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Since the 1%’s Government and their Media Monopoly has created an illusion of prosperity. And that the misleaderships of the Trade Union Bureaucracy, along with of the mass organizations of Blacks and other oppressed minorities and, and women have supported this illusion; In the first part of this essay, I will present a series images and quotes, to give you an idea about the real state of the United States Economy. n the Second part of this essay I will explain why the capitalists have been able to impose their worldwide austerity program.
AusterityReal State of the United States Economy
There are literally two Americas. One America is beautiful … overflowing with the milk of prosperity and the honey of opportunity. This America is the habitat of millions of people who have food and material necessities for their bodies and culture and education for their minds and freedom and human dignity for their spirits. In this America, millions of people experience every day the opportunity of having life, liberty and the pursuit of happiness in all of their dimensions. And in this America millions of young people grow up in the sunlight of opportunity. But tragically and unfortunately, there is another America. This other America has a daily ugliness about it that constantly transforms the ebullience of hope into the fatigue of despair. In this America millions of work-starved men walk the streets daily in search for jobs that do not exist. In this America millions of people find themselves living in rat-infested, vermin-filled slums. In this America people are poor by the millions. They find themselves perishing on a lonely island of poverty in the midst of a vast ocean of material prosperity. — Martin Luther King, The Other America 4/14/1967
There are still two Americas of the those that have and those have not. Since Martin Luther King speech, there has been ‘merger mania’ resulting in an ever increasing concentration of the wealth, in today’s world, this has division has reached such a point that now, according to Oxfam, the World’s 26 richest people own as much as poorest 50%!
During This Economic Crisis, Capitalism’s Three Point Political Program has been Austerity, Scapegoat Blacks, Minorities, and ‘Illegal’ Immigrants for Unemployment, and, if an opposition to austerity develops, The Iron Heel.
Democracy in the United States?: As the Capitalist Robber Barons Steal from the 99%: Only the 1% Voted For Austerity — The 99% Should Decide On Austerity — Not Just The 1% Who Profit From Austerity! Under Austerity, All of the World Will Eventually Be Pauperized, Humbled, and Desecrated Like Greece and Puerto Rico. Socialism Means True Democracy — The 99% Will Rule! — Not the Few!
In the United States, under President Obama, The Capitalist Parties (Republicans and Democrats) openly declared a policy of austerity in response to the capitalist crash in 2008-2009, as a solution to the crisis of capitalism.
One part of the illusion of prosperity is the ‘booming’ stock market. But, a lot of that is done by buy backs.
Five years after the official end of the Great Recession, corporate profits are high, and the stock market is booming. Yet most Americans are not sharing in the recovery. While the top 0.1% of income recipients—which include most of the highest-ranking corporate executives—reap almost all the income gains, good jobs keep disappearing, and new employment opportunities tend to be insecure and underpaid. Corporate profitability is not translating into widespread economic prosperity. The allocation of corporate profits to stock buybacks deserves much of the blame. Consider the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. During that period those companies used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37% of their earnings. That left very little for investments in productive capabilities or higher incomes for employees.”
The result of today’s alliance of the Finance, Insurance and Real Estate (FIRE) sector with natural resource and infrastructure monopolies has been to reverse the 20th century’s reforms promoting progressive taxation of wealth and income. Industrial capitalism in the West has been detoured along the road to rent-extracting privatization, austerity and debt serfdom. The result is a double-crisis: austerity stemming from debt deflation, while public health, communications, information technology, transportation and other basic infrastructure are privatized by corporate monopolies that raise prices charged to labor and industry. The debt crisis spans government debt (state and local as well as national), corporate debt, real estate mortgage debt and personal debt, causing austerity that shrinks the “real” economy as its assets and income are stripped away to service the exponentially growing debt overhead. The economy polarizes as income and wealth ownership are shifted to the neo-rentier alliance headed by the financial sector.
As a result, the growing debt has grown to be larger than the Gross National Product!
For government economic statistics, I use John Williams, web site, Shadow Government Statistics; because it is more accurate than the US government statistics, which vary from decade to decade.John Williams explains how Shadow Government Statistics evolved:
One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless. That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily), considerable coverage in the broadcast media and a joint meeting with representatives of all the government’s statistical agencies. Nonetheless, the quality of government reporting has deteriorated sharply in the last couple of decades. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience. Over the decades, well in excess of 1,000 presentations have been given on the economic outlook, or on approaches to analyzing economic data, to clients—large and small—including talks with members of the business, banking, government, press, academic, brokerage and investment communities. I also have provided testimony before Congress (details here). An old friend—the late-Doug Gillespie—asked me some years back to write a series of articles on the quality of government statistics. The response to those writings (the Primer Series available at the top-center of this page) was so strong that we started ShadowStats.com (Shadow Government Statistics) in 2004. The newsletter is published as part of my economic consulting services.
Real World, Negative Economic News Intensified, Despite Heavily-Gimmicked GDP and Labor Numbers: Mounting Political and Policy Issues for the Administration and the FOMC. With headlines such as the unemployment rate at a sixteen-year low and GDP growth purportedly on the rise, it is understandable that the current Administration takes credit for the good news. The problems with that, however, are twofold. First, most of the better-quality, underlying economic series show that headline economic activity never recovered fully from the collapse into 2009, having yet to reach the status of “Economic Expansion” (see Commentary No. 876), and they are turning down anew. Headline labor and GDP eventually will come into line with underlying reality. Second, the U.S. economy does not change direction quickly, usually with a time-lag of nine-to-twelve months, often more. Accordingly, whatever is happening in the current economy largely still reflects circumstances in place during the prior Administration. That will change within the next four-to-six months, in time for the current Administration to receive credit for a new recession that already is in play. Similar circumstances were seen where the 2001 recession came out of the Clinton Administration and was credited to the Bush Administration, where the 2007 recession and economic collapse unfolded during the Bush Administration and was taken on by the Obama Administration and now, in its residual, re-intensifying form, has been passed on to the Trump Administration. The President always needs to exude optimism, but rather than taking credit for turning the economy around, prudent caution on what lies ahead and intensified pressure on Congress to generate new economic stimulus might make some sense. . . .
Budget Deficit and Federal Debt Ceiling Crises Threaten Financial and Economic Stability Underlying Economic Numbers Still Show an Unfolding and Deepening Recession GDP Should Begin to Catch Up With Tomorrow’s July 26th Reporting and Revisions Second-Quarter 2019 GDP Expectations of 1.3% to 2.6% Should Be Disappointed Real Quarterly GDP Contraction Remains Likely, At Least by the Second Revision First-Quarter 2019 GDP Growth of 3.1% Should Revise Lower Economy Cannot Resume Stable, Positive Growth Without an Active, Healthy Consumer Major Fed Easing Looms; Renewed Quantitative Easing Could Be in Place by September FOMC Easing Now Could Mark Onset of Perpetual Quantitative Easing
U.S. Fiscal Conditions, U.S. Economic Activity and Federal Reserve Policy All Are in Turmoil, with Domestic Financial Markets and the U.S. Dollar Eventually Taking Related Major Hits. Likely weaker-than-expected second-quarter GDP should have negative implications for domestic financial- market and fiscal stability.
U.S. Debt Versus the GDP. The Trump Administration and Congress reportedly have reached a deal on U.S. fiscal policy to go beyond the 2020 election, with expanded deficit spending and an increased debt ceiling. While there may be some needed economic stimulus in that package, the effects will intensify the long-range solvency issues for the U.S. Government, with resulting mounting stress on the domestic financial markets and particularly on the exchange-rate value of the U.S. Dollar and the U.S. Dollar versus precious metals. The Federal Debt section expands upon these issues, including a rather startling graph of the GDP minus Federal Deb.
The Following Graph of GNP ‘Growth’ Demonstrates That the Economy of the United States is not ‘Booming’.
The Economic Conditions of the Working Class During The ‘Recovery’
Through their support to the Democratic Party, and their self-described program of a partnership with capitalism, the treachery and mis-leaderships of the Trade Union Bureaucracy. along with of the mass organizations of Blacks and other oppressed minorities and, and women have supported this solution to the capitalist crisis. And thus, Austerity, for the most part, has been unopposed. And the Labor Bureaucracy and has be silent about the actual living conditions and pauperization’s and the overall lowering of the stand of living of the working class. (What has been lost, the 1% have taken!)
Poverty is High and Rising in the United States
We are living in precarious times, and if you haven’t prepared for an economic collapse yet, it is time to start taking action. Despite what some “experts” would like you to believe, the US is on shaky financial ground. Several indicators suggest things are far worse than many think. Let’s take a look at them now. More than half of families in the US live in “asset poverty.” A recent study found that more than 63 percent of American children and 55 percent of Americans live in “asset poverty”. This means they have few or no assets to rely on in the event of a financial emergency such as a job loss, a medical crisis, recessions, or natural disasters.
Unemployment Levels Have Been Over 20% in the United States Since the 2009 Crash!
According to Shadow Government Statistics Real Unemployment has been at 1930s depression levels since the 2009 crisis. But the working class leaderships have been silent. (See the Chart Below)
Shadow Government Statistics Alternate Unemployment Charts The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers. The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment. The Shadow Government Statistics Alternate Unemployment Rate for June 2019 is 21.2%
Real Wages Have Been Cut Over 100% Since1974!
Wages gave not kept up with inflation
Since the Neoliberal Labor Bureaucracy declared itself to be in a (Domestic) Partnership With the Boss’ (‘Bedding the Boss!’)! Starting in the mid-1980s, this ‘partnership’ gave birth to the one, two, three, ect. .. wage tier system! Selling out the futures of future young workers entering the labor force. And, since the lowest union wage is the immediately the highest non-union wage, this wage tier system cut the wages of the entire working class!
When I was a union official, I called this system labors’ rush to the bottom! The Graph Below is a Graphic Example of the Decline in Standard of Living of the Working Class, Since the Trade Union Bureaucracy Declared Itself to Be ‘In a (Domestic) Partnership With the Boss’(Class Cooperation)! Through the 1980s and 199os they even included this ‘partnership’ into their work agreements and the partnership was fully established! Starting in the mid-1980s, This ‘partnership’ gave birth to the one, two, three, three, ect. wage tier system! Selling out the futures of future young workers entering the labor force. And, since the lowest union wage is the immediately the highest non-union wage, this wage tier system cut the wages of the entire working class! When I was a union official, I called this system labors rush to the bottom! As in graphically shown in this: Shadow Government Statistics Graph.
At the same time, Real Wages have Fallen Since the Wage Price Freeze of 1972 (Shadow Government Statistics): Graph 3 plots the seasonally-adjusted earnings as officially deflated by the BLS (red-line), and as adjusted for the ShadowStats-Alternate CPI Measure, 1990-Base (blue-line). When inflation-depressing methodologies of the 1990s began to kick-in, the artificially-weakened CPI-W (also used in calculating Social Security cost-of-living adjustments) helped to prop up the reported real earnings. Official real earnings today still have not recovered their inflation-adjusted levels of the early-1970s, and, at best, have been in a minimal uptrend for the last two decades (albeit spiked recently by negative headline inflation). Deflated by the ShadowStats (1990-Based) measure, real earnings have been in fairly-regular decline for the last four decades, which is much closer to common experience than the pattern suggested by the CPI-W. See the Public Commentary on Inflation Measurement for further detail. This process has led to a greater productivity and windfall profits for the capitalist, without more value being added to society.
Actually, the figures are even worse, if you count those who ‘don’t count’ or who were never counted, those who cannot find work and those who have been, at one time , in the prison system, (See the Following Quote.)
In the last two-and-a-half decades, the prison population has undergone what the United States Bureau of Justice Statistics director Jan Chaiken last year called “literally incredible” expansion. Chaiken reported a quadrupling of the U.S. incarceration rate since 1975. That rate, more than 600 prisoners for every 100,000 people, is by far the highest in the industrialized world. The U.S. incarcerates its citizens at a rate six times higher than Canada, England, and France, seven times higher than Switzerland and Holland, and ten times Sweden and Finland. Beyond sheer magnitude, a second aspect of America’s incarceration boom is its heavily racialized nature. On any given day, Chaiken reported, 30 percent of African-American males ages 20 to 29 are “”under correctional supervision'” — either in jail or prison or on probation or parole. Especially chilling is a statistical model used by the Bureau of Justice Statistics to determine the lifetime chances of incarceration for individuals in different racial and ethnic groups. Based on current rates, it predicts that a young Black man age 16 in 1996 faces a 29 percent chance of spending time in prison during his life. The corresponding statistic for white men in the same age group is 4 percent. According to Thomas K. Lowenstein, director of the Electronic Policy Network, 7 percent of Black children- nearly 9 times more than white children- have an incarcerated parent. — Race, Prison, and Poverty
The Following graph of the negative growth of the gross national product is not an image of a booming economy or of a recovery of the economy, since the 2009 crash!!
Usury And Fraud
Since the 1970s usury and fraud
Credit Cards Companies have legally violated usury laws since 1978, allowing banks to make highly profitable loan shark loans.
Have you wondered why credit card companies can ignore your state’s usury law, which limits the amount of interest that can be charged on a loan, and charge whatever rate they want? The answer lies in a 1978 Supreme Court ruling, Marquette National Bank of Minneapolis vs. First of Omaha Service Corp. The case not only changed the law, but also became a light-bulb moment for the industry, setting it on a 30-year path that deeply affected state economies and Americans’ debt levels. “There have been a few seminal events in the industry; this was one of them,” says Scott Crawford, a former analyst in the Congressional Budget Office and for credit card issuer HSBC. He is now CEO of DebtGoal.com. “There was a premium for being in states with lax usury laws. It gave you a strong advantage over operators in other states.”
Currently. the Banks, through the Federal Reserve are now making a profit Risk Free. As they pay less than 1% on savings accounts, they receive higher interest from what they deposit in the Federal reserve.
. . . That’s true for most of us, but banks themselves are earning 2.4% on their deposits at the Federal Reserve. These deposits, called “excess reserves,” include the reserves the banks got from our deposits, on which they are paying almost nothing; and unlike with our deposits, there is no $250,000 cap on the sums banks can stash at the Fed amassing interest. A whopping $1.5 trillion in reserves are now sitting in Fed reserve accounts. The Fed rebates its profits to the government after deducting its costs, and interest paid to banks is one of those costs. That means we the taxpayers (The 1%-RS) are paying $36 billion annually to private banks for the privilege of parking their excess reserves at one of the most secure banks in the world – parking their reserves rather than lending them out. The banks are getting these outsized returns while taking absolutely no risk, since the Fed as “lender of last resort” cannot go bankrupt.:
And they profit from profiteering of Students through usury. High interests rates are now legal for students and credit card debt for the working class.
Why the Capitalists Have Been Able to Impose Their Worldwide Austerity Program.
The United States ruling class, the 1%, have followed the advice of James Madison in their implementation of austerity. . Madison once stated:
. . . I believe there are more instances of the abridgment of freedom of the people by gradual and silent encroachments, by those in power, than by violent and sudden usurpations. On a candid examination of history, we shall find that turbulence, violence, and abuse of power by the majority trampling on the rights of the minority, have produced factions and commotions, which in republics, have more frequently than any other cause produced despotism. If we go over the whole history of the ancient and modern republics, we shall find their destruction to have generally resulted from those causes. . .
In today’s world, austerity means the reduction of society’s social wages that was won in the 1930s and 1940s due of the CIO, Social Security, Unemployment benefits, welfare, public education, ect., and the gains won by the Civil Rights Movement in 1960s.
Since the United States is one of the few countries in the world where the leadership of the unions openly belongs to and has allegiance to a political party of the ruling class —The United States has had no opposition to austerity!
The implementation of austerity in the United States, began with President Kennedy in 1960. His tax reform lower taxes for the 1% and increased taxes for the 99%! In 1975, when I ran for Mayor of San Francisco, I termed this fact as robin hood in reverse taxation. (Robing from the poor to give to the rich!)
From the Taft-Hartley law 1n 1948, the Kennedy Landrum Griffin Act and financial law changes, such a Clinton’s Glass–Steagall Act reform, and Supreme Court decisions have been done to strengthen the wealth and power of the capitalist class— the 1%! And to weaken the power of the working-class, oppressed Minorities, and the women’s rights that were won in the 60s-80s.
Clinton, who was termed the ‘First Black President’drafted a memorandum for the elimination of any program that creates (1) a quota; (2) preferences for unqualified individuals; (3) creates reverse discrimination (The slogan of the racists); or continues affirmative action even after its equal opportunity purposes have been achieved.” (A myth) Actually, according to an article from the Boston Globe, at the elite colleges, there is affirmative action for rich dim white kids.
In the preface to his book, The Media Monopoly, Ben H. Bagdikian(Pulitzer Prize-winning journalist, former editor of the Washington Post, and dean emeritus of the Graduate School of Journalism at the University of California at Berkeley) wrote:!
As the United States Enters the twenty-first century, power over the American mass media is flowing to the top with such devouring speed that it exceeds even the accelerated consolidations of the last twenty years. For the first time in U.S. history, the country’s most widespread news, commentary, and daily entertainment are controlled by six firms that are among the world’s largest corporations, two of them foreign. Even with the dramatic entry of the Internet and the cyber world with their uncounted hundreds of new firms, the controlling handful of American and foreign corporations now exceed in their size and communications power anything the world has seen before. Their intricate global interlocks create the force of an international cartel. There are pernicious consequences. While excessive bigness itself is cause for economic anxieties, the worst problems are political and social. The country’s largest media giants have achieved alarming success in writing the media laws and regulations in favor of their own corporations and against the interests of the general public. Their concentrated power permits them to become a larger factor than ever before in socializing each generation with entertainment models of behavior and personal values. The impact on the national political agenda has been devastating, For years, the mainstream news has over dramatized its reporting of congressional and White House debate on the national debt and deficit beyond their intrinsic importance. Politicians raised the issue, but it was seized upon and overblown by the major media–media that politicians use as a bellwether on what issues will get them the most public attention and partisan advantage. During these crucial years, the American economy was undergoing an astonishing phenomenon that the mainstream news left largely unreported or actually glamorized in its infrequent references: the largest transfer of the national wealth in American history from a majority of the population to a small percentage of the country’s wealthiest families.
Bagdikian was writing about the 1990s, the process of the largest transfer of the national wealth in American history from a majority of the population to a small percentage of the country’s wealthiest families. this transfer (robbery) has continued up to today.
Worldwide Most of the Capitalist Countries have adopted and carried out austerity, most of the time with the compliance of the labor bureaucracy and/or Socialist, Communist, and Workers Political parties bureaucracies.
An example is Greece where masses of workers and their alias have demonstrated and conducted strikes against austerity, that was imposed by the International Monetary Fund (IMF). A new political formation was formed named Syriza, a social democrat popular fromt. In the general election, Syriza got elected on a program against austerity. The Syriza petty-bourgeoise got elected and Alexis Tsipras got elected Prime Minister. Very quickly after being elected, Alexis Tsipras betrayed the people of Greece and signed an agreement with the IMF to imposed the austerity, in Greece, that was demand by the IMF.
There is, however, one bright light in the world picture. Jeremy Corbyn an anti-war leader and labour MP, who, in 2017, got elected as the leader of the British Labour Party, running against the Blair Leadership, who had complied with the austerity program imposed upon the working class by the 1% in the United Kingdom.Corbyn ran on a program against austerity. He spoke at mass rallies of workers he agitated against austerity. And masses of workers joined the Labour Party to elect Corbyn.
As the Financial Times, gritting its teeth, commented: “Jeremy Corbyn has returned as leader of Labour, tightening the grip of the hard left over one of Britain’s oldest political parties.” The ruling class is alarmed at this advance of the left and will do whatever they can to stop it. The right wing is a Fifth Column of big business within Labour. They are careerists like their counterparts in the capitalist parties. They will jump ship when the time comes. Britain is heading into unchartered waters. The Tories, although repackaged, are heading for a bust up over the Brexit negotiations. The splits in the Tory Cabinet can already be seen. This is simply a foretaste. With a new economic crisis, the scene will be set for a general election showdown. At that point, the capitalist Establishment may call on the right wing in the Labour Party to split to prevent Corbyn coming to power.
After the election. the labour party put forth a Manifesto against austerity, under the slogan; For the Many Not the Few! For the 99% to decide their own fate
To end austerity, intimately, we must work to build one, two, three, and many working class political parties. And develop a nw world working class order, under the slogan, For the Many Not the Few with this goal we can begin to build a more effective worldwide movement. Against the Capitalist Robber Barons who steal and have stolen the world’s from the 99%! Fight Against Austerity!