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.
An unsentimental look at how things are now
By Christine Schofelt
29 August 2015
The Katrina Decade: Images of an Altered City, David G. Spielman, with essays by Jack Davis and John H. Lawrence, The Historic New Orleans Collection, New Orleans, Louisiana, 2015
Photographer David G. Spielman (born 1950) documented the immediate aftermath of the devastation in New Orleans in his previous book, Katrinaville Chronicles(2007). The story of that book is itself remarkable.
His publisher, Louisiana State University press, explains: “When Hurricane Katrina approached New Orleans, photographer David G. Spielman decided to stay and weather the storm, assisting his Uptown neighbors, a community of Poor Clare nuns. Katrina passed, and as the flood waters filled the city, the scope of the devastation only gradually dawned on Spielman, who was cut off from outside communication. Faced with the greatest personal and professional challenge of his life, he determined to document the scene unfolding around him. He managed to secure a generator to power his laptop computer, and in the days, weeks, and months after August 29, 2005, he transmitted e-mails to hundreds of friends and clients and cautiously traversed the city taking photographs. Katrinaville Chroniclesgathers Spielman’s images and observations, relating his unique perspective on and experience of a historic catastrophe.”
Spielman revisits the subject in his most recent book, The Katrina Decade. Documenting the state of the city in black-and-white photos taken between 2009 and 2014 or so, he leaves the well-traveled paths taken by the tourist industry and Chamber of Commerce, who tout the “resilience” and supposed recovery of the city.
Unlike much of the photography devoted to New Orleans, before or after Katrina, Spielman’s work includes many more recent buildings and scenes. The French Quarter and genteel mansions are entirely absent. Since those are well-documented elsewhere, this is not a great loss. Spielman’s focus is on the low-lying areas of the city, those most hard-hit. These areas were largely unknown, poor and unfashionable at the time of Katrina, and remain so. Very few people are present in the photos, and those who are bring out the lingering desolation.
Buildings overgrown with vines are common–whether in the Seventh Ward, Mid-City or Central City. One in particular, possibly a shotgun double in New Orleans East, is totally enveloped–its triangular outlines the only indication that humanity had any hand in things at all. In the distance sits another building seen as the glimpse of a roof in good repair. The buildings cannot be more than a few hundred yards from each other, but the distance seems unbridgeable.
The majority of the photos are of residences or infrastructure such as hospitals and retail stores. Both the storm itself and the intervening years have taken their toll. Graffiti (some quite poignant), occasional squatters and the unrelenting natural elements contribute in their various ways to push buildings that might have been salvageable into a state of irretrievable decay.
The image of Charity Hospital taken in 2014 is one of the starkest, however surrounded by traffic and life it may be. Indeed, this is the most bustling of the photos in the book, but the hospital, which never re-opened after Katrina, is caught here under a looming sky and stands as a symbol of incredible lost potential.
As the WSWS noted at the time, “The catastrophe unleashed by Katrina has unmistakably revealed that America is two countries, one for the wealthy and privileged and another in which the vast majority of working people stand on the edge of a social precipice.” The processes of official neglect and searing poverty exposed to the world’s view by the hurricane ten years ago have continued on. This finds sharpest expression in tracts of untouched or barely touched neighborhoods to which people have not been able to return or, if they never left, have not had the resources to rehabilitate.
One notes the similarities between certain pictures of the West Bank [of the Mississippi River] or Uptown and images of de-industrialized areas from many US cities (Detroit, Cleveland, Baltimore, etc.): burned out, stripped-down cars sit in front of abandoned mid-century housing developments, children play basketball in a broken hoop set before a broken house.
Spielman is not given to the current fetish for “Ruins Photography.” There is no romanticism in these pages. A news photographer by trade, he cites the Works Project Administration’s Dust Bowl documentation in the 1930s as his chosen approach to his city, and is careful to avoid sentimentality. That the images are aesthetically effective is the result, in the first place, of the objective situation being taken for what it is. The buildings are largely shot head-on, and there is no attempt to prettify or make them approachable. If someone happens to live or work there, he or she is taken as part of the whole.
Such honesty is particularly welcome when dealing with this much-mythologized city. It is seemingly forgotten in the anniversary events marking the catastrophe that actual people lived here, or live here still–some in appalling conditions more reminiscent of the turn of the last century than this one.
The promoters who want to welcome tourists or entice investors are full of bravado and boasting. New Orleans, they say, is “back.” Much, however, is still missing and still slipping away. Spielman’s book is a quiet and potent reminder of this.
By Peter Symonds
28 August 2015
Amid continuing global share market volatility, the financial elites around the world have been intently focussed on the movement of Chinese stock markets and more broadly on the state of the Chinese economy. Yesterday’s rise of the benchmark Shanghai Composite Index, after falls in six successive trading sessions, produced an almost audible sigh of relief as share prices responded by rising on major markets internationally.
The deluge of media commentary on the Chinese economy reflects the degree to which the world economy as a whole is dependent on continued growth in China. Speaking on the Australian Broadcasting Corporation’s “Lateline” program last night, Ken Courtis, chairman of Starfort Holdings, pointed out that “this year we’re expecting 35 to 40 percent of all the world’s growth to come from China.” If that did not happen, “then we have a real problem.”
Concerns in ruling circles that China’s economic slowdown will lead to political instability were evident in an article published in the Financial Times (FT) on Tuesday entitled, “Questions over Li Keqiang’s future amid China market turmoil.” Analysts and party insiders who spoke to the FT suggested that the Chinese premier was “fighting for his political future” after the Shanghai Composite Index plunged by 8.5 percent on Monday—its largest decline since early 2007.
Analyst Willy Lam from the Chinese University of Hong Kong told the newspaper: “Premier Li’s position has certainly become more precarious as a result of the current crisis. If the situation worsens and if there comes a point where [President Xi Jinping] really needs a scapegoat, then Li fits the bill.”
Li and Vice Premier Ma Kai were closely associated with efforts in early July to stem the falling share markets, including a ban on short selling and new stock offerings and share sales by large investors. According to the FT, state-owned institutions pumped an estimated $200 billion into the share market, only to see it plummet over the past week.
The Chinese leadership is more broadly under fire. A lengthy article in the New York Times last weekend reported that Xi had been told by powerful party elders to focus more on restoring economic growth and less on his anti-corruption drive.
Xi, however, has exploited high-profile anti-corruption cases to consolidate his grip on power, jail potential rivals or challengers, and intimidate factions critical of his government’s accelerating pro-market reform and further opening up to investment. A shrinking economy will only fuel tensions within the isolated and sclerotic Chinese Communist Party (CCP) regime and open up the prospect of renewed factional infighting.
Having all but abandoned its socialistic posturing, the CCP leadership has depended for its legitimacy on continued high levels of economic growth. The fear in Beijing and major financial centres around the globe is that rising unemployment and deepening social inequality will lead to social unrest, particularly in the working class, which is now estimated to number 400 million.
The official growth figures have fallen this year to 7 percent—well below the 8 percent level that the CCP long regarded as the minimum required for social stability. Many analysts, however, regard even 7 percent as significantly overstating actual growth. A recent Bloomberg survey of 11 economists put the median estimate of Chinese growth at 6.3 percent.
Others put the figure far lower. Analyst Gordon Chang told the Diplomatwebsite that “influential people in Beijing” were “privately saying that the Chinese economy was growing at a 2.2 percent rate.” He pointed to other indicators of declining economic activity: rail freight (down 10.1 percent in the first two quarters of 2015), trade volume (down 6.9 percent), construction starts by area (down 15.8 percent) and electricity usage (up by just 1.3 percent).
While the Beijing leadership is under pressure to boost the economy, the slowdown in China is bound up with the broader global crisis of capitalism. The restoration of capitalism in China over the past three decades has transformed the country into a vast cheap labour manufacturing platform that is heavily reliant on exports to the major economies.
In highlighting China’s contribution to world growth, Ken Courtis noted on “Lateline” yesterday that “Japan is contracting or in great difficulty still, the US is growing at 2, 2.5 percent, [and] Europe is slugging around at 1.5, 1 percent.” These economies, however, are precisely the markets on which China depends. The latest figures for July showed that exports slumped by 8.3 percent year-on-year, with exports to Europe and Japan down 4 percent, partially compensated by a rise of 7 percent to the US.
Following the 2008 global financial crisis, the CCP leadership only maintained economic growth through a massive stimulus package and the expansion of credit. However, with exports and industrial production stagnating, the money flowed into infrastructure spending, property speculation and, more recently, stock market speculation. Notwithstanding occasional rallies in response to government measures to ease credit, falling property prices over the past year, and now plunging share prices, underscore the fact that these speculative bubbles are unsustainable.
The Chinese regime is under international pressure to accelerate its pro-market reform agenda, including privatisation of state-owned enterprises (SOEs) and the further liberalisation of the financial sector to open up new profit opportunities for foreign investors. Such measures, however, will only heighten the social gulf between rich and poor and provoke wider social unrest. The last round of privatisations in China resulted in the destruction of tens of millions of jobs.
The Beijing regime, which represents the interests of the tiny layer of Chinese millionaires and billionaires, is deeply fearful of the emergence of a movement of the working class. The fact that questions are being raised about the future of Prime Minister Li Keqiang is an indicator of the existing sharp tensions that will only intensify as financial and economic turmoil worsens and impacts on the lives of hundreds of millions of people.
In an interview with Democracy Now!. economist Michael Hudson talked about the wild ride on Wall Street Monday that saw the Dow Jones Industrial Average initially fell a record 1,100 points before closing down nearly 600 points. “The real problem is that we’re still in the aftermath of when the bubble burst in 2008,” he told Amy Goodman, “that all of the growth in the economy has only been in the financial sector, in the monopolies—only for the 1 percent. And it’s as if there are two economies, and the 99 percent has not grown. And so, the American economy is still in a debt deflation. So the real problem is, stocks have doubled in price since 2008, and the economy, for most people, certainly who listen to your show, hasn’t grown at all.
Below is an interview with Hudson, followed by a transcript:
http://www.democracynow.org/embed/story/2015/8/25/casino_capitalism_economist_michael_hudson_onAMY GOODMAN: “Black Monday.” That’s how economists are describing yesterday’s market turmoil, which saw stock prices tumble across the globe, from China to Europe to the United States. China’s stock indexes fell over 8 percent Monday and another 7 percent today. On Wall Street, the Dow Jones Industrial Average initially fell a record 1,100 points before closing down nearly 600 points. The decline also caused oil prices to plunge to their lowest levels in almost six years.
Joining us now to try to make sense of what’s really behind the fluctuations in the market is economist Michael Hudson, president of the Institute for the Study of Long-Term Economic Trends, a Wall Street financial analyst and distinguished research professor of economics at the University of Missouri, Kansas City. His latest book, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
MICHAEL HUDSON: Welcome to Democracy Now! It’s great to have you with us.
Thanks for having me again.
AMY GOODMAN: Professor Hudson, talk about what happened in China and what happened here in the United States.
MICHAEL HUDSON: Well, what happened in China doesn’t have very much to do at all with what happened in the United States. Wall Street would love to blame China, and the Obama administration would love to blame China, and Europe would love to blame China. But most of the Chinese stocks went down because small Chinese investors were borrowing from, let’s say, the equivalent of payday loan lenders to buy stocks. There was a lot of small speculation in Chinese stocks pushing it up. But this was an internal Chinese phenomenon. And China, as a whole, doesn’t really have the problems.
The real problem is that we’re still in the aftermath of when the bubble burst in 2008, that all of the growth in the economy has only been in the financial sector, in the monopolies—only for the 1 percent. And it’s as if there are two economies, and the 99 percent has not grown. And so, the American economy is still in a debt deflation. So the real problem is, stocks have doubled in price since 2008, and the economy, for most people, certainly who listen to your show, hasn’t grown at all.
So, finally, the stocks were inflated really by the central bank, by the Fed, creating an enormous amount of money, $4.5 trillion, essentially, to drop over Wall Street to buy bonds that have pushed the yields down so high—so low, to about 0.1 percent for government bonds, that pension funds and investors say, “How can we make money?” So they buy stocks. And they borrowed at 1 percent to buy up stocks that yield maybe 4 percent. But who are the largest people who buy the stocks? They’re the companies themselves that have done stock buybacks. They’re the managers of the companies that have used their earnings, essentially, to push up stock prices so they get more bonuses. Ninety precent of all the earnings of the biggest companies in America in the last five years have gone for stock buybacks and dividends. It’s not being invested. It’s not building new factories. It’s not employing more people.
So, the real problem is that we’re in a nonrecovery in America, and Europe is in an absolute class war of austerity. That’s what the eurozone is, an austerity zone. So that’s not growing. And that’s really what’s happening. And all that you saw on Monday was just sort of like a shift, tectonic shift, is people realizing, “Well, the game is up, it’s time to get out.” And once a few people want to get out, everybody sees the game’s up.
AMY GOODMAN: And China?
MICHAEL HUDSON: In China, it’s largely small borrowers who borrowed from intermediate lenders, that have borrowed from the big banks. So a lot of individuals in China that tried to get rich fast by riding the stock market all of a sudden find out that they have a lot of debt to intermediate, you know, non-bank lenders, insiders, people who banks will lend to. It’s like the British banks lending to real estate speculators to lend out to homebuyers. So this is essentially the attempt to get rich by riding the stock market in China went way overboard. Chinese stocks are still above what they were at the beginning of the year. This is not a crisis. This is not very much. It’s just that the artificial increase in the market has now ended some of the artificial push-up. And it’s still artificial, and it will still go down some more.
AMY GOODMAN: I’m surprised you say that what happened in China and what happened in the United States are not related.
MICHAEL HUDSON: They are related in a way, but the U.S. funds have not invested very much in the Chinese stocks. Most of the China fund stocks are inHSBC, which lends to China—the bank. The break first happened in China, but the break itself was within China. And this showed investors—this is a symptom—that what happened in China is going to happen in Europe, and it’s going to happen in the United States.
AMY GOODMAN: Talk about China as the world’s second largest economy, and what you think would be the healthiest relationship between China and the United States.
MICHAEL HUDSON: Well, the economy is not the stock market. China’s economy had to accumulate a large amount of foreign reserves just to withstand the kind of American financial war that brought the Asia crisis of 1997. So China acted defensively. It exported a lot, developed huge international reserves to make itself independent of the West. And now it’s in the middle of shifting away from an export economy to begin to produce for its own people. I mean, why should Chinese workers spend all their lives making goods for Wal-Mart to sell in the United States and Europe? Why don’t they make goods for themselves to raise their own standard of living? That was what China’s doing, and that means that China doesn’t have to export more, and there’s really nowhere to export to, if Europe isn’t growing and the U.S. consumers aren’t spending. Obviously, the attempt is to make China itself grow. But the Chinese took the money; instead of consumer goods, they bought stocks.
AMY GOODMAN: As markets in China plunged Monday, former U.S. treasury secretary and president emeritus of Harvard University, Larry Summers, tweeted this dire prediction: “As in August 1997, 1998, 2007 and 2008 we could be in the [early] stage of a very serious situation.” Is he overstating what’s going on?
MICHAEL HUDSON: The question is: What does he mean by “situation”? When he says “situation,” he means his constituency, the 1 percent. He doesn’t mean the economy as a whole, the 99 percent. He’s been wrong on almost everything that he’s called. What he’s calling for now is: You have to cut taxes on the 1 percent more; you have to give the 1 percent more money, and it will all trickle down. This is part of his patter talk, trying to support his usual right-wing position. But you have to be very careful when you listen to Larry Summers.
AMY GOODMAN: Michael Hudson, your book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy. Explain what you mean.
MICHAEL HUDSON: Well, most people think of parasites as sort of just taking, taking money from the economy, and the 1 percent is sort of sucking up all the income from the 99 percent. But in nature, what parasites do, they don’t simply take. In order to take, they have to take over the brain of the host. And economists have a word, “host economy.” It’s for a foreign country that lets American investors in. Smart parasites help the host grow. But the parasite, first of all, has to make the host believe that the intruder is actually part of the body, to be nurtured and taken care of. And that’s what’s happened in national income accounting in America and in other countries. The newspapers and the media—not your show, but most of the media—treat the financial sector as if that’s really the economy, and when the stock market goes up, the economy is going up. But the economy isn’t going up at all.
And the financial sector somehow depicts itself as the brains of the economy, and it would like to replace government. What Larry Summers said is what—governments have to pay their debts by privatizing more, essentially, by doing what Margaret Thatcher did in England. That’s his solution to the crisis: All the governments have to do is balance the budget, sell everything to Wall Street on credit, and we won’t have any more problem. And that’s basically—the financial sector is almost at war, not only against labor, as most of the socialists talk about, but against governments and against industry. It’s cannibalizing industry. So now most of the corporations in America are using their income not to do what industrial capitalism did a century ago, not to build more factories and employ more people and make more profits; they’re just using it, as I said, to push it to pay dividends and to buy back their shares and to somehow manipulate the financial sector in the stock prices, not the economy as a whole. So there’s been a divergence between the real economy and what I call the—economists call the FIRE sector—finance, insurance and real estate. And they’re going in separate directions.
AMY GOODMAN: You are—you have been an adviser to the Syriza party in Greece. You’re a friend of the former finance minister, Yanis Varoufakis. Can you talk about what’s happening there now and what that bodes for the economy, not only in Greece, but in Europe, maybe even here?
MICHAEL HUDSON: Well, the story begins, actually, about four years ago, when Greece had a very large foreign debt, taken on basically by the military government and what followed. And it was obvious that as soon as thePASOK, the socialist party, came in, they said, “Look, the debt’s much larger than we thought. We can’t pay it.” And they were going to write it down. TheIMF looked in and said, “Greece can’t pay the debts. We’ve got to write them down.” The board looked in, said they can’t pay the debts. But then the European central banks came in and said, “Look, our job as central bankers is to support the banks. Greece owes the debt to the, essentially, French banks and German banks, and we’ve got to support them.” So, despite the fact that the IMF was pushing for a debt write-down four years ago—the head of theIMF at that time, Dominique Strauss-Kahn, wanted to run for president of France, and he was told by French President Sarkozy, “Well, wait a minute, if French banks hold most of Greek debts, you can’t, at the IMF, say that we’re going to write down the debts.” So they didn’t. And meanwhile, the eurozone said, “We won’t let you, the IMF, be part of our program, the troika, if you don’t pretend that Greece can pay the debt.”
So Greece was left with a huge debt. It was pushed into depression. The GDP fell worse than it did in the 1930s. Finally, the Syriza party came in, in January, and Varoufakis and Tsipras thought, “Well, then, OK, we can explain to the finance ministers of Europe that you can’t expect to push Greece into a depression, push more austerity, and somehow austerity will enable us to repay the debt. That’s crazy.” And he thought that he could reason with them. And the Europeans, who he was reasoning with, the central bankers, said, “We’re not here to talk about economics. We’re lawyers. We’re here to collect money. It doesn’t matter that you’re going to go into a depression. It doesn’t matter that you’re going to have to have another 20 percent of your population emigrate. We’re only here to collect the payments. And if you don’t pay, then we’re going to pull the plug.”
And they pulled the plug on the Greek banks a few months ago and said, “We’re not going to accept any of the bank transfers, payments with Greek banks here. So, if you’re exporting and you want credit for export, you’re not going to give it to you. We’re going to treat Greece like America treated Cuba and America treated North Korea. You’re going to be the North Korea of Europe if you don’t succumb, surrender and pay.” And that’s why Tsipras said, “Oh, my—we don’t want to bring an absolute, you know, total breakdown, because that would bring the right wing to power.” Varoufakis said, well, he agrees that there’s no alternative but to sort of surrender for the present and try to join hands with Italy, Spain and Portugal, but he wasn’t going to be the administrator of the depression. So you had the referendum, and the Greeks now say, “Well, no matter what, we’re not going to pay.” And the eurozone says, “Then we’re going to just wreck you, or smash and grab.”
AMY GOODMAN: I want to ask you very quickly about presidential politics, about two of the Republican presidential candidates, Jeb Bush and John Kasich. Both worked for Lehman Brothers, Kasich after he ran for—after he was a congressman; Jeb Bush, according to The Wall Street Journal, Bush signed on with Lehman after leaving the Florida Governor’s Mansion, making it clear he wanted to work as a hands-on investment banker. I believe he made something like $14 million working for Lehman and then Barclays.
MICHAEL HUDSON: Well, almost—both parties are basically run by Wall Street. The Democratic Party, ever since Bill Clinton, was run by Robert Rubin. And all of the secretaries of the treasury, the officials, have basically come from Goldman Sachs, especially Tim Geithner. One of the problems in Greece, by the way, was that Obama and Geithner, coming from the Rubin group, met at the Group of Eight meetings and told—were told, basically, Greece, “You have to pay, because the American banks have made so many big bets on Greek bonds that if Greece doesn’t repay”—this is back in 2011—”then the American banks will go under, and if we go under, we’re going to pull Europe down.” So, the American banks basically—we’re talking about Wall Street investment firms. They don’t—they’re called investment bankers, but they don’t invest. They gamble. And we’re really much more in casino capitalism than finance capitalism.
So you have Wall Street people basically running politics, whether they’re the actual politicians—Obama didn’t work on Wall Street, but he worked with the real estate families. No matter who the president is, they’re going to appoint Treasury heads and Fed, Federal Reserve, heads from Wall Street. Wall Street has a veto power on all the major Cabinet positions, and so, essentially, the economy is being run by the financial sector for the financial sector. That’s the problem with politics in America today.
AMY GOODMAN: Michael Hudson, thank you very much for being with us, president of the Institute for the Study of Long-Term Economic Trends, a Wall Street financial analyst, distinguished research professor of economics at the University of Missouri, Kansas City. His latest book, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
By Barry Grey
27 August 2015
A top official of the Federal Reserve Board broadly hinted Wednesday that the US central bank, contrary to previous indications, would not begin to raise its benchmark interest rate at the September meeting of its policymaking committee.
The statement by William Dudley, president of the Federal Reserve Bank of New York and vice chairman of the Fed’s Federal Open Market Committee (FOMC), was timed to buttress and expand an early morning rally on US stock exchanges, which had seen over $2 trillion in market capitalization wiped out in massive declines over the previous six trading sessions. Over those six days, the Dow lost 11 percent of its market value.
Speaking in New York about one hour after the 9:30 a.m. start of trading, Dudley said, “From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago.” “Normalization” is Fed-talk for beginning to gradually lift the federal funds rate from near-zero, where it has remained since shortly after the September 2008 Wall Street crash.
Dudley’s remarks carry additional weight because he is known to be a close ally of Fed Chairwoman Janet Yellen. His statement was a calculated signal to Wall Street banks and other financial interests that the US central bank and government were prepared to open the cash spigot even wider and provide whatever public funds were necessary to shield the financial elite from the consequences of a new eruption of the global capitalist crisis.
When Dudley made his remarks, an opening bell surge of 430 points on the Dow Jones industrial average had fallen back to 300 points and fears were mounting of a repeat of Tuesday’s session, when an opening gain of 442 points turned into a rout in the final 30 minutes of trading, with the Dow closing down 205 points, or 1.3 percent.
Dudley’s intervention had the desired effect. Major investors went on a buying spree and drove the rally higher, resulting in massive gains for all three major indexes—the Dow, the Standard & Poor’s 500, and the technology-laden Nasdaq. The Dow finished with a gain of 619 points (3.5 percent), the S&P 500 closed 73 points higher (3.90 percent), and the Nasdaq gained 191 points (4.24 percent). These were the biggest one-day gains for all three indexes since the second half of 2011.
The surge on US markets came despite another down day on Chinese markets. An early rally on the Shanghai Composite Index collapsed, leading to a 1.3 percent loss at the close of trading. It was the fifth consecutive down session, during which the main Chinese exchange has lost more than a quarter of its value.
The loss was all the more significant in that it followed Tuesday’s announcement by the Chinese central bank of major moves, including a quarter percentage point cut in the benchmark interest rate and a reduction in bank reserve capital ratios, designed to push hundreds of billions of dollars worth of new cash into the country’s financial markets.
The surge on Wall Street came as well against the backdrop of new losses on European markets. On Wednesday, the French CAC 40 closed down 1.40 percent, the German DAX lost 1.29 percent, and Britain’s FTSE 100 index declined by 1.68 percent.
There were other signs that the global deflationary pressures underlying the recent stock market selloffs were continuing unabated. The protracted fall in commodity prices continued, with oil prices falling in both the US and Europe. The drop in the US market followed the release of weekly US inventory data showing a drop in gasoline demand and record-high stockpiles of crude oil and petroleum products.
Copper prices were down 3.1 percent.
Besides the sharp slowdown in Chinese economic growth and collapsing commodity prices, the other acute expression of a worsening world slump and mounting financial problems is the crisis in the so-called emerging market economies. Countries ranging from Brazil, to Russia, Turkey, Indonesia, Thailand, and South Africa are reeling from falling stock and bond prices, plunging currencies, and increasing indebtedness.
They are being hit particularly hard by the slowdown in China, a major market for commodity exports, and the broader combination of plunging commodity prices and glutted markets. On Tuesday, South Africa, the biggest economy on the African continent, unexpectedly reported that its economic output contracted by 1.3 percent on an annualized basis in the second quarter. Economists had predicted a gain of 0.6 percent, itself a sharp decline from the country’s first-quarter 1.3 percent expansion.
In his morning remarks to reporters, Dudley alluded to the recent global stock market and currency turmoil. “International developments have increased the downside risk to US economic growth somewhat,” he said. “The slowdown in China and the sharp fall in commodity prices are increasing the strains on many emerging market economies and this could lead to a slower global growth rate and less demand for US goods and services.”
While implicitly acceding to demands from prominent financial figures, such as former Treasury Secretary Lawrence Summers, to delay any increase in interest rates, Dudley rebuffed the call made Tuesday by Summers and Ray Dalio, head of hedge fund giant Bridgewater Associates, for a new round of “quantitative easing,” i.e., Fed bond purchases, to directly pump additional billions of dollars into US financial markets.
“I’m a long way from quantitative easing. The US economy is performing quite well,” he said. He also held out the possibility of the Fed raising rates before the end of 2015, saying, “I really hope we can raise interest rates this year.”
But in signaling the Fed’s determination to do whatever is necessary to rescue the financial aristocracy from the consequences of its own speculative and semi-criminal activities, Dudley is making clear that the ruling class will continue to carry out the very policies that, far from producing a genuine recovery, have deepened the crisis announced by the Wall Street meltdown of 2008.
The US central bank and government, and their counterparts internationally, have focused all of their efforts on rescuing the financial oligarchy and creating the conditions for it to further enrich itself at the expense of the working class.
The primary means has been the provision of unlimited funds to subsidize and underwrite the parasitic activities of the banks and hedge funds. The main mechanism for promoting what the Fed calls the “wealth effect,” i.e., the enrichment of the financial-corporate elite, has been the stock market, with the Fed financing a massive inflation of share values by means of zero interest rates and money-printing in the form of quantitative easing.
Before the latest market turmoil, share values on US markets had tripled from their lows at the height of the financial crisis in early 2009, and stock markets internationally had hit record highs.
This has gone hand in hand with a relentless attack on the conditions of the working population by means of mass layoffs, wage-cutting and the gutting of social programs. Governments have been bankrupted by the diversion of funds to bail out the banks and speculators, whose debts have been shifted onto the balance sheets of the capitalist state, with the working class made to foot the bill.
Meanwhile, the real economy has been starved of productive investment and left to stagnate. The current stock market turmoil reflects the growth of deflationary forces in the global economy that threaten to overpower the efforts to inflate and maintain financial bubbles for the benefit of the rich.
A despairing response to a complex world
By Kelly Taylor
26 August 2015
The announcement that artist Banksy was creating “Dismaland”, an installation parodying the theme park experience, created a huge wave of interest. (See the video trailer here.)
The website selling advance tickets for the show crashed due to the volume of people trying to make a purchase. Banksy issued apologies and follow-on announcements. Despite rumors that the process was a hoax, a spokeswoman for the artist insisted, according to the BBC, that the attraction’s website was “100 percent real” and had gone down under “huge demand”.
In any event, the ticket-buying experience was a taster for the theme park as a whole—how the process of life under capitalism of building hope, excitement and anticipation in youth becomes butchered by the reality of disappointment, anger and loss in adulthood. This was a sentiment expressed by one of the artworks, proclaiming, “Keep hold of your longings … going … going … gone”.
Banksy says he hit upon the location for the theme park while walking past the disused Art-Deco “Tropicana” Lido in the seaside resort of Weston-super-Mare (on the Bristol Channel, 18 miles southwest of Bristol) six months ago. There is some irony to the fact that the event is being held in the town. After the Second World War it became a popular holiday destination for workers from industrial Birmingham, but then fell, like many resorts, into a protracted decline in the 1970s. Today, with significant alcohol and drug problems, parts of Weston have turned into a real-life Dismaland.
Entry to the theme park is via an airport-type security installation created by California-based artist and filmmaker Bill Barminksi. Actors play the roles of unhelpful and intimidating staff. For visitors, it is probably the only opportunity they will get to poke fun at security measures and not face further consequences.
This effort to warn about the threat of a militarised and locked-down society is married to another concern of Banksy—attendees bringing in pens, markers and paint. They are not allowed on site, for fear of attack on the artwork by opponents of Banksy who feel he has sold out to commercialism.
Coming through the main gates into Dismaland, one is confronted with a world that is terribly sick, where the staff are depressed, uncooperative and dreary, and the slowed-down Hawaiian-style holiday music continually bears down on you. The entire thing is a scene of surreal carnage, with a riot van operating as a fountain on the palace lake.
The show consists of three parts: the traditional Banksy dark view of modern life with old, battered fairground toys littered everywhere, along with works from his previous shows in Bristol and New York; a more traditional art exhibition inside the old main building; and an area of tents given over to the promotion of “political activism”. Throughout the exhibition there is a strong anarchistic theme, conveyed through simplistic slogans such as “Power Inherently Corrupts, Don’t Trust Experts”.
Dismaland brings together artists from all over the world and particularly the oppressed countries of the Middle East in an interactive art form, with Banksy in the role of curator. Some of the art works are sensitive and emotionally charged, and address the chaos and violence of the present class system, including:
* Banksy’s “Immigrants on a Boat”. This traditional seaside slot machine game allows visitors to steer boats across a pool, but with a difference. Numerous boats are packed with migrant workers, but one is a gunboat patrolling below the white cliffs of Dover while the attendant shouts out, “I see no borders, I see no race”. It comes as a shock to visitors to realise the water is littered with dead migrants or to discover they are steering the gunboat. The feeling that these people are human and deserve better is heightened by the intricate and individual detail in each migrant’s face, clothing and posture.
* Amir Schiby’s upside down image of four Palestinian boys playing on a beach, recalling the innocence and beauty of childhood and made all the more emotive knowing they were later killed by Israeli shelling.
* Jimmy Cauty’s UK town in the aftermath of a social uprising, the scale and detail of which is breathtaking. The flashing blue lights of the police light up the set. The streets are awash with soldiers and police, a few of whom spray “Fuck the P……” on a wall—a reminder of the false flags and provocations often carried out by the police to justify further oppression.
* Darren Cullen’s “Pocket Money Loans” installation, offering a satirical attack on payday loan companies. Children are offered a good price to sell their healthy teeth and get advance payments on their pocket money.
* The “Museum of Cruel Objects”, curated by Gavin Grindon, housed in a blacked-out bus with a timeline of war and oppression.
* Tammam Azzam’s reproduction of Gustav Klimt’s “The Kiss”, projected onto a bombed-out housing complex in Damascus, Syria.
The simple iconoclastic images in Dismaland and the one-liners that often accompany them offer the visitor an amusing, angry and healthy protest, but after a while their impact weakens and one is struck by the build-up of unrelenting despondency. Inevitably, hopelessness and the lack of belief that the situation can be improved create a certain cynicism.
However genuine Banksy’s opposition to the existing set-up may be, his outlook has never developed beyond a youthful anarchism gained on the trendier back streets of Bristol.
Disneyland, like McDonalds, is an easy target and something of a cliché for artistic treatment. More problematic still is the thin line between attacking big-brand influence on economic and political life and blaming the working class for supposedly being wedded to consumerism and viewing a trip to Disneyland as the “holiday of a lifetime”. Attendants in various places hold bunches of black balloons—as if for sale-which read, “I am an imbecile”.
The resignation, passivity and fatalism expressed by the likes of Banksy become links in a causal chain. This is an artist who has had an impact on people. It is an evasion of responsibility simply to say “Oh, what a terrible world we live in, but there’s not much we can do about it”.
The limitations of the parody theme park raise the need for a far greater appreciation by artists of a host of historical and contemporary issues, including the crisis of working class leadership and perspective. Only such a deeper understanding will help break down the scepticism and pessimism that dominates in artistic circles, even the “oppositional” ones. And it might lead Banksy and others to avoid simply portraying working people as passive victims of the “consumer society”, but as the social force that can and will fight for something better.