The political economy of Covid-19

Governments around the world are attempting to prop up a failing capitalist system by — surprise! — throwing money at wealthy individuals and corporations, especially in the financial industry. In other words, in this time of unprecedented crisis and economic difficulty, it’s business as usual.

We were here not much more than a decade ago, although the rise in unemployment has been more dramatic than during the economic collapse of 2008. That global economic crisis was a long time coming but was inevitable for anyone willing to pay attention. During the 1990s stock-market bubble, traders repeatedly said the dramatic price rises could not last, but as long as the consensus view was that the long bull market would continue they were not going to step off the ride. When the bubble did burst, new forms of speculation kept the financial industry’s party going for several more years. Credit was the lubricant for the later round, both inflating a real estate bubble and enabling consumer spending to continue in the face of declining wages, until the speculation became unsustainable.

No more bubbles to inflate, governments representing the world’s four largest economies alone committed US$16.3 trillion in 2008 and 2009 on bailouts of the financiers who brought down the global economy and, to a far smaller extent, for economic stimulus. Those commitments included $11 trillion for the U.S. (where money thrown at capitalists far exceeded the $700 billion in the Troubled Assets Relief Program), $4 trillion for the European Union, $750 billion for Japan and $600 billion for China. Smaller economies did that too. The Reserve Bank of Australia shoveled A$1.8 billion (US$1.5 billion at the then exchange rate) at financiers to shore up its banking system. The Reserve Bank of India did the same, handing out 60 billion rupees (US$1.3 billion).

Cherry blossoms in Washington (photo by Sarah H. from USA)

All that was simply to deal with the immediate crisis of 2008. As stagnation continued, many of the world’s most prominent central banks decided to throw new gigantic sums of money at the financial industry. Specifically, through programs known by the technical name of “quantitative easing.” What that is are central banks buying in massive amounts bonds issued by their own governments, corporate bonds and/or mortgage-backed securities. For all the talk of the world’s governments taking “unprecedented” measures to deal with the dramatic economic crash triggered by the Covid-19 pandemic, most of the money being committed is in the form of new quantitative easing.

An economic song and dance

The supposed purpose of quantitative-easing programs is to stimulate the economy by encouraging investment. Under this theory, a reduction in long-term interest rates would encourage working people to buy or refinance homes; encourage businesses to invest because they could borrow cheaply; and push down the value of the currency, thereby boosting exports by making locally made products more competitive.

In actuality, quantitative-easing programs cause the interest rates on bonds to fall because of the resulting distortion in demand for them, enabling bond sellers to offer lower interest rates. Seeking assets with a better potential payoff, speculators buy stock instead, driving up stock prices and inflating a stock-market bubble. Money not used in speculation ends up parked in bank coffers, boosting bank profits, or is borrowed by businesses to buy back more of their stock, another method of driving up stock prices without making any investments.

By any standard, we are indeed talking about massive amounts of money. Just on “quantitative easing” alone, the Federal Reserve, European Central Bank, Bank of England and Bank of Japan spent approximately US$9.36 trillion, or, if you prefer, €8.3 trillion, in the years following the 2008 collapse. Here’s a breakdown:

  • The Federal Reserve spent $4.1 trillion in three QE programs that ended in November 2014.
  • The European Central Bank spent €2.6 trillion on its QE programs, which only concluded at the end of 2018.
  • The Bank of England spent £375 billion on its QE program.
  • The Bank of Japan has spent north of ¥200 trillion; precise figures are not available. Japan’s QE has been so large and long-lasting that the Bank of Japan now owns assets valued at more than the entire country’s economy.

Think of all the social needs that could have been fixed for such sums. For example, the British think tank Policy Exchange estimated in 2015 that Britain’s needs for investment in transportation, communication and water infrastructure to be a minimum of £170 billion. That is less than half of what the Bank of England spent on its quantitative-easing scheme. The U.S. could have wiped out all student debt, fixed all the schools, rebuilt aging water and sewer systems, cleaned up contaminated industrial sites and repaired dams — all for $700 billion less than what was spent on quantitative easing.

Given this recent history — by no means an aberration in the history of these capitalist governments — it is no surprise that relief for the economic crash caused by Covid-19 has been largely directed at corporate boardrooms and the bank accounts of the wealthy.

Stimulus packages to deal with pandemic, but who gets stimulated?

The Federal Reserve, like most central banks, is “independent” of the rest of government. The reason given is to avoid “political interference,” but in reality so the elites of financial institutions can continue to do whatever they want without consequence. But as is customary, the Federal Reserve doesn’t act in a vacuum; Congress and the White House are also doing what they can to shovel gigantic sums of money at financiers and industrialists.

So far, Congress has passed two stimulus packages that were signed into law, one in late March and the second in April. A third has been passed by the House of Representatives, but the Senate has shown no inclination to take it up and there is reason to doubt House Democrats are actually serious about this last effort.

The first stimulus is the CARES (Coronavirus Aid, Relief, and Economic Security) Act, worth $2 trillion, which was signed into law on March 27. This is the act that resulted in United Statesians receiving one-time $1,200 checks from the federal government. Considering that the average monthly rent in most cities of the United States is more than that, those checks are tokens that serve to obscure where most of the money went. It wasn’t to households left without work.

The Federal Reserve (photo by Stefan Fussan)

A second stimulus bill was passed and signed into law on April 24 and is worth another $500 billion. Most of the money in this second stimulus bill was earmarked for the Paycheck Protection Program (PPP), a loan program in the CARES Act intended for small businesses that may be forgiven if firms use them to keep workers on payroll; the PPP had run out of money in two weeks. Democrats said they wanted money in this round to go to state governments struggling with suddenly shrinking tax revenue but, as is their custom, immediately capitulated when Republicans said no.

The CARES Act included $250 billion to bolster unemployment insurance, $500 billion in aid for industry and state governments, other monies going directly to specific industries and $350 billion for the PPP. Sounds nice, yes? Appearances and reality, however, diverge.

Before the second, supplemental stimulus package was passed, it had already become apparent that much of the stimulus money was going to Big Business. And that was not all, as yet more tax cuts for large corporations were included in the CARES Act. According to Democracy Now, “A congressional committee reports tax provisions in the coronavirus stimulus passed by Congress last month will overwhelmingly benefit the wealthiest Americans. Four out of five tax filers benefiting from the $70 billion temporary tax loophole are millionaires or billionaires. They’ll receive an average windfall of $1.6 million — dwarfing the $1,200 payments for working Americans.”

Manipulation of Paycheck Protection Program

Meanwhile, much of the PPP money didn’t go to mom-and-pop businesses forced to close due to the Covid-19 pandemic. At least 75 publicly traded companies received funds from the PPP, which is supposed to help small businesses. The Associated Press reports:

“The Paycheck Protection Program was supposed to infuse small businesses, which typically have less access to quick cash and credit, with $349 billion in emergency loans that could help keep workers on the job and bills paid on time. But at least 75 companies that received the aid were publicly traded, the AP found, and some had market values well over $100 million. And 25% of the companies had warned investors months ago — while the economy was humming along — that their ability to remain viable was in question. By combing through thousands of regulatory filings, the AP identified the 75 companies as recipients of a combined $300 million in low-interest, taxpayer-backed loans. Eight companies, or their subsidiaries, received the maximum $10 million possible, including a California software company that settled a Securities and Exchange Commission investigation late last year into accounting errors that overstated its revenue.”

Even the Big Business cheerleaders at the CNBC business news cable channel reported that “Hundreds of millions of dollars of Paycheck Protection Program emergency funding have been claimed by large, publicly traded companies, new research published by Morgan Stanley shows.” This report estimated that at least $243.4 million of the total $349 billion handed out in the PPP as of April 21 — by which time the PPP had already run out of money — went to publicly traded companies.

The above figures might be an underestimate; a later Washington Post report said “hundreds” of publicly traded companies have received a composite of more than $1 billion in PPP funding, although some of that money has been returned under public pressure. Eighty percent of applicants were left with nothing after funding ran out.

Published reports differ in determining the number of inappropriate recipients of PPP money because there is little accountability. One reason for that, beyond the usual wanting to shield favored donors from public scrutiny, might be that several members of Congress have themselves received PPP money. The Trump administration is refusing to provide information; it would not be a surprise to find there is something to hide there as well. Politico reports that “at least four members of Congress have reaped benefits,” and the actual total might be higher. “It’s a bipartisan group of lawmakers who have acknowledged close ties to companies that have received loans from the program — businesses that are either run by their families or employ their spouse as a senior executive,” Politico reports, naming two Democrats (Susie Lee of Nevada and Debbie Mucarsel Powell of Florida) and two Republicans (Roger Williams of Texas and Vicky Hartzler of Missouri).

Tax breaks for the one percent slipped into stimulus

One tax break inserted into the second stimulus bill only applies to companies with revenue of $25 million and another provision lets people in households earning at least $500,000 a year deduct even more of their business losses from stock market profits, The New York Times reports. These deductions will enable the recipients to reduce what they owe in capital gains taxes. Victor Fleischer, a tax law professor at the University of California, Irvine, told the Times, “Many of the tax benefits in the stimulus are ‘just shoveling money to rich people.’ ”

And given the grifters who occupy the White House, it will come as no surprise that there are special benefits for the owners of real estate. One of the goodies stuffed into the stimulus packages will allow people who own their businesses through partnerships or other similar structures to use all of the losses they claim on paper to offset taxes they might otherwise owe from other income, such as stock market profits, eliminating a cap on how much of those losses could be used. These partnerships can be very profitable, but as long as they show a loss on paper the owners can offset taxes. Jesse Drucker of The New York Times, in an interview on National Public Radio’s Fresh Air program, estimates this tax break for the wealthy will cost the government $135 billion — essentially all of which will go to the top one percent.

The Rideau Canal in Ottawa (photo by John Talbot)

This massive tax break is not specifically written for the real estate industry, but that is the industry that is likely to benefit the most as corporate real estate operations are often structured in these ways. Mr. Drucker said:

“In real estate, you can actually have, in the real world, what is quite a profitable business that generates losses on tax returns because real estate developers get to write down the value of their buildings. That turns into a deduction. And the result is that people like Jared Kushner and Donald Trump — to the degree that we have had some insight into their taxes over the last few years, we have seen that they have reported big losses on their tax returns. In many cases, it’s almost certainly the result of some of these favorable provisions that let them write down the value of their buildings. So the point is that any tax law change you make that gives people the ability to make maximum use of their losses is something that could very easily benefit real estate investors because they have so many losses. And in the case of Jared Kushner and Donald Trump, we don’t have to speculate on that. We know that in previous years, they have reported big losses, which would put them in a position to benefit from this.”

Not even the most elementary provisions to put some limits on where the money is going were inserted into these stimulus bills. For example, although there is a clause prohibiting the use of the money for stock buybacks and extra executive pay, it’s followed by another clause allowing Treasury Secretary Steve Mnuchin (the foreclosure king) to waive the prohibition. Nor are there measures to demand that corporate recipients even pay tax. Reuters reports that the PPP has given “millions of dollars in American taxpayer money to a number of firms that have avoided paying U.S. tax.” Twelve companies provided with $104 million in loans use offshore havens to cut their tax bills, seven of which paid no taxes.

Federal Reserve offers trillions of dollars

The Federal Reserve’s contribution to the wealthy goes far beyond the two stimulus bills. By the end of March, the Fed had already committed more than $3 trillion in loans and asset purchases in the wake of a rapidly collapsing economy. This included fresh commitments to a recently announced new quantitative-easing program in which the Fed had pledged to spend $700 billion to buy Treasury and mortgage-backed bonds in addition to multiple loan programs. Although most of this will come from printing money, $450 billion of this came from the $2 trillion CARES Act stimulus passed by Congress.

Following its March 23 announcement, the Fed announced another round of measures on April 9, this time committing $2.3 trillion in new loans and credits for business and local governments. The centerpiece of this round is the “Main Street Lending Program,” which makes it sound like these loans will be earmarked for small businesses, but loans will be offered to corporations with as many as 10,000 workers and revenues of up to $2.5 billion. Not exactly what we have in mind when we think of “Main Street.” The set of measures could inject $6 trillion into the financial system, but that money, if actually spent, seems mostly destined for the pockets of speculators.

With state and local governments dangerously short on revenue due to the economic crisis, and thus putting social programs in jeopardy, what does the White House want to do? The only “solution” demanded by Donald Trump is to cut the payroll tax, the source of money for Social Security. The president claims he wants a “temporary” payroll tax cut, but that has to be seen not only in light of his complete inability to say anything truthful but his and his administration’s stated desire to cut Social Security. Cutting the funding for the retirement program is a good way to undercut it, which has long been the wish of Wall Street. Even if there weren’t nefarious reasons at work, would a temporary payroll tax cut provide a jolt to the economy? Definitely no, says the Center on Budget and Policy Priorities in a May 12 commentary.

“President Trump has said he will not support any additional relief or stimulus measures in response to the human and economic crisis caused by the Covid-19 pandemic unless they include a temporary payroll tax cut,” the Center said. Stimulus packages are only effective “if they quickly deliver resources to people and businesses that most need it and so are most likely to spend rather than save any extra dollars they receive.” But the Trump plan would fail to help either. The Center said:

“Cutting the employee share of payroll taxes gives the most help (in dollar terms) to higher earners, who are less likely to need the help or to spend most or all of the extra money. Compounding the weaknesses of this approach, it does less for those with lower earnings and nothing at all for people who have lost jobs. And cutting employer payroll taxes is an ineffective way to shore up business hiring and investment. Business’ main problem now is lack of customers for their products — both because of social distancing measures and because many customers’ incomes have fallen dramatically as unemployment has risen. Businesses will not hire (or retain) more workers or invest in more equipment than they need to produce the goods and services they can actually sell.”

Already there are signs that the windfall large businesses have received from the Trump administration have been slipped into bank accounts, not into investment. Economist Jack Rasmus has calculated that the loss of income for the tens of millions of United Statesians plunged into unemployment has cost them a composite $1.3 billion in lost wages. Ridiculing the orthodox economic “theory” that the problem with recessions are “sticky wages” — in other words, wages don’t fall fast enough or far enough during downturns — Professor Rasmus notes that businesses are not investing in the wake of the wage reductions. He writes:

“They’re hoarding the $1.74 trillion in Congressional loans and grants bailouts. And hoarding the $650 billion in business tax cuts also in the bailout legislation thus far (which one hears very little about in the media, I might add). … [T]he short term cash deposits by business in just institutional money funds (only one source) has risen from $2.3 trillion before March 1, 2020 to $3.3T today. That’s a $1T rise in cash deposits by businesses, just in institutional money funds. More is being deposited in commercial banks. The long run average of business deposits in commercial banks has been around 5% (6% under Obama and 4.6% under Trump 2016-19) to 15.8% since March 1. Businesses and investors are hoarding their cash and stuffing it in their short term accounts in banks, funds, and who knows where else, on and offshore.”

Much of that hoard of cash is likely destined for stock buybacks, dividends, speculation, buying companies and boosting lobbying efforts down the road. U.S. corporations spent more than $1.1 trillion on buying back stock in 2018 and although the pace slacked a bit in 2019, more than $700 billion went toward buybacks. Stock buybacks are completely unproductive spending — they are simply corporations buying their own stock, giving those who sell a premium to the trading price and boosting profits for remaining shareholders because the profits will be shared among fewer people. Speculators love them.

Britain, EU and Canada: Lots for financiers, crumbs for working people

Capitalism is a global system, and thus using a crisis to benefit the wealthy and powerful is hardly limited to the United States, even if it is the center of the global capitalist system and thus at the forefront of propping up its winners. Tax Watch UK, which describes itself as an “investigative think tank,” discovered that among the recipients of loans under the Bank of England’s Covid Corporate Financing Facility are 13 companies with links to tax havens or that “have seen controversy regarding their financial affairs.” Those 13 companies received £4.8 billion, or almost 30 percent of the total. Tax Watch UK reports that among these is Baker Hughes, a subsidiary of General Electric, “which is embroiled in a £1 billion tax dispute over unpaid taxes going back to 2004.”

The British government, headed by the mendacious Boris Johnson, hasn’t been shy about handing out money to business. The Bank of England has committed £200 billion to quantitative easing (bond buying), £330 billion in loan guarantees for business and an unspecified amount for “short-term liquidity” for the government, among other measures. Separately, Whitehall has committed tens of billions of pounds to three separate loan programs, property tax holidays, direct grants for small firms, grants for “innovation” and other items. For working people? A total of £14.7 billion of additional funding to the National Health Service and £7 billion for increased payments under the Universal Credit scheme and other benefits. Overall, quite one-sided toward capital.

City of London expanding (Photo by Will Fox)

Similar to the United States and United Kingdom, the bulk of money committed by the European Union to shore up the economy during the Covid-19 pandemic is for quantitative easing. The EU has committed to pouring €1.35 trillion into buying private- and public-sector securities by June 2021 under its Pandemic Emergency Purchase Program.

The EU will also offer a €540 billion addition to its European Stability Mechanism, an International Monetary Fund-style loan program under which money is loaned to governments under condition that recipients implement severe austerity. (This is the program under which the EU paid off the Greek government’s debt to European banks, meaning that Greece instead owed its debts to EU institutions rather than the banks, doing nothing to lower the debt level but forcing Athens to administer punishing austerity that left Greeks destitute.) And on top of the above, the EU has thrown in another €200 billion for businesses. For working people, nothing more than relative crumbs: €37 billion “to support public investment for hospitals, [small businesses], labor markets, and stressed regions” and €100 billion to protect workers and jobs. Once again, quite one-sided in favor of capital.

Back across the Atlantic, Canada has announced multiple programs, including quantitative easing. The Bank of Canada has implemented several QE programs for buying corporate bonds, federal and provincial government bonds, mortgage bonds and commercial paper (short-term debt issued by corporations), as well as programs to provide credit and “support the stability of the Canadian financial system.” The Bank of Canada is not forthcoming about the total cost of these programs; it has committed to spending C$5.5 billion per week, with no cutoff date, on just two programs, the purchases of federal government bonds and mortgage bonds. A measure of what has been spent so far is indicated in the central bank’s balance sheet, which reveals that total assets held by it increased from $120 billion on March 11 to $498 billion on June 11. So that’s $378 billion with more to come.

What is Canada spending on working people? $116 billion for “direct aid to households and firms” and $4 billion for the health system. So a lot less, and even some of this much smaller amount will be going to businesses.

Although more direct aid for working people is being included this time around — given the crisis of neoliberalism and that the massive subsidies to the same financiers responsible for the crash of the economy in 2008 haven’t been forgotten, political leaders had no choice but to sweeten the pot a little — the overwhelming majority of the money dispensed is going to the financial industry and to large corporations. Again it must be asked: How much more useful would it have been to use this money for practical needs and direct payments to people instead of propping up a bloated and wasteful financial system? More directly, how long can the peoples of the world continue to believe that a system in crisis so frequently and requires such massive bailouts works?

The corporate origins of the anti-science “reopen” demonstrations

Many of the same extreme right operatives who created the “Tea Party” are behind the anti-science and anti-intellectual spectacles opposing measures designed to combat the Covid-19 pandemic. And with much the same agenda.

By now, that is not much of a secret, but it is nonetheless necessary to expose these roots, and to debunk the anti-science conspiracy theories they help spread. This is an astroturf operation underwritten by Betsy DeVos, her ultra-reactionary family and veteran operatives linked to them, with FreedomWorks, primary organizer of the early Tea Party protests, and the Club For Growth, a libertarian outfit dedicated to eliminating Social Security, lurking in the background.

Perhaps the most virulent outbreak was in Lansing, where armed militia members were given free reign to roam Michigan’s state capitol building, causing a legislative session to be called off. A truly dangerous precedent — will these characters be allowed to take over the capitol next time? And that these White protestors were left untouched, even allowed to hijack the functioning of government for a day, makes for a sharp contrast with the Black Lives Matter protestors being arrested and brutalized by police around the country.

A doctor in a hospital during the COVID-19 pandemic (photo by Pablo Jarrín0

To make another comparison, recall that similar armed White militia members were allowed to take over a federal sanctuary and desecrate Native American artifacts in rural Oregon in 2016. Can anybody imagine Black protestors taking over a government facility with an intention of sparking a rebellion lasting even a day without every police agency that could mobilize mowing them down in a fusillade of bullets and bombs, much less being allowed to spend weeks and allowed to come and go as they pleased?

Let’s examine the evidence. There is plenty of it, should we wish to look.

The wealthy extremists behind the astroturf campaign

Edwin Rios, writing in Mother Jones on April 17, 2020, provided this report on the Lansing demonstrations:

“The protest, known as ‘Operation Gridlock,’ featured a fair share of MAGA hats, Trump flags, at least one Confederate flag, chants of ‘Lock her up!’ in reference to [Governor Gretchen] Whitmer, and far-right groups from the Proud Boys to the Michigan Liberty Militia. They clogged up the streets outside the state Capitol and defied Whitmer’s ban on public gatherings. The whole charade was facilitated by the Michigan Conservative Coalition, a conservative political group that doubles as a front for Michigan Trump Republicans, and promoted by the Michigan Freedom Fund, a conservative group with ties to Education Secretary Betsy DeVos, a Michigan billionaire philanthropist power broker before she joined the Trump administration.”

A detailed Snopes report put together by Alex Kasprak and Bethania Palma found plenty of DeVos family money:

[T]his anti-lockdown movement was originally pushed by a small circle of fervent activists who have been protesting almost constantly since well before the onset of the pandemic. Furthermore, they have benefited from a political action infrastructure originally created to support the DeVos-funded, anti-union ‘right-to-work’ movement. These methods have apparently created the perception of widespread discontent with public health measures largely supported by the American populace and are part of a campaign playbook self-evidently resulting in an increasingly radicalized base of Trump supporters as the 2020 general election approaches.”

The article reports that the DeVos family made $14 million in political contributions to the Michigan Republican Party and other Republican groups, and also donated substantial amounts of money to the Michigan Freedom Network. The Network is in turn tightly linked to the Michigan Conservative Coalition, a group that the Snopes report characterizes as “a collection of former Tea Party-aligned groups and pro-Trump organizations whose purpose is to recruit and train an ‘army of conservative activists,’ most notably the groups Michigan Trump Republicans, Women for Trump, and the Lakes Area Tea Party. The people who run the coalition have deep ties to the Michigan GOP and to Trump campaign surrogates,” with strong links with Michigan Republican officials.

Not mentioned in these articles but nonetheless relevant is that Betsy DeVos’ brother is Erik Prince, founder of the notorious Blackwater mercenary army.

“Reopening” the economy in the corporate interest

To round out this survey, CNN reporters located two more sources of support:

“One prominent voice supporting the protests is Stephen Moore, the founder of the Club for Growth and an unofficial economic adviser to President Trump. … Moore told CNN he has been working on this organization with FreedomWorks, a conservative advocacy group that gained prominence during the Tea Party era.”

The Club For Growth is an ultra-reactionary outfit with connections to the Koch Brothers dedicated to eliminating government-run social benefits. Club for Growth founder Stephen Moore is on record with this statement: “Social Security is the soft underbelly of the welfare state. If you can jab your spear through that, you can undermine the whole welfare state.” In other words, it’s work until you drop, if he gets his way.

FreedomWorks is a group of corporate lobbyists formerly run by Dick Armey (a hard-line Republican Party operative who once was majority leader in the U.S. House of Representatives) that was the primary organizer of the early Tea Party protests. FreedomWorks’ predecessor organization was the Citizens for a Sound Economy, which was founded and funded by David and Charles Koch (although the surviving brother, Charles, does not currently back FreedomWorks). Sharing similar roots is Americans for Prosperity, a lavishly funded and tightly controlled pressure group founded by the Koch Brothers dedicated to promoting the family business interests and extremist political philosophies, and also heavily involved in organizing the Tea Party. Organizers of the Tea Party sought to deflect anger from corporate elites consumed by greed and arrogance who bend the country’s institutions to their benefit, and instead pin the blame on “the government,” on minorities, on immigrants and any other handy scapegoat. Sound familiar?

Yonge-Dundas Square in Toronto during the pandemic (photo by Sikander Iqbal)

It will come as no surprise those readers who pay attention that the Trump administration has a hand in these events. For several weeks, the White House has been agitating to “reopen” the country regardless of health consequences — an unusually open reminder that working people are seen as nothing more than disposable peons in the eyes of Wall Street and corporate boardrooms.

The Associated Press, as cautious a news agency as exists in the U.S., has provided further details:

“Republican political operatives are recruiting ‘extremely pro-Trump’ doctors to go on television to prescribe reviving the U.S. economy as quickly as possible, without waiting to meet safety benchmarks proposed by the federal Centers for Disease Control and Prevention to slow the spread of the new coronavirus. The plan was discussed in a May 11 conference call with a senior staffer for the Trump reelection campaign organized by CNP Action, an affiliate of the GOP-aligned Council for National Policy. A leaked recording of the hourlong call was provided to The Associated Press by the Center for Media and Democracy, a progressive watchdog group.

CNP Action is part of the Save Our Country Coalition, an alliance of conservative think tanks and political committees formed in late April to end state lockdowns implemented in response to the pandemic. Other members of the coalition include the FreedomWorks Foundation, the American Legislative Exchange Council and Tea Party Patriots.”

As always, we should member that the “freedom” promoted by these representatives of big capital means freedom for capital, not people. “Freedom” is equated with individualism — but as a specific form of individualism that is shorn of responsibility. Imposing harsher working conditions is another aspect of this individualistic “freedom,” but freedom for who? “Freedom” for industrialists and financiers is freedom to rule over, control and exploit others; “justice” is the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Working people are “free” to compete in a race to the bottom set up by capitalists.

To this, we can now add the “freedom” to spread a deadly virus without regard to the danger imposed on others.

Debunking that Covid-19 was created in a laboratory

The complement of exposing the funders and organizers of the movement to ignore measures to provide for public health during a pandemic — how dare Governor Whitmer and other state governors seek to keep people alive! — is exposing the disinformation spread by their followers.

Contrary to conspiracy theories peddling the idea that Covid-19 is an artificial creation, possibly intentionally created for political purposes, multiple teams of scientists have determined that Covid-19 is a virus that originated in nature, and can not have been created in a laboratory. It does not help that U.S. President Donald Trump and his almost as ignorant secretary of State, Mike Pompeo, have repeatedly implied such — in the minds of Trump followers, how could scientists who have spent a lifetime studying diseases and epidemics possibly know as much as the all-knowing, all-seeing Dear Leader?

Downtown Portland, Oregon, during the pandemic (photo by Mattsjc)

Kristian Andersen, an infectious disease researcher at the Scripps Research Institute who led a team of evolutionary biologists and virologists from several countries, said Covid-19 has components that differ from those of previously known viruses and therefore had to come from an unknown virus or viruses in nature. A human-created virus would need to work with already known viruses and engineer them to have desired properties, according to Andersen.

Writing in the peer-reviewed journal Nature Medicine, Andersen and his colleagues wrote, “Genetic data irrefutably show that SARS-CoV-2 [the virus that causes Covid-19] is not derived from any previously used virus backbone” and conclude, “we do not believe that any type of laboratory-based scenario is plausible.”

A molecular epidemiologist in Switzerland, Emma Hodcroft, who is not connected to the study led by Andersen, agreed. Hodcroft, who is part of a team studying changes in coronaviruses to track how they spread, said, “We see absolutely no evidence that the virus has been engineered or purposely released.” Andersen said there were several clues that clinched the case that the virus is natural, including adaptations protecting it from an immune-system attack that doesn’t occur in viruses being worked on in laboratories.

This ongoing work has also debunked the erroneous idea that Covid-19 contains bits of HIV. There was one paper that made the HIV assertion that was not peer-reviewed and was quickly retracted after numerous scientists pointed out serious flaws in it. There are no fragments of the genetic code of HIV in the virus, European Scientist reports in an article that then debunks this conspiracy theory from other angles.

Debunking that deaths from Covid-19 are overstated

Researchers on the Our World In Data web site provide a good explanation for why Covid-19 deaths are likely under-reported, not over-reported. To summarize, the reasons that deaths are being under-reported include that many countries only report Covid-19 deaths that occur in hospitals, meaning that people who die from the disease at home may not be recorded; some countries only report deaths for which a Covid-19 test has confirmed that a patient was infected with the virus; and that the pandemic may result in increased deaths from other causes due to weakened health care systems, fewer people seeking treatment for other health risks and less available funding and treatment for other diseases.

According to the U.S. Centers for Disease Control and Prevention (CDC), the official death toll attributed to Covid-19 counts only laboratory-confirmed Covid-19-associated deaths, and 5,048 probable Covid-19-associated deaths. Not counted are deaths among infected persons who did not access diagnostic testing, tested falsely negative, or became infected after testing negative, died outside of a health care setting or for whom Covid-19 was not suspected by a health care provider as a cause of death. Official Covid-19 deaths also do not include deaths that are not directly associated with Covid-19 infection.

A study of New York City deaths from March 11 to May 2 by the CDC found there were 24,172 excess deaths. The official total of deaths associated with Covid-19, however, is 18,879 deaths. Therefore, the CDC study determined, there were 5,293 deaths that were not identified as either laboratory-confirmed or probable Covid-19-associated deaths. That is an undercounting of Covid-19 deaths as high as 22 percent.

The CDC report said, “Covid-19-associated mortality is higher in persons with underlying chronic health conditions such as heart disease and diabetes, and deaths in persons with these chronic health conditions might not be recognized as being directly attributable to Covid-19. In addition, social distancing practices, the demand on hospitals and health care providers, and public fear related to Covid-19 might lead to delays in seeking or obtaining lifesaving care.”

A separate study conducted by a team of scientists on the death rates in New York State, England, Wales, Scotland, the Netherlands and Italy found that the number of deaths attributed to Covid-19 through May 6 range from one-half to three-quarters of the total number of excess deaths. The scientists, led by Kieran Docherty of the University of Glasgow, concluded that the additional deaths “may represent unrecognized deaths due to Covid-19.”

Debunking that Covid-19 is no more fatal than the flu

The World Health Organization found that Covid-19 data to date suggests that 80% of infections are mild or asymptomatic, 15% are severe infections requiring oxygen and 5% are critical infections requiring ventilation. These fractions of severe and critical infections are higher than what is observed for influenza infection. A WHO report states:

“While the true mortality of COVID-19 will take some time to fully understand, the data we have so far indicate that the crude mortality ratio (the number of reported deaths divided by the reported cases) is between 3-4%, the infection mortality rate (the number of reported deaths divided by the number of infections) will be lower. For seasonal influenza, mortality is usually well below 0.1%. However, mortality is to a large extent determined by access to and quality of health care.”

The United States has by far the most number of cases and the most deaths from the virus, something caused in large part by the for-profit health care system of the U.S., which is designed to deliver corporate profits rather than health care, and thus produces among the worst results of any advanced capitalist country while costing by far the most. A country with a health care system with incentives so inhumane that early deaths are considered to be a “silver lining” for corporations.

Some of the claims that Covid-19 is no worse than the flu rest on a single discredited report. The discredited report, concerning two studies in Los Angeles and Santa Clara counties that purported to claim that Covid-19 death rates are similar to seasonal flus, were quickly and widely debunked. An Ars Technica article said the two studies used flawed statistical models to put the number of people with the virus at 50 to 85 times higher than was actually the case at the time, thus drastically lowering the studies’ reported death rate. The methodologies used to recruit people to this study was also flawed, including using Facebook and e-mail to ask for participants and thus far from random. Finally, the antibody test used in the two studies has a low rate of accuracy.

Need more? The Federation of American Scientists notes that between 2010 and 2019, the flu killed between 12,000 and 61,000 United Statesians during each eight-month long season (October to May). In just over four months, or about half of a flu season, Covid-19 killed over 100,000 people (as of May 28), or 785 people each day, in the U.S. alone.

Finally, Northwell Health reports that each infected person spreads Covid-19 to an average of 2.2 other people. By comparison, those with the seasonal flu infect approximately 1.3. So, yes, it is more easily transmitted than the flu.

As a final thought, it has not escaped my attention that the right-wing anti-science protestors largely did not wear face masks while demonstrating, nor did they observe social distancing. By contrast, the Black Lives Matters protests that erupted after the police murder of George Floyd overwhelmingly wear face masks. (Nor did they carry weapons.) I’ve participated in three Black Lives Matters marches at the time of writing this article, and not only can I confirm that almost everyone wears masks, but there are always a couple of people handing out masks to people who need one. That’s the difference between people who think others should die so they can get a haircut and those with a strong social conscience.

No thinking please, we’re red-baiting

The red-baiting of Bernie Sanders is in full swing. From Democrats. Yes, the silly season is upon us as Senator Sanders was roundly condemned because he believes literacy campaigns are good things.

I know the United States is a uniquely anti-intellectual country, but, still, you’d think teaching reading and writing might be thought of as positive goals. The Republican responses to Senator Sanders’ 60 Minutes interview in which he condemned the late Cuban leader Fidel Castro’s authoritarianism but also acknowledged Cuba’s social achievements, such as drastically improving literacy rates, was predictable. It was only to be expected that there would be pushback by Florida Democrats, who continue to believe they have to roll in the dust at the feet of right-wing Cuban émigrés.

Nonetheless, Democrats outdid themselves. Let’s first pause to quote the words of Senator Sanders that sent them into paroxysm of indignation: “We’re very opposed to the authoritarian nature of Cuba but you know, it’s unfair to simply say everything is bad. You know? When Fidel Castro came into office, you know what he did? He had a massive literacy program. Is that a bad thing? Even though Fidel Castro did it?”

Evidently it is. Particularly humorous was the response of Representative Stephanie Murphy, a Florida Democrat, who said of President Castro on Twitter: “His ‘literacy program’ wasn’t altruistic; it was a cynical effort to spread his dangerous philosophy & consolidate power.”

Teaching people who previously had been left in miserable poverty and without adequate education how to read and write? Run, run for your life!

Viñales Valley, Pinar del Rio province, Cuba (photo by Adam Jones adamjones.freeservers.com)

And demonstrating yet again his complete ignorance, Senator Marco Rubio offered this “history” lesson: “Democratic socialism sounds benign, but at the core of Democratic socialism is Marxism, and at the core of Marxism is this fake offer that if you turn over more of your individual freedom, we’re going to provide you security. We’re going to provide you free healthcare. We’re going to provide you free education. But the problem is that when they can’t deliver on it or you’re not happy with it, you don’t get your freedoms back.”

Where does one begin with such nonsense? Before we get to what socialism actually is, allow me to inform Senator Rubio and other bloviators that virtually every country on Earth, and every advanced capitalist country other than the U.S., has universal health care — and gets better results than the U.S. for a lot less money. Arranging for everybody to have access to health care really isn’t a spectacular achievement. It is not even necessary to be a socialist country to achieve it.

It ought to be possible to hold more than one thought in one’s head at a time, that there could be positive and negative attributes at the same time. Nor should it be forgotten that although demonologists like Florida politicians reflect those who didn’t like Cuba, we never hear from those inside Cuba who support their revolution.

Can reading be a conspiratorial act?

A short-hand definition of socialism would be this: Popular control of production so that enterprises are oriented toward meeting the needs of everyone in a democratic system instead of for the profit of an individual owner or for speculators. A system in which working people make the decisions in their enterprises and their communities and that such decision-making is done in a broader social context so that decisions with social repercussions are made with the peoples and communities affected. In other words, when people have real control over the conditions of their lives — the rule of people instead of the rule of capital.

Incidentally, Senator Sanders isn’t offering anything like that. He’s also been in favor of some U.S. overseas offensives, such as the bombing of Yugoslavia; echoes the right-wing lies about Venezuela even if he opposes an invasion; and refers to Hugo Chávez as a “dead communist dictator” even though President Chávez and his Bolivarian movement won 16 out of 17 elections in an electoral system the Carter Center called “the best in the world.” So the red-baiting of Senator Sanders is not based on reality but on an inability to distinguish between New Deal liberalism, designed to save capitalism, and socialism.

Miami skyline (photo by Wyn Van Devanter)

As I am writing these lines, I happen to be reading the autobiography of Dorothy Healey, the long-time Communist Party organizer who rose to be the chair of the party’s Los Angeles branch, then the second biggest in the U.S. In her book, she gave a detailed account of the political trial she and several other party leaders underwent in the 1950s on trumped up, political charges. Without minimizing the seriousness of the many years of jail they faced, this story also makes useful parallels with today. The prosecution used a strategy of guilt by association, and by distorting the party’s ideas, whether intentionally or out of ignorance of what those were. Healey wrote:

“As in the Foley Square case [a previous political trial of Communist leaders], it was a trial of books. The prosecutor would have witnesses read big chunks of violent-sounding passages from Marx, Engels, and Lenin. This kind of trial could not have been conducted in any other advanced capitalist country — France or England or Italy — because the basic concepts of Marxism were so well known, studied in every university, and familiar to every active trade unionist, that people would have laughed at the outrageous simplifications offered up so solemnly at our trial. That was a peculiarly American phenomenon.”

The mere act of reading and self-education was considered part of the “evidence” against Healey and her co-defendants! She wrote:

“The assistant prosecuting attorney, Norman Neukom, was a vulgar, ignorant man. He was so astonished when one of the defendants was quoted on the need for Communists to engage in continual study. ‘Imagine,’ he told the jury, ‘grown-up people feeling the need to continue to study history and economics and philosophy after they’ve left school.’ For him, somehow, this was further evidence of the evil nature of our conspiracy, grown-ups discussing books they had read. In his cross-examination he wasn’t interested in or capable of refuting any of the substantive points Oleta [O’Connor Yates] made about Party theory and activities.”

Times certainly haven’t changed.

Cubans under Batista had good reasons to join a revolution

None of the above is to suggest that Cuba is above criticism, or that the constrictions on political expression in Cuba is something to ignore. Cuba needs more democracy as it continues to convert the services sections of its economy from state-owned enterprises to cooperatives, as agriculture has long been. We might, however, reflect on the crushing burden of 60 years of attempts to strangle the country by its giant neighbor to the North.

The United States not only threatens to use its overwhelming power in military might but abuses its desirability as a huge market for exports by making its embargo extra-territorial and fully leverages its position as the controller of the global financial system. U.S. embassy personnel have reportedly threatened firms in countries such as Switzerland, France, Mexico and the Dominican Republic with commercial reprisals unless they canceled sales of goods to Cuba such as soap and milk. Amazingly, a American Journal of Public Health report quoted a July 1995 written communication by the U.S. Department of Commerce in which the department said those types of sales contribute to “medical terrorism” on the part of Cubans! Well, many of us when we were, say, 5 years old, might have regarded soap with terror, but presumably have long gotten over that.

Conditions in pre-revolutionary Cuba were ripe for a revolution. The country’s hundreds of thousands of agricultural wage earners averaged only 123 days of work per year. Nearly half of the rural population was illiterate, 60 percent lived in huts with earth floors and thatched roofs and two-thirds lived without running water. Not surprisingly, poor health was rampant with health care generally unavailable and unaffordable to the poor who made up the huge majority of Cuba’s population. Plenty of force was used to maintain that level of inequality. In Santiago de Cuba, the country’s second-largest city, Batista’s police would torture people to death, with mutilated bodies strung from trees in city parks or dumped in gutters; victims could be as young as 14.

Those conditions and the use of state terror tactics to keep those conditions in place were swiftly reversed after the revolution, never to return. But let us not have any fear of acknowledging that authoritarianism is not unknown in post-revolutionary Cuba and although there are fully free elections at the municipal level, higher-level government positions are not subject to popular vote. One-party states are not conducive to democratic decision-making, regardless of where on the political spectrum the one-party state sits and even in a case like Cuba where citizens are widely consulted and policies adjusted based on popular feedback. Consultation isn’t the same as the power to make decisions.

There is terrorism, but it comes from Washington

But is the United States in any position to point fingers at another country? Let’s look at the record of U.S.-Cuba relations.

The mere fact of the revolution, and its insistence on developing Cuban resources to benefit Cubans rather than immiserating them to enhance U.S. corporate profits, was sufficient to ensure steady hostility from Washington. Aviva Chomsky, in her book A History of the Cuban Revolution, reports the Central Intelligence Agency’s Miami station alone was given $50 million per year to coordinate the sabotage and overthrow of the Castro government following the Cuban rout of the Bay of Pigs invaders. Not content with the CIA’s efforts, President John Kennedy established a separate effort to sabotage Cuba, called “Operation Mongoose,” tolerated terrorist activities by Cuban exile groups based in Miami, and oversaw a series of sabotage operations against Cuban infrastructure, one of which led to the death of 400 workers at an industrial plant. A steady stream of raids intended to sabotage infrastructure and industry continued after the missile crisis, including a CIA-organized operation in which Cuban exiles mined a harbor, which led to the destruction of boats and the deaths of several people.

Cartoon by Carlos Latuff

Later in the 1960s and thereafter, CIA tactics switched to encouraging exile groups to conduct those types of terrorist operations rather than directly conducting them itself. Instead, the CIA concentrated on biological attacks that resulted in a variety of crop, animal and human outbreaks of diseases. The CIA goal (carrying out U.S. government policy) remained fixed, as an agency operative would later admit: “We wanted to keep bread out of the stores so people would go hungry. We wanted to keep rationing in effect and keep leather out, so people got only one pair of shoes every 18 months.”

In a report published on April 20, 2000, in the Miami New Times, Jim Mullen compiled a list of terroristic acts committed by Cuban exiles in the Miami area, a list Mr. Mullen said is “incomplete, especially in Miami’s trademark category of bomb threats.” Mr. Mullen listed 71 acts of violence from 1968 (all but two from 1974) through April 2000. The list includes seven people, six of whom were exile figures, murdered in a three-year span of the 1970s; a radio reporter whose legs were blown off by a bomb after the reporter condemned exile violence; dozens of actual bombings; several beatings of demonstrators, including a nun; and bombings of cultural events.

Who gets to point fingers?

There is no bigger hypocrisy than U.S. government officials condemning other governments. Martin Luther King was correct when he called the U.S. the biggest pervader of violence in the world, and that is no less true today. The list of countries that the U.S. has invaded, overthrown governments or interfered in elections is too long to fully recount. In Latin America and the Caribbean alone, the U.S. has invaded 96 times. That total represents only the direct invasions; it doesn’t include coups fomented by the U.S., including Guatemala in 1954 and Chile in 1973.

Chile under Salvador Allende was similarly denounced as a dangerous dictatorship even though the Allende government kept strictly within legal bounds while the right-wing opposition used extralegal means to oppose it and when that didn’t work called in the military to bomb, arrest, force into exile, “disappear,” torture and kill hundreds of thousands. What “crimes” did President Allende commit? These three statistics concisely summarize the story:

• In 1970, on the eve of Allende’s electoral victory, 50 percent of Chile’s children were undernourished, stunting their development; there were 600,000 considered developmentally disabled because of lack of protein and other problems of malnutrition.

• In 1972, the Allende administration arranged for 550,000 breakfasts and 700,000 lunches to be served daily to students.

• By the early 1980s, under Pinochet, more than half the population of greater Santiago was unable to develop normally either physically or mentally as a result of lack of proper nourishment.

It takes a breathtaking level of ignorance to see providing health care, seeing to it that children receive proper food and raising literary and cultural levels is a form of terrorism while believing such basics should be provided only to those who can afford them. Unfortunately, such ignorance is bipartisan.

Why do Yemen’s dead not merit the attention of Jamal Khashoggi?

The apparent murder of Saudi Arabian dissident journalist Jamal Khashoggi is a shocking crime that merits the international attention it has received, but nonetheless it is impossible not to wonder why the death of a single person receives vastly more coverage than ongoing Saudi atrocities in Yemen.

Is it that a dramatic story involving a single personality is easier to grasp than a war fought over complex political and ethnic issues, or does the differing levels of attention signal that Mr. Khashoggi has achieved the status of an honorary westerner while the tens of thousands dead in Yemen represent a distant “other”? Some combination of both of these are likely at work, and that he is a fellow journalist makes his fate all the more compelling for reporters and editors. Geopolitical considerations are certainly at play here, with the towering hypocrisy of the Trump administration on full display, a hypocrisy that stands out even in the dismal history of U.S. government policies toward Saudi Arabia.

President Donald Trump’s transparent attempts to exonerate Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, by “speculating” that “rogue agents” might be behind Mr. Khashoggi’s demise inside the consulate is beyond laughable, or would be if the issue weren’t so serious. Billions of dollars of arms sales are at stake (not to mention a reliable supply of oil), so minor trifles like human rights or cold-blooded murder can be swept aside. Whatever evidence the Turkish government possesses has not been made public, and it would seem the most likely reason is because Ankara has bugged the Saudi consulate. If so, a sensitive matter that the Turkish government would rather evade.

The thuggish behavior of the crown prince has to be laid partially at the doorstep of the White House because President Trump has heartedly embraced him, giving the green light to Saudi Arabia’s bottomless contempt for human rights. We might even speculate that President Trump wishes he could do away with opponents as firmly as the crown prince. And never mind the atrocities the United States (along with Britain and France) facilitate in its all-out support of Saudi Arabia’s war in Yemen — what is human life (especially the lives of “others”) when profits are at stake?

A blind child carries a dove at a protest against the attack on the al-Nour Center for the Blind in Sana’a, Yemen, on January 10, 2016. Students say neither the school, nor themselves, have taken any side in the war. (photo by Almigdad Mojalli/VOA)

By any standard, the conduct of the war in Yemen is inhumane. Nobody knows how many people have died as a result of the fighting, although the independent group Armed Conflict Location & Event Data Project (ACLED) estimates that almost 50,000 people were killed from January 2016 to July 2018. Implying a much higher total, Save the Children estimates that at least 50,000 children died in 2017 alone, or about 130 per day. The charity further estimated that almost 400,000 children will need treatment for severe acute malnutrition.

The United Nations Office for the Coordination of Humanitarian Affairs offers this sobering assessment:

“An alarming 22.2 million people in Yemen need some kind of humanitarian or protection assistance, an estimated 17.8 million are food insecure — 8.4 million people are severely food insecure and at risk of starvation — 16 million lack access to safe water and sanitation, and 16.4 million lack access to adequate healthcare. Needs across the country have increased steadily, with 11.3 million who are in acute need — an increase of more than one million people in acute need of humanitarian assistance to survive.”

The United Nations Human Rights Council reports that Saudi-led “coalition air strikes have caused most direct civilian casualties. The airstrikes have hit residential areas, markets, funerals, weddings, detention facilities, civilian boats and even medical facilities.” Both sides are reported by the council to forcibly conscript children between the ages of 11 and 17 to fight.

A study written for the World Peace Foundation, The Strategies of the Coalition in the Yemen War: Aerial bombardment and food war, by Martha Mundy reports that “From August 2015 there appears a shift from military and governmental to civilian and economic targets, including water and transport infrastructure, food production and distribution, roads and transport, schools, cultural monuments, clinics and hospitals, and houses, fields and flocks.”

To what end are these atrocities committed? Professor Mundy writes:

“While the US and UK back their Coalition allies unfailingly in their wider political and strategic objectives, the two major Arab actors in the Coalition, Saudi Arabia and the [United Arab] Emirates, have different economic priorities in the war. That of Saudi Arabia is oil wealth, including preventing a united Yemen’s use of its own oil revenues, and developing a new pipeline through Yemen to the Indian Ocean; that of the Emirates is control over seaports, for trade, tourism and fish wealth. The attack on al-Hudayda [a major port] explicitly aims to complete the economic war militarily. That the immense suffering of Yemen’s people has still not brought surrender by those in Sanʾa [the Yemeni capital] does not give credibility to the tactic of further hunger and disease. Yet for the Coalition, as a senior Saʿudi diplomat responded (off the record) to a question about threatened starvation: ‘Once we control them, we will feed them.’ ”

Yemen is highly dependent on food imports, and the blockades of its ports have put Yemenis at risk of famine. Professor Mundy draws this conclusion:

“If one places the damage to the resources of food producers (farmers, herders, and fishers) alongside the targeting of food processing, storage and transport in urban areas and the wider economic war, there is strong evidence that Coalition strategy has aimed to destroy food production and distribution in the areas under the control of Sanʾa. … [F]rom the autumn of 2016, economic war has compounded physical destruction to create a mass failure in basic livelihoods. Deliberate destruction of family farming and artisanal fishing is a war crime.”

There is little coverage of this ongoing humanitarian disaster in the corporate media. Why are millions of lives almost an afterthought while one privileged life merits such intense attention? Again, the fate of Mr. Khashoggi and the spotlight it shines on Saudi practices merit the widespread commendation it has attracted. But why such indifference to millions of others? Where is our humanity?

World Bank solution for lack of jobs: Cut worker protections

The World Bank is in the process of completing its “World Development Report 2019: The Changing Nature of Work” and, surprisingly, the latest draft version opens with quotes from Karl Marx and John Maynard Keynes. Has the World Bank suddenly lost sight of its purpose and will now take up the cause of working people?

Well, you already know the answer to that question, didn’t you?

Only a few paragraphs down we begin to see where this paper is heading. After a bit of perfunctory hand-wringing over disruptions caused by robotics, we read the problem is “domestic bias towards state-owned or politically connected firms, the slow pace of technology adoption, or stifling regulation.” And although some jobs are disappearing, fear not because “the rise in the manufacturing sector in China has more than compensated for this loss.”

Oh, so we should all move to China to get new jobs.

Never mind that the highest minimum wage for Chinese workers, that mandated in Shanghai, is $382 per month. In some places the minimum wage is half that, if workers are fortunate enough to be paid regularly. And that millions of rural Chinese are being driven into cities to become sweatshop workers, so for now there won’t be enough work for the rest of the world. Then again, letting bosses have the upper hand is what the World Bank has in mind. No, its economists haven’t forgotten what the institution’s purpose is nor why it exists.

A Chinese-owned factory in Lesotho (photo by K. Kendall)

So what to do? The World Bank report does suggest not allowing corporations to dodge taxes to the degree that they do. Very well, but even if taxes were collected at the statutory rates, that would still leave corporations vastly under-taxed. No suggestion by the bank, of course, that corporations actually pay a fair tax rate. Corporations currently account for a paltry nine percent of U.S. tax receipts; in the 1950s, they accounted for 30 percent or more. Similarly, in Canada personal income taxes account for three and a half times more revenue than do corporate income taxes; these were equal in 1952.

There is much discussion of “investing in human capital,” a particularly favored mantra of the World Bank. What does that mean? Capitalists are likely to interpret such talk — rather common in NGO circles these days — to mean demanding more skills or degrees from prospective workers, but in the United States graduates with doctorate degrees are being forced to take jobs in academia as part-time adjuncts, and plenty of folks in other fields are “over-educated” already for the jobs they hold. This concept comes from the idea that the problem is that there aren’t enough skilled people for all those wonderful jobs that are out there, just over the rainbow. But in the real world, as opposed to Right-wing think tanks, that is not so.

A 2014 report issued by the National Employment Law Project found that higher-wage jobs were created at a much lower rate during the “recovery” from the 2007-08 economic collapse than had been lost; conversely, low-wage jobs (paying less than $13.33 per hour) were created twice as fast as they had been lost. In separate studies, the Economic Policy Institute found that long-term unemployment is elevated for workers at every education level (and was increasing at a somewhat higher rate for those with some college or a four-year college degree than the average), and that the so-called “skills mismatch” is a myth.

So we come to the real “solution” in the minds of World Bank officials: Cut worker-protection laws.

Aw, you really aren’t surprised, are you?

(Graphic by Real-World Economics Review)

Here’s a key passage in the report: “Rapid changes to the nature of work put a premium on flexibility for firms to adjust their workforce, but also for those workers who benefit from more dynamic labor markets.”

Dynamic for who? What we have here are code words meaning make it easier to fire people. And that’s the real takeaway message, no matter the lofty rhetoric about governments creating a new social contract. “Creating jobs” and “investing early in human capital” are two elements of the World Bank paper’s suggested new social contract. Unfortunately, there are no thoughts on how new jobs might be created when capitalists are in a frenzy of eliminating jobs to maintain their profit rates and survive relentless market competition. More schooling, which is what “investing early in human capital” amounts to, is fine by capitalists, as long as they don’t have to bear any of the costs. It’s up to students to take on more debt to create this new “human capital.”

Contrast this happy talk with the reality of the capitalist workplace. A report just issued by Democratic U.S. Representative Keith Ellison found the average ratio of CEO-to-median-worker pay is 339-to-1. That ratio among the 500 biggest U.S. corporations is as high as almost 5,000-to-1. Nope, I don’t think the boss works thousands of times harder than you do. At McDonalds, for example, the CEO’s annual salary could be used to pay the yearly wages of 3,101 workers making the chain’s median pay.

The sort of societal priorities and imbalances of power that enable such appalling inequality might be summed up by the uses to which money is put. In Los Angeles, a new football stadium is being built and the estimated cost of it is now estimated at $4.9 billion. That figure has risen considerably and likely will again. Given all the homelessness in Los Angeles, and all the other social problems, what could have been done with $4.9 billion?

The number of homeless people in California is estimated at 130,000. Doing something about that might be one way to “invest” in human development, and doing so might even save money. A Rand Corporation study carried out for Los Angeles County found that homeless people who are provided stable shelter make fewer trips to the emergency room and are arrested less frequently, to the extent that the cost of the housing is more than offset.

Oops, but that’s not profitable for the well-connected as throwing money at stadium boondoggles or cutting jobs. But if you earn enough degrees, perhaps you’ll fulfill the World Bank’s prophesy by landing a job at a Chinese sweatshop.

Leaked Trump infrastructure plan is a plan for corporate subsidies

The Trump administration’s plans to rebuild infrastructure in the United States have been leaked, and it appears to be as bad as feared. At least three-quarters of intended funding will go toward corporate subsidies, not actual projects. It is possible that no funding will go directly toward projects.

There’s no real surprise here, given that President Donald Trump’s election promise to inject $1 trillion into infrastructure spending was a macabre joke. What is actually happening is that the Trump administration intends to push for more “public-private partnerships.” What these so-called partnerships actually are vehicles to shovel public money into private pockets. These have proven disastrous wherever they have been implemented, almost invariably making public services more expensive. Often, far more expensive. They are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service.

That is no surprise, as corporations are only going to provide services or operate facilities if they can make a profit. And since public-private partnerships promise guaranteed big profits, at the expense of taxpayers, these are quite popular in corporate boardrooms. And when those promises don’t come true, it taxpayers who are on the hook for the failed privatization.

Panorama of Paris (photo by Benh Lieu Song)

The collapse earlier this month of Carillion PLC in Britain put 50,000 jobs at risk, both those directly employed and others working for subcontractors. The holder of a vast array of government contracts for construction, services and managing the operations of railways, hospitals, schools and much else, Carillion received contracts worth £5.7 billion just since 2011. Overall, an astonishing £120 billion was spent on outsourcing in Britain in 2015.

What did British taxpayers get for this corporate largesse? It certainly not was the promised savings. Parliament’s spending watchdog agency, the National Audit Office, found that privately financing public projects costs as much as 40 percent more than projects relying solely on government money. The office estimates that existing outsourcing contracts will cost taxpayers almost £200 billion for the next 25 years. (This report was issued before Carillion’s collapse.) In response, Labour leader Jeremy Corbyn said, “These corporations need to be shown the door. We need our public services provided by public employees with a public service ethos and a strong public oversight,” The Guardian reported.

Naturally, there was one group that did quite well from this privatization: Carillion’s shareholders, who reaped £500 billion in dividends in the past seven years. But it is the government that will have to pick up the tab if the company’s employees are to continue to be paid. On top of that, the company’s pension shortfall reached £900 billion, according to Reuters.

By no means is Carillion’s collapse the only privatization disaster in Britain. A bailout of the corporate-run East Coast rail system is expected to cost hundreds of millions of pounds. There are numerous other examples that have proven windfalls for corporate executives but expensive mistakes for the public.

Offer subsidies first, ask questions later

One of the many empty promises made by President Trump during the 2016 campaign was that his infrastructure plan would “leverage public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.”

“Spur” investment, not actually spend on investment. This supposed plan originated with Wilbur Ross and Peter Navarro, a conservative economics professor. Ross, now Commerce secretary (although perhaps not for long if recent reports are to believed), was an investment banker who specialized in buying companies and then taking away pensions and medical benefits in order to quickly flip his companies for a big short-term profit. The two recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects. The two claimed that over 10 years the credits could spur $1 trillion in investment.

So the new administration won’t actually spend $1 trillion to fix the country’s badly decaying infrastructure; it hopes to encourage private capital to do so through tax cuts.

That brings us to this week’s leak. The news site Axios published the Trump administration’s six-page outline for infrastructure investment on January 22. The document mentions no dollar figures. But what the document does do is to discuss where money will be sent. First up is “infrastructure incentives initiative,” which is to account for 50 percent of total appropriations. This category will provide grants to be used for “core infrastructure” projects and requires “Evidence supporting how applicant will secure and commit new, non-federal revenue to create sustainable long-term funding” and requires new sources of “revenue for operations, maintenance and operations.”

Netherlands highway (Daan Roosegaarde)

Although it is possible that local- or state-government funding could provide the required revenues, given the intentions of the Trump régime, what this means is that privatization is being counted on for these projects, with corporations taking over public facilities providing the required ongoing revenue streams.

A hint that this is intended is that the first item on a list of “Principles for Infrastructure Improvements” is an intention to make it easier for tolls to be placed on highways. That item is this: “Allow states flexibility to toll on interstates and reinvest toll revenues in infrastructure.” Again, it is possible that state governments might do this themselves. But the more likely scenario is the privatization of highways, with the corporations gaining control then installing toll booths to not only provide funds for maintenance but to hand themselves a perpetual profit. And if the profits don’t materialize, it won’t be private capital holding the bag. For example, nine privatized toll roads in Spain will cost taxpayers there €5 billion because the roads are being nationalized in the wake of the private operators’ failures.

A further hint is found buried in the section on water infrastructure, where we find this passage: “Remove the application of Federal requirements for de minimis Federal involvement.” This is likely intended to provide a green light to privatization of water systems. That has been done in France and Germany, with disastrous results. For example, water prices in Paris doubled over 25 years before the city took back its water system, saving €35 million in the first year and cutting rates. The German city of Bergkamen reduced costs by as much as 30 percent after returning its basic utilities to the public sector.

No details for a plan not based in reality

Another 25 percent of the total appropriations for the White House infrastructure investment plan is a “rural infrastructure program,” under which state governments are “incentivized to partner” with “private investment.” Various other programs constitute the remainder of the plan, none of which are clear as to who or what will be eligible.

The official unveiling of the plan will likely not be released until after the January 30 State of the Union address, according to a report in The Hill. A further sign of the lack of specifics is that the White House has had nothing substantial to say on the topic. The most recent statement on infrastructure that a search of the official White House web page could find was an August announcement that the president had signed an executive order making the “environmental and permitting processes more efficient.”

Channeling the president’s usual disregard for reality, the announcement claimed that “delays” in infrastructure projects cost “trillions” of dollars. The only actual projects mentioned are three pipelines, including the Keystone XL and Dakota Access lines, of which the announcement claims will “create over 42,000 jobs and $2 billion in earnings.” (Those figures appear directly copied from a widely discredited State Department environmental impact statement issued in 2014, when the Obama administration was supporting them.) In reality, a study by the Cornell Global Labor Institute found that, when all effects are calculated, there may be a net loss of jobs. Additional fuel costs in the Midwest, pipeline spills, pollution and the rising costs of climate change would contribute to job losses.

Of course, environmental damages are not considered in Trump administration projections, putting them even more in the realm of fantasy. Consider two World Health Organization studies that concluded polluted environments cause 1.7 million children age five or younger to die per year. The U.S. Environmental Protection Agency estimated a year ago that 230,000 lives would be saved and 120,000 emergency-room visits saved in 2020 if the Clean Air Act is left intact. Globally, air pollution could lead to nine million premature deaths and US$2.6 trillion in economic damage from the costs of sick days, medical bills and reduced agricultural output by 2060, according to an Organisation for Economic Cooperation and Development study.

This doesn’t come cheap, either — a study of energy subsidies estimates the totality of subsidies given to fossil fuels for 2015 was $5.6 trillion. Lest you think some “anti-oil” group made that calculation, that figure comes to us courtesy of the International Monetary Fund! The Trump administration will only add to this mind-boggling total as it has made clear its intentions to further subsidize gas, oil and especially coal, no matter the lack of rational economics. And the cost of global warming? Incalculable. What would be the future cost of hundreds of millions displaced from drowned cities? Or, in the long term, of destroying the Earth’s ability to maintain a stable environment?

Although Donald Trump is the worst yet of a long line of disastrous U.S. presidents, let’s forgo the easy idea that he alone is responsible for facilitating corporate plunder at the cost of all other human considerations. He is highly useful to the plutocrats who control the Republican Party, so much so that talk of a Trump impeachment should be relegated to the level of fantasy for the foreseeable future, barring an all-time wipeout in the 2018 midterms despite the Democratic Party’s uncanny ability to blow elections. The greater question is if sufficient numbers of Trump voters come to realize the degree they were hoodwinked for believing that a billionaire who built his fortune by screwing working people would somehow come to their rescue.

That’s the short term. For the longer term, humanity finding its way out of the dead end it is speeding toward depends on freeing itself from the grips of a system that repeatedly throws up Trumps, Bushes, Harpers, Thatchers and the like. The Trump administration is a symptom, not a cause, of morbid decay.

Can’t we have an honest conversation about Vietnam?

The Ken Burns/Lynn Novick television series on the Vietnam War provides yet another example of the narrowness of “acceptable” political discourse in the United States. More than four decades past the end of that imperialist adventure, having a serious discussion about it remains taboo.

The series also provides a fresh example of how the narrowness of acceptable discourse is disguised through the appearance of a vigorous debate. I will confess here I have not watched Burns and Novick’s The Vietnam War, but the consistency of the many discussions of it I have read confirm what would have been expected: The liberal side of the “debate” on the Vietnam War, that an “honorable” effort was tragically miscarried because of “mistakes.”

The series has a long list of corporate sponsors, typical for a Public Broadcasting System production. One of the Koch Brothers, David H. Koch, provided funding, as did the Andrew W. Mellon Foundation, the Rockefeller Brothers Fund and Bank of America. Such blue-chip sponsors are not going to associate themselves with any organization that has the slightest potential of providing any challenging critique.

Rice paddies in Vietnam (photo by Simon Gurney)

But let us not reverse cart and horse. This is the sort of case where corporate sponsors, including fiercely anti-democratic ones like the Koch Brothers, provide funding because they are confident of what they will be getting. There is no need for any formal censorship because corporate control of the media will see to it that viewpoints challenging the mythologies of capitalism are deemed out of bounds.

Most large, influential broadcast stations and print publications are owned by large corporations, and a typical small-city newspaper is owned by a prominent local businessperson if it is not owned by a large corporation. Powerful corporate interests appoint the top editors and managers of their media properties — these mass media decision-makers are men and women who already see the world through the prism of dominant ideologies, and those ideologies will be reflected in the way that news stories are covered. Those ideologies are also reflected in indirect ways — pressure to increase readership or viewership easily leads to pandering to perceived (and sometimes manufactured) consumer interests such as wall-to-wall coverage of celebrity gossip and exhaustive coverage of sports teams simultaneous with the shrinking of news sections.

The press isn’t free if you don’t own one

Many folks on the Left have the idea that there is some sort of organized conspiracy among owners and managers of major media outlets to make sure that ideologically inconvenient perspectives are shut out. That simply isn’t so. Competition alone would prevent any such collusion; within “acceptable parameters” reporters and editors want to be the first to report news. It is enough that corporate-inspired ideologies pervade a society and that corporate ownership ensures that decision-making positions are filled with those who hold to some variant of prevailing ideologies or are inclined to “play it safe” by cautiously remaining within “acceptable” boundaries.

The mass media will then simply reflect these dominant ideologies, and continual repetition through multiple mass media outlets reinforces the ideologies, making them more pervasive until the emergence of a significant countervailing pressure. The very competitive nature of mass media ownership helps dominant ideologies prevail — if so many different outlets report the same news item in a nearly identical way, that “spin” can easily gain wide acceptance. Or if stories are reported differently by competing media outlets, but with the same dominant set of presumptions underlying them, those dominant presumptions, products of ideologies widely propagated by elite institutions, similarly serve as ideological reinforcement.

Editors can reign in reporters with independent mindsets by not running unacceptable stories, or revising them so that dominate ideologies and mythologies are not challenged. When a reporter is fearless enough to follow the trail until some semblance of the truth can be published, even if in watered-down fashion, an exemplary punishment can be made of him or her (such as was done to Gary Webb after his reporting on the CIA). But even when that is not the case, a simple ignoring of a story can make it disappear.

The persistence with which stories are reported is another reinforcement — stories that serve, or can be manipulated, to uphold dominant ideologies can be covered for long periods of time with small developments creating opportunities to create fresh reports at the same time that stories that are ideologically inconvenient are reported briefly, often without context, then quickly dropped. An inconvenient story run once, then ignored, can even misleadingly be pointed to as “proof” that news is being reported no matter what interests are at stake.

One well-documented example will provide an illustration — coverage by elite media of Jerzy Popieluszko, a pro-Solidarity priest in Poland murdered in 1984 by Polish secret policemen in contrast to coverage of priests and other church personnel murdered in U.S.-backed Latin American dictatorships.

Human rights depends on if the U.S. supports the régime

In their classic book, Manufacturing Consent, Noam Chomsky and Edward Herman analyzed four U.S. media outlets that then often set the tone for the press — the most influential newspaper (The New York Times), the two main news magazines (Time and Newsweek) and the most authoritative television news broadcaster (CBS). Their study found 140 articles/broadcasts on Popieluszko and eleven articles/broadcasts on 23 victims in Guatemala during a period that overlapped with Popieluszko’s murder; the Times ran ten front-page articles on Popieluszko, none on the others.

The articles on Popieluszko routinely featured graphic descriptions of the details of his murder and consistently tied his murder to Polish communist authorities despite the fact that the murderers were swiftly arrested and found guilty in an open trial. By contrast, only four of the 23 Guatemalan victims had their names mentioned in any news account, little detail was offered for any of these murders, no remark was made concerning the fact that no arrests were made in any of these cases, nor was U.S. material support of the Guatemalan government that was behind the murders once mentioned.

None of the prevailing situation precludes energetic debate in capitalist mass media within the parameters set by prevailing ideological interpretations. Ideas that directly challenge corporate orthodoxy can be excluded at the same time that a debate among two or more “acceptable” ideas rages. This brings us back to interpretations of the Vietnam War. At the end of the 1990s a strong debate played out in the mass media outlets of the United States concerning the Vietnam War (one in which the Times was a significant participant).

A U.S. Air Force plane drops a white phosphorus bomb on Vietnam in 1966.

This debate had all the appearances of a serious dissection of a bloody, deeply divisive blot on U.S. history. But although the debate was heated and lively, it was only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting. Left out were the widely held views that the war should never have been fought because it was a war to extend U.S. hegemony or that the U.S. simply had no business fighting in someone else’s civil war.

Further, the first “acceptable” viewpoint implied, and the second explicitly stated, that the U.S. didn’t really fight hard to win the war, ignoring the actual intensive level of the U.S. war effort in which most of North Vietnam’s larger cities were reduced to rubble, much of the farming lands were destroyed and three million Vietnamese were killed. The total tonnage of bombs dropped by the U.S. in Vietnam exceeded that of all bombing by all countries during World War II. Reports of the countryside at the end of the war spoke of entire regions as “bare, gray and lifeless.”

So much for the proverbial “fighting with one hand tied behind the back.” And let’s not forget that the Vietnamese had already spent years freeing themselves from the grip of France, only to have the U.S. sabotage elections and resume the fight. That the Vietnamese have the right to decide for themselves how their economy will be structured, or even be allowed independent development at all, and that the U.S. used the full might of the world’s biggest military machine to prevent that, is still outside “acceptable” discussion.

Debate in the service of obfuscation

The liberal conception of an honorable effort that tragically failed is every bit an obfuscation as the conservative perspective that a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting. But that these two narrow perspective were allowed to fight it out provided the appearance of a free and open media at the same time that the media obscured.

To return briefly to Guatemala, there has only rarely been any effort in the U.S. to discuss Washington’s bloody role (and elsewhere in Latin America). The Eisenhower administration overthrew Guatemala’s democratically elected government, after a 1952 “national intelligence estimate” (a joint document put together by the CIA and other U.S. intelligence agencies) declared that the United Fruit Company’s massive profits there were a “U.S. interest” requiring intervention.

Allen Dulles, then the CIA director, met with a United Fruit official, promising that whomever the CIA would select as the next Guatemalan leader would not touch the company. The overthrow would institute a 40-year nightmare of state-organized mass murder. A series of military leaders, each more brutal than the last and fortified with U.S. aid, unleashed a reign of terror that ultimately cost 200,000 lives, 93 percent of whom were murdered by the state through its army and its death squads.

The worst of these dictators was General Efraín Ríos Montt, whose régime murdered more than 1,000 people a month during 1982. Ríos Montt was an evangelical Protestant preacher who declared that his presidency was the will of God. Ronald Reagan responded by paying a visit to Ríos Montt, declaring him “totally dedicated to democracy” and claiming that reports of human rights abuses were a “bum rap.”

Do you ever see of this (only one of dozens of examples that could be cited) discussed in the U.S. corporate media? I don’t, either.

In countries in which the media is controlled by the government, it is easy for people to disregard what they read or hear because it is all coming from the same source, even when there is room for different opinions. A system in which the mass media is believed to be independent is far more effective at suffusing a society with an ideology. Such a system is not the result of some sort of conspiracy or a conscious plan, it is simply a natural outgrowth of corporate institutions growing so powerful at the expense of all other institutions.

And when a particularly skilled team of producers is able to uphold the interests of elite institutions, corporate and otherwise, the red carpet will be rolled out. Slick, beautifully presented work beats ham-fisted propaganda every time.