Fearing a Wealth Tax & Hoping to Stave Off A Recession/Crash Till After The Election
Since the deep financial crash of 2008, the US economy has been in an upswing. The smart Wall Street Money, with cash held in reserve, jumped into the stock market upswing as early as summer 2009, while the rest of us faced job losses, foreclosures, underwater mortgages and the stress of barely getting by. Median US household wealth fell from $107,000 (2007) to $58,000 (2010). Compare this to average household wealth (which emphasizes the high incomes): $563,000 (2007) falling to $463,000 (2010). It is a typical picture across decades of an economic system that rests upon money created by bankers for bankers. Working and poor people are in the first group seeing our wealth decline by almost half, while economic elites lost only about 18%. (Data from IRS crunched by Zucman & Saez at Berkeley).
What can we expect now that the upcycle has lasted ten years? It’s the longest upcycle since 1854. Realistically, a recession/crash awaits and the Federal Reserve Bank (FED) is trying various tricks to hold it off while keeping the public in the dark. In the fall, bankers and mass media worried momentarily about the reversal of the interest yield curve. Then, about the FED’s emergency decision to pour $158 billion into the overnight REPO market (overnight repurchase of loans from overextended banks). Don’t worry, we are told this was a one-time fluke. ‘REPO Market’ and ‘interest yield curve’ are just jargon to most Americans, terms which explain little and imply that our future is safe with the FED and those smart Wall St financiers.
In reality, the financial system is shaky. That recent $158 billion bailout was for the same REPO Market that became “frozen” in 2008 triggering the collapse of banks such as British Northern Rock, Bear Stearns, Lehman, other shadow banks and even insurance giant AIG. Corporations and banks lost trust in each other, not knowing who would be left standing tomorrow. The best historical analogy is the 1930s Depression after the 1929 stock crash. Usually forgotten is the deep recession in 1937 (8 years after 1929) and the fact that the US only got out of the Depression because of WWII spending.
Michael Bloomberg knows this history because his private company Bloomberg LP is the main transmitter of business, financial and economic news in the World. Bloomberg LP has 280,000 proprietary computer terminals set up inside companies worldwide. Each terminal costs about $24,000 a year to rent, yielding $6.7 billion revenue with no effective competition. The company has 20,000 employees, including 2,300 reporters, who develop information, analyses, and predictions for terminal subscribers, as well as more generic information for Bloomberg Business Week Magazine, cable channels and other businesses. This unique monopoly on business news forms the foundation of Bloomberg’s $62 billion fortune.
Two books shed very helpful light on Michael Bloomberg, the man, the presidential candidate and especially on his three terms as NYC mayor: Bloomberg: Money, Power, Politics, 2009, by NY Times reporter Joyce Purnick; and The Many Lives of Michael Bloomberg, 2019, by former Washington Post and NY Times Reporter Eleanor Randolph. These books make clear how Bloomberg wins elections: he buys them. While NYC Mayor, Bloomberg spent at least $650 million of his own money, nearly half of it on his campaigns. The rest went to seventy nine NYC charities, agencies, and nonprofits that circulated money at the grass roots and finessed his popularity with “opinion leaders”. Governor Nelson Rockefeller set a precedent for this style of politics in New York, spending about $15 for every vote he received. Bloomberg made this look like chicken feed. He spent $174 per vote received in 2009.
Since leaving the mayorship, Bloomberg has been a giant political donor to both parties: $40 million (in 2014), $60 million (2016), $93 million (2018 — all to Democrats). He has announced his intention to spend $100 million in a race for President, however it’s easy to imagine him spending $500 million (less than 2% of his constantly growing fortune). He has already spent over $400 million by 2-17-20.QUOTES FROM BLOOMBERG:
“I don’t regret supporting the Iraq War.”
“Taking from the rich is a bigger problem than inequality.” Daily Beast, 2-14-20
“When I get to heaven, I’m not sure I’m going to stand for an interview. I’m going right in,” Bloomberg on CBS 60 Minutes, 4-27-17.
His ego befits his real world position. Our money system was designed over time purposely to siphon wealth and power from the natural world and regular people to an arbitrary elite among us. Necessary products of that system are a few individuals who wield superhuman financial, political and media power as M. Bloomberg does. Sadly, the Democratic National Committee (DNC) is ruled by outsized donors like Bloomberg and will manipulate the rules, as in 2016, to assist his chances. On 2-2-20, the DNC abandoned its donation rules so Bloomberg can join the debates, despite having basically one donor, himself.
To protect the current power structure and its underlying monetary system, party heavyweights may sabotage justice-oriented candidates like they did in 2016. And if one is nominated anyway, they may financially abandon him/her like they did McGovern in 1972, confident that their shortsighted and selfish interests will be better served by Trump.