From the Nye Committee to Joe Kent, the fight against war profiteering is a constant struggle.

By Hunter DERENSIS

Is it unethical to profit off the mass death of your countrymen, and should something be done about it?

In a society where wealth of any origin is increasingly looked at with suspicion and envy, weapons contractors have somehow avoided the spotlight. Even domestic gunmakers have withstood more public criticism than the producers of battleships, humvees, and fighter jets.

When did a healthy skepticism of war profiteering turn into social acceptance of massive corporate structures whose material interest is destruction and who conceal their business practices through identity politics? This conditioning is the conclusion of a century-long shift in how the public perceives the munitions industry, or what came to be universally termed the “military-industrial complex.” Analyzing the history of this shift will help us determine how best to reawaken their long dormant opposition to the international racket known as war.

During the Progressive Era, with its promotion of economic regulation and “trust-busting,” the average American had already grown distrustful towards big business. Public enmity was directed at two companies in particular, J.P. Morgan and DuPont, which after the start of World War I became the poster children for war profits and undue political influence.

Founded by its namesake financier in 1871 and left in the hands of his eponymous son, J.P. Morgan & Co. had grown into one of largest investment banking firms in the world. E.I. du Pont de Nemours and Company had an even longer lineage, dating back to 1802. Managed at the time by Pierre S. du Pont (when he wasn’t busy managing General Motors as well), it was the leading chemical firm in the country.

As war spread across Europe in the late summer of 1914, Americans remained overwhelmingly predisposed to George Washington’s advice, written in his farewell address, that we should not “entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor, or caprice.” In that tradition, Secretary of State William Jennings Bryan issued an edict banning financial loans to the belligerents. This arrangement may have served Americans faithfully for over a century, but it was not satisfactory for the House of Morgan. “From August 1914 to April 1917,” writes historian Martin Horn, “while the United States was neutral, the Morgan banks worked assiduously to further the Allied cause.”

Morgan executives already had significant economic and social ties to London before the war, and these connections only grew tighter after the cannons started firing. In January 1915 the British government appointed J.P. Morgan as their official purchasing agent in the United States. The French followed suit in May. In their new capacity as the Allies’ stalking horse, J.P. Morgan would handle their foreign exchange operations and advise their political officials.

Through intricate negotiations and their position as Wall Street’s dominant bank, J.P. Morgan successfully lobbied to lift Bryan’s ban shortly after their appointment. The Great Commoner resigned from the cabinet a few months later, having correctly anticipated that Woodrow Wilson wasn’t truly committed to American neutrality.

President Wilson had been in the Morgan ambit for years, even serving on the board of their subsidiary the Mutual Life Insurance Company. It was alleged at the time, and for years after, that the House of Morgan pressured the administration to intervene on the side of the Allies to protect its financial investments. Despite numerous indications, such as local straw polls, private letters, and telegrams to Congress, that a majority of Americans continued to oppose intervention in Europe, the vote for war was overwhelming: 373 to 50 in the House of Representatives, 82 to 6 in the Senate. On the eve of the vote, Sen. George W. Norris, Nebraska’s stalwart progressive Republican, angrily declared that “we are about to put the dollar sign upon the American flag.”

Wall Street did not share Norris’ trepidation about the war declaration. According to the New York Times, “Wall Street was bright with the Stars and Stripes floating from banks and brokerage houses. Figuratively, the street gave a concerted sigh of relief.”

As doughboys landed in France, J.P. Morgan felt reassured that its loans would be repaid by a victorious British government. It was said the son made more money in two years than his father had in his entire life. And weapon manufacturers saw their profit margins skyrocket like never before. The DuPont company provided 40 percent of the propellant powder used by the Allies over the course of the war; its stock price jumped from $20 to $1,000 a share. A study of major military suppliers conducted by the U.S. Treasury Department found that aggregate corporate net income was $4.7 billion in 1913 and almost doubled to $8 billion in 1917.

Even before U.S. entry into the war, there was an attempt to place a cap on these increases. The Revenue Act of 1916 placed a special tax on munitions, the first excess profits tax in American history. For every pound of gunpowder, dynamite, or nitroglycerin, manufacturers would pay two cents to the federal government. DuPont complained that it was a personal tax, as it ended up paying 90 percent of the money collected from it during the war.

For some representatives, this penalty wasn’t nearly high enough. Sen. Hiram Johnson of California, former governor and Theodore Roosevelt’s 1912 running mate, had voted for the war but thought those “who coin the blood of war” and “make swollen war profits” should pay the cost. He proposed an 80 percent war profits tax to kneecap the likes of DuPont and Bethlehem Steel; the measure failed 62 to 17 in the Senate. Furious, Johnson referred to his colleagues as “dollar patriots, who so vociferously shout for the blood of the land but who nevertheless believe war to be a period when great profits should be made by a few.”

The guns went silent in November 1918 and World War I formally concluded the next year with the Treaty of Versailles. Great Britain kept its empire, Germany lay prostrate, and weapons contractors found themselves significantly richer than they were just four years earlier. But the American people could not pinpoint what they had gained from crossing the Atlantic, aside from 117,000 dead doughboys, unpaid war debt, and the Spanish flu.

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Despite its provocative title, the book is an even-tempered exposé of weapons manufacturers, including their business practices, biographical chapters on half a dozen American and European firms, and an analysis of their behavior and profits during World War I. While explicitly denying that munitions makers were the sole cause of American participation in the war, the authors do conclude that “the rise and development of the arms merchants reveals them as a growing menace to world peace.”

Americans of all walks of life agreed. The same year Merchants of Death was published, 94,000 American farmers signed a petition in opposition to increased armaments. Fifty thousand veterans paraded through Washington on April 6, 1935, in a march for peace.

Marine Major General Smedley Butler, two-time Medal of Honor winner, joined the brouhaha with his 1935 book War Is a Racket. A veteran of 130 battles on three continents, Butler claimed in a simultaneously published magazine article that he had been “a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer; a gangster for capitalism.”

By the mid-1930s, the Merchants of Death thesis was accepted to varying degrees by the Veterans of Foreign Wars, the American Federation of Labor, the National Grange, the Hearst newspaper chain, and the National Education Association.

Popular sentiment had its intended effect. Recounts historian Matthew W. Coulter: “The mounting criticism and public pressure drew attention from Du Pont officials, who in May [1934] ceased discussions with European gunpowder producers because ‘a formal agreement among manufacturers would cause the loudest and most violent criticism and put us in a very disagreeable position. We would be accused of joining together to foment wars, increase armament, etc.’”

The stage was set for a small group of dedicated activists and lawmakers to turn an all-encompassing antiwar climate into permanent policy and actionable reform. Their work would begin with further disclosures about the munitions industry.

Dorothy Detzer had served as the executive secretary of the Women’s International League for Peace and Freedom since 1924, a position previously held by the organization’s founder, Jane Addams. An ideological pacifist, Detzer had been lobbying Congress to investigate the munitions industry for years.

Riding the growing wave of public indignation, Detzer met privately with Sen. George Norris. Although supportive, he felt he was too old to lead such an undertaking. The two methodically went through a list of all 96 U.S. senators, crossing off names as they went. When they finished, only one man was left: Gerald Nye.

“Gerald Nye was a Republican U.S. Senator from North Dakota. He was a La Follette Republican…populist, anti-monopoly, anti-corporate, [but] he was also a nationalist, America First, patriotic,” explains Professor Jeff Taylor of Dordt University in an interview with The American Conservative. Taylor also serves as an Iowa state senator. “He was derided by the metropolitan press in the East as this country bumpkin from out in the sticks of North Dakota but he was a smart guy and a very principled guy.”

He was also a hothead. Nye was an inflammatory speaker who tended to personalize politics and overstate his arguments. Norris, aware of Nye’s peccadillos, excused them as “the rashness of enthusiasm.”

Although he initially turned down Detzer’s entreaties, Nye eventually accepted the role that had been chosen for him, and he filled it with gusto. “The time is coming when there will be a realization of what monkeys the munition makers can make of the otherwise intelligent people of America,” the brash North Dakotan told the press.

What would be dubbed the Nye Committee was created through old fashioned Washington wheeling and dealing. Congress was set to approve the Vinson-Trammel naval shipbuilding bill to appropriate $470 million for the construction of 102 new ships, making the U.S. Navy the equal of the British fleet. Nye, leading a minority in opposition to the bill, introduced an amendment which would cap profits as 8 percent of the cost of each warship and mandate that half of them be built in government shipyards. To placate and compel him to withdraw his amendment, the Senate voted to create a formal committee to investigate arms manufacturers on April 12, 1934.

This maneuver showed Nye to be a “skillful and shrewd parliamentary tactician,” in Detzer’s words. For her efforts she was permitted to select the committee’s chief investigator and join its staff. Her choice was Stephen Raushenbush, son of the Social Gospel theologian and a true believer in the Merchants of Death thesis. Journalist John T. Flynn signed on as a member of the committee’s advisory counsel.

“The mere hint of an investigation had met with wide acclaim,” recalled Secretary of State Cordell Hull in his memoirs. Seeking support in the Midwest for his domestic programs, President Franklin Roosevelt gave his public blessing to the investigation. Nye was joined by six other senators who promptly voted him chairman.

The Special Committee on Investigation of the Munitions Industry was the first of its kind. Perfunctory commissions had been appointed before, but never anything with the force of law to compel arms manufacturers into the limelight. Historian Stuart D. Brandes referred to the committee as “the most earnest and influential political investigation of the first half of the twentieth century.”

In its less than two years of life, the Nye Committee held 93 hearings and called more than 200 witnesses to testify. These included personages as prominent as J.P. “Jack” Morgan, Pierre S. du Pont and his brothers, and former Senate Majority Leader James E. Watson.

Working with limited funds and a minuscule staff, the committee searched the records of major arms and munitions firms for skulduggery—and they found it. Criminal or unethical actions included bribery of foreign officials (primarily in South America), lobbying the U.S. government to obtain foreign sales, selling weapons to both sides of international disputes, and covert undermining of disarmament conferences.

“The committee listened daily to men striving to defend acts which found them nothing more than international racketeers, bent upon gaining profit through a game of arming the world to fight itself,” Nye declared in an October 1934 radio address.

To rein in the munitions industry and clamp down on war profits the committee recommended price controls, the transfer of Navy shipyards out of private hands, and higher industrial taxes. Nye suggested that upon a declaration of war by Congress, taxes on annual income under $10,000 should automatically be doubled while higher incomes should be taxed at 98 percent. “Do that and then observe the number of jingoists diminish,” he said. If such policies were ever enacted, wrote The Nation magazine, “Business men would become our leading pacifists.”

Manufacturers were not thrilled at this prospect, to say the least. “Private industry should be aided and encouraged in time of war and in my opinion should not be subject to conscription the same as manpower,” testified a smiling Eugene G. Grace, president of both Bethlehem Steel Corporation and its subsidiary Bethlehem Shipbuilding Corporation. “The incentive method of compensation, subject to limitation, is just as necessary in time of war as in peace.” Over two years, 1917 to 1918, Grace personally pocketed $2,961,000 in bonuses on top of his $12,000 annual salary as president.

Explosive hearings and Nye’s provocative pronouncements (“women and children who did lose their lives were, in effect, camouflage for covering up shipments of munitions of war”) made the committee’s findings headline news going into 1936. That winter, however, Nye dug deeper than his political beneficiaries were willing to tolerate.

In a major attack on Woodrow Wilson—dead almost twelve years—Nye accused the president and Secretary of State Robert Lansing—dead over seven years—of having withheld critical information from Congress about post-war plans and secret treaties among the Allies.

The reaction from “old-line Democrats, the lovers of Woodrow Wilson” as they were characterized by the New York Times, was fierce. Senator Tom Connally of Texas labeled Nye “a historical ghoul, to desecrate the sacred resting place of the honored dead.” Seventy-eight-year-old Carter Glass of Virginia, defending Wilson’s idealistic aims, beat his knuckles on his desk until they bled, with only Senate decorum preventing him from calling Nye a coward. Committee members Walter F. George of Georgia and John P. Pope of Idaho threatened to resign (although they had both ceased regularly attending hearings).

Losing the confidence of the Democratic party, which held a two-thirds majority in the Senate, and the Roosevelt administration, who saw Nye’s growing popularity among Republicans as a threat in the 1936 presidential election, Gerald Nye found his investigation cut short and defunded. Glass, who chaired the Appropriations Committee, said Nye hadn’t uncovered a “revelation worth $125,000, or even 25 cents.”

In their quest to definitively prove the Merchants of Death thesis, Nye and his allies fell short of their ultimate goal. “It would not be fair to say that the House of Morgan took us to war to save their investment in the Allies,” concluded Nye, “but the record of facts makes it altogether fair to say that these bankers were in the heart and center of a system that made our going to war inevitable.” Nye centered the blame on President Wilson’s lifting the ban on supplying credit to belligerents, which “paved and greased” the road to war.

The committee found no evidence that munitions manufacturers had more lobbyists or influence in Washington at the time of the war than any other special interest group, and searching through their files failed to prove collusion in naval contract bidding. The reality is there was almost no arms industry in the United States in 1914. Even when the committee was active in the 1930s, military contracts made up less than 1 percent of either Bethlehem Steel or DuPont company sales. In the estimation of historian Robert H. Ferrell, the Nye Committee was a “small investigation of several large topics.”

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In January 1937, almost a year after Democratic leadership suffocated Nye’s committee, Gallup found that 70 percent of Americans regretted their nation’s participation in World War I. An even higher 82 percent favored a prohibition on private companies selling munitions. Even as late as October 1939, a month after the German invasion of Poland, Gallup found that 68 percent of respondents continued to think American participation in World War I had been a mistake. Furthermore, 34 percent believed that in making its decision the United States had been the “victim of propaganda and selfish interests.”

Companies felt this acute public pressure. A Fortune magazine poll in October 1940 said that 59 percent of businessmen were hesitant to enter the defense industry. Even after the United States entered the Second World War, General Motors, fearful of postwar backlash, voluntarily offered the government large price reductions. According to GM vice chairman Donaldson Brown, this was done to “protect the Corporation against the public censure and ill will that might arise in future if it were charged that we had profiteered or made exorbitant profits in the war business.” Some smaller manufacturers followed suit.

The most significant policy change during this time was the byproduct of a more than two-decade court battle. During World War I, Bethlehem Steel had been the country’s leading shipbuilder and second biggest producer of steel. Disputes about its contracts, its level of profit, and a twisty road of arbitration led to the Supreme Court decision United States v. Bethlehem Steel in 1942. The Court ruled against the government’s argument that profit had been so excessive that it should be released from the agreement. It was decided that Bethlehem Steel was entitled to its full $25 million profit, a margin of 22 percent.

In response, Congress formally codified and empowered the secretary of each department to review and renegotiate military contracts after figures like total cost, time delays, and profit margins came into clearer view. This created the renegotiation process, which was used to full effect. As Fortune magazine reported in early 1944, “Some renegotiators have developed very direct questioning techniques. They may ask the contractor, ‘How big a profit are you prepared to defend now when casualties are mounting and your neighbors’ sons are being killed?’ This gives most contractors pause.” Gerald Nye’s rhetoric lived on, even as he lost reelection that same year.

Into Nye’s chairmanship stepped a one-time haberdasher from Missouri, Harry S. Truman, who was instructed to lead a committee investigating waste, fraud, and abuse during the war. Although he had supported Nye’s efforts as a freshman senator, Truman now referred to his predecessor’s committee as “pure demagoguery.” His newfound criticism didn’t prevent him from leveling the same complaints, expounding in a February 1942 speech that “individuals and companies have made extravagant fees on defense contracts at the expense of their fellow citizens. Their greed knows no limit.”

Out of a nation of 140 million people, it would be Harry Truman who succeeded Franklin Roosevelt as president in 1945. And it would be his administration that gave birth to the monstrosity that Nye and others had been searching for in vain: the military-industrial complex.

During the Nye Committee’s hearings, it was the gunpowder mogul himself, Pierre S. du Pont, who laid out the most cogent, succinct rebuttal to the Merchants of Death thesis. The temporary nature of war, du Pont explained, made them bad markets for long-term investment. Some businesses might expand to accommodate the new demand, but wars tend to end abruptly, leaving those firms high and dry with no return on their capital. No industry can survive on war, he concluded.

But that was in 1936, a world away from where the United States stood just a decade later. With the emerging Cold War with the Soviet Union, the military budget became an invariable war budget. The National Security Act of 1947 united two subdivisions into the Department of Defense, and created the Central Intelligence Agency. A permanent bureaucracy was established along the Potomac. No longer would American wars be temporary, and there would be no more abrupt ends. Pandora’s box was opened for the perpetual profit in arms.

To put things in perspective, Institute for Policy Studies cofounder Richard J. Barnet relates in his book The Economy of Death a story from the late 1930s of a chemist applying for work in the U.S. Department of the Navy and being rejected on the grounds that the department already had one. Fast forward thirty years to when Barnet was writing in 1969, and half of all scientists and engineers in the United States worked either directly or indirectly for the Pentagon. Economist Robert L. Heilbroner called the American system of military production “the largest planned economy outside the Soviet Union.”

While the interwar period saw disarmament conferences, the proliferation of peace groups, and mass demonstrations against war, the postwar era saw a population too fearful of the communist menace to make a fuss about munition profits. By the late 1950s, after Sputnik reached the atmosphere and candidates spoke about a phony “Missile Gap,” public opinion was heavily skewed towards higher military spending. Americans believed the boasts of Premier Krushchev that the Soviet Union would assert its dominance over space, science, and the skies.

And there stood a president who felt he was losing control over the situation.

Dwight D. Eisenhower, as Supreme Allied Commander during World War II and commander in chief for eight years, was more intimately familiar with the operations of the Pentagon, its influence, and its relationship with weapons contractors than any other living person. In 1930 he had even served as chief military aide on President Hoover’s War Policies Commission, a toothless endeavor to correct and improve on the country’s military performance before the next war (including limiting profiteering).

As president he had used his stature to end active combat in Korea, temper the Suez Crisis, and even cut the conventional military budget (while increasing spending on nuclear weapons). Privately he worried how a future president, lacking his experience, would be bullied by the generals. “God help this country when we have a man sitting at this desk who doesn’t know as much about the military as I do,” Eisenhower confided to General Andrew Goodpaster.

On January 17, 1961, Eisenhower gave his nationally televised farewell address from the Oval Office. “Until the latest of our world conflicts, the United States had no armaments industry,” he said, in contrast with the “permanent armaments industry of vast proportions” that had been created in the previous fifteen years.

His warning was dire:

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

Eisenhower was the first public figure to use the term “military-industrial complex,” a phrase that has become the standard for describing the sprawling, integrated system of corporate power, military brass, and government bureaucracy that allows northern Virginians to make big salaries while working twenty hour weeks.

It would be a few years until “military-industrial complex” entered the common vernacular, when it was picked up by the anti–Vietnam War left. In the 1960s, the disparity between the size of the military’s budget and the paltriness of its results in Southeast Asia became too stark to ignore. The Kennedy and Johnson administrations spent half a trillion dollars on defense, equal to the amount spent from 1945 to 1960. This didn’t bring Westmoreland any closer to stomping out the Vietcong, but it did increase the value of military contracts awarded to Johnson’s home state of Texas by a factor of three and a half.

The Vietnam War led to a groundswell of outrage against many domestic institutions. People particularly distraught with the behavior and performance of weapons contractors found their champion in Senator William Proxmire, Democrat of Wisconsin.

“He was kind of a gadfly and a protector of taxpayers’ trust,” recalls William Hartung, director of the Arms and Security Program at the Center for International Policy. “He was very into government ethics. He took little to no campaign contributions, he did a lot of campaigning just by walking his district. He was kind of ascetic, in some ways, certainly not open to things like gifts from special interests or anything like that.”

“He worked with whistleblowers in the Pentagon to expose the cost overruns on the C-5A transport plane, which was a Lockheed production. And that was one of the bigger, probably going back to the war profiteering days, one of the bigger exposés of corporate malfeasance in the military sector,” Hartung adds.

Proxmire was the archnemesis of the Lockheed Corporation, already the largest military contractor in the United States. He led the opposition to the company’s bailout by the federal government in 1971, a measure that only passed the Senate with a tie-breaking vote by the vice president. Despite the loss, Proxmire did shepherd the passage of the Foreign Corrupt Practices Act of 1977, outlawing the munitions industry’s bribery of foreign officials that had been discovered in the 1930s.

Despite his ability to build coalitions against the most egregious examples of profligacy, Proxmire’s fight against the military-industrial complex was a lonely one. His Golden Fleece Award, which he would hand out monthly to the most wasteful government programs, was an entertaining gimmick, but his efforts lacked both the enthusiasm among the public and the supportive partnership of his colleagues that propelled the Nye Committee’s investigative power.

As was to be expected, the behemoth that had been fed a steady diet of public subsidies for 45 years didn’t dissolve alongside the Soviet Union. Instead it consolidated, notably with the mergers of the Northrop and Grumman corporations in 1994 and of Lockheed and Martin Marietta in 1995. By 2001, the new millennium began with five companies holding a majority of Pentagon contracts: Lockheed Martin, Raytheon, General Dynamics, Boeing, and Northrop Grumman.

The Global War on Terror has proved a bonanza for the industry. “I am a believer in an adequate national defense,” Senator Nye said in 1934. “I do not believe in preparing, as we are today, to go to all quarters of the earth to wage war.” He hadn’t seen anything yet.

The United States currently possesses nearly 800 military bases located in over 70 countries. In the past twenty years it has launched ground invasions of Iraq and Afghanistan, fought covert wars in Syria, Yemen, and across Africa, and conducted air wars on Libya, Pakistan, and half a dozen other countries. The monetary costs boggle the mind.

The U.S. Department of Defense “spent $14 trillion adjusted for inflation since 2001,” says Hartung. “And it went up ten years running after the September 11 attacks, which had never happened before. And now it’s hovering well above the peaks of Vietnam, or Korea, or the Reagan buildup.”

Unlike their prewar predecessors, whose portfolios were slim on military contracts, today’s companies are animals that feed solely on Pentagon chum. In 2017, arms sales represented 94 percent of Raytheon’s total revenue. Lockheed-Martin, the largest defense contractor in the world, received 88 percent of its revenue from arms sales, followed closely by Northrop Grumman at 87 percent and General Dynamics at 63 percent. The smallest is Boeing at 33 percent.

“What that produces is a scenario where public money is effectively being funneled, hundreds of billions of dollars a year into these private corporations whose number one priority is not U.S. national security. The number one priority is not even job creation. Their number one priority is profits for their shareholders,” said Eli Clifton, senior advisor at the Quincy Institute for Responsible Statecraft. “Is it good for American security to be that dependent on essentially five companies, and is it good for the U.S. economy?”

In serving their shareholders, the military-industrial complex has been eminently successful. If you had purchased $10,000 worth of company stock in 2001, after twenty years of war in the Middle East that same stock would be worth $43,167 with Raytheon, $72,516 with General Dynamics, $107,588 with Boeing, $129,645 with Northrop Grumman, and $133,559 with Lockheed Martin.

When defense contractors win, you can trust that it’s the taxpayers who lose. Cost overruns and overcharges are not an anomaly but something that affects every part of the military-industrial complex from the most advanced missile system to the tiniest tool.

With the loss of the renegotiation process, efforts by the government to recoup these unforeseen expenses have been largely “defanged,” explains Mandy Smithberger, director of the Center for Defense Information at the Project on Government Oversight. “It’s become increasingly challenging for the government to challenge overcharges. The Department of Defense Inspector General is going to be coming out with a new report on the company Transdigm which made headlines for, in one case, charging a profit in excess of 4,000 percent. But in that case the company gave a refund but it was a voluntary refund because there really wasn’t anything they did that was illegal.”

Modern polling on the military-industrial complex is nonexistent. Americans are regularly asked about whether to increase or decrease the military budget, and occasionally even about individual arms sales to certain countries. But they are never asked the heart of the matter: whether large corporations making exuberant profits from the fighting and dying of U.S. soldiers is permissible in the first place.

Smithberger believes the lack of data is demonstrative of how much influence military contractors have over think tanks and other non-profits that conduct most of these polls. “These are rarely the questions that are asked. There is polling around general revolving door issues… but it is not an area that gets the attention it deserves,” she told TAC.

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In response to the 2020 George Floyd riots, Northrop Grumman donated $1 million to the NAACP Legal Defense and Educational Fund, along with $728,000 in matching funds to social justice and equity organizations that its employees gave to. The company regularly receives high marks from Human Rights Watch for its promotion of LGBTQ+ inclusion in the workplace, including producing a “comprehensive transgender toolkit and education program” for its managers and employees.

Not to be outdone, General Dynamic celebrated Pride Month this year by holding an educational seminar centered around the USNS Harvey Milk, the oil replenishment tanker they’re constructing named for the assassinated San Francisco supervisor and gay rights activist.

In addition to sponsoring floats at various pride parades, Lockheed Martin has spent more than a decade trying to make its brand synonymous with LGBTQ+ acceptance. In one of its advertising videos, an employee named David tells the audience, “I’m married to a man. I’ve been at Lockheed Martin for thirteen years. And that’s who I am. And you know what, together those two things are amazing.”

Last year, Lockheed Martin sent thirteen white male senior executives to a special diversity training program to be divested of their white, male, heterosexual privilege. The executives learned that qualities like “rugged individualism,” “hard work,” “operating from principles,” and “striving towards success” are the groundwork of a racist, misogynistic culture of white men that’s “devastating” for minorities and women.

But not too devastating, apparently. In January 2019 Politico published a lead story, “How Women Took Over the Military-Industrial Complex.” Out of the top five weapons contractors, four (sans Raytheon) were now led by female CEOs. The piece celebrated the “watershed for what has always been a male-dominated bastion.” Encouraged by the higher percentage of women getting involved in selling munitions, the article was happy to relay that “women are shrewd negotiators.” A victory for feminism, but a defeat for the taxpayer’s wallet.

“There probably has been a decision to pursue outwardly progressive, so-called socially responsible policies that allow them to fit in with the rest of corporate America,” Eli Clifton says. “People will count them in with the group that does those things. And that’s kind of shocking and appalling. This company makes weapons that kill people. And their diversity, and their buy-in to top-line social issues shouldn’t be allowed to whitewash the reality of what they’re doing.”

But for most left-of-center voters and nonprofits, the masquerade is enough.

“This is what they do,” an exasperated Glenn Greenwald, award-winning journalist, explained in November 2020. “They exploit woke ideology and culture war issues to make the left and liberals think that they’re their allies and march behind them. And they put black faces, and gay faces, and female faces onto corporatist and militaristic policies to soften them.”

The military-industrial complex and “woke” identity politics are a complementary match. It’s a divide and conquer strategy that’s already succeeded on the campuses. Eighty-five years ago college students were chanting, “No more battleships, we want schools,” while organizing against the next war. Today a college student is more likely to praise Northrop Grumman for promoting a diverse, intersectional workspace while degrading a white southern military sign-up for upholding “white supremacy.”

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In the 1930s, a supermajority of Americans supported the curtailment or outright abolition of a rapacious but negligible munitions industry. After World War II, when the threat of a military-industrial complex manifested itself as infinitely more powerful than its anticipatory critics expected, opposition has proved sporadic and temporary.

Perhaps, like a fish who can’t conceive of a world beyond the water, society has become too accustomed to the system. In 1971, scholar Marc Pilusuk and activist Tom Hayden wrote, “Our concept is not that American society contains a ruling military-industrial complex. Our concept is more nearly that American society is a military-industrial complex.”

On the other hand, that view could be too pessimistic. The American people have not rejected accountability for war profiteers. In the modern era, they haven’t been asked. Could they be waiting to excoriate them, if only given an opportunity?

Meet Joe Kent, who’d like to hand them a bullhorn.

A Republican candidate in Washington state’s Third District, Kent is primarying incumbent five-term congresswoman Jaime Herrera Beutler. Already endorsed by former President Donald Trump and some conservative members of Congress, he’s recognized as a competitive challenger. But what makes him a standout in the 2022 midterms is his rooted and robust hostility to the military-industrial complex.

“We have had a military-industrial complex or ruling political or ruling military class for the last twenty years now that has been lying to the American people, and they’ve gotten caught red-handed doing it,” Kent told The American Conservative. “It’s the way our financial system is rigged. It’s this permanent ruling class just really taking advantage of the American people.”

Already enlisted in the U.S. Army before the September 11 attacks, Kent began the Global War on Terror as a “true believer” in the Bush administration’s regime change plans for the region, particularly Iraq. But while there he witnessed firsthand the disconnect between ground level troops and policymakers. “They have an agenda. And that agenda is always being driven towards more war, more occupation, more foreign aid,” he said. “If you dissent from that you’re kind of a heretic.”

Deployed into combat eleven times as a chief warrant officer and then Green Beret with the U.S. Special Forces, Kent gradually came to see the strong financial incentive that he believes disproprotionately drives our nation’s wars and the people who spend their careers advocating them. The particular book which had “a big impact” on him was Colonel David Hackworth’s About Face, which he read in 2005 while fighting in Iraq. Kent has also read General Smedley Butler’s War Is a Racket which he found “very telling.”

But the kick in the teeth came on January 16, 2019, when Joe’s wife and the mother of his sons, U.S. Navy Chief Cryptologic Technician Shannon Kent, was killed in Syria. The Islamic State’s attack on Manbij occurred just over a month after President Trump had announced American troops would be making a full withdrawal.

“The second Trump and…his national security team started talking about getting us out of some of these wars, I saw mid-senior level leaders turn on a commander in chief in a way I’d never seen before,” Kent explained. “And to me that culminated, for me personally, with Trump trying to get our troops out, the military delaying that, slow rolling, Mattis resigning, McGurk resigning, and then my wife being killed in a place that she had no business being after the commander in chief, on a mandate of the American people, ordered them to be out of there.”

When asked if he’d be willing to chair a committee to investigate the military-industrial complex’s actions during the Global War on Terror, similar to the Nye Committee, Kent did not hesitate. “Yes, 100 percent, I would love to,” he said.

“If we have Americans who are actively engaged in war, I don’t think they should be able to profit off of that,” Kent elaborated. “Them profiteering while we have our people in harm’s way I think is a bad precedent to have because that truly turns it into a racket.”

Describing Gerald Nye, Hiram Johnson, William Borah, and others, Professor Jeff Taylor said, “In the end these are men of principle, they’re not men primarily of power or profit.” That is what the nation needs to shake it out of its inoculated stupor. Leaders of principle with the will to address the hard questions, and call these arms manufacturers what they really are: merchants of death.

theamericanconservative.com

Here’s everything you need to know about the urgency of fair tax reforms to pay for vital public investments and reverse extreme inequality.

By Sarah ANDERSON, Brian WAKAMO, Justin CAMPOS

President Joe Biden and Congressional progressives have responded to public pressure by putting bold spending proposals on the table that would make our economy more fair, sustainable, and resilient in the face of future crises.

The chances of these proposals passing depends largely on whether lawmakers can reach consensus around tax increases on wealthy individuals, big corporations, and Wall Street. The 11 charts below show how such reforms would both generate revenue to help pay for transformative public investments while also curbing the skyrocketing inequality that is undermining our society and democracy. According to Americans for Tax Fairness, such fair tax reforms are extremely popular, with voters expressing support by 60-65 percent or more in 12 recent polls.

Taxes on the Wealthy

Biden aims to raise the top marginal tax rate from 37 percent to 39.6 percent, where it stood before the 2017 Republican tax cuts. Tax rate hikes at the top were an effective tool in reversing the extreme inequality of the “Gilded Age.” Under high top rates in the post-WWII decades, the share of national income flowing to the richest 0.1 percent fell significantly. When policymakers once again slashed those rates, beginning in the 1960s and accelerating in the 1980s, inequality shot back up. According to Professor Emmanuel Saez, the richest 0.1 percent of Americans pocketed 10.84 percent of total U.S. income in 2018, a level not seen since 1929. Contrary to the arguments of tax hike opponents, real U.S. GDP grew faster in the 1950s and 1960s than in more recent decades. The subsequent decade with the highest growth rate was the 1990s — after Congress enacted moderate top tax rate increases.

In the United States, wealth inequality is even more severe than income inequality, and the reduction in the top income tax rate has been a key factor. According to Institute for Policy Studies analysis of data collected by Saez and fellow economist Gabriel Zucman, the share of U.S. taxes paid by the top .01 percent was just slightly higher in 2018 than in 1962, despite the more than tripling of their share of the nation’s wealth. By contrast, the bottom 50 percent saw their share of U.S. wealth drop by more than half during this period. The top marginal tax rate in 1962 was 91 percent, compared to 37 percent in 2018.

Institute for Policy Studies analysis adds further evidence of the direct connection between tax policy and extreme wealth concentration. The rate of taxation of America’s richest .01 percent of households, as a percentage of their wealth, decreased by over 83 percent between 1953 and 2018. The decline in this relative tax rate accelerated after 1979. Stronger minimum wage, antitrust enforcement, and unionization rates during the 1953-1979 period undoubtedly had some equalizing effect, and yet during this period it required a top tax rate four times the current rate simply to keep the wealth share of the top 0.1 percent in check.

Why do the rich pay such a small share of total U.S. taxes, relative to their great wealth? Beyond their ability to hide their money from the IRS, the rich benefit from the tax code’s preferential treatment of income from investments. Currently, the top marginal tax rate for the richest Americans is 37 percent, while the top rate for long-term capital gains is just 20 percent. The higher the U.S. income group, IRS data show, the larger the share of income derived from investment profits. By contrast, Americans who are not among the ultra-rich get the vast majority of their income from wages and salaries.

The rich are well-positioned to benefit from the discount tax rate on investment earnings because of their dominance on Wall Street. Federal Reserve data indicate that the richest 1 percent hold more than half of all stocks and mutual funds, while the bottom 90 percent of Americans own just 11 percent. The disparities in stock ownership are even starker if race is factored in. While 61 percent of white families owned at least some stock in 2019, only 34 percent of Black and 24 percent of Latino families did, according to the Federal Reserve.

Biden’s plan would close the capital gains loophole for the rich by requiring individuals earning more than $1 million a year to pay the same tax rate on the sale of stock and other assets as they pay on income from wages.

America’s richest also exploit estate tax loopholes, shell corporations, trusts, and other sophisticated methods of shielding their accumulated fortunes from taxation. This has accelerated the accumulation of wealth — and power — in the hands of a few individuals while entrenching oligarchic dynasties. According to Institute for Policy Studies research, America’s 50 wealthiest family dynasties together held $1.2 trillion in assets in 2020. By comparison, the bottom half of all U.S. households—an estimated 65 million families — shared a combined total wealth of just twice that, at $2.5 trillion. The five wealthiest dynasties (the Walton, Koch, Mars, Lauder, and Cargill-MacMillan families) saw their wealth increase by a median 2,484 percent from 1983 to 2020.

The Biden plan would curb wealth concentration by strengthening the estate tax and closing a loophole that allows the wealthy to escape capital gains taxes altogether on assets they pass on to their heirs. Senators Bernie Sanders and Elizabeth Warren and other Democrats have also called for an annual wealth tax. Their proposal would raise an estimated $3 trillion over a decade by taxing fortunes worth more than $50 million at a rate of 2 percent and those with wealth of more than $1 billion at 3 percent. Institute for Policy Studies Associate Fellows Lee Price and Bob Lord have suggested a third tier of 10 percent on wealth in excess of $5 billion.

Taxes on Corporations and Wall Street

America’s wealthy have also benefited enormously from reductions in the corporate tax rate, which has fallen from a peak of 52.8 percent in the 1960s to 21 percent under the 2017 Republican tax law. The windfalls of lower corporate taxes flow primarily to high-income Americans because of their disproportionate ownership of corporate stock. Wealthy corporate executives, who receive most of their compensation in some form of stock-based pay, also benefit, while evidence of gains for workers is lacking.

This corporate tax rate-cutting, combined with rampant use of offshore tax havens and other avoidance schemes, puts a strain on public budgets. The percentage of total federal revenue from corporate tax receipts dropped from 32.1 percent in 1952 to 6.6 percent in 2019, according to Office of Management and Budget data.

Most Democrats agree on the need to increase corporate taxes, but views differ on the ideal rate. Biden has proposed an increase from 21 to 28 percent, along with a global minimum tax and other measures to curb offshore tax dodging. Senate Budget Chair Sanders would like to see a return to the 35 percent rate, while some moderates have proposed 25 percent.

As corporate tax obligations have declined, CEO pay has skyrocketed. According to Office of Management and Budget data and Economic Policy Institute research, when corporate tax receipts made up 21.8 percent of all federal revenue in 1965, the average CEO-to-median worker pay ratio was 21 to 1. After the 2017 Republican tax cuts, corporations plowed significant windfalls into stock buybacks and executive bonuses. By 2019, corporate tax receipts had fallen to just 6.6 percent of federal revenue and the average pay ratio had risen to 320 to 1.

Progressive senators and House members have introduced the Tax Excessive CEO Pay Act to incentivize corporations to narrow their economic divides. The bill would apply graduated tax increases on corporations with large CEO-median worker pay gaps, beginning with 0.5 percentage points on corporations with pay ratios of 50 to 1 and rising to 5 percentage points on firms with ratios above 500 to 1.

Opponents of raising the U.S. corporate tax rate often point to lower statutory rates in other large economies. But huge loopholes in the U.S. tax code have lowered the effective rate that corporations actually pay the IRS. In fact, the Institute on Taxation and Economic Policy found that 55 large, profitable U.S. corporations paid zero in federal income taxes in 2020. Because of these loopholes, U.S. corporate tax revenue as a share of GDP is actually lower than in any other G7 country. By contrast, average CEO pay at large U.S. corporations is off the charts compared to their international counterparts, according to Institute for Policy Studies analysis of Willis Towers Watson data.

Policymakers should not tie their hands by requiring every dime of new spending to be offset with new revenue, especially given the enormous long-term benefits of health care, education, and climate change investments. But there will be pressure to pay for a considerable share of new spending, and Biden’s total proposed corporate tax changes, including a global minimum tax and other loophole closures, would generate an estimated $2.2 trillion. This chart compares revenue from just one of Biden’s proposed reforms — an increase in the corporate rate from 21 percent to 28 percent — with the cost of select investments that would help American families fulfill their potential and live in dignity.

Ordinary Americans are used to paying sales taxes when they purchase a car or home, a tank of gas, or a restaurant meal. But when a Wall Street trader buys millions of dollars’ worth of stocks or derivatives, there’s no sales tax at all. This tax-free approach has also contributed to the explosion of the algorithm-based computerized trading that dominates our financial markets while adding no significant value to the real economy. Just one indicator of the disparity between these traders and low-wage workers: since 1985, the average Wall Street bonus has increased 1,217 percent. If the minimum wage had increased at that rate, it would be worth $44.12 today, instead of $7.25, according to the Institute for Policy Studies.

Lawmakers have introduced several financial transaction tax bills that would generate massive revenue while curbing short-term speculation. Under one proposal, a tax of just 10 cents on every $100 worth of trades in stock and other securities could raise some $750 billion over 10 years.

The raging debate over public investment financing has created a huge opening for long overdue fair tax reforms. Without drastic changes in the tax code, we will continue to see those at the top accumulate ever more obscene levels of wealth and power while our physical and human infrastructure crumbles and low-income Americans, particularly people of color, get left behind.

inequality.org

BlackRock Corporation is currently a co-owner or a shareholder, in 18,000 banks, companies, and financial service providers, primarily in the U.S. and Canada, in the European Union, and in Western-oriented nations. Such a numerous simultaneous presence of a single owner has never been seen before in the history of capitalism.

Yet BlackRock is only the tip of the current, newly formed capitalist iceberg. The next largest capital organizers of this new kind are Vanguard, State Street, Capital Group, Amundi, Wellington, Fidelity, T Rowe Price, Pimco, Norges. BlackRock is exemplary for these currently determining players of US-led Western capitalism. Smaller new capital players with related, also hardly regulated business models such as private equity investors (“locusts”), hedge funds, investment banks and venture capitalists are also part of the current phase of the newly formed capitalism at the latest since the banking crisis of 2007 – they here are only briefly referred to. (1)

BlackRock – Rise of the Leading Shadow Bank

BlackRock is the result of a long series of deregulations in the U.S., but also spills over into the entire Western economic, financial, fiscal and governmental system, in Europe mostly through subsidiaries in the City of London.

Headquarters in the largest U.S. financial haven, Delaware

BlackRock does have its operational headquarters in New York and branches in a few dozen states. But the company’s legal headquarter as a corporation is in the U.S. financial oasis of Delaware.

This tiny U.S. state built its position as a leading Western financial haven in the 20th century, initially for U.S. companies: Particularly low taxes on profits, low disclosure requirements, the establishment and management of letterbox companies as a business segment, and extremely “liberal” corporate law: liability and transparency are particularly limited, for example, compared to a classic stock corporation. Since the 1920s, the U.S. corporation DuPont (pharmaceuticals, armaments, auto supply) has been at the forefront of this development: It had and still has its legal domicile there and thus evaded public control and tax payments even during its worldwide expansion; it also cooperated, for example, with the German pharmaceutical cartel IG Farben during the Nazi era. These capitalist freedoms have also been used for decades by most multinational corporations and banks, not only located in the USA, but also from the EU, Asia (especially Hong Kong), Latin America, also for hundreds of subsidiaries each.

The EU has recognized the legality of this corporate law on its territory. The Federal Republic of Germany, which was founded after World War II at the instigation of the U.S., recognized already in the German-American Friendship Treaty of 1954 under its founding chancellor Konrad Adenauer that U.S. companies could operate in the Federal Republic under the laws of the financial haven of Delaware. (2)

Deregulation since U.S. President William Clinton

Freedoms under Delaware law have been continuously expanded and have become significant beyond the U.S. on a large scale globally since the beginning of the 21st century.

In the 1980s, Wall Street bankers began new financial products and practices, which were then legalized under the presidency of “Democrat” William Clinton. For example, at Bank First Boston during the 1980s, Laurence Fink, who later founded BlackRock, made it a business model to bundle and sell individual hypoptheque loans (for the purchase of condominiums and homes) to banks and turn them into tradable securities. Fink first practiced this in one of the equally deregulated new financial players, the private equity firm Blackstone. In 1988, he went independent from Blackstone with Blackrock (written much later as BlackRock): The small black stone became the great black rock. (3)

Blackrock & Co were not and are not subject to the old banking regulations, renewed after the 2008 financial crisis. U.S. President Obama even made BlackRock the advisor for the resolution of the financial crisis: as advisor to the U.S. Federal Reserve, Blackrock helped decide the fate of insolvent banks, insurance companies and corporations: Who would be rescued, who would not? In the process, BlackRock’s own business scale skyrocketed.

The EU followed suit, and BlackRock has also been an advisor to the ECB since the head of the European Central Bank, Mario Draghi (until 2020), came from Goldman Sachs. In 2020, BlackRock also got a consulting contract with the European Commission for ESG (Environment, Social, Governance). (4)

BlackRock: Largest “shadow bank”

BlackRock & Co are not considered banks under corporate law, despite many bank-like operations. The World Bank, the central banks and the G7 countries still officially regard BlackRock and Co as “shadow banks”. To this day, they remain unregulated “under observation” in the central bank of central banks, the Bank for International Settlements (BIS, headquartered in Basel/Switzerland), which is dominated by the Federal Reserve Bank. (5) Through their lobby, BlackRock & Co have achieved that Western governments keep postponing regulation. (6)

The basis of capital power: The Super-Rich and the U.S. location

BlackRock & Co obtain their capital base through the capital they raise from entrepreneurs, corporate foundations, banks, insurance companies, pension funds. An increasingly important group of capital providers is the number of super-rich, multi-millionaires and multi-billionaires, which is growing by leaps and bounds with deregulation: They are known as High Net Worth Individuals (HNWI) and Ultra High Net Worth Individuals (UHNWI).

BlackRock commands more than $8 trillion in 2021, earning itself in fees, commissions, and its own trades, but essentially acting as the legal representative and manager of the capital providers. To all of them, BlackRock also guarantees higher annual returns than previous asset managers, traditional banks, and corporations because of its greater freedoms.

BlackRock under the US administrations since William Clinton

Wall Street and the new capital organizers supported the Democratic Party by majority in the USA since the 1990s because they had become powerful through its deregulations. That’s why BlackRock CEO Fink was in the conversation to be Treasury Secretary under presidential candidate Hillary Clinton. He had brought Obama administration staffers to BlackRock.

But when anti-Wall Street Republican Donald Trump won the 2016 election, cutting taxes on corporations while promising them higher government subsidies, Fink declared: “Trump is good for America. ” (7)

U.S. President Joe Biden, in office since 2021, has appointed several high-ranking BlackRock executives to his administration. So Brian Deese: The head of BlackRock’s global sustainable investing division will be the president’s chief economist. Wally Adeyemo has served as U.S. President Obama’s chief advisor on international economic relations, then joined BlackRock as Fink’s chancery chief, and has been president of the Obama Foundation since 2014; now he is deputy Treasury secretary under Biden. Michael Pyle was in charge of International Financial Relations at the Treasury Department under Obama. Then he became head of global investment strategy at BlackRock, now he is chief economist for Vice President Kamala Harris.

Biden himself was a senator for the state of Delaware from 1973 to 2009. He helped build Delaware into the world’s most important corporate financial haven – and thus a tool for BlackRock & Co. So BlackRock is more than ever active part of „America First“.

The new power of the invisible capitalists

BlackRock & Co have also replaced the traditional big banks at latest since the financial crisis of 2008: the unregulated shadow banks are now the owners of even the regulated big banks, but also of, for example, all the big digital corporations such as Amazon, Google, Apple, Microsoft and Facebook. At the same time, BlackRock & Co have managed to remain virtually unknown to the general public.

BlackRock combines the following characteristics and practices:

*Ultraliberal corporate constitution under the laws of the financial haven of Delaware

*Status as an unregulated “shadow bank”

*the unique volume of capital employed, currently $8 trillion

*the unique insider and monopoly position as a simultaneous major shareholder in 18,000 corporations, banks, financial service providers

*the advisory function with important governments, with the US National Bank Federal Reserve, with the ECB and with the European Commission

*with ALADDIN, the largest collection and analysis system in the Western world for financial, economic and political data

*a system of paid influence agents in key countries such as the U.S., Germany, the U.K., France, Mexico, Switzerland

*Integration with “America First” political, media, legal, rating, consulting, intelligence and military systems. For example, BlackRock is a shareholder in the leading Western liberal media outlet, the New York Times.

It is this combination that creates power. From this it becomes clear that in capitalism it is not enough for the exercise of power to simply be rich or super-rich, multimillionaire or multibillionaire. Rather, it is the multiple presence in companies, banks, financial institutions, governments, leading media and the multiform systemic multiple networking that is decisive.

Simultaneous Multiple Ownership: Example Wirecard

It is often claimed in “critical” circles that BlackRock & Co. cannot have such a large influence because they only ever own 3 or 5 or at most 10 percent of the shares. This was also the argument of BlackRock’s former chief lobbyist in Germany, the CDU politician Friedrich Merz.

But BlackRock is intertwined with the next dozen similar capital organizers through cross-ownership and consults for decisions in the joint enterprises, such as before shareholder meetings: To coordinate voting, the Big Three in particular, BlackRock, Vanguard, and State Street, often hire the financial agencies Institutional Shareholder Services (ISS) and Glass Lewis.

And there is the multiple ownership around one company where BlackRock & Co are the determining shareholders. Let’s take the fraud company Wirecard, which is currently the subject of scandal in Germany. Members of the Bundestag and leading state and private media are fiercely denouncing Finance Minister Scholz, the financial regulator Bafin and the auditors Ernst&Young (EY) for failing to uncover the multi-billion dollar fraud perpetrated by this financial services provider over many years.

But no one asks: who are actually the owners of Wirecard? That’s right, BlackRock was a shareholder for the longest time with 5 percent, making it the third largest shareholder. But BlackRock is at the same time much more:

*BlackRock is shareholder in Wirecard’s other major shareholders, e.g. Goldman Sachs,

*BlackRock is shareholder in Wirecard’s largest lenders, Commerzbank, Société Générale, and Deutsche Bank,

*and Blackrock is shareholder in the rating agency Moody’s, which determined Wirecard’s creditworthiness and credit terms. (8)

This de facto multiple presence of BlackRock & Co is as important to the functioning of contemporary capitalism as their public obscurity.

Network of Influential Agents

BlackRock maintains paid agents of influence in all major states: These are leading people from governments, political parties, corporations, central and other banks. These individuals receive high-paying consulting contracts and seats on boards of companies in which BlackRock is a major shareholder.

Laurence Fink, BlackRock’s chief executive, acts (or acted) as an influence agent himself:

*Member of U.S. President Donald Trump’s Business Council

*Director in the Council on Foreign Relations (CFR)

*Presenter at the World Economic Forum

*Meets heads of state, government and corporations in person

*Lobby office in Washington, donor to both U.S. political parties

*Lobby office in Brussels.

Friedrich Merz, ex-faction leader of the CDU in the Bundestag: partner in the U.S. business law firm Mayer Brown, until 2020 chairman of the supervisory board of BlackRock Deutschland AG.

Michael Rüdiger, ex-head of Dekabank Deutsche Girozentrale, on the Supervisory Board of Deutsche Börse AG: successor to Merz at BlackRock Deutschland AG.

Hildegard Müller, President of the German Association of the Automotive Industry, on the Executive Board of the CDU Economic Council and the Central Committee of German Catholics: Member of the supervisory board of the largest housing company in Germany, Vonovia where BlackRock is a major shareholder.

Cherryl Mills, ex-chief of staff to Hillary Clinton at the State Department: member of the supervisory board of BlackRock.

George Osborne, ex-finance minister in the British Tory government, editor of The Evening Standard newspaper: BlackRock advisor with a 650,000-pound-a-year contract.

Philipp Hildebrand, ex-president of the Swiss National Bank: head of BlackRock’s European headquarters in London.

Jean-Francois Cirelli, ex-chief executive of France’s largest energy companies GDF/Suez/Engie: head of BlackRock France.

Marco Antonio Slim Domit, son of the richest Mexican, Carlos Slim: member of BlackRock’s supervisory board.

How does BlackRock generate the super profits?

Through its position of power, BlackRock generates higher profits than traditional companies, banks, and asset managers in Western capitalism. (9)

New Monopolies and Oligopolies

BlackRock & Co are the controlling shareholders in the most important companies in the same industries, i.e., simultaneously in the most important banks, the most important pharmaceutical, oil, agribusiness, automotive, logistics, airline, defense, and digital corporations, both throughout the capitalist West and in each of the most important individual states, such as in the United States, Germany, France, Great Britain, and Switzerland.

On the one hand, this means a new kind of monopoly formation, for example when BlackRock, Vanguard, State Street & Co are at the same time, in changing composition, the new major shareholders of the most important Wall Street banks, for example in Germany at the same time major shareholders of the two largest banks, i.e. Deutsche Bank and Commerzbank. Or like this: BlackRock & Co are, again in changing composition, at the same time determining shareholders in the 30 DAX corporations of Germany, in the 40 CAC corporations of France and in the 500 S&P corporations of the USA. This type of monopoly formation is not covered by any of the outdated antitrust laws of Western countries.

Mergers and acquisitions

Another form of monopoly or oligopoly formation is mergers and acquisitions. BlackRock & Co can do this all the more easily because they are at the same time co-owners in the most important companies in the same industry, both nationally and internationally.

For example, BlackRock & Co are the major shareholders of the two chemical companies Bayer in Germany and Monsanto in the USA. Bayer’s largest shareholders during the 2016 – 2020 Monsanto takeover were, in this order: BlackRock, Sun Life Financial, Capital World, Vanguard, Deutsche Bank. Monsanto’s largest shareholders were, in slightly different order: Capital World, Vanguard, BlackRock, State Street, Fidelity, Sun Life Financial. At the same time, BlackRock is also a shareholder of Deutsche Bank.

This is how the world’s largest agrochemical group came into being: it combines market leadership in seeds, pesticides, agricultural patents and global data on farmers, agricultural companies and agricultural markets. And, of course, BlackRock & Co are also major shareholders in other agricultural and chemical companies such as BASF, LG Chem (South Korea), Akzo Nobel (Netherlands), and Pfizer and DowDupont (USA).

Digitization

BlackRock & Co are the determining shareholders of the large digital corporations Google, Amazon, Apple, Microsoft, Facebook and many others as soon as they stabilize their success. This also applies to such corporations as those in the automotive and logistics sectors that are developing self-driving cars, trucks and delivery drones with artificial intelligence, including Tesla, for example. Of course, this also applies to defense corporations.

The management of the Corona pandemic by Western governments has further spurred the expansion of digital corporations by leaps and bounds, not least through government contracts for healthcare, public administration and government communications. BlackRock & Co are the first to benefit from this.

Robotized speculation

Digitization with the help of artificial intelligence is also taking hold in finance. BlackRock & Co do not wait anxiously like traditional shareholders for the dividend decided and paid out at the end of the year. They take that too, but the much more lucrative business is the speculation with the shares that runs throughout the year. Every movement in the value of the stock – up or down – is used for speculation.

The advantage that BlackRock is the biggest insider in the Western economy is increased by its subsidiary ALADDIN (Asset Liability and Debt Derivative Investment Network): This is the biggest collection and exploitation facility for financial, economic and political data. In the nano-second range, the values of all shares and other securities on all stock exchanges in the world are simultaneously recorded, compared with each other and evaluated, bought, sold in a largely robotized manner. Through additional purchases and sales, reinforced by loan shares, upward and downward movements of securities can be accelerated and used for speculation – faster and more profitably than by competitors and small speculators. If, for example, a stock constantly rises and falls due to scandals, as in the case of Wirecard, or in the case of a merger that drags on for years, as in the case of Bayer/Monsanto – then this is the ideal, profit-generating business area for BlackRock.

If national reporting laws are violated in the process – in Germany, for example, the Securities Trading Act – then financial regulators such as Bafin are not in a position, either technologically or in terms of personnel, to exercise the necessary control. (10)

Aiding and abetting global tax evasion

Part of the higher return for capital providers is BlackRock’s organized tax evasion for the benefit of its wealthy capital providers, the HNWIs and UHNWIs. For example, the 5 percent of shares in the lignite company RWE represented by BlackRock are distributed among 154 shell companies in a dozen financial havens between Delaware, the Cayman Islands and Luxembourg. The shell companies bear names such as BlackRock Holdco 6 LLC. In this way, the actual beneficial owners, the super-rich investors, are anonymized and made to disappear in front of financial and stock exchange supervisory authorities, tax offices, employees and the public: organized irresponsibility. (11)

In addition, this further impoverishes the affected states, the public infrastructure decays, private infrastructures, on the other hand, are expanded.

Low wages, union hatred, rents, privatized pensions

BlackRock, as a simultaneous shareholder of the five largest housing corporations in Germany – Vonovia, Deutsche Wohnen, LEG, Grand City Properties, TAG – promotes excessive increases in rents and utility costs.

BlackRock profits from low-wage labor in national and global supply chains – at Amazon and Apple as well as at Tesla, promotes precarious working conditions also in the housing management subsidiaries of the housing corporations controlled by BlackRock&Co.

BlackRock lobbies the EU and governments through its influence agents for privatized pensions – also tax-subsidized, of course – with the help of the financial product ETF (Exchanged Traded Funds), a kind of “people’s share” in which BlackRock leads the world market ahead of Vanguard. (12)

Environmental destruction, armament and new wars

BlackRock is a shareholder in the major coal, lignite, oil, pharmaceutical, agribusiness, and automobile corporations in the United States and the European Union. BlackRock’s high profit withdrawals thus also prevent the necessary innovations in transport, energy and the environment and endanger the survival of mankind. Newly launched environmental funds are only an addition of comparatively very small size, while disproportionately larger ownership stakes in fossil fuel corporations continue to be held.

BlackRock, Vanguard & Co are also the largest shareholders in the leading defense corporations – including those involved in nuclear bomb production – in the U.S. and EU: Boeing, Lockheed, Northrop, General Dynamics, Raytheon (U.S.), BAE (UK), Rheinmetall (Germany), Leonardo (Italy) and others. BlackRock & Co use rearmament, military interventions and wars by the US and EU states as a source of profit and increase the global threat of war.

Practices include circumventing export restrictions currently in the wars in Yemen and Libya, for example, by supplying warring parties such as Saudi Arabia. BlackRock has not withdrawn from any of the aforementioned groups.

Corona pandemic: accelerated build-up of private world power

BlackRock CEO Fink has been the acknowledged spokesman at the World Economic Forum (Davos) since several years for the “renewal” of capitalism, particularly in environmental and climate matters (Great Reset of Capitalism).

Fink notes correctly that the governments of the West are increasingly failing to meet the expectations of their populations. As an alternative, however, Fink & Co are concerned not with democratizing states, such as collecting taxes, fostering labor incomes in accordance with human rights, and expanding public infrastructure.

Rather, Fink said as a star speaker at the World Economic Forum: The alternative is to build a new private power structure, with multinational private companies and private foundations at its core. The “Corona” measures are intended to serve as an accelerant. “Neoliberalism has had its day,” writes World Economic Forum founder Klaus Schwab, but revolutions and uprisings are to be prevented. (13)

Current international law, the Universal Declaration of Human Rights including social and labor rights, the UN majority decision to ban nuclear weapons, the UN conventions, for example, on the rights of refugees, children and migrant workers, and on the sanctioned responsibility of companies in global supply and production chains (Binding Treaty) – Fink, Schwab & Co do not mention any of these in their new canon of values.

A greened new capitalism is supposed to whitewash all violations of international law, human rights and democracy: Greenwashing. Current governments and international institutions like the World Bank, the UN and the European Commission are supposed to assist in this. (14) BlackRock also advises the Federal Reserve Bank and the European Central Bank on their trillion dollar/euro Corona recovery programs.

BlackRock & Co want a renewed green capitalism. Many new funds are being launched for this purpose. However, they are comparatively small in scale. In essence, BlackRock & Co continue to be the controlling owners of fossil capitalism, i.e., the oil, mining, automobile, pharmaceutical, and defense corporations that maintain a global, deep-pocketed network of subcontractors and persistently violate human rights with impunity. Tax evasion, shrinking of national economies, prevention of necessary innovations for the environment and mass-serving infrastructure, impoverishment of states, and last but not least: dwindling political approval of the majority of the population for the complicit governments and previous governing parties: Fossil capitalism in more ways than one.

China wins system comparison, the West arms up

Poverty in the colonies, in the neocolonially exploited regions of Africa and Latin America, and increasingly also of their own populations, including the middle classes of the rich metropolises – the old Western capital democracies have long put up with this, most brutally and for the longest time in the leading Western state, the United States.

But with the People’s Republic of China, an alternative has emerged in just a few decades: Now the world’s largest economy, it has brought many millions of feudally, colonially and capitalistically impoverished people into sustainable upward development, in contrast to the capitalist West and the developing countries dependent on it, such as India and Brazil. In China, labor incomes of the majority and the middle class have been rising sustainably for at least three decades, the number of socially insured people has been increasing (labor, health, pensions), and the infrastructure for housing, new cities, ground-based mass transportation, free education has been expanded.

To this domestic development comes the alternative, namely inclusive globalization: on all continents, even for instance in a growing number of states of the European Union, the approval for the multiple investments of the New Silk Road is growing. This kind of globalization goes, and this is a very important difference, with respect for international law: without military accompaniment, without a global ring of military bases, without capital ships constantly patrolling off distant coasts, without covert or overt military intervention.

Last but not least, the fight against the Corona pandemic showed: China is winning the systems competition. In contrast, the economically, technologically and politically declining U.S.-led West – at least so far – sees armament against China and its most important cooperation partners, Russia and Iran, as the main way out. (15)

At the same time, BlackRock & Co continue their efforts to acquire stakes in China’s leading companies and to obtain licenses for financial operations in China. In doing so, they accept government regulations that they fight against in the West. The battle of the systems is multifaceted and by no means decided.

Notes

(1) On typology, practices and consequences, see Werner Rügemer: The Capitalists of the 21st Century. An Easy-to-Understand Outline on the Rise of the New Financial Players, 308 pages, tredition Hamburg 2019
(2) German-American Treaty of Friendship October 29, 1954; confirmed by judgement of the german Federal Court of Justice january 29, 2003 VIII 155/02
(3) On the history of the deregulations in the U.S. and the founding of BlackRock, see Rügemer: The Capitalists of the 21st Century p. 24 ff.
(4) New Order from Brussels: Will BlackRock soon determine EU climate policy? Deutsche Wirtschaftsnachrichten May 5, 2020
(5) Adam Lebor: The Tower of Basel. The Shadowy History of the Secret Bank that Runs the World. New York 2013, p. 252 ff.
(6) International Monetary Fund: What’s Shadow Banking? Many financial institutions that act like banks are not supervised like banks, in: Finance and Development June 2013, p. 42 f.
(7) BlackRock chief Larry Fink praises Trump tax cuts, bbc.com/news/av/business-42830383, January 26, 2018
(8) Werner Rügemer: Betrugsunternehmen Wirecard am Pranger – wo aber bleibt BlackRock? www.nachdenkseiten.de September 4, 2020 (Fraud Company Wirecard – but where is BlackRock?)
(9) For special references see the indictment, the testimonies of the witnesses and experts and the verdict at the Tribunal against BlackRock in Berlin on September 26-27, 2020; www.blackrocktribunal.de
(10) See Rügemer: The Capitalists of the 21st Century p. 16 ff.
(11) See Rügemer: The Capitalists of the 21st Century p. 28 f.
(12) George Osborne to earn 650.000 at BlackRock for 4 days a month, Financial Times March 8, 2017
(13) Klaus Schwab is founder and organizer of the World Economic Forum; Malleret founded the asset management company IJ for capital investment of UNHWI (starting from about 100 million per person)
(14) For the alternatives and counter-mouvements oriented to international law and human rights, see www.blackrocktribunal.de
(15) See the preface to the 3rd german edition of Werner Rügemer: Die Kapitalisten des 21. Jahrhunderts, Köln 2021

Whoever controls the narrative controls the world. That’s all you’re seeing in efforts to manage information via censorship, algorithm changes, “fact” checking, Russian propaganda panic, etc. Humans are story-driven animals, so if you control the stories you control the humans.

* * *

Lessons from this whole Wall Street/Reddit ordeal:

• The stock market is a scam.
• There is no “free market” and there never will be.
• Wall Street predators are the most despised people on earth.
• The public can do more to fight back than it had previously assumed.
• There’s surely a lot more we can do to fight back that we haven’t thought of yet.

* * *

You can’t expose how rigged the system really is without pushing against its power structures according to its own rules. When the entire system pushes back and boots you out in front of everyone, more people are made more aware that it is rigged. This can only be a good thing.

* * *

Every single hedge fund plutocrat has at some point in their lives thought the words “I can’t believe I’m getting away with this!”

* * *

This is another one of those awkward “we need to shut down the rabble without looking like a totalitarian oligarchy” standoffs.

* * *

Myth: The rich compete with each other and ordinary people benefit from it.

Reality: The rich collaborate with each other against ordinary people.

Example:

It will always tend to be more profitable to do bad things than good things: ecocide over preservation, exploitation over equality, war over peace. Humanity remains on a doomed trajectory for as long as its systems maintain profit-seeking as the driving force behind its behavior.

The only argument capitalism really has for this is that people can do their good deeds separately from their profit chasing: philanthropy etc. But at best this just means a tiny percentage of human behavior is going toward good things while everything else goes to bad things.

If human behavior is driven by profit chasing and it’s more profitable to do bad things than good things, and if the entire system is pointed at doing bad things with only a few charitable good things done in our free time, we will necessarily remain on a doomed trajectory.

* * *

Biden’s Iran policy is just Trump’s Iran policy with “TRUMP’S FAULT” scribbled over it in crayon.

* * *

Democrats: We propose a shitty, awful thing that will kill people and benefit billionaires.

Republicans: Make it 60% worse and you’ve got a deal.

Democrats and Republicans: We have produced a bipartisan measure! That’s the power of pragmatism, compromise, and working together.

* * *

First they came for the conspiracy theorists, but I did not speak out, for I was not a conspiracy theorist.

Then they came for the socialists, but I did not speak out, for I was not a socialist.

They never came for me, for I am a shitlib and they’re fine with me.

* * *

Have the heart to prioritize the good of the collective and the balls to take your stand as an individual.

* * *

Too many people are expecting Biden’s warmongering to manifest as blatant Bush-style ground invasions. If you keep looking in that direction you’ll probably miss his actual warmongering, which will more likely manifest as proxy wars, cold war escalations, coups, sanctions, etc.

* * *

Your favorite commentator will eventually say something you strongly disagree with. The more you put them on a pedestal, the more that’s going to hurt. Regard them as an equal, whose views you can take when they’re useful and leave when they’re not, and this won’t happen.

* * *

It is not strange or suspicious when someone chooses to focus their criticisms on the most powerful and destructive government on earth, it is strange and suspicious that more people don’t.

* * *

Whenever there’s a new US president and people criticize his actions, someone from the other side always points out that it was actually started by the previous president. And then, somehow, the conversation never becomes about why all US presidents advance the same evil agendas regardless of their political party or campaign platform.

The political/media class generally fixates on the differences between presidents, but you can learn a whole lot more about what’s really going on by looking at their similarities.

* * *

Once the collective began awakening to the fact that a free and democratic society is preferable to a totalitarian one, it became inevitable that there would soon emerge totalitarian societies disguised as free and democratic societies.

* * *

Ideologically I am first and foremost a truth and transparency advocate. I hold it self-evident that if people could really see what’s happening in their world uninhibited by government secrecy, propaganda and censorship, they’d naturally force a much healthier system into being.

I have other ideological preferences (I’m way down in the left-libertarian corner of the political compass), but I also have enough humility to know that maybe my way wouldn’t be best for everyone, and we must all be allowed to see the truth and let everyone make up their mind.

This to me is the least authoritarian position possible: let everyone see the truth uninhibited by the narrative manipulations and opacity of powerful, then let the collective decide on the best path from there. It would definitely end up much healthier than our current system.

Really it’s just a matter of letting awareness expand, which is always the driver behind any positive change people make. It should be allowed to expand inwardly too: legalize psychedelics. Bring consciousness to unjust societal dynamics. Encourage healing and inner exploration.

* * *

Be your own revolution. You have all the media access you need to help wake the world up with the power of your own inspired action. Reject cliques, factions and sectarianism, and have the courage to stand on your own two feet attacking the machine with your own unique abilities.

* * *

Just blast off. Don’t wait for your comrades. Don’t try to pull them along with you before they are ready. Just blast forward into your own revolution, burning brightly and scorching the machine with your light. Shine brightly enough and the others will follow when they’re ready.

One of the most frustrating things is seeing where we need to move and not being able to get the collective to come with you. You’re like “It’s there, let’s move!” and they just want to bicker and ego spar. Just blast off into health yourself. The others will come when it’s time.

* * *

Narrative and reality are becoming further and further apart on a mass scale, and it’s gonna snap at some point. And it just so happens that a lucid perception of the difference between narrative and reality is the thing that spiritual awakening is. This can happen at mass scale.

* * *

We are living in unprecedented times. In unprecedented times, unprecedented things can happen. It is entirely possible that we end up winning this thing and creating a healthy world together. There is no real argument to the contrary.

caitlinjohnstone.com

The Pew surveys have found the same thing: In almost all countries surveyed, other than Poland, public approval of America’s leadership plunged when Trump replaced Obama, and that low approval stayed down throughout Trump’s Presidency.

However, also on December 17th, the great investigative journalist David Sirota headlined at his “The Daily Poster” blog, “End The Austerity Loop”, and he documented that President Obama’s response to George W. Bush’s policies that had crashed the U.S. economy (and actually the entire world’s economy) had actually been to institute a bailout of the megabanks (“broker-dealers”), and — as soon as it was passed by Congress — Obama’s Administration refused to help the people who had been evicted from their homes as a result of what Wall Street had done. Obama said instead that all of the federal money had already been spent and he wouldn’t authorize increasing the federal debt even more than he already had authorized in order to bail out Wall Street.

Of course, Congress was also culpable in all of these Robin-Hood-in-reverse policies (protecting Wall Street while abandoning Main Street), but the ultimate leadership was at the top, and it was a policy of sheer hypocrisy. Trump has merely been hypocritical in a different way, and espousing a different set of excuses for his failures.

The article in the Spring 2011 Review of Banking & Financial Law, by Tae Yeon Kim, “Pay It Back (TARP Developments)”, described the situation as follows:

The purpose of Title XIII (“Pay it Back Act”) of the DoddFrank Act, according to Senator Michael Bennett, was to “rebuild the credibility of our financial system, save taxpayers billions of dollars, and finally move to end the TARP”12 by “prevent[ing] further government spending, recaptur[ing] taxpayers’ investment in financial institutions, and ensur[ing] that repaid funds are used for deficit reduction.”13 Under Title XIII, TARP funding authorized under the EESA was reduced from $700 billion to $475 billion.14 Also, no additional TARP funds can be spent on any program initiated after June 25, 2010; any money repaid to the TARP fund must be used for deficit reduction only.15 Title XIII amends the Housing and Economic Recovery Act of 2008. The Treasury must allocate the sale of obligations and securities, as well as fees paid by Fannie Mae, Freddie Mac, and Federal Home Loan Banks to the General Fund of the Treasury (“General Fund”).16 The funds must be “dedicated for the sole purpose of deficit reduction” and “prohibited from use as an offset for other spending increases or revenue reductions.”17 Similarly, TARP funds provided to a state under ARRA and rejected by the Governor or by the State legislature, or funds withdrawn or recaptured by the head of an executive agency not obligated by a State or local government, will be rescinded and deposited in the General Fund.18 Once in the General Fund, the money will be “dedicated for the sole purpose of deficit reduction” and “prohibited from use as an offset for other spending increases or revenue reductions.”19 Section 1306 further provides that discretionary ARRA appropriations that have not been obligated as of December 31, 2010 shall also be rescinded and deposited in the General Fund for the sole purpose of deficit reduction.

On 18 February 2011, National Public Radio headlined “TARP Watchdog Says Foreclosure Plan Is Failing” and reported that

Neil Barofsky, the special inspector general for the massive federal bank bailout program, or TARP, is stepping down from his post in March. He says the Obama administration’s program to prevent foreclosures is broken, and that many of the people it’s supposed to be helping are now “in a far worse place than they would have been had this program not existed.”

The megabanks had gotten their federal help, but foreclosures and boarded-up windows and storefronts were appearing everywhere and were lowering the surrounding property-values, so that both lower and middle-class real estate were getting progressively worse and more run-down. The TARP Bailout Program saved the megabanks but not their victims; and here is why, as explained even by a conservative, pro-corporate, source:

The Problem With the TARP Program for Homeowners

Why didn’t more people take advantage of the HAMP and HARP programs? This would have pumped billions into the economy and helped millions of homeowners avoid foreclosure.

The problem was the banks. They cherry-picked applicants and refused to consider those with lower equity. Banks were too wary of risk to allow the programs to work.

These were the same banks, who just a few years before, were giving out loans to anyone because they were making money on the investments that were created from the loans.

There was no risk to the banks, as all these loans were guaranteed by Fannie Mae or Freddie Mac. Banks didn’t want to be bothered with the paperwork involved with homeowners who had mortgage insurance.

On 25 July 2016, a mortgage-industry website headlined “Obama administration presents a look at life after HAMP” and acknowledged “that there’s more work to be done.” (That was putting it mildly.)

The Obama Administration did nothing whatsoever to reduce those foreclosures. In fact, there was even less prosecution of financial and other white-collar crimes than there had been under Bush.

The admirers of President Trump are equally deceived — no less deceived than the admirers of Obama had been. Trump promised to “drain the swamp” and did none of that.

In foreign policies, Trump continued Obama’s wars (including aggressive sanctions), such as against Syria, and against Russia, and against Iraq, and intensified Obama’s war against China and against Iran and against Venezuela — all of these being against countries that had never threatened to invade the U.S., and so all of them were (and are) actually wars of aggression, not of defense.

Americans are profoundly deceived to accept such people as leaders, instead of to reject them as liars and as traitors.

Most Americans — and many people throughout the world — prefer one or the other of those two American Presidents on the basis only of political prejudices, but the actual differences between Obama and Trump were more stylistic than substantive.

President Trump, at the end of his Presidency, is polling, among the American public, both as one of the worst Presidents ever and as one of the best Presidents ever, and this is a reflection of the astoundingly sharp partisan divide now between Democrats and Republicans. Pathetically few Americans recognize that both of the two Parties represent only the billionaires — not the American people. This pervasive miscomprehension, by the public, results because the billionaires control not only the Government, they also control the press — they shape the population’s perceptions, so as to make this aristocracy (America’s billionaires) acceptable to the public, directing the public’s rage to be against the opposite Party, instead of against the billionaires themselves, who actually control the country.

Consequently, Democratic Party voters think that that Party is their  Party, and Republican Party voters think that that Party is their  Party. However, in reality, both Parties are controlled by America’s hundreds of billionaires — not  by the Party’s voters. Obama represented the Democratic Party’s billionaires, and Trump represented the Republican Party’s billionaires (other than the ones who, in 2020, disliked Trump so much that they donated instead to the Biden campaign or to one of its PACs). This is a Government of the people, by the billionaires, and for the billionaires. It’s no democracy, whatsoever, and the U.S. Constitution has been covered-over, by the U.S. aristocracy’s Supreme Court’s rulings, to become, by now, merely a parchment document, which ‘means’ whatever the (majority of) the U.S. aristocracy’s Supreme Court say  that it means. Although those jurists are paid by the public, they don’t represent America’s Founders, and they don’t represent the American people. They represent — and protect the interests of — America’s billionaires. They were chosen because that is what they had been doing before they had been chosen. If they hadn’t been doing this, they wouldn’t have been chosen. That’s today’s American reality.

Jake JOHNSON

President-elect Joe Biden’s transition team in recent weeks has quietly brought aboard alumni of Wall Street titan Goldman Sachs, tech giants Google and Facebook, and notorious consulting firm McKinsey, heightening alarm among watchdog groups that have urged the incoming administration to steer clear of the corrupting influence of corporate America.

Without the public announcements that accompanied the president-elect’s cabinet picks and original members of the transition, Team Biden has added to its agency review groups Monica Maher, vice president for cyber threat intelligence at Goldman Sachs; Eric Goldstein, an 18-year Goldman Sachs veteran; and Josh Zoffer, a former engagement manager at McKinsey who now works at private equity firm Cove Hill Partners.

On or around Thanksgiving, Politico reported, Biden’s transition also “quietly added four Facebook and Google employees to its agency review teams,” despite pressure on the president-elect to resist Big Tech’s efforts to “co-opt” his administration. As Reuters pointed out earlier this month, there are currently “more tech executives than tech critics on Biden’s transition team.”

Goldman Sachs’ global headquarters, in center, in New York’s lower Manhattan, 2010. (Dismas, CC BY-SA 3.0, Wikimedia Commons)

Eleanor Eagan, research assistant at the Revolving Door Project (RDP), an initiative that scrutinizes executive branch appointees, told Common Dreams Tuesday that the Biden team appears to have been counting on “people not paying quite as much attention” to later additions to the transition team.

“This move by the transition team to slip in these revolving-door figures later in the game certainly is a troubling indication of what could be to come” as Biden begins staffing lower-profile but powerful positions in his administration, said Eagan.

As part of its ongoing effort to shine light on industry influence on the upper reaches of the federal government, RDP on Tuesday morning unveiled a Personnel Map that aims to visualize and track “the breadth and depth of corporate America’s interest in the executive branch.”

News of Biden’s latest additions to his transition team “fits very well with what we’re trying to highlight with the Personnel Map,” said Eagan.

“Corporate America is meticulous in its pursuit of influence over the executive branch, targeting not only the highest profile spots but the full slate of relatively obscure, powerful positions beneath them,” Eagan added in a statement. “The Revolving Door Project believes it is time for groups with the public interest at heart to think just as expansively about executive branch governance.”

With Biden’s cabinet beginning to take shape following his picks to lead the State Department, the Pentagon, the Agriculture Department, Housing and Urban Development, and other key agencies, progressives are growing increasingly concerned about the corporate ties and business-friendly records of several of his nominees.

Tom Vilsack, Biden’s pick to lead USDA, is a dairy industry lobbyist; retired Gen. Lloyd Austin, the president-elect’s nominee for defense secretary, currently serves on the board of Raytheon, one of the largest military contractors in the world; and Antony Blinken, Biden’s secretary of state pick, co-founded a consultancy firm that has worked on behalf of corporate clients in the tech, finance, and arms industries.

“I think there are some red flags or, in this case, some discouraging blue flags,” Norman Solomon, national director of the progressive advocacy group RootsAction.org, told the Associated Press over the weekend, pointing specifically to Neera Tanden, Biden’s pick to lead the Office of Management and Budget.

Progressives have also been vocalizing their frustration with what they view as a lack of representation among the president-elect’s nominees thus far. Sen. Bernie Sanders (I-Vt.) told Axios last week that given the significant role it played in Biden’s decisive victory, “the progressive movement deserves a number of seats—important seats—in the Biden administration.”

“Have I seen that at this point? I have not,” the Vermont senator said. “I’ve told the Biden people: The progressive movement is 35-40% of the Democratic coalition. Without a lot of other enormously hard work on the part of grassroots activists and progressives, Joe would not have won the election.”

Evan Weber, political director of the youth-led Sunrise Movement, told The Washington Post over the weekend that “we cannot move forward in a new direction with just the same people, including some of the people who are responsible for the mess we are in.”

“We would like to see more young progressives in roles in the Biden administration,” said Weber.

Common Dreams via consortiumnews.com

When it comes to the crime families of New York, they literally do catch and kill people who can’t be trusted to keep the secrets of their criminal operations. When it comes to the superrich in New York, they’re more inclined to “catch and kill” the story, rather than the accuser. (Jeffrey Epstein’s untimely death last year may be an exception.)

On October 11, 2017, Jim Rutenberg, writing for the New York Times about the aiders and abettors to Harvey Weinstein’s sexual assaults, explained the catch and kill strategy as follows:

“There is also another dynamic at play, involving something akin to a protection racket. This is the network of aggressive public relations flacks and lawyers who guard the secrets of those who employ them and keep their misdeeds out of public view.”

Keeping the secrets out of public view can involve a payoff to the victim and an NDA (non-disclosure agreement) or it can involve a more twisted version: getting a news outlet or Hollywood studio to pay big bucks to buy the story rights from the victim, with the promise to release the story to the public, then killing the story and making sure it doesn’t see the light of day anywhere else. This happens to a far greater extent than Americans currently understand.

The mushrooming transmutations of catch and kill today involve not just public relations flacks, high-priced lawyers, publishers, mainstream media and Hollywood studios. Increasingly, catch and kill includes the U.S. Department of Justice, making this version of catch and kill exponentially more dangerous to American democracy.

We’ll start off with a few of the catch and kill operations that you may have heard something about and then move on to the insidious Wall Street operations that have not, heretofore, been looked upon as catch and kill operations.

Trump’s Woman Problem and the National Enquirer

In December 2018, Donald Trump’s personal attorney, Michael Cohen, was sentenced to 3 years in jail for, among other things, two catch and kill operations that were meant to “influence the 2016 election and did so in coordination with one or more members of the campaign,” according to the U.S. Attorney’s Office. The catch and kill plots involved a payment of $150,000 to Karen McDougal, a former Playboy model who alleged an affair with Trump. The payment was made by American Media, Inc. (AMI), the parent of the National Enquirer. AMI bought McDougal’s story, killed it, and then assigned the rights to the story to Cohen’s LLC. In addition, Cohen paid porn star Stormy Daniels $130,000 for her silence about an alleged affair with Trump.

In AMI’s non-prosecution agreement with the Department of Justice, it admitted that its Chairman and CEO at the time, David Pecker, had met with Cohen and hatched a plan to “help deal with negative stories” about Trump’s relationships with women, by “assisting the campaign in identifying such stories so they could be purchased and their publication avoided.” AMI also admitted that in purchasing McDougal’s “limited life rights for $150,000,” it had no intention “to publish the story or disseminate information about it publicly.”

Ronan Farrow and the Harvey Weinstein Investigation

Ronan Farrow has cast a harsh light on NBC, suggesting that it may have been involved in a nuanced form of catch and kill during his investigation of Harvey Weinstein’s alleged sexual assaults on women. NBC failed to broadcast Farrow’s story despite having filmed witness interviews. After NBC told Farrow that his story wasn’t reportable, Farrow took it to the New Yorker, where the article was published and won him a Pulitzer Prize in 2018. That article includes allegations of three rapes by Weinstein.

Farrow appeared on the MSNBC Rachel Maddow program shortly after his article ran in the New Yorker. Farrow was asked by Maddow why NBC did not air the story. Farrow responded:

“I walked into the door at the New Yorker with an explosively reportable piece that should have been public earlier. And immediately, obviously, the New Yorker recognized that and it is not accurate to say that it wasn’t reportable. In fact, there were multiple determinations that it was reportable at NBC.”

Jeffrey Epstein and the U.S. Attorney’s Office

Catch and kill is about the only logical way to view what happened to Jeffrey Epstein at the hands of Alex Acosta, then U.S. Attorney for the Southern District of Florida when Jeffrey Epstein got the sweetheart deal of a lifetime.

In July of 2006, the Palm Beach, Florida Police Chief, Michael Reiter, delivered a deeply investigated case against Epstein to the FBI, according to the November 2018 intrepid reporting of Julie Brown in the Miami Herald. Brown indicated that it took just eight months of FBI interviews for the U.S. Attorney’s office in Florida to have a 53-page Federal indictment ready to file against Epstein involving sexual assaults against dozens of underage girls.

But the indictment was never filed. A deal was worked out by then U.S. Attorney, Alex Acosta, and Epstein’s well-connected lawyers. Federal charges were dropped against Epstein and he was allowed to plead guilty to only Florida state charges: one count of soliciting sex from a minor and one count of soliciting sex from an adult woman. Epstein was able to serve just 13 months in jail while also given a work release program to sit in his well-appointed office 12 hours a day, and driven around by his chauffeured limo. The deal was so outrageously constructed that it even denied his dozens of victims knowledge of the terms of the deal.

Had Julie Brown not conducted that courageous investigation for the Miami Herald, had the Miami Herald declined to publish it, the U.S. Attorney’s Office for the Southern District of New York would not have been embarrassed into bringing the new charges against Epstein on July 8, 2019. Acosta, who had curiously become Trump’s U.S. Labor Secretary, was embarrassed into resigning as a result of the public uproar.

JPMorgan’s Catch and Kill Deal with the Department of Justice

On November 19, 2013, the Department of Justice and other regulators settled their mortgage securities fraud case against JPMorgan Chase for an unprecedented $13 billion. One year later, we would learn from Matt Taibbi’s reporting at Rolling Stone that the Justice Department had a highly reliable lawyer-whistleblower that had worked at JPMorgan Chase, Alayne Fleischmann, who had documentary evidence that she had warned the bank that it was peddling defective mortgages.

The Statement of Facts offered to the public along with the settlement strongly suggested a catch and kill operation. There were none of the typical smoking gun internal emails; there were none of the internal documents showing an intent to defraud; there were none of the documents that Alayne Fleischmann had provided to Justice Department investigators. And there were no names of employees that had engaged in the fraudulent practices.

Citigroup’s Catch and Kill Deal with the Department of Justice

On July 14, 2014, the Justice Department settled a similar mortgage securities fraud case against Citigroup for $7 billion. Loretta Lynch, then U.S. Attorney for the Eastern District of New York, said this about the investigation:

“After nearly 50 subpoenas to Citigroup, Trustees, Servicers, Due Diligence providers and their employees, and after collecting nearly 25 million documents relating to every residential mortgage backed security issued or underwritten by Citigroup in 2006 and 2007, our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone.”

But just like a good ole National Enquirer catch and kill operation, those 25 million documents were locked tightly away from public view.

The preposterously skimpy details the Department of Justice released to the public in its 9-page Statement of Facts (SOF) was devoid of anything that could have allowed the public to connect the dots in the fraud. Instead of Appendix 1 being filled with incriminating emails or whistleblower letters proving Citigroup’s intent to defraud, it was a meaningless listing of deal names which told the public absolutely nothing about the nature of the fraud.

Fortunately for America, Citigroup had an internal whistleblower who wasn’t going to wait around for “justice” from the U.S. Department of Justice. Richard Bowen first testified to the Financial Crisis Inquiry Commission (FCIC). According to Bowen’s testimony in FCIC archives, he shared the following with the Commission:

“In June 2006, Bowen discovered that as much as 60% of the loans that Citi was buying were defective. They did not meet Citigroup’s loan guidelines and thus endangered the company—if the borrowers were to default on their loans, the investors could force Citi to buy them back. Bowen told the Commission that he tried to alert top managers at the firm by ‘email, weekly reports, committee presentations, and discussions’; but though they expressed concern, it ‘never translated into any action.’ Instead, he said, ‘there was a considerable push to build volumes, to increase market share.’ ”

The FCIC document also reports that Bowen “finally took his warnings to the highest level he could reach—Robert Rubin, the chairman of the Executive Committee of the Board of Directors and a former U.S. treasury secretary in the Clinton administration, and three other bank officials. He sent Rubin and the others a memo with the words ‘URGENT—READ IMMEDIATELY’ in the subject line. Sharing his concerns, he stressed to top managers that Citi faced billions of dollars in losses if investors were to demand that Citi repurchase the defective loans.”

Richard Bowen went even further, giving his documents and story to 60 Minutes. The program aired on December 4, 2011. It was ironically titled “Prosecuting Wall Street,” a dig at the U.S. Justice Department that was missing in action when it came to prosecuting any Wall Street executive for crimes that led to the financial crash of 2008.

To more fully reflect on what a catch and kill operation looks like when it’s run on behalf of a big Wall Street bank by the Justice Department, versus what a meaningful investigation on behalf of the American people looks like, consider the evidentiary record released to the public by the U.S. Senate’s Permanent Subcommittee on Investigations when it was Chaired by Democratic Senator Carl Levin in 2013. The investigation probed JPMorgan’s $6.2 billion in losses from its London Whale derivative bets gone bad using bank depositors’ money. The public was presented with a 306-page report, 98 pages of meaningful exhibits including internal emails with names, and two volumes of testimony under oath.

Unfortunately for the American people, that Subcommittee hasn’t conducted any meaningful investigations of Wall Street banks since Republicans took control of the Senate in 2015.

The only element of truth and facts that the American people have today when it comes to Wall Street crime is when a courageous whistleblower comes forward before they are nabbed in a catch and kill operation.

Wall Street on Parade via counterpunch.org

Yet as becomes more clear every day, far from maintaining the current global structure, created by U.S. bankers and diplomats and dictated to the rest of the world back in 1944, all these efforts are just accelerating the disintegration of the Old Order.

There is a supreme irony to this, for the most important creator of the Old World Economic and Financial Order – the one that is now disintegrating as we watch – was none other than the patron saint of liberalism – a man who has become a non-person in the United States in the past 40 year “Age of Reagan” (as I explain in my 2015 book “Cycles of Change“) – legendary 32nd President of the United States President Franklin Roosevelt.

It is fascinating to watch Democratic Party leaders today as they desperately try to conjure up the great appeal and success of the only man ever to win four U.S. presidential held up Roosevelt’s leadership through World War II as a model of leadership for today.

That should be entirely true, But neither current (and sinking fast) putative party nominee Joe Biden nor his always-collapses-at-the-crucial-moment Senator Bernie Sanders haven’t a clue what they are talking about.

Two factors were central to Franklin Roosevelt’s extraordinary success as a war leader – and Sanders and Biden are both pathetically blind to both of them:

The first was Roosevelt’s unhesitating and consistent support for his allies, especially the unprecedented flow of Lend Lease aid in food, trucks and other equipment to the Soviet Union which was carrying the main burden of the combat war against Nazi Germany almost single-handedly.

The second was the remarkable fiscal prudence and caution Roosevelt showed throughout his presidency, especially in his creation of the landmark Social Security program.

Roosevelt was vastly more cautious and even cynical in developing this program to give financial support for the first time in history to aging Americans.

Although the landmark congressional legislation was passed in 1935 and became law on August 14 of that year as part of the so-called “Second New Deal,” financial contributions out of the pay checks of all legally working Americans only started to be withdrawn in 1937. Even then, it was still another three years before the first U.S. citizen ever to receive a check from Social Security picked it up: That was 76-year-old Ida Fuller of Vermont on January 17, 1940. Her first check came to the generous sum of $41.30.

From 1935, when the legislation was passed to vast popular acclaim, it was another six years at the height of the Great Depression, when more Americans were starving and dying of poverty and related hardships than ever before or since in the nation’s history before a single individual actually got any benefit from it.

The actuarial calculations on which Roosevelt designed Social Security were even more cynical and ruthless.

Social Security was to be paid to retirees after the age of 65. But at the time, the median age of Americans was 61. Only a tiny privileged minority survived to the age of 65 or beyond.

Roosevelt practiced exceptional caution to keep the U.S. economy and currency stable during the New Deal and the Great Depression. Contrary to popular (Republican) myth, he was adamantly opposed to bankrupting the country either in his own time or in that of his grandchildren. “It is almost dishonest to build up an accumulated deficit for the Congress of the United States to meet in 1980,” he famously said. “We can’t do that. We can’t sell the United States short in 1980 any more than in 1935.”

Roosevelt’s exceptional caution contrasts with the wild spending both Republicans and Democrats from Bernie Sanders to Donald Trump have been practicing, driving their country into final bankruptcy during the current coronavirus crisis.

Comments financial analyst and former London merchant banker Martin Hutchinson in his May 4 “Bear’s Lair” column, “the CBO (Congressional Budget Office)’s estimate of budget deficits of 18% of GDP in 2020 and 10% of GDP in 2021 are truly frightening. …they bring the likely bankruptcy of the U.S. government much closer than seemed likely previously, probably to around 2030.”

Indeed, given the terrifying vulnerability of the U.S. financial system to the collapse of the $2 trillion junk bond market used to financial the collapsing fracking energy sector, projecting a meltdown U.S. financial crisis a balmy ten years ahead seems wildly optimistic.

In fact, the road from Franklin Roosevelt’s cautious callousness in designing Social Security so that it would not pay a penny to those who needed it for another five years (until, indeed, the Great Depression was already over!) to the “spend endlessly, spend now” crazed panic of both Republicans and Democrats is a very clear one:

It is the road of palliative Western liberalism, open borders and global Free Trade: It is a road that inevitably leads to ever huger debt burdens, ever-declining standards of living and inevitable ruin.

By contrast, the extremely fiscally cautious, highly conservative financial policies that Russian President Vladimir Putin continues to follow get no respect from the spendthrift, zero interest rate maniacs on Wall Street. Yet it is Russia that is currently in a far stronger position to ride out the global financial as well as pandemic crises than the United States.

In statecraft and economics as in architecture, the most important issue is not how high you build but how well you build and how deep you build – How good your foundations are.

The storm of pandemic is already heralding the storm of financial crisis. That crisis can indeed be solved, but only by abandoning the old shibboleths, the old false gods that, as Dostoyevsky predicted at the very beginning of our modern industrialized, interconnected Age, would inevitably bring us to our ruin, unless reined in and reversed in time.

It is grotesque that millions of workers are being laid off by corporations which are in turn receiving taxpayer funds. Many of these corporations have stashed trillions of dollars away in tax havens and have contributed zero to the public treasury. Yet they are being bailed out due to shutdowns in the economy over the Covid-19 crisis.

Why aren’t the banks and corporations being forced by governments to pay for their workers on sick leave or in lockdown? It’s because the governments are bought and paid-for servants of the top one per cent. Some political leaders are the embodiment of the one per cent, like Donald Trump and senior members of the U.S. Congress.

The biggest orgy of funny money is seen in the U.S. where the Trump administration and Congress have approved the printing of trillions of dollars to prop up corporations and banks. Meanwhile crumbs are being thrown at millions of workers and their families.

In just five weeks, unemployment has hit a staggering 26.4 million people in the U.S. – and that’s the official figure. The real level is doubtless much higher. It is reported that the job losses have wiped out all the employment gains made over the past decade since the last financial crisis in 2008. As with the present crisis, the U.S. government arranged trillion-dollar bailouts for banks and industries back in 2008-2009. It didn’t last long until the next binge.

In truth is this is a familiar pattern over the past century where the economy is continually salvaged from ruin by the government at the expense of ordinary workers, small businesses and taxpayers. The recurring rescue is proof that the system of private capital and supposed free markets is a myth.

The system typically privatizes profit for an elite while socializing the losses for the mass of people. It has always been a version of “socialism for the rich”.

In the distant past the salvaging of broken-down capitalism was at least conducted with a certain degree of democratization and social progress. In the New Deal era of Roosevelt in the 1930s at least government intervention went a long way to restoring workers and their rights, despite bitter opposition from capitalists. Over recent decades, however, the rescuing of capitalism has seen an ever-increasing emphasis on plying money and loans to corporations and investors while ordinary workers are neglected. This process of embezzlement reached new heights in the 2008 crash. Now under Trump the larceny has become legendary. It should be underscored though that the corruption has bipartisan endorsement from Republicans and Democrats. They are really one party beholden to big business.

As Eric Zuesse commented in an-depth analysis published in our journal this week, the Covid-19 “top-down bailout” in the U.S. will result in even more social inequality and ultimately more dysfunction in the American economy going forward. “The outcome will therefore be economic collapse, and perhaps even revolution,” notes Zuesse.

It is indisputable that capitalism is a failed system both in the U.S. and Europe. The Covid-19 pandemic and its disastrous social impact of sickness and deaths shows that such an economy cannot organize societies based on satisfying human needs. Instead, it functions to continually enrich the already wealthy while creating ever-greater numbers of impoverished and deprived. This chronic polarization of wealth has been pointed out by many critics of capitalism, including Karl Marx, and more contemporaneously by progressive economists like Richard Wolff and Thomas Picketty.

It is fair to describe corporate capitalism (or socialism for the rich) as a pathology which produces many other pathologies, including deprivation, crime, insecurity, ecological damage, militarism, imperialism and ultimately war. Ironically, a virus is exposing the pathological system. And it is, inevitably, forcing a cure to arise.

It’s time to abolish the parasitical system and implement something more civilized, effective, sustainable and democratic. That is the task of people organized to fight for their interests. The delusion of bailing out a failed and sick system must be shaken off once and for all.

Pepe ESCOBAR

You don’t need to read Michel Foucault’s work on biopolitics to understand that neoliberalism – in deep crisis since at least 2008 – is a control/governing technique in which surveillance capitalism is deeply embedded.

But now, with the world-system collapsing at breathtaking speed, neoliberalism is at a loss to deal with the next stage of dystopia, ever present in our hyper-connected angst: global mass unemployment.

Henry Kissinger, anointed oracle/gatekeeper of the ruling class, is predictably scared. He claims that, “sustaining the public trust is crucial to social solidarity.” He’s convinced the Hegemon should “safeguard the principles of the liberal world order.” Otherwise, “failure could set the world on fire.”

That’s so quaint. Public trust is dead across the spectrum. The liberal world “order” is now social Darwinist chaos. Just wait for the fire to rage.

The numbers are staggering. The Japan-based Asian Development Bank (ADB), in its annual economic report, may not have been exactly original. But it did note that the impact of the “worst pandemic in a century” will be as high as $4.1 trillion, or 4.8 percent of global GDP.

This an underestimation, as “supply disruptions, interrupted remittances, possible social and financial crises, and long-term effects on health care and education are excluded from the analysis.”

We cannot even start to imagine the cataclysmic social consequences of the crash. Entire sub-sectors of the global economy may not be recomposed at all.

The International Labor Organization (ILO) forecasts global unemployment at a conservative, additonal 24.7 million people – especially in aviation, tourism and hospitality.

The global aviation industry is a humongous $2.7 trillion business. That’s 3.6 percent of global GDP. It employs 2.7 million people. When you add air transport and tourism —everything from hotels and restaurants to theme parks and museums — it accounts for a minimum of 65.5 million jobs around the world.

According to the ILO, income losses for workers may range from $860 billion to an astonishing $3.4 trillion. “Working poverty” will be the new normal – especially across the Global South.

“Working poor,” in ILO terminology, means employed people living in households with a per capita income below the poverty line of $2 a day. As many as an additional 35 million people worldwide will become working poor in 2020.

Switching to feasible perspectives for global trade, it’s enlightening to examine that this report about how the economy may rebound is centered on the notorious hyperactive merchants and traders of Yiwu in eastern China – the world’s busiest small-commodity, business hub.

Their experience spells out a long and difficult recovery. As the rest of the world is in a coma, Lu Ting, chief China economist at Nomura in Hong Kong stresses that China faces a 30 percent decline in external demand at least until next Fall.

Neoliberalism in Reverse?

San Miguel, Bulacan, Philippines, 2016. (Judgefloro, CC0, Wikimedia Commons)

In the next stage, the strategic competition between the U.S. and China will be no-holds-barred, as emerging narratives of China’s new, multifaceted global role – on trade, technology, cyberspace, climate change – will set in, even more far-reaching than the New Silk Roads. That will also be the case in global public health policies. Get ready for an accelerated Hybrid War between the “Chinese virus” narrative and the Health Silk Road.

The latest report by the China Institute of International Studies would be quite helpful for the West — hubris permitting — to understand how Beijing adopted key measures putting the health and safety of the general population first.

Now, as the Chinese economy slowly picks up, hordes of fund managers from across Asia are tracking everything from trips on the metro to noodle consumption to preview what kind of economy may emerge post-lockdown.

In contrast, across the West, the prevailing doom and gloom elicited a priceless editorial from The Financial Times. Like James Brown in the 1980s Blues Brothers pop epic, the City of London seems to have seen the light, or at least giving the impression it really means it. Neoliberalism in reverse. New social contract. “Secure” labor markets. Redistribution.

Cynics won’t be fooled. The cryogenic state of the global economy spells out a vicious Great Depression 2.0 and an unemployment tsunami. The plebs eventually reaching for the pitchforks and the AR-15s en masse is now a distinct possibility. Might as well start throwing a few breadcrumbs to the beggars’ banquet.

That may apply to European latitudes. But the American story is in a class by itself.

Mural, Seattle, February 2017. (Mitchell Haindfield, Flickr)

For decades, we were led to believe that the world-system put in place after WWII provided the U.S. with unrivalled structural power. Now, all that’s left is structural fragility, grotesque inequalities, unpayable Himalayas of debt, and a rolling crisis.

No one is fooled anymore by the Fed’s magic quantitative easing powers, or the acronym salad – TALF, ESF, SPV – built into the Fed/U.S. Treasury exclusive obsession with big banks, corporations and the Goddess of the Market, to the detriment of the average American.

It was only a few months ago that a serious discussion evolved around the $2.5 quadrillion derivatives market imploding and collapsing the global economy, based on the price of oil skyrocketing, in case the Strait of Hormuz – for whatever reason – was shut down.

Now it’s about Great Depression 2.0: the whole system crashing as a result of the shutdown of the global economy. The questions are absolutely legitimate: is the political and social cataclysm of the global economic crisis arguably a larger catastrophe than Covid-19 itself?  And will it provide an opportunity to end neoliberalism and usher in a more equitable system, or something even worse?

 ‘Transparent’ BlackRock

Wall Street, of course, lives in an alternative universe. In a nutshell, Wall Street turned the Fed into a hedge fund. The Fed is going to own at least two thirds of all U.S. Treasury bills in the market before the end of 2020.

The U.S. Treasury will be buying every security and loan in sight while the Fed will be the banker – financing the whole scheme.

So essentially this is a Fed/Treasury merger. A behemoth dispensing loads of helicopter money.

And the winner is BlackRock—the biggest money manager on the planet, with tentacles everywhere, managing the assets of over 170 pension funds, banks, foundations, insurance companies, in fact a great deal of the money in private equity and hedge funds. BlackRock — promising to be fully  “transparent” — will buy these securities and manage those dodgy SPVs on behalf of the Treasury.

BlackRock, founded in 1988 by Larry Fink, may not be as big as Vanguard, but it’s the top investor in Goldman Sachs, along with Vanguard and State Street, and with $6.5 trillion in assets, bigger than Goldman Sachs, JP Morgan and Deutsche Bank combined.

Now, BlackRock is the new operating system (OS) of the Fed and the Treasury. The world’s biggest shadow bank – and no, it’s not Chinese.

Compared to this high-stakes game, mini-scandals such as the one around Georgia Senator Kelly Loffler are peanuts. Loffler allegedly profited from inside information on Covid-19 by the CDC to make a stock market killing. Loffler is married to Jeffrey Sprecher – who happens to be the chairman of the NYSE, installed by Goldman Sachs.

While corporate media followed this story like headless chickens, post-Covid-19 plans, in Pentagon parlance, “move forward” by stealth.

The price? A meager $1,200 check per person for a month. Anyone knows that, based on median salary income, a typical American family would need $12,000 to survive for two months. Treasury Secretary Steven Mnuchin, in an act of supreme effrontry, allows them a mere 10 percent of that. So American taxpayers will be left with a tsunami of debt while selected Wall Street players grab the whole loot, part of an unparalleled transfer of wealth upwards, complete with bankruptcies en masse of small and medium businesses.

Fink’s letter to his shareholders almost gives the game away: “I believe we are on the edge of a fundamental reshaping of finance.”

And right on cue, he forecasted that, “in the near future – and sooner than most anticipate – there will be a significant reallocation of capital.”

He was referring, then, to climate change. Now that refers to Covid-19.

Implant Our Nanochip, Or Else?

West Virginia National Guard members reporting to a Charleston nursing home to assist with Covid-19 testing. April 6, 2020. (U.S. Army National Guard, Edwin L. Wriston)

The game ahead for the elites, taking advantage of the crisis, might well contain these four elements: a social credit system, mandatory vaccination, a digital currency and a Universal Basic Income (UBI). This is what used to be called, according to the decades-old, time-tested CIA playbook, a “conspiracy theory.” Well, it might actually happen.

A social credit system is something that China set up already in 2014. Before the end of 2020, every Chinese citizen will be assigned his/her own credit score – a de facto “dynamic profile”, elaborated with extensive use of AI and the internet of things (IoT), including ubiquitous facial recognition technology. This implies, of course, 24/7 surveillance, complete with Blade Runner-style roving robotic birds.

The U.S., the U.K., France, Germany, Canada, Russia and India may not be far behind. Germany, for instance, is tweaking its universal credit rating system, SCHUFA. France has an ID app very similar to the Chinese model, verified by facial recognition.

Mandatory vaccination is Bill Gates’s dream, working in conjunction with the WHO, the World Economic Forum (WEF) and Big Pharma. He wants “billions of doses” to be enforced over the Global South. And it could be a cover to everyone getting a digital implant.

Here it is, in his own words. At 34:15: “Eventually what we’ll have to have is certificates of who’s a recovered person, who’s a vaccinated person…Because you don’t want people moving around the world where you’ll have some countries that won’t have it under control, sadly. You don’t want to completely block off the ability for people to go there and come back and move around.”

Then comes the last sentence which was erased from the official TED video. This was noted by Rosemary Frei, who has a master on molecular biology and is an independent investigative journalist in Canada. Gates says: “So eventually there will be this digital immunity proof that will help facilitate the global reopening up.”

This “digital immunity proof” is crucial to keep in mind, something that could be misused by the state for nefarious purposes.

The three top candidates to produce a coronavirus vaccine are American biotech firm Moderna, as well as Germans CureVac and BioNTech.

Digital cash might then become an offspring of blockchain. Not only the U.S., but China and Russia are also interested in a national crypto-currency. A global currency – of course controlled by central bankers – may soon be adopted in the form of a basket of currencies, and would circulate virtually. Endless permutations of the toxic cocktail of IoT, blockchain technology and the social credit system could loom ahead.

Already Spain has announced that it is introducing UBI, and wants it to be permanent. It’s a form insurance for the elite against social uprisings, especially if millions of jobs never come back.

So the key working hypothesis is that Covid-19 could be used as cover for the usual suspects to bring in a new digital financial system and a mandatory vaccine with a “digital identity” nanochip with dissent not tolerated: what Slavoj Zizek calls the “erotic dream” of every totalitarian government.

Yet underneath it all, amid so much anxiety, a pent-up rage seems to be gathering strength, to eventually explode in unforeseeable ways. As much as the system may be changing at breakneck speed, there’s no guarantee even the 0.1 percent will be safe.