Politicians from the major bourgeoisie parties in power today have proven themselves to us once again. The stimulus package passed through both Houses of Congress this week and signed into law by President Trump is a disaster.

We are told by the media that the American government has produced emergency aid in response to the emergency of the covid-19 virus pandemic.

Even Sen. Sanders ended up compromising with the Republican majority and the corporate Democrats, voting in favor of the bill and leaving it in the end unanimously unopposed, 96 votes to 0. After initially withholding his vote, Sanders secured a much needed victory for the inclusion of unemployed, tipped-earners, and gig economy workers into the recipients of the new legislation, regularly left out of state and federal welfare programs.

Sen. Ocasio-Cortez has said that, “the option that we have is to either let them suffer with nothing, or to allow this greed and billions of dollars, which will be leveraged into trillions of dollars, to contribute the largest income inequality gap in our future.” So with great shame, we needed to allow this bill to pass into law so that Socialists could live to fight another day in Congress until the next covid-19 emergency bill comes around, and we can be sure that another one is coming. It too will inevitably need to be contested in all of its details.

Trump, Mar. 27:

“We got hit by the invisible enemy and we got hit hard … I think we are going to have a tremendous rebound.”

“January 2020 set a record for the most CEO departures in the US in one month — 219 in all.”

Economic Stimulus

What we have been gauranteed by this legislation, totalling 880pgs in length, and published overnight in cooperation with Washington lobbyists, is that we as citizens of Empire in light of the pandemic will be given a cash sum of $1200 per adult and $500 per child. With a roll off for earners with moderate income, a corrupt and erroneous bureacracy will be put into action to determine who welfare can be withheld from at great expense to the American public either way.

Of course, this amount is dwarfed by the hundreds of billions of dollars that have been offered as cash bailouts to businesses, and even worse the trillions of dollars that have been pumped into banks through the system of quantitative easing.

These loans are ostensibly paid out on the expectation, always underlied by the reliability of the central power held by the American government and its military, that they will generate an interest before they get paid back. This movement circulates cash through the economy and generates a profit for the bank, instead of allowing the value of its cash holdings to wither away. The NYPost, the sort of Rupert Murdoch owned rag we are forced to receive our information filtered down through these days, has even said that:

“Trump administration economist Larry Kudlow said the package would include $4 trillion in lending power for the Federal Reserve as well as a $2 trillion aid package currently being hammered out by Congress.”

From CNBC:

“The Trump administration and Republicans agreed to add an inspector general and congressional panel to oversee the fund.”

From Vox:

“President Donald Trump said on Friday that he will not adhere to a portion of the $2 trillion coronavirus stimulus bill that would authorize an inspector general to oversee how $500 billion in business loans will be spent.”

“Trump also said that he would not adhere to a second provision of the bill that would grant some congressional committee consultation for expenditures made by the State Department, Department of Veterans Affairs, and US Agency for International Development (USAID).”

While the stated goal of a stimulus package is to get a frozen economy back to work again, the bottom line of a virus pandemic is that no amount of supplied market liquidity will change the number of people who are working. We are on quarantine. Mayors and governers across America have called for anywhere from strongly suggested social distancing up to mandatory lockdowns. But the several weeks we have decided on remaining inside so far will not even be enough.

“Treasury Secretary Steven Mnuchin, asked how long the aid would keep the economy afloat, said: “We’ve anticipated three months. Hopefully, we won’t need this for three months.”"

“New York Gov. Andrew Cuomo said Wednesday that an approximately $2 trillion assistance package the Senate hopes to quickly approve doesn’t come close to meeting his hard-hit state’s needs.”

“Gallup: Trump job approval soars 12 net points to 49-45, the best net approval of his entire presidency.”

“60% of Americans approve of his handling of coronavirus against 38% who do not.”

We need to be able to clearly understand the real productivity of the labor force. We are now facing 3 million unemployment, along with a drastic reduction of economic activity.

In mid-March initial proposals, Yang, AOC, Gabbard, Dems called for a UBI that will be insufficient to provide for the workers and which obviously will be obstructed by Republicans. Even though it is true that Republican Senators like Romney and Cotton have stated support for a very low dollar amount basic income, we should know that they are not going to follow through on such claims.

“The Republican-led amendment to cap unemployment benefits failed in a 48-48 vote.”

“A compromise plan was made to set aside $250 billion for tax rebates and the same amount for unemployment.”

“A tax credit for some small businesses for 50% of wages paid to employees during the coronavirus crisis.”

“Those who did not file tax returns can use a Form SSA-1099, Social Security Benefit Statement or Form RRB-1099, a Social Security Equivalent Benefit Statement, per Page 149 of the bill.”

Ed McCaffery:

“Under the change, our rich taxpayer couple – and this applies only for individuals, not corporations – can now deduct an unlimited amount of “excess losses” in real estate against income from other sources. So now real estate moguls with lucrative day jobs or bountiful capital gains from other investments can go back to living tax-free, the Kushner way, before limits were put in place as part of the 2017 tax reform bill.”

Sen. Sanders:

“So, right now, our focus has got to be, in my view, to make sure that all workers in this country are kept whole, they continue to get their paycheck, to make certain that in addition to that, people get a check of $2,000 a month to make certain right now that we move in an unbelievably aggressive way, to make sure that our health care providers, our doctors and our nurses are not dying on the job trying to protect us.”

“And that means that Trump has got to enforce in a vigorous way the Defense Production Act, to make sure that companies now are not producing t-shirts and underwear, that is not our major need at the moment. Masks, gowns, gloves are the need. And companies have got to do that. Some are already voluntarily doing that.”

Vaccine

It is expected by legitimate viral sciences that a vaccine could take at least up to 18 months to go into mass production, and that is only if the first versions of a vaccine that we are studying end up working. During that time the general public will be forced to return to quarantine for multiple long durations in order to avoid repeated breakouts of the virus. Unlike prior crises like the one that occurred in 2008, no amount of artificial manipulation of market liquidity will be able to get people to go back to working in large numbers. Inevitably, as we are already seeing from right wing ideologues, we will be told that we must go back to work at risk to our health in order to prevent the economy from collapsing. But in any case, it will not be a multi trillion dollar gift to the interests of capital that will get companies rehiring again, it would only be the careful social planning of the economy that could allow production to continue during a longterm pandemic in a way that will allow the right goods to be made and the right public services to be provided in a way that is safest to the health of the workers.

“Senate Minority Leader Chuck Schumer said another bill to counter the effects of the coronavirus is likely, opening the door to another legislative package just hours after senators reached a deal on a $2 trillion stimulus plan early Wednesday.”

“I think the odds are high we’re going to have to do something again,” Schumer said on MSNBC’s Morning Joe. “We have to see in the next few weeks what other problems haven’t been solved.”"

““This bill is a good bill,” he said, noting “it doesn’t have everything I like in it. And there are a few things in it I don’t like. But overall, we need it.””

Zero Interest Rate Loans

Interest rates were being dropped to 0 in aug/sept 2019, before even earliest understanding of possible virus. Arguably, at some point in Nov/Dec, world leaders would have been notified of an impending pandemic event occurring.

The American federal government for several decades has been understood to do absolutely whatever is required to keep the perceived value of the stock market moving up. Usually, interest rates are dropped in the event of a crisis in order to get money moving again.

But, this tool was used by Trump during what was said by himself and other economic officials (like Larry Kudlow) to be a long term bull market, that extended over the duration of Trump’s whole term. They claim that the market was always rising, even though we know that actual productivity was not rising during this period along with corporate profitability.

Was Trump admin trying to keep profits rising high through the rest of his term leading up to election day Nov. 8, at great risk to his ability to pull the country out of a crisis were we to enter into one for any other reason during this period (because we wouldnt have dropping the interest rate to rely on, already being at 0, the common Keynesian tool we have to use to have an affect on the economy)?

Was he trying to crash the economy deliberately through an easily perceived runup on the market that would result in the recession that was always known to be coming, which he believed his administration could use tools other than changing the interest rate to pull us out of the recession before the end of the election year allowing him to look like he led the country out of an unavoidable recession?

Around the world, far right authoritarian governments are finding it less necessary to rely on oldschool neoliberal Keynesian economic tools like making slight changes to the interest rates, and their constituency or their voter base is more open to obvious racist white nationalist policies that develop policy through the creation of ethnonationalist legal systems. No benefits will directly be provided to anybody, but any legal mechanisms that are required by the market to function fluidly, including the destruction of organized labor, will be enforced.

Over Night Repo Market

The US Treasury supplies major banks with an overnight $1.5 trillion short term loan market, which is alleged to supply liquidity to the market.

The role of the US Federal Reserve and the US Treasury is to control monetary policy at the national level, which involves manipulating interest rates set by banks, and issuing treasury certificates as debt to control the total amount of money circulating through the economy.

Most world governments do not have this power over their own economy.

It could involve direct planning with major industries, however this is strongly discouraged by all modern conservative and liberal political parties in power today in many governments around the world.

Stocks continued to crash below the limit level multiple times in one week, triggering an automatic temporary shutdown of the market, being the first time this happened in decades.

  • $500 billion direct payments, payroll taxcuts bailout to businesses unchecked
  • $60 billion airline industry

Nobody is stepping a foot on an airplane no matter how much money you shovel into the furnace.

  • $300 billion small business loans
  • $5 million paid sick leave - only cover 20% of workers (companies between 50 and 500 employees). There is no rationale behind this, simply bureacratic fumbling to prevent giving social power over to the working class.
  • up to $250 billion direct checks to Americans - would only cover 1 or maybe 2 one time checks of $1000, won’t cover a virus that could have several major reoccurances over a period of several years before there is an effective vaccine.

These amounts, in total, which will be fought over, are pitiful in comparison with what will be handed to businesses.

“Second, the Fed will raise the interest rate on reverse repos. That’s a new tool the Fed created to control the fed funds rate. The Fed “borrows” money from its member banks overnight. It uses the Treasurys it has on hand as collateral. It’s not a real loan because no cash or Treasurys change hands. But, the Fed does deposit the interest into the banks’ accounts the next day. This controls the fed funds rate because banks won’t lend to each other at a lower rate than what they’re getting on the reverse repos.”

Schumer:

“The New York Democrat is working on a plan to pile at least $750 billion into efforts to combat the outbreak, his office said Monday. The plan would “get money directly into hands of American people” and include health-care affordability measures, forbearance on federal loans, a moratorium on evictions and foreclosures, assistance for small businesses and emergency child care, according to his office.”