Category: Economics

Categories
Economics Politics

America’s Last Stand

It is 2024 and once again we turn our tired eyes towards electing another President of the United States.

Why so tired? 

Biden vs. Trump…the election two-thirds of America does not want.

This is what the American Experiment has come down to…two of the least popular Presidents in U.S. history running in a rematch.

We could laugh it off for the pulp fiction it is if we were not facing a myriad of existential challenges:

  • A climate crisis requiring a rapid reduction in global greenhouse gas emissions by 2030 in order to avoid irreversible, catastrophic climate related impacts.
  • Unnecessary geopolitical conflicts: War in Ukraine, Genocide in Gaza threatening a U.S. War with Iran, while the drum beats for a U.S. war with China over Taiwan.
  • Severe Wealth & Income inequality radicalizing democratic governments around the world.

In our moment of greatest need, choosing the lesser of two evils will not do. 

This moment calls for our generation’s Abraham Lincoln…a leader who is capable of uniting independent minded Americans for the good of each other And our country.

Who is this leader? 

It is NOT President Joe Biden:

  • Israel is committing genocide in Gaza. We know this because the genocide is being live streamed on social media by Israeli Defense Forces and Palestinians in Gaza. The International Court of Justice (ICJ) has determined the evidence submitted by South Africa supports a plausible case for genocide in Gaza, and the risk of ‘irreparable prejudice’ to the Palestinian people is sufficient to support Emergency provisions to order Israel to immediately stop killing, harming or denying essential food, water, shelter or medical care to the Palestinians in Gaza. The ICJ issued six Emergency provisions, four by a vote of 15 – 2 and two by a vote of 16 – 1. For the two 16 – 1 provisions [preventing & punishing incitement to commit genocide, and providing essential food, water & care], the Israeli Judge on the ICJ concurred. The American representative on the ICJ, President (Chief Judge) Joan Donoghue, concurred with all 6 Emergency provisions. Only Uganda opposed all Emergency provisions. 
  • Yet, President Biden claims the charge of genocide by Israel is baseless. He has provided exclusive diplomatic cover for Israel’s genocide by twice vetoing globally supported ceasefire petitions at the United Nations. He has circumvented U.S. law by providing billions in funding to Israel directly and deployed two aircraft carrier groups to the region in support of Israel without Congressional consent.
  • Biden has broken critical promises:
    • Failed to raise the federal minimum wage
    • Failed to provide $2,000 stimulus checks if Georgia elected both democratic senators
    • Failed to provide broad Student Loan Forgiveness
    • Forced Railroad Workers to end strike with no meaningful concessions from Corporate executives
    • Claims he is running for re-election to protect democracy from fascism when he has orchestrated the first sham Presidential primary season in U.S. history. State democratic parties are being pressured by the National Democratic Party to cancel primary elections and grant all delegates to President Biden. Florida has already complied.

It is NOT former President Trump:

  • While President Trump has successfully earned the anti-establishment moniker by eviscerating both President George W. Bush [for the War in Iraq] and Presidents Clinton and Obama [for selling out Middle & Working class Americans], he has done nothing to slow the multi-trillion dollar syphoning of wealth and income from the middle & working classes to the top 1% American earners.
  • The CARES Act passed March 2020 offered temporary relief to workers and small businesses (most expired by August 2020) while providing the Federal Reserve the seed funds to unleash $4 Trillion dollars in liquidity to large corporations. By year-end 2020, people who earned $27,000 or less lost 10 million jobs, 30% of all small businesses in America closed and never reopened, yet corporations boomed with the S&P 500 increasing 16.3% and the NASDAQ Composite increasing 43.6%. U.S. Billionaires’ wealth increased by over $1 Trillion dollars, while according to the U.S. Census Household Pulse Survey: 33% of U.S. households are having a hard time covering basic expenses and 12% report food shortages.
  • President Trump’s 2017 Tax Cuts and Jobs Act was a complete boondoggle for wealthy Americans by reducing corporate taxes from 35% to 21%, doubling the Estate tax eligibility threshold from $11 million per couple to $22 million, reducing the corporate pass-through tax by 20%, and reducing the highest earning individual tax bracket from 39.6% to 37%. Per the Tax Policy Center, the average annual benefit to top 1% earners is $61,090 while the median earners received just $910. 

America wants an Independent:

  • 2023 Gallop poll indicates 43% of Americans identify as Independent verses 27% for Democrats and 27% for Republicans

Independents need to borrow a page from former President Obama’s playbook. During the 2020 Democratic Primary, Senator Bernie Sanders was starting to run away with the race to the nomination. After tying in Iowa, Senator Sanders won New Hampshire, then blew away the field in Nevada. Establishment Democrats panicked. Over the next few weeks, leading up to Super Tuesday, President Obama encouraged centrist democrats Mayor Pete Buttigieg (#3 in delegates) and Amy Klobuchar (#4 in delegates) to drop out and endorse Biden (#2 in delegates) the day before Super Tuesday, while fellow liberal democrat Senator Elizabeth Warren (#5 in delegates) was encouraged to stay in the race to split the left leaning Super Tuesday voters. Senator Warren then dropped out two days later on March 5th, 2020. 

Independents and 3rd Party Candidates should use the Primary/Caucus season to make their best case to the American people. As we enter the summer while both establishment parties are having their coronation conventions, Independents and 3rd Party candidates can come together and determine the unifying agenda, then select the strongest Presidential ticket for the general election. Once an independent ticket is selected, national ballot access can be obtained by utilizing the coalition parties earned ballot access (i.e. Green, No Labels or Libertarian Party access). Independent and participating 3rd party organizations can work together in support of the newly selected independent ticket. 

What could be America’s unifying agenda?

According to the Rand Corporation, had the more equitable income distribution of the three decades after WWII (1945 – 1974) been maintained through today, all working Americans in the bottom 90% of earners would be doing much better. More specifically, you could pay each worker an additional $1,144 per month ($13,728 per year). The accumulated loss in earnings from 1975 to 2020 is estimated at $50 trillion dollars.

America needs the Clean New Deal.

The Clean New Deal is a two-part plan:

  • Establishment of a new national commitment to rebuild the American Middle Class:
    • National Jobs Guarantee with wages starting at Area Median Income
    • Develop a new National Renewable Energy Power Grid
    • Build a National Renewable Energy High Speed Rail System
    • Modernize & Repair the Nation’s Bridges and Transportation Infrastructure
    • Retrofit National Housing stock for Sustainability & Climate Risk Adaptation
    • Retrofit Excess Commercial Real Estate for Sustainable Multifamily Housing
    • Enact Medicare for All
    • National Student Loan Forgiveness
    • Free Public Vocational and College Education
    • Phase Down of the Global U.S. Military Footprint
    • Federal Tax Overhaul to restore pre-Reagan Progressive Tax Structure
  • Our new Independent President must appoint an Independent Counsel who will:
    • Investigate the Criminal Causes of the Multi-Trillion Dollar redistribution of Income & Wealth from Working and Middle Class Americans to the Wealthy Elites
    • Establish a standing Federal Grand Jury to interrogate Persons of Interest and bring Federal Indictments where appropriate
    • Make recommendations to the Congress for Impeachment of any Office Holders found to have engaged in actionable activities within the scope of the Independent Counsel
    • Make Recommendations for Federal Legislation to repeal or modify any law that is found to have facilitated the extraordinary redistribution of income and wealth

If given a credible independent choice for President and a unifying agenda, America will reject the lesser of two evils and elect the first independent President of the United States.

No doubt it will be a moonshot, but so is America…the first country in the world to declare “we hold these truths to be self-evident, that all men are created equal…”.

Categories
Economics Politics

Why Quantifying Climate Risk is the Wrong Question

Climate changes everything, even traditional approaches to risk management.

A typical risk management process includes a risk assessment by probability & timeliness of occurrence and quantification of impact on business operations. Risks are then prioritized based on the magnitude and timeliness of impact. Risk mitigation strategies are developed which provide capital requirements. Finally, a cost-benefit analysis is completed to establish the risk tolerance for the organization.

This process will not work for climate change risk mitigation. Why?

Climate Change is a planetary phenomenon that is producing climate-related impacts which are building exponentially over a multi-decade period. As such, the timeliness of material climate-related impacts is apt to exceed the strategic horizon for most businesses.

Climate Change presents a global challenge with no historical reference points in modern civilization*. In the absence of historical reference points, quantifying future climate-related impacts requires first understanding how global warming changes the Earth’s ecology, then how a changing ecology impacts the economy. One lesson from over 40 years of global climate models is even the scientific community has persistently underestimated climate-related impacts due to the cascading, interconnected characteristics of the global ecology.

Given these challenges, producing actionable data in the near-term on future client-related impacts is a dubious proposition.

What now? On what basis do we proceed to mitigate climate-related risk?

Qualitative analysis.

The accumulation of greenhouse gas (GHG) emissions in the atmosphere is accelerating planetary warming, which is rapidly altering weather patterns and causing material degradation to crop yields, fresh water, biodiversity and other ecological systems necessary to sustain human life.

Climate change presents an existential challenge that will likely have unimaginable impact on future generations if we do not act immediately.

The best-known method to slow and ultimately stop the global warming is a rapid reduction in global GHG emissions. To this end, the global signatures to the Paris Agreement set a goal to limit global warming to well below 2 degrees Celsius, with an optimal target goal of 1.5 degrees Celsius. This goal can only be achieved with the active participation and cooperation of the global community.

No country or multi-national organization can meet the challenges presented by climate change alone.

The developed nations cannot meet the challenges presented by climate change without the developing nations.

The timely transition to a net-zero carbon economy will require the cooperation of fossil fuel interests who would need to choose to keep a third of all known oil reserves, 50% of all natural gas reserves, and 80% of all coal reserves untapped if we are to keep global warming well below 2 degrees Celsius.

Can we do it?

Yes.

Once we realize our progeny may face extinction level events if we fail to meet this challenge.

*For 10,000 years, the global average surface temperature has remained stable within a standard deviation of 1 degree Celsius. Since approximately 1850, the accumulation of greenhouse gas (GHG) emissions has increased the average global surface temperature 1.2 degrees Celsius. Accordingly, the global average surface temperature is trending warmer than at any other point in modern history.

Categories
Economics Politics Social Evolution

A Picture is Worth a Thousand Words…

Network – Howard Beale…

https://youtu.be/MRuS3dxKK9U
“I’m a human being, goddamnit! My life has value!”

Yet the wrong people got mad and we learned the wrong lesson.

Wall Street – Gordon Gekko

“Greed is Good.”

And so it is…

The Big Short – Jared Vennett explains Wall Street’s mortgage backed securities con.

“It’s all shit.”

Predators eat their own…

Margin Call – John Tuld

“Sell it all. Today.”

And it wasn’t just a movie…

U.S. Senate Hearing – Senator Levin grills Goldman Sachs – 2010

“How Goldman got comfortable (screwing their own clients)”

Then the predators blame the prey…

Rick Santelli Rant – 2/19/2009

“Do we want to subsidize the losers’ mortgages.”

Comedy becomes the last refuge of truth – Jon Stewart exposes Jim Cramer

“F@#k you!”

But the suffering is real…

Up in the Air – You’re Fired

“I think the anger comes from I just wasn’t needed anymore.”

“Freedom is just another word for nothing left to lose.”

Joker – 2019

“Everything Must Go!”

Surely a global pandemic will bring us together…

PBS Newshour – Judy Woodruff

“How the pandemic has exposed America’s deep divide.”

And yet we have a much bigger problem…

Natural Disasters from climate change – December 22 to 25, 2021

https://youtu.be/RoJv1IzPBk8
These severe weather events are occuring because global average surface temperature has increased 1.07°C since 1850. (See UN’s 6th IPCC report – 8/2021)

Will we notice the threat of climate change?

Don’t Look Up – Interview: Leonardo DiCaprio

“We have a finite window of 10 years to make this transition.”
Categories
COVID-19 Economics Politics

How Wealthy Elites Chose to Betray the American Working Class…

Greed is not new, but previous generations learned hard lessons about the perils of consolidating wealth in too few hands. The gilded age led to the Great Depression of the 1890’s, and the roaring 20’s led to the stock market crash of 1929 and the great depression of the 1930’s.

Out of necessity, FDR instituted the new deal framework that reined in excessive financial speculation and established the modern social safety net. Add in expanded access to college education and home ownership in the 1950’s and you have the largest and most prosperous working class in global history.

Then Lewis Powell writes the Powell memo to the US Chamber of Commerce in 1971 as a call to arms for American corporations to co-opt the media, university system, and the government to advance the interest of American corporations. Powell was appointed to the Supreme Court in 1972 while major corporations deployed the strategy outlined in the memo.

American wealthy elites learned from 1950-1970, broad based prosperity was too expensive because they could not control the American people. By 1970, working class Americans were transforming the country through the civil rights movement,  anti-war movement, equal rights movement, and were attempting to organize a poor man’s march on Washington D.C. when Dr. Martin Luther King Jr. was assassinated in Memphis.

Yet the wealthy elites knew the lessons of previous efforts to consolidate wealth in too few hands had led to ruinous depressions. Their solution was to make wealth insulated from depressions by privatizing profits and socializing losses.

First, President Reagan dealt a death knell to the American Labor movement by firing the striking air traffic controllers in 1981. Then President HW Bush negotiated, and President Bill Clinton supported the ratification of the North American Free Trade Agreement (NAFTA), which de-industrialized America by off-shoring millions of manufacturing jobs.

By the late 1990’s, Wall Street forced Congress to repeal Glass-Steagall by merging Travelers Insurance with Citibank, which gave Congress one year to break up the largest financial services company in the world. Congress caved and repealed Glass-Steagall. Then in the lame duck Congress at the end of Bill Clinton’s presidency, Congress passed sweeping legislation deregulating complex financial instruments.

Wall Street then utilized complex collateralized debt obligations rated AAA by captive credit rating agencies to loot restricted institutional investors like pension funds, life insurance companies and municipal investors, and prey on unsuspecting residential mortgage holders. By the end of 2006, institutional investors stopped buying the mis-rated securities, which trapped homeowners in rapidly escalating adjustable rate mortgages and destroyed the investment banks that got caught holding trillions of dollars of worthless securities.

Some banks hedged their fraudulent investments with credit default swaps that bankrupted AIG (the world’s largest insurance company). Wall Street’s exit strategy was “too big to fail”, perfectly executed by former Goldman CEO, Hank Paulsen, who was selected to be W’s perfectly timed Treasury Secretary.

The great recession protected wealth while millions of Americans lost jobs, homes, pensions, and retirement savings. No major player went to jail because President Clinton made the complex financial instruments legal, and President Obama refused to use the RICO laws to prosecute the rampant fraud on the American people (Google “William K Black”).

The method was replicated with the COVID-19 pandemic. The CARES Act gave temporary support to individuals and small businesses (which expired by August 2020), while authorizing the Federal Reserve to ‘invest’ $4.25T in large multi-national corporations. By year-end, 2020 GDP contracted 3.5%, but the Dow Jones Industrial Average index increased 7.2%, S&P 500 increased 16.3%, Russell 2000 increased 18.4%, and the Nasdaq Composite increased 43.9%. US billionaires net worth increased over a trillion dollars, while 30% of all small businesses failed, and workers with annual wages of $26,000 or less lost 10 million jobs.

Thankfully, the American working class is fighting back. For the first time in 40 years, there are multiple strikes ongoing across America involving thousands of workers in deep red (Alabama) and dark blue (New York) states. The great resignation has totaled over 32 million workers with monthly recurring all-time records in August (4.2 million workers quit) and September (4.3 million).

Now is the time for each of us to decide with whom do we stand?

I stand with the working class.

Categories
Economics Politics Social Evolution

A Path to Sustainability…

COP26 is merely the start of our transformation to a 21st century sustainable economy. As it stands now we have non-binding commitments to cut GHG emissions 50% by 2030.

Here is what we need:

Binding commitments to tie net zero transition to a peak global average surface temperature increase of 1.5°C.

Graduated carbon pricing of $100 per ton by 2025, $125 by 2030, and $150 by 2035 & thereafter.

Acknowledgement of the carbon budget from 1850 to peak temperature increase of 1.5°C.

Retroactive carbon price of $50 per ton charged to the wealthy nations who benefitted most from the 2,400 GtCO2 of carbon pollution emitted since 1850. This $120T will initially capitalize the Global Net Zero Transition Fund. Future carbon pricing proceeds will be injected directly into the Fund.

Establish a fossil fuel stranded assets regime that will tie future subsidies and stranded assets compensation to investment in scaling up sustainable energy power generation including new sources such as green hydrogen, and ammonia.

Establish a Leap Frog power generation program for India, China and the emerging world funded by the Global Net Zero Transition Fund. Leap Frog means increasing energy production from carbon-free, sustainable energy sources.

Require all businesses to disclose a decarbonization transition plan tied to the peak temperature increase of 1.5°C and inclusive of 95% of scope 1, scope 2, and scope 3 emissions by 2025 or face 2030 carbon pricing fees.

Establish a global anti-profiteering regime capping Return on Investment for Net Zero Transition activities. We will not succeed if investors can impose economic rents at every stress point.

Can we do it?

Yes…

If enough of us convince the wealthy elites they will not escape the price of inaction.

Categories
Economics Politics

Just the facts*

For 10,000 years the average global surface temperature remained stable within 1°Celsius.

Stable temperature produced consistent weather patterns that allowed humanity to develop farming. Farming allowed humanity to produce surplus food that supported faster population growth, trade, and ultimately modern civilization.

Carbon, methane and other greenhouse gas pollution in the atmosphere causes global warming.

For every 1,000 GtCO2 of carbon in the atmosphere, the average global surface temperature increases 0.45°C.

Since 1850 (about the beginning of the industrial revolution), the accumulated carbon pollution in the atmosphere is 2,390 GtCO2.

Currently, human activity is putting 40 GtCO2 of carbon pollution in the atmosphere per year.

For all the talk about limiting greenhouse gas pollution, the amount of carbon pollution is increasing each year by an increasing amount.

The 60-year average yearly increase in carbon pollution is 1.61%.

The 10-year average yearly increase in carbon pollution is 2.4%.

The 30-year projected average yearly increase in carbon pollution is 3.5%.

We have all noticed the proliferation of extreme weather events in recent years. Huge forest fires throughout the western and Pacific northwestern US, Greece, and Australia. Torrential rainfall and flooding in Tennessee, Germany, Belgium, New York, New Jersey, and Connecticut. Tropical storms escalating into category 4 Hurricanes in Asia and the Gulf of Mexico. Severe heat waves bringing 115°F weather to Portland, Seattle, and as far north as Saskatchewan (Canada).

All these extreme weather events are due to global average surface temperature increasing 1.07°C since 1850.

We currently have more carbon in our atmosphere than the Earth has experienced in 800,000 years.

By comparison, the last ice age ended 15,000 years ago.

At the rate of annual greenhouse gas pollution, global climate scientist estimate average global surface temperature will increase since 1850 by 1.5°C in 2035.

At 1.5°C, the rate and intensity of extreme weather events will be unprecedented in the historical observational record.

And if you think we have plenty of time to reverse the greenhouse pollution in the atmosphere causing global warming, in order to give the planet a 50% chance not to exceed 1.5°C by 2050, our 30-year average annual carbon pollution cannot exceed 16.67 GtCO2.

That is 58% less than our current annual carbon pollution of 40 GtCO2 per year for the next 30 years.

The climate crisis is real, and it is here. The economy exists within the ecology. Get educated on what sustains human life.

*The source of the data cited here is the science basis of the Summary for Policymakers from the UN’s 6th Intergovernmental Panel on Climate Change.

Every member country of the United Nations has endorsed the findings of the report.

The Summary for Policymakers is 42 pages long (the whole report in almost 4,000 pages long).

Here is the link for your review:

https://www.ipcc.ch/report/ar6/wg1/#SPM
Categories
Economics Personal Growth Social Evolution

The Urgency of Now


As Americans, the virtues we are encouraged to use as guideposts for success impede our personal fulfillment because they are at odds with how we exist each day.

Nothing in nature lives independently. By design, we all are interdependent on each other and the natural environment that provides for us.

When the cells in our body compete we call the condition cancer. Humanity is functioning like cancer to the ecology that sustains us.

We can’t experience the luxuries of our modern lives based only on what our family, friends, and people like us produce. Self interest at the expense of the common interest is self defeating.

Once we remember we survive daily based on the contributions of many people we will never know, the well being of all of us becomes as important as our own well being.

Why must we remember now?

We face global challenges beyond the capacity of self interest to mitigate:

1. Climate crisis – we are within 15 years of exceeding average global surface temperature increase since 1850 of 1.5 degrees Celsius.

2. Income & wealth inequality is destroying democratic institutions and destabilizing national governments, which is leading to severe polarization and mass migration of under resourced populations.

3. Nuclear weapons proliferation – Iran will be the next nation to obtain nuclear weapons because their most powerful enemies (Israel and U.S.A) have nuclear weapons. This is not new. India responded similarly to Pakistan obtaining nuclear weapons.

4. Technological disruption due to automation and artificial intelligence is displacing low skilled labor and ultimately highly skilled labor. Since technology is owned by the wealthy elites through control of multi-national corporations, income & wealth inequality is exacerbated because income from automated productivity goes to the owners of technology. Masses of people are becoming economically irrelevant.

While our Earth is abundant, self-interest has rendered humanity impotent in the face of extinction level challenges. 

Yet we still have a choice, if only we remember who we are.

Categories
COVID-19 Economics Social Evolution

Thoughtlessness…Our Persistent Pandemic

How do we get to a place where we fear/hate/harm the hands that serve us?

Democrats hating Republicans…
MAGA hating the establishment political parties…
Rural people hating City Slickers…
Wall Street hating Main Street…
Rich hating Poor…
Capitalists hating Environmentalists…
Us hating Them…
Everyone hating Anyone who hates them first…

Thoughtlessness.

How do we come to accept popular virtues as truth when they are disproved by our actual experience?

Independence…None of us live independently.

Freedom…Financial freedom only buys what other people produce.

Competition…When our bodies produce cells that compete we call it cancer. As such, humanity is a growing cancer in the ecology that sustains us.

Self interest…produced the richest family in America, who employs hundreds of thousands of people that qualify for food stamps.

Thoughtlessness.

When we consider America’s response to the COVID-19 Pandemic…

We exercised our freedom to wear a mask or not;

We asserted our independence by socially distancing or not;

We demonstrated our insatiable competitive spirit by reopening local economies far too early;

We revealed the dominant self interest by directing trillions of dollars to Wall Street while a third of all small businesses failed, working class employment plummeted 20%, and 12% of American households report food shortages;

And the culmination is 600,000 pandemic related deaths and counting, 33% of US households expecting eviction or foreclosure due to unemployment, while Wall Street booms (Nasdaq Composite up 43.6% in 2020 vs. 2019) and the billionaire class gained a trillion dollars in new net worth.

Thoughtlessness.

Can we find our way out of the swamp of thoughtlessness?

Absolutely.

Our persistent thoughtlessness pandemic will end the moment a critical mass of us remember who we are…

One human family, interdependently reliant on each other and the natural environment that sustains us.

Categories
COVID-19 Economics Social Evolution

2021 – The Year of the Economy

Recently I read a book written by economist, Stephanie Kelton, called the “The Deficit Myth”, which provided a comprehensive analysis on modern monetary theory (MMT). In essence, deficits do not matter because as a sovereign fiat currency nation who’s debt is entirely in our own currency, the United States can spend as much money as we need with inflation being our only limiting factor. While I concur with the validity of MMT, I differ with Stephanie’s claim that politicians in both political parties are not already thoroughly versed in MMT. They are. And the implications are transformative.

The most cursory review of historical economy data shows two generations of politicians have purposely driven federal debt from $1 Trillion dollars in 1980 to over $27 Trillion dollars currently through the use of MMT.

Deficit spending paid for trillions of dollars of military spending, regressive tax cuts, a new entitlement (Medicare Part D) converted into a multi-trillion dollar boondoggle for the pharmaceutical industry by making bulk purchase pricing illegal, and a deregulation scheme that gutted environmental protection laws and repealed Glass-Steagall (to whom we have Bill Clinton to thank!). And pursuant to MMT, the trillions of dollars in annual deficits funneled surpluses to the private sector.

Tragically, fiscal policy supported by both political parties targeted the trillions in surpluses to the wealthiest Americans via trade agreements (GATT and NAFTA) that allowed American multi-national corporations to off-shore labor, assets, and profits further avoiding US taxation, while simultaneously forcing US labor to compete for jobs with 3rd world labor.

The GINI coefficient is the economic data point used to measure income and wealth inequality. A GINI coefficient of 0 equals perfect economic equality and 1 equals absolute economic inequality. According to the World Bank, the 1979 GINI coefficient in the US was .345 verses 2019 of .48 (source: Statista). 2019 US GINI coefficient is tied for the 20th most unequal economy in the world with Costa Rica, and by far the most unequal of all G7 nations (UK is #2 with .392). Yet this was all before COVID-19.

Since COVID-19 was declared a global pandemic, the US Congress has approved multiple stimulus packages with the most significant being the CARES Act approved the end of March 2020, and the recent $900 Billion dollar stimulus package. The CARES Act on its face included $2.2 Trillion dollars in economic stimulus, but also authorized the Federal Reserve to invest ten times the $425 Billion dollar allocation for corporations with more than 500 employees (or $4.25 Trillion dollars). A rough estimate of the distribution of the two stimulus packages follows:

Small Businesses (less than 500 employees) and Individuals =

$320B ($1,200 one time payments)

$160B ($600 one time payments)

$300B ($600/week Pandemic Unemployment Assistance or PUA

$  63B ($300/week PUA)

$480B (80% Payroll Protection Program or PPP; 20% poached by large corporations)

$285B (PPP 2nd round)

$  25B (Rent support)

$  10B (Child care)

$1.643 Trillion dollars

(25.2% of the two primary stimulus packages)

Large Corporations (500+ employees)

$  75B (Airlines)

$425B (large co. with 500+ employees)

$4,250B (Fed Reserve Investment)

$120B (PPP poaching)

$  15B (Airline 2nd stimulus)

$4.885 Trillion dollars

(74.8% of the two primary stimulus packages)

$6.528 Trillion dollars*

*(Total allocated excludes approximately $822 Billion dollars largely for emergency services, state & local government support, vaccination purchases & distribution, and a laundry list of heinous pork).

By the end of 2020, the economic damage of COVID-19 includes a 31% contraction in 2Q20 GDP (vs. 1Q20), 33% growth in 3Q20 GDP (vs. 2Q20 or 90% annualized of 2019 GDP), small businesses in operation down 29% since January 2020, net job loss of approximately 10 million jobs (primarily for jobs with annual salaries of $27k/year or less where employment is down 20%; jobs with annual salaries over $60k/year have returned to pre-COVID-19 employment levels). 4Q20 data, including the critical holiday shopping season (Fed Chair stated retail sales are sluggish), have yet to be reported.

Given the fiscal stimulus has been heavily skewed toward large corporations verses small businesses or individuals (75% vs. 25%), Wall Street posted historic gains despite the global pandemic:

DOW industrials up 7.2% verses 2019

S&P 500 up 16.3%

Russell 2000 up 18.4%

NASDAQ composite up 43.6% (highest since 2009)

Source: Wall Street Journal

As of 11/30/2020, US Billionaires’ net worth increased $1 Trillion dollars since the pandemic began (Source: Statista and Americans for Tax Fairness).

According to the US Census Household Pulse Survey completed 12/21/2020:

33% of US households are having a hard time covering basic expenses.

33% expect joblessness to lead to eviction in the next 60 days.

12% report food shortages for their household.

Accordingly, COVID-19 has provided our political leaders the opportunity to use over $9 Trillion dollars** in deficit spending and stimulus to exacerbate income and wealth inequality in America.

**($9T = $5T in deficits (2020: $3.7T; 2021 so far: $1.329T [source: Congressional Budget Office] + $4.25T from the Federal Reserve)

This is the US pandemic economy.

The American people cannot rely on the current political parties or politicians or establishment political or economic commentators for constructive support in rebuilding the post-COVID-19 economy.

Recently (according to Reuters), Paul Krugman announced he expects the US economic recovery from the pandemic to be “much faster and continue much longer than many people expect.” The Nobel Laureate in Economics cites higher US savings rate and pent up demand as the drivers for the US economic recovery. Undoubtedly, the extraordinary savings and pent up demand must be from the 60% of American households (excluding 29% small business failures) that are not living paycheck to paycheck and can afford a $400 unexpected expense. Tragically, 40% of US households do not qualify (according to Federal Reserve data & a Harvard University study).

Solutions to the economic challenges facing people impacted by COVID-19 will not be coming from establishment sources.

Therefore, I strongly recommend focusing our attention regarding the post-pandemic economy on non-establishment commentators such as Richard Wolff, Yanis Varoufaukis, Peter Joseph, Chris Hedges, and Yuval Noah Harari.

Yuval Harari has written extensively about the economic impact of technological disruption, which has been accelerated by COVID-19. Take note of the extraordinary performance of the tech companies on the NASDAQ composite (up 43.6% vs. 2019). Large industrial corporations like General Motors (beyond buying back their own shares) are investing in automated technology to dramatically reduce the cost structure of their business models in anticipation of materially lower aggregate demand in the near term (3 to 5 years). Accelerating automation will make large portions of the working class “economically irrelevant” (according to Yuval Harari).

This is the discussion we need to have on the new post-pandemic economy.

Ecological sustainability is the reason why we must not simply restore the pre-COVID economy. While the climate science and global environmental events are irrefutable, powerful carbon based energy interests continue to block meaningful progress to keep global average temperature increases from exceeding the critical limit of 1.5 degrees.

The prospect of a sixth mass extinction event has been warned by diverse commentators including Pope Frances (see his 2015 encyclical “Laudato Si”) and David Attenborough (see his latest documentary released in September 2020: “A Life on Our Planet”).

The time is urgently now to escape the binary mythology of capitalism (developed in the 1700’s) or socialism (developed in the 1800’s), and innovate an economy of the 21st century. Much work has been done in this area.

Peter Joseph founded the Zeitgeist Movement (see https://www.thezeitgeistmovement.com/about/) in 2008 as a science based economic sustainability project, which advocates for a global resource management economic system informed by open source innovation and utilizing decentralized production. Peter is a deeply thoughtful, exceptionally articulate advocate for a new, redefined economy that aligns with equality and ecological sustainability. Peter’s latest book “The New Human Rights Movement” was made into his latest film “InterReflections”, which was released October 2020.

If 2020 was the year of COVID-19, 2021 will be the year of the Economy.

To meet the challenges of the new pandemic economy, it behooves each of us to break with the conventional narrative in order to shift our consideration towards building a future worthy of our progeny.

Categories
Economics Social Evolution

An Alternative to Money

Money is a very efficient medium of exchange compared to barter. The problem with money is it ties access to resources based solely on possessing it. The more money you have, the more resources you can control.

Accordingly, money is amoral because it is indifferent to the need for resources. The existence of money necessitates scarcity in the availability of resources by allowing a few people to possess control over enormous resources leaving most people on earth resource deprived.

What then is a meaningful alternative? To answer this question, I need to review a few indisputable facts:

We share one planet, which produces a finite amount of natural resources that sustains all of us.

Technological advances leverage our natural resources to produce a finite amount of finished goods and services.

If each person is empowered to possess as much resource as they are able to accumulate, there will never be enough resources for everyone.

If all people have access to the accumulation of human knowledge, they will possess the necessary information to identify their unique talents and perfect their unique skills in order to maximize their individual productivity.

If humanity guarantees access to the resources each person can use to reach and maintain their full potential, there would be no need to accumulate excess resources to ourselves.

Eliminating money, and guaranteeing access to resources eliminates price and quality differentiation of goods and services, which occur today to allow fortunes to be made on affordable, sub-standard goods and services.

If all goods and services are designed to provide the highest quality possible, enormous resources will be saved by eliminating repetitive consumption, planned obsolescence, and other economic inefficiencies common to the current global economy.

If all goods and services are provided at the highest quality possible, health and wellness will be optimized for all people.

If we shift from an ownership relationship with resources to a stewardship relationship, we will maximize utilization and minimize waste.

Currently, we possess resources that are idle until we are ready to use. Sophisticated use-share systems can be innovated that would allow people to reserve resources for when they are needed. This would make resources, now produced at the highest quality possible, available on demand.

Accordingly, access to resources will be based on what we can USE…no more and no less.

Waste and gluttony will be global security violations.

Sustainability will be restored through a system of global resource management informed by the accumulation of human knowledge.