Central banks step in to prop up global financial bubble

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31 August 2015

Early last week, global stock markets experienced their worst selloff since the 2008 financial crisis. At the opening of US markets on Monday, the Dow Jones Industrial Average was down more than 1,000 points, its largest intraday fall in history. By the end of the week, however, the markets in the United States and Europe had staged a major rally, recovering much of what they had lost.

The reason for the turnaround in global stock markets was not hard to find. As the New York Times put it: “Once again, the Federal Reserve helped save the day for investors” who were “inspired by soothing words from an influential Fed policy maker.” By “soothing words,” the Times means the promise of further infusions of cash into the financial system, which has fueled the continual rise in equity prices.

In particular, the Times was referring to the comments of William Dudley, president of the Federal Reserve Bank of New York and a key ally of Fed Chairwoman Janet Yellen, who said that the deterioration of the US economy made the case for raising interest rates “less compelling.”

Whether or not the Fed actually raises interests rates a small amount at its meeting next month, these statements were a pledge to do whatever it takes to keep the Wall Street asset bubble inflated.

The same day, European Central Bank Executive Board member Peter Praet made clear that the ECB stood ready to go even further by expanding its ongoing “quantitative easing” money printing operation. “There should be no ambiguity on the willingness and ability of the Governing Council to act if needed,” he declared.

These announcements compounded the moves by the Chinese central bank Tuesday to cut its target interest rate and reduce banks’ reserve requirements simultaneously, sending yet another flood of money into the economy on top of the 900 billion renminbi ($140 billion) it is estimated to have injected in June and July.

It is striking that, largely on the basis of a few hints dropped by monetary policy officials, the biggest global stock market sell-off since 2008 was at least partially reversed.

These developments underscore a basic reality of the contemporary capitalist economy: the ongoing stock market surge, which has seen all three major US stock indexes triple in value since 2009, is the product not any genuine economic “recovery,” but of continual infusions of cash from global central banks.

The present situation is the outcome of an extended process. Over the course of decades, the creation of wealth for the financial elite has become increasingly divorced from any productive activity and tied ever more directly to speculation in financial bubbles—a process most nakedly expressed in the United States. As Raymond Dalio, head of Bridgewater Associates, the world’s largest hedge fund put it, “The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around.”

Significantly, Dalio, whose wealth has tripled since 2008, this week called for the Federal Reserve to respond to growing turmoil in financial markets with a new round of quantitative easing.

In fact, so dependent has the global economy become on free money that former Treasury Secretary Lawrence Summers conceded in a column last week that, “Satisfactory growth, if it can be achieved, requires very low interest rates that historically we have only seen during economic crises,” concluding that “new conditions require new policies.”

Of course, the wealth of the financial elite cannot come from nowhere. Ultimately, the continual infusion of asset bubbles is the form taken by a massive transfer of wealth, from the working class to the banks, investors and super-rich. The corollary to the rise of the stock market is the endless demands, all over the world, for austerity, cuts in wages, attacks on health care and pensions.

Nowhere are these processes more clear than in the US. In the aftermath of the 2008 crash, the Obama administration and the US Federal Reserve made trillions of dollars available to the banks and major financial institutions. As a result, the share of wealth held by the richest 0.1 percent of the population grew from 17 percent in 2007 to 22 percent in 2012, while the wealth of the 400 richest families in the US has doubled since 2008.

The same period has witnessed an unprecedented decline in the incomes of working people. According to the latest Federal Reserve survey of consumer finances, between 2007 and 2013 the income of a typical US household fell 12 percent. The median US household now earns $6,400 less per year than it did in 2007.

The threatened bursting of the asset bubbles is driven by concern that the easy money policy is reaching some form of denouement, that the ammunition of central banks is drying up. All the more ferocious will be the ruling elite’s assault on the working class, in the United States and internationally.

As the WSWS wrote in 2009, “The most essential feature of a historically significant crisis is that it leads to a situation where the major class forces within the affected country (and countries) are compelled to formulate and adopt an independent position in relationship to the crisis.”

The ruling class responded to the crisis with a drive to vastly expand its own social wealth and privileges at the expense of the great majority of society. This drive will only intensify in the coming months and years. The working class must advance its own worked out program, based on an understanding of the forces that it confronts: a ruthless financial aristocracy, political institutions that are bought-and-paid for by the banks and giant corporations, and a global social system, capitalism, that has reached a historic dead-end.

Andre Damon

 

http://www.wsws.org/en/articles/2015/08/31/pers-a31.html

New York cops spied on activists against police violence

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By Sandy English
29 August 2015

A report published last week in Glenn Greenwald’s Intercept has revealed that police spied and exchanged information on activists who led protests against police violence last winter in New York City.

The spying was conducted by a special counterterrorism squad from police working for the New York Metropolitan Transportation Authority (MTA) and the Intelligence Division of the New York Police Department (NYPD).

The protests erupted after the refusal of a grand jury to indict NYPD officer Daniel Pantaleo for the murder of Eric Garner. Pantaleo was videotaped strangling Garner during a targeted arrest for allegedly selling tax-free cigarettes in the borough of Staten Island on July 17 last year.

As he lay on the ground, Garner told police officers on the scene several times that he could not breathe. He was given no first aid and was pronounced dead at the hospital. His death was later ruled a homicide by the city coroner’s office.

Activists obtained 118 pages of police reports from the MTA and 161 pages from the Metro North Railroad through New York’s Freedom of Information Law. The documents cover protests that took place from December 2014 to February 2015 in Grand Central Station in Manhattan where the MTA police have jurisdiction. A number of protests in the timeline occurred there.

The NYPD has not released any documents, but those that have been supplied reveal an information exchange between the NYPD and the MTA police, and the presence of both NYPD as well as MTA undercover officers at the protests.

Police tracked demonstrators as they were moving around Grand Central Station and in the city and identified specific individuals among the demonstrators. One undercover officer sent frequent email updates on the activities of protesters at the station during a protest on Martin Luther King Day in January. These included notice of the presence of Jose LaSalle, a founder of CopWatch Patrol Unit, in an email that includes his photograph.

Another email chain from December includes a chart of upcoming protests, including one organized by high-school students.

It is worth noting that some of the police spying occurred after Democratic Mayor Bill de Blasio called for a halt to the protests against police violence in the aftermath of the shooting death of two NYPD officers in Brooklyn on December 20 by a deranged gunman, although the documents indicate that surveillance of protesters also took place before de Blasio’s plea.

The political atmosphere during the first half of December in New York City was one of intensifying anger at police violence, particularly over the Garner case, but also including the dozens of police shootings in the city over the past decade, as well as the shooting of Michael Brown in Ferguson, Missouri and the refusal in November of a grand jury to indict his killer, Officer Darren Wilson.

During the period from December 4 to December 15, large demonstrations against police violence took place throughout the city, some of them partly spontaneous, with tens of thousands of workers and youth protesting in Washington Square Park on December 15.

After the December 20 shooting, however, elements of the state apparatus attempted to go on a counteroffensive. Police union officials claimed that de Blasio had blood on his hands for his supposed tolerance of anti-police-violence protests, and the NYPD staged a near-mutiny when cops turned their backs on de Blasio on several occasions in what became a political mobilization of the police. Over the next few weeks, NYPD officers then performed a systematic slowdown in arrests and citations for minor crimes across the city.

While police surveillance and intimidation of protesters during this period were undoubtedly intensified, these practices certainly did not begin from scratch. Spying on protesters in New York City who have not broken the law and represent no threat to public safety is the modus operandi of the NYPD and other state agencies, including the FBI and the Department of Homeland Security.

The NYPD has a long and well-documented history of spying on and harassing Muslims in the aftermath of the terrorist attacks of September 11, 2001. More recently New York cops have video-recorded, photographed, followed and intimidated nonviolent protesters, such as those involved in the 2011 Occupy Wall Street protests in Zuccotti Park in Lower Manhattan. The NYPD also subjected these protesters to beatings, pepper spraying and the use of LRAD sound cannons. One of the most egregious state attacks on protesters’ democratic rights was the frame-up of organizer Cecily MacMillan in 2014.

There can be little doubt that the documents published by the Intercept are only the tip of an iceberg of sustained and extensive surveillance of organizers of and participants in protests against police violence, not only in New York City, but throughout the United States.

 

http://www.wsws.org/en/articles/2015/08/29/poli-a29.html

Is Donald Trump Really a ‘Fascist’?

The Trump campaign doesn’t seem so funny anymore.

Donald Trump speaks in Manchester, New Hampshire, USA, on April 12, 2014
Photo Credit: Andrew Cline / Shutterstock.com

Although he is still a clown, nobody laughs at Donald Trump anymore — which may be the real purpose of his candidacy, at least as far as he is concerned. The casino mogul is pleased to instill fear among Republican elites, as he dominates their presidential nominating contest — and forces them to face a hard question about the man who is exciting such belligerent enthusiasm among Republican voters.

Is Trump a real live fire-breathing fascist?

From Newsweek to Salon to the Daily Caller, commentators of various colorations have found ample reason to apply that often-discredited label to him. While these observers hesitate to lump Trump in with totalitarian dictatorships and historic crimes against humanity, they are clearly concerned over his strongman appeal, his populist rhetoric, and his rejection of GOP free-market orthodoxy.

Genuine conservatives aren’t wrong to fret, but they seem unwilling or unable to grasp the clearest evidence that Trump is channeling toxic currents from the past — namely, his appeals to racial bigotry, his truculent attitude toward other nations, and his extremist “solution” to illegal immigration.

Obvious clues to the noxious nature of Trumpism keep cropping up across the political landscape like poison mushrooms. In Boston’s “Southie” neighborhood, once headquarters of the openly racist anti-busing movement known as ROAR (Restore Our Alienated Rights), two white males severely beat an older Hispanic man. When arrested, one of the thugs told police, “Donald Trump was right, all these illegals need to be deported.”

Rather than deplore this ugly assault, Trump’s impulse was to praise the zeal of his supporters. “It would be a shame,” he said when first told of the beating, then added: “I will say that people who are following me are very passionate. They love this country and they want this country to be great again. They are passionate.”

At a big rally in Mobile, Alabama, Trump welcomed Senator Jefferson Beauregard Sessions, R-Ala., the only prominent politician singled out for praise. Sessions is a dubious figure whose federal judicial nomination was once rejected by the Senate Judiciary Committee over his record of racially inflammatory behavior and remarks — which included calling a white civil rights lawyer “a disgrace to his race” and opposing the Voting Rights Act. Today, he is the chief Senate opponent of legal immigration to the United States.

Opposition to legal as well as illegal immigration is a foundation of the white nationalist movement in the United States. So perhaps nobody should have been too surprised when a loud voice in the Mobile audience greeted Sessions’ arrival by screaming “White Power!”

Again, the reaction of the Trump campaign was telling. Campaign manager Corey Lewandowski responded that he wasn’t aware of the “white power” shouter. “I don’t know about the individual you’re talking about in Alabama,” he insisted. “I know there were 30-plus thousand people in that stadium. They were very receptive to the message of ‘making America great again’ because they want to be proud to be Americans again.”

Asked about the Boston beating, Lewandowski acknowledged that violence is “unacceptable,” continuing: “However, we should not be ashamed to be Americans. We should be proud of our country, proud of our heritage, and continue to be the greatest country in the world.” Like his boss, Lewandowski isn’t subtle. His dog-whistle about “heritage” and being “proud” was heard loud and clear by the white supremacist underworld, which is rallying behind Trump.

The troubling tone in Trump’s language can be detected when he talks about foreign policy, too. As David Cay Johnston recently reported, the draft-dodging billionaire boasts that he is the “most militaristic” candidate, and has blatantly advocated attacking other countries to “take” their oil. Imperial warmongering is a classic hallmark of fascism — indeed, it was military aggression by Nazi Germany that led to World War II.

Finally there is Trump’s “solution” to illegal immigration. He promises to deport an estimated 11-12 million people, a plan that would be ruinously expensive and grossly inhumane to even attempt. The only analogous projects on that scale were atrocities carried out by the Turks against Armenians and, later, by the Nazis against European Jews.

Imagine a country that seeks to round up millions of brown-skinned people by force, transforming itself into a police state, while mobs of vigilantes in militias scourge frightened families out of hiding. It is not hard to predict scenes of bloodshed and horror.

No Donald, that isn’t the way to “make America great again.” For most of us — the majority of citizens who have no use for Trump and Trumpism — that isn’t America at all.

Joe Conason is the editor of the National Memo and writes a column for creators.com

 

http://www.alternet.org/election-2016/donald-trump-really-fascist?akid=13427.265072.KrNupL&rd=1&src=newsletter1041631&t=4