceeding the supply of available workers."

While Powell—who has previously said one of his objectives is to "get wages down"—conceded Wednesday that he doesn't see recent wage growth as the "principal story of why prices are going up," he and other Fed officials continue to enact aggressive rate hikes that will ultimately have the effect of cutting wages and potentially throwing millions out of work.

During his remarks Wednesday, Powell made clear that the Fed intends to raise interest rates further in the coming months and keep them elevated for the foreseeable future. Any talk of pausing the rate hikes to assess their impact on the economy, Powell said, would be "very premature."

The Fed's sixth interest rate increase of the year—the fastest pace of hikes since the Volcker era—heightened already widespread concerns that the central bank is pushing the U.S. and potentially the global economy into a terrible downturn.

"The Federal Reserve's decision today to raise interest rates by 0.75% will have a direct and harmful impact on working people and our families," said Liz Shuler, the president of the AFL-CIO. "The Fed's actions will not address the underlying causes of inflation—the war in Ukraine, climate change's effect on harvests, and corporate profits."

"Working people should not be the target of lowering inflation—it should be corporations that are earning record profits," Shuler added.

In recent weeks, despite the lack of attention to corporate profits during Powell's Wednesday press conference and his previous appearances, mainstream media outlets and newspapers have increasingly highlighted the link between company price hikes and inflation that progressive publications and lawmakers have been emphasizing for months.

Earlier this week, The New York Times ran a story noting that major food companies and restaurants "have continued to raise prices on consumers even after their own inflation-related costs have been covered."

"Although food companies are prominent examples of how rapid inflation is being passed from producers to consumers, the trend is evident across a wide variety of industries," the Times observed. "Executives from banks, airlines, hotels, consumer goods companies, and other firms have said they are finding that customers have money to spend and can tolerate higher prices."

Previously, when it wasn't being ignored or waved away, the connection between high corporate profits and inflation was mocked as a fantasy. In the op-ed pages of the Jeff Bezos-owned Washington Post, columnist Catherine Rampell called the idea that corporate greed is pushing up prices a "conspiracy theory."

But as the Economic Policy Institute's Josh Bivens argued in response to Rampell's May column, "Ignoring the role of profits makes inflation analyses a lot weaker."

"As a simple matter of fact," Bivens wrote, "the rise in profits has been historic and has explained far, far more of the rise in prices over the past year than labor costs or import tariffs, and this makes it odd indeed to label calls to address this as 'conspiracy theories.'"

This content originally appeared on Common Dreams - Breaking News & Views for the Progressive Community and was authored by Jake Johnson.

Federal Reserve Chair Jerome Powell fielded questions for around 40 minutes on Wednesday following the central bank's decision to impose another large interest rate hike, but not a single reporter asked about the extent to which record-high corporate profits are fueling inflation even as companies openly boast about their pricing power.

Progressive economists have estimated that corporate profits are to blame for at least 40% of price increases during the recovery from the pandemic-induced downturn, a disproportionate contribution to the stubbornly high inflation that is eating away at workers' wages. Some have put the number at over 50%.

"Ignoring the role of profits makes inflation analyses a lot weaker."

The notion that corporate price hikes are putting upward pressure on inflation—which has myriad causes—is hardly fringe. Lael Brainard, the Fed's vice chair, acknowledged in a speech last month that "since the pandemic, significant supply and demand imbalances have coincided with large increases in retail trade margins in several sectors."

"In some sectors, the increase in the retail trade margin exceeds the contemporaneous increase in wages paid to the workers engaged in retail trade, although this is not true in food and apparel," Brainard said. "The return of retail margins to more normal levels could meaningfully help reduce inflationary pressures in some consumer goods, considering that gross retail margins are about 30 percent of total sales dollars overall."

But corporations' conscious decisions to raise consumer prices well beyond the actual costs of their goods and services didn't receive any attention during Powell's press conference.

Instead, the Fed chair and reporters from corporate outlets such as The Wall Street Journal, Fox Business, The Washington Post, and The New York Times focused on workers' wages and the labor market, which Powell is explicitly trying to weaken. Reporters also pushed Powell on the risks of recession, which he admitted are growing, and the stock market's reaction to the Fed's latest announcement.

"Despite the slowdown in growth, the labor market remains extremely tight, with the unemployment rate at a 50-year low, job vacancies still very high, and wage growth elevated," the Fed chair said during his opening statement. "Although job vacancies have moved below their highs and the pace of job gains has slowed from earlier in the year, the labor market continues to be out of balance, with demand substantially exceeding the supply of available workers."

While Powell—who has previously said one of his objectives is to "get wages down"—conceded Wednesday that he doesn't see recent wage growth as the "principal story of why prices are going up," he and other Fed officials continue to enact aggressive rate hikes that will ultimately have the effect of cutting wages and potentially throwing millions out of work.

During his remarks Wednesday, Powell made clear that the Fed intends to raise interest rates further in the coming months and keep them elevated for the foreseeable future. Any talk of pausing the rate hikes to assess their impact on the economy, Powell said, would be "very premature."

The Fed's sixth interest rate increase of the year—the fastest pace of hikes since the Volcker era—heightened already widespread concerns that the central bank is pushing the U.S. and potentially the global economy into a terrible downturn.

"The Federal Reserve's decision today to raise interest rates by 0.75% will have a direct and harmful impact on working people and our families," said Liz Shuler, the president of the AFL-CIO. "The Fed's actions will not address the underlying causes of inflation—the war in Ukraine, climate change's effect on harvests, and corporate profits."

"Working people should not be the target of lowering inflation—it should be corporations that are earning record profits," Shuler added.

In recent weeks, despite the lack of attention to corporate profits during Powell's Wednesday press conference and his previous appearances, mainstream media outlets and newspapers have increasingly highlighted the link between company price hikes and inflation that progressive publications and lawmakers have been emphasizing for months.

Earlier this week, The New York Times ran a story noting that major food companies and restaurants "have continued to raise prices on consumers even after their own inflation-related costs have been covered."

"Although food companies are prominent examples of how rapid inflation is being passed from producers to consumers, the trend is evident across a wide variety of industries," the Times observed. "Executives from banks, airlines, hotels, consumer goods companies, and other firms have said they are finding that customers have money to spend and can tolerate higher prices."

Previously, when it wasn't being ignored or waved away, the connection between high corporate profits and inflation was mocked as a fantasy. In the op-ed pages of the Jeff Bezos-owned Washington Post, columnist Catherine Rampell called the idea that corporate greed is pushing up prices a "conspiracy theory."

But as the Economic Policy Institute's Josh Bivens argued in response to Rampell's May column, "Ignoring the role of profits makes inflation analyses a lot weaker."

"As a simple matter of fact," Bivens wrote, "the rise in profits has been historic and has explained far, far more of the rise in prices over the past year than labor costs or import tariffs, and this makes it odd indeed to label calls to address this as 'conspiracy theories.'"

This content originally appeared on Common Dreams - Breaking News & Views for the Progressive Community and was authored by Jake Johnson.

Did the Republican "October Surprise" arrive today? Will $7/gallon oil throw the election in November to Republicans? And how will a severe recession on Biden's watch play out?

The reason world bodies are talking about the US Fed and American interest rates is because when the US Fed raises interest rates here, other countries have to do the same or their currencies will begin to sink against the dollar.

Jerome Powell, Vladimir Putin, and Mohammad Bin Salman are on the verge of throwing the entire world into a massive depression.

Powell's interest rate increases are compounded by the action taken this morning by Russia and Saudi Arabia, leading the OPEC+ meeting in Vienna, to cut oil production by 2 million barrels a day.

These two leaders of OPEC+ have a visceral hatred of both President Biden and democracy itself: throwing oil prices to or above $100 a barrel and gas prices above $6/gallon here in the US will have massive political repercussions, handing a sword to Republican partisans who openly also hate democracy.

It will also fuel inflation, provoking even more wrong-headed rate increases by Powell. And it's not like there aren't credible voices telling Powell he's playing with fire.

What, for example, do the United Nations' Conference on Trade and Development (UNCTAD), former Labor Secretary Robert Reich, and the corporate accountability group Accountable.us all know that Jerome Powell and his mostly-Republican colleagues at the Fed fail to understand?

In a nutshell, it's pretty straightforward:

Today's inflation is caused in large part by the one-off confluence of rebound from two years of depressed demand hitting highly monopolized and fragile supply systems.

To compound the problem, this situation has become an excuse for the world's largest corporations—particularly the fossil fuel industry giants and their patrons in Russia and Saudi Arabia— to extract the largest profits in history from the rest of us.

Two weeks ago the World Bank warned us, as The Wall Street Journal headline noted, that fixing inflation by raising interest rates alone would be a disaster: "World Bank Warns of Global Recession Next Year if Central Banks Lift Interest Rates Too High."

This week it's the United Nations, as noted again by The Wall Street Journal in an article published Monday and titled: "U.N. Calls On Fed, Other Central Banks to Halt Interest-Rate Increases."

The UNCTAD report, issued the same day as the Journal article reported on it, is blunt in its assessment. The lead paragraph on their report's home page says it clearly:

"The world is headed towards a global recession and prolonged stagnation unless we quickly change the current policy course of monetary and fiscal tightening in advanced economies."

The reason world bodies are talking about the US Fed and American interest rates is because when the US Fed raises interest rates here, other countries have to do the same or their currencies will begin to sink against the dollar.

Rapid devaluation like that can be very destructive to their economies, so what the Fed does, interest-rate-wise, the world must do.

And the world, increasingly, thanks this is going to be a disaster, particularly when combined with Russia and Saudi Arabia's new actions today designed to destabilize western democracies. But the fed persists.

Instead of heeding the warnings of "liberals" like the World Bank, the United Nations, corporate watchdog groups, and wise elders (and PhD economists) like Reich, however, Republican bankster Jerome Powell and many of his colleagues around the world are exclusively using the sledgehammer of interest rate increases to try to tamp down inflation.

Raising interest rates has already crippled the American housing market; mortgage companies are laying off employees and going bankrupt in ways we haven't seen since the Bush Crash of 2008. Refinance applications are down 45% in just six months, and houses are sitting on the market longer and longer every week.

Amazon just laid off 100,000 employees, as both Netflix and Google have announced hiring freezes. The signs of impending recession are all around us. Technically we're already in one, as GDP has contracted for two straight quarters.

But Powell and the Fed are on course for more interest rate increases. Meanwhile, some of our largest and most profitable corporations are on a price-gouging binge which is exploding inflation.

As Accountable.us notes in a report this week, US gasoline prices are up 13 percent for the year, while oil prices have only increased 1.2 percent. In other words, they are screwing us.

Today's OPEC+ took about 2 percent of the world's crude oil off the market, a radical action that will explode oil prices and send gas prices spiraling up just in time for the November elections.

Meanwhile, corporate profits across the board are higher than any time in American history, as the Federal Reserve documents.

As former Clinton Labor Secretary Robert Reich notes at his excellent Substack newsletter:

"Yet the Fed isn't paying attention. Minutes of the Fed's July 26-27 policy meeting reveal seven mentions of 'wage' or 'wages', 17 of 'labor market', eight of 'job' or 'jobs', and not one of 'profit'."

Inflation isn't particularly mysterious: it's simply what happens when prices go up or there's a decline in the purchasing power of money.  

It can be driven by supply shocks—shortages of essential commodities—as it was in the 1970s by the Arab Oil Embargo. It can be driven by fiscal irresponsibility as we've seen in developing countries. Or it can be driven by an economy that no longer responds to competitive pressures.

Supply shocks arguably began today's inflation, but it's the lack of competition that's sustaining and driving it today.

In an unregulated capitalist system, the first imperative of business is to eliminate competition. This can be done by offering a better product or the same product at a lower price. It can be accomplished through innovation and invention. It can be accomplished by better marketing and promotion.

But the easiest way to eliminate competition is to create monopolies. As I lay out in The Hidden History of Monopolies (forward by Ralph Nader), this is the path that American companies had chosen for them by Ronald Reagan when, in 1983, he directed the DOJ, SEC, and FTC to essentially stop enforcing our nation's antitrust laws.

The immediate result was an explosion of mergers and acquisitions, what people old enough to remember the era knew as the "M&A Mania." Michael Milken, Chainsaw Al Dunlap, Michael Douglas in the movie Wall Street were all singing the same tune: smash together all the medium-sized companies into giant behemoths that would never again have to worry about real or meaningful competition.

By the turn of the century we'd achieved a state of oligopoly, a situation where every industry in American was finally dominated by a handful of companies that worked together like cartels to monopolize markets.

When one airline raises prices a hundred bucks, for example, every other one does the same five minutes later. When one brand of potato chips downsizes their bags by an ounce, all its "competitors" do the same the next day.

As a result, the average American pays—every year—$5,000 more in total for everything from cell service to drugs to internet access than do the citizens of countries that still enforce anti-trust laws like Canada and most of Europe.

And now these corporate giants, throwing millions into this fall's elections on behalf of Republican candidates, are using their monopolistic positions to squeeze more and more profits out of the American consumer.

The UN Conference on Trade and Development has a simple and straightforward solution to the problem of corporate price-gouging driving inflation. They are explicitly calling on:

"Governments to deploy a pragmatic strategy, including price controls, antitrust measures and windfall taxes on excessive corporate profits and to use these funds to support the most vulnerable."

Instead, the Republican at the head of our Fed is planning to further increase interest rates, provoking the first serious recession during the administration of a Democratic president since Jimmy Carter was bushwhacked by the Reagan campaign late in 1980.

They say the Fed and its chair are immune from political pressure. It's BS.

In 1965, President Lyndon B. Johnson famously pulled his Fed Chairman, Bill Martin, into the Oval Office and slammed him up against a wall, warning him to stop raising interest rates. Martin had just announced a rate hike coming up and he followed through, but that was it: he didn't repeat his error for the next three years.

The month after LBJ announced he wasn't going to seek re-election, however, Martin raised interest rates by a full point. The political pressure was off and Martin reacted.

I'm not suggesting that President Biden should slam Jay Powell against a wall, but going hard on the UN's suggestions is an easy alternative, particularly given the coming explosion in gasoline prices.

When, back in March, President Biden tried to reach out to our allies Saudi Arabia and the UAE to ask them to restore the production they'd cut under threat from Trump in 2020, both refused to take his call, according to press reports.

Meteor Blades reported at Daily Kos that The Wall Street Journal laid it out:

"The Saudis have signaled that their relationship with Washington has deteriorated under the Biden administration, and they want more support for their intervention in Yemen's civil war, help with their own civilian nuclear program as Iran's moves ahead, and legal immunity for Prince Mohammed in the U.S., Saudi officials said. The crown prince faces multiple lawsuits in the U.S., including over the killing of journalist Jamal Khashoggi in 2018.

"The Emiratis share Saudi concerns about the restrained U.S. response to recent missile strikes by Iran-backed Houthi militants in Yemen against the U.A.E. and Saudi Arabia, officials said. Both governments are also concerned about the revival of the Iran nuclear deal, which doesn't address other security concerns of theirs and has entered the final stages of negotiations in recent weeks."

The outcome was predictable.  Saudi Arabia and Russia are cutting oil production to keep oil prices and profits high, while President Biden is attacked from every direction in the US for high prices at the pump. 

Republican politicians grandstand on the issue and hammer it daily into the news, blaming the increased price of gasoline on a president who's trying to both get Iranian oil back on the market and increase Saudi production. 

The high price of gas and diesel, meanwhile, keep jacking up US inflation, giving the GOP another lead pipe to hit Democrats over the head with.

The United Kingdom—run by a conservative government—just put into place a windfall profits tax on their fossil fuel industry: Biden, Pelosi, and Schumer should do the same and push it through Congress via reconciliation right after the election.

Similarly, President Biden could instruct his DOJ, FTC, and SEC to begin comprehensive analysis of those sectors of the American economy where monopoly and oligopoly are making it easy to price-gouge American consumers.

Big oil, banks, airlines, internet service providers, Big Pharma, cell companies, media operations, and pharmaceuticals are all good places to start.

The Administration could also work to reverse the 2015 change in US law that ended the ban on exporting American oil, and change its policy toward Venezuela so their oil can move into our markets.

History shows it is possible to slow and even stop inflation without producing a recession. It also shows that overzealous Fed activity, like Chairman Powell is currently risking, can produce a disaster.

Let's repeat the best of history rather than the worst.

This content originally appeared on Common Dreams - Breaking News & Views for the Progressive Community and was authored by Thom Hartmann.

Late last week, the states agreed to forfeit their water from Lake Powell in order to ensure that the reservoir can still produce power. The deal puts a finger in the metaphorical dike, postponing an inevitable reckoning with the years-long drought that has parched the Colorado River — and a wrenching tradeoff between power access and water access for millions. It does so, in part, through an unusual act of hydrological accounting.

The deal has two parts. The first and more straightforward part is that the federal government will move 500,000 acre-feet of water (about 162 billion gallons) from the Flaming Gorge Reservoir into Lake Powell, bumping up water levels in the latter body. Flaming Gorge, which stretches across Wyoming and Utah, is mostly used for water recreation, so the immediate effects of the transfer will be minimal. The feds could do more of these water transfers later in the year if things get worse, drawing on water from other nearby reservoirs.

The second part is more complicated — and less helpful. In ordinary circumstances, the Bureau of Reclamation releases water from Lake Powell into an even larger reservoir called Lake Mead, from which it then flows to households and farms across the Southwest. As part of the deal, the states that rely on Mead water are agreeing to leave about 480,000 acre-feet of that water in Lake Powell, thus lowering the water levels in Mead. (Reclamation already announced earlier this year that it would delay the release of 350,000 acre-feet of water in Powell in anticipation of spring snow runoff.)

The problem is that Lake Mead’s falling water level has huge implications for water access in the Southwest. Pursuant to a drought contingency plan worked out back in 2019, declines in Mead trigger mandatory water reductions for states like Nevada and Arizona. The first of these reductions arrived last year, when the river entered a so-called “Tier 1” shortage, resulting in a 30 percent cut to Arizona’s water allocation. This has forced farmers in the Phoenix area to fallow their cotton and alfalfa fields. Officials expect the river to enter a Tier 2a or 2b shortage in the coming years, which would mean even larger cuts. Keeping water in Lake Powell makes it more likely the reservoir will reach that threshold.

The deal contains an eyebrow-raising workaround for this. In exchange for leaving the water in Lake Powell rather than having it flow to Lake Mead, the states get something in return: Officials at the Bureau of Reclamation will act as if that the water did go to Mead, thus treating Mead’s water level as though it’s higher than it really is. The hope here is to avoid triggering the cuts that would accompany a Tier 2b shortage declaration, even though the actual water level in the reservoir will likely fall low enough to warrant such cuts.

In other words, the states have agreed to ensure Lake Powell has more water than it should, and in return they get to pretend as though Lake Mead has more water than it does. The deal protects the towns and tribal communities that rely on Powell for water, but only for a short time: The ongoing drought has shown no signs of letting up, and it’s only a matter of time before water levels in Powell fall back into the danger zone, jeopardizing hydropower access and drinking water quality.

The Bureau of Reclamation did not respond to Grist’s requests for comment. An announcement confirming the agreement is expected later this week.

For the millions of people who rely on Lake Mead, meanwhile, the deal just postpones a shortage declaration that was bound to arrive in a few years anyway. It may give states like Arizona more time to figure out how to cope with declining water allotments, but it won’t stop cotton fields from going fallow or absolve suburbs like Scottsdale of the need to drastically reduce their water usage. 

For as long as there’s a drought on the Colorado, federal officials will have to choose between hydroelectric power in communities that depend on Lake Powell and water access in those that rely on Lake Mead. The sudden advent of this new short-term deal shows not only that these decisions are not going away, but that they will arrive faster than any of the parties on the river ever thought they would.

This story was originally published by Grist with the headline As Lake Powell dries up, the US turns to creative accounting for a short-term fix on Apr 26, 2022.

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

And, nothing changes in this story by people opting not to believe in global warming. Their beliefs are not going to help the billions of people who will suffer the consequences in the decades ahead, just like it doesn’t help a shooting victim if the guy pulling the trigger doesn’t believe that bullets hurt people.

A great example of nonsense antienvironmental beliefs affecting action is the effort to construct the Lake Powell Pipeline (LPP). This is a pipeline that would transport 83,800 acre-feet of water a year from Lake Powell to Washington County, Utah. Washington County has a rapidly growing population, and the argument is that it will need water from Lake Powell to serve its needs.

Apart from the question of whether the pipeline is really needed, there is also the problem that Lake Powell doesn’t have the water. Even without the pipeline draining more than 80,000 acre-feet of water a year, the lake is already approaching the critical level at which point the Glen Canyon dam will no longer be able to supply power to 5 million people in the Southwest.

While the lake’s level is already below the danger point, where it no longer has the targeted margin, it would have been even closer if we had LPP operating for the last fifteen years. We would already be below the critical level of 3490 feet if the LPP had been operating for the last 30 years.

Source: Bureau of Reclamation and author’s calculations.

Incredibly, our antienvironmentalists are still pushing for the pipeline spending, millions of dollars on planning and studies. It’s hard to imagine a worse use of money, except for actually building the pipeline.

The reality is that because of global warming, we are seeing much less rain and snowfall in the area than in prior decades. There is no reason to think this picture will get better in the years ahead. That means we will have problems maintaining energy production from the dam even without the LPP. If we were to build the LPP, we would very quickly need another energy source for 5 million people in the area.

But, the antienvironmentalists are like little kids. They have to be humored with the idea that we could build the LPP, even though it makes no sense. So, we will spend millions more doing pointless analyses of the LPP’s costs and benefits, even when its obvious that costs swamp the benefits, since the water simply is not there.

It is expensive to have a large segment of the population living in Never-Never Land.

This first appeared on Dean Baker’s Beat the Press blog. 

This content originally appeared on CounterPunch.org and was authored by Dean Baker.

The precipitous drop is the result of the decades-long drought in the American West that has ravaged the Colorado River for years, forcing unprecedented water cuts in states like Arizona. This newest milestone on Lake Powell, though, is significant for another reason. The reservoir also sustains a hydroelectric power plant, Glen Canyon Dam, that provides energy to millions of people. That power source, critical for rural and tribal communities across the region, is now in jeopardy. 

The federal government expects Lake Powell’s levels to rise again this spring as mountain snow melts across the West, but there’s still a significant chance that the reservoir will reach the so-called “dead pool” stage some time in the next few years, at which point it will stop producing hydroelectric power altogether. The dry spell has been causing slowdowns or shutdowns at power plants in California and Nevada, creating yet another challenge for officials trying to adapt to a seemingly endless water shortage. 

If reservoirs like Lake Powell keep falling, millions of people across the West will have to turn to dirtier and more expensive energy at a time when transitioning to renewable power is of paramount importance for reducing carbon emissions.

The Colorado provides water for more than 40 million people. While the river has gone through several wet and dry spells over the past century, it’s never faced a challenge like the present “megadrought,” which scientists say has no precedent in the last millennium. As precipitation levels have remained low year after year, inflow from the river’s tributaries has slowed to a trickle, and its reservoirs have started to run dry.

When Lake Powell is full, its surface sits some 3,700 feet above sea level, but the reservoir hasn’t reached that threshold in some time. Water levels have fallen over the past several years of rainless winters, reaching a new low of 3,525 feet last week. The lake is now only a quarter full, and water levels are just 35 feet above the dead pool threshold for power generation. Officials say there is a significant risk of a dead pool in the next few winters.

When federal officials built a dam at the southern end of Glen Canyon, forming Lake Powell, they assumed there would always be enough water moving through the Colorado River system to turn the turbines, and thereby generate a supposedly endless supply of cheap renewable energy. The customers who bought this clean power were rural towns, electrical cooperatives, and tribes, many of whom didn’t have many alternate power sources.

In recent years, as Lake Powell has begun to dry up, the turbines have become less efficient. The federal Bureau of Reclamation has already shaved down power deliveries from the dam.

“We are already seeing reduced generation from Glen Canyon Dam,” said Lisa Meiman, a spokesperson for the Western Area Power Administration, a government authority that markets hydroelectric power from around the region. “[Generation] has been dropping pretty consistently as the lake elevations have declined, so we’re about a third less efficient in terms of power production now than we are at an average elevation.” 

When that happens, Meiman said, “we have to go out and purchase replacement power in the spot market, which is typically more expensive.” It also comes from dirtier sources like coal and gas, she said. For most customers who buy power from the dam, losing it won’t be all that big of a deal. For them, hydroelectric power accounts for only a fraction of their overall power needs, and any price increases get spread out over thousands of users, keeping costs down.

For some customers, though, the shutdown of the dam will be far more painful. Utility bills have already started to rise as the dam becomes less efficient, and a total shutdown would lead to significant cost increases for the small and remote entities that rely on it. 

Hardest hit will be the 50-odd tribal nations dependent on hydroelectric power not only for residential energy needs but also to power revenue-generating commercial ventures like casinos. Thanks to generations of underinvestment by the federal government, many tribes that buy electricity from Lake Powell don’t have their own power generation capacity to replace it, and building new power sources isn’t cheap. According to a report produced by a consulting firm looking at the impact of a Glen Canyon Dam shutdown, tribal nations would experience the “the most troubling” consequences of the power loss.

The dam’s largest tribal customer is the Navajo Tribal Utility Authority, or NTUA, which provides electricity to some 30,000 residential customers on the Navajo reservation. 

“It’s a very sensitive issue for all of us right now,” Walter Haase, the tribal utility’s general manager, told the Associated Press last week on the heels of the water level announcement from the Bureau of Reclamation. 

The NTUA is spending millions of dollars to build out renewable energy capacity that could help soften the blow of a dam shutdown. Other tribes that can’t afford to build such new power sources, though, will have to pay higher rates for replacement electricity out of pocket, which could strain revenues. The consultants’ report pointed to the Hopi Tribe, which does not have a casino to bolster its finances, as being especially vulnerable to these cost hikes.

Small municipalities that depend on the dam are also feeling the pain.

“Hydro is very low-cost, renewable energy, [so] our energy costs will go way up,” said Bryan Hill, the general manager of Page Utility Enterprises. The company services the town of Page, Arizona, which sits on the edge of Lake Powell. Hill said he’s already been feeling the pain as deliveries have slowed down. 

“They’ve got a tourniquet on in the form of slowing down the generation and trying to reduce the bleeding,” he said, “but we’re already losing money. Unless things change, there will be a significant rate adjustment.” The exact scale of that adjustment isn’t clear, but residents of Page who have come to rely on cheap power will see a noticeable rise in their annual bills. Because spot-market energy is also getting more expensive as the nation’s power system transitions from coal and gas toward renewables, the rate increase will be compounded.

Glen Canyon Dam isn’t the only hydroelectric source that’s struggled amid the drought: Power generation at the larger Hoover Dam in nearby Lake Mead has fallen by around a quarter, and officials in California shut down a hydroelectric plant at Lake Oroville last year as water levels in the lake fell below the generation threshold. The two dams together serve about 2 million customers. These power losses further drive up prices and strain the grid at a time when energy is already getting more expensive as older coal plants come offline.

To make matters worse, though, the power shortage in Lake Powell is intertwined with the larger water shortage on the Colorado. If the water level in Lake Powell continues to fall, federal officials will have to balance between the needs of water users and the needs of power users. If they hold enough water back in Lake Powell to keep the turbines running, they’ll be withholding water from farmers and homeowners who rely on it farther downstream. If they push as much water as they can toward the end users, they’ll spike the power bills of the small entities who rely on the dam.

The agency has yet to decide on its priorities should the historic lows continue, but time is running out. The latest models suggest there’s a 1 in 4 chance the dam won’t produce power by 2024. 

“Glen Canyon Dam and Lake Powell serve many purposes, many divergent purposes,” said Meiman. “For a ton of stakeholders who are all going to be affected by declining lake elevations, there is not going to be a simple solution or an easy solution.” 

This story was originally published by Grist with the headline Lake Powell water crisis is about to be an energy crisis on Mar 21, 2022.

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