October Surprise: Market Apocalypse?

Volatility!

That’s the word that Wall Street uses when investors are getting nervous. And Wall Street and the financial pundits should and are getting nervous now.

The major US equity markets-- the Dow Jones, S&P, and NASDAQ-- have enjoyed a strong, and, to many, a paradoxical recovery since the pandemic shuttered much of the productive economy. While unemployment has soared and is only slowly reversing, while growth has collapsed, and while earnings are challenged, stock markets are marching forward, restoring nearly all of their previous losses by the end of August.

To many of us, it is not unusual to see stock performance far outpace the general economic welfare of the people. That is a commonplace of the capitalist economy.

Nor is it unusual for investors to expect that the stock market will outperform the economy in general. After all, that was the point of Piketty’s celebrated, thorough historical study of capital which showed that, all things being equal, the rate of return on investment will grow faster than the rate of economic growth. As a result, capitalism necessarily generates what we Marxists insist is exploitation.

But equity markets are not free floating, independent systems; they must intersect at some point or some time with the real economy. Stock performance must reflect the underlying ability of its associated corporation or enterprise to produce something of worth to the investor: profit. 

So if stock values in the five or six months of the 2020 pandemic seem dissociated from the economy, what is going on?

The Wall Street Journal offers a useful, if incomplete, explanation of the anomaly. How Stocks Defied The Pandemic (September 15, 2020) suggests five factors: 1. Stimulus from the Fed and Congress, 2. Expectations of a strong recovery, 3. The dominance of the tech giants, 4. The return of individual investors, and 5. Momentum trading.

Certainly the Federal Reserve and the two parties’ elected officials acted swiftly in the wake of the pandemic shut-down. Absorbing the lessons of the 2007-2009 crisis, they cranked out trillions of dollars’ worth of stimulus, they sanctioned easy loans, and they collapsed interest rates swiftly. 

But it is telling that equity markets appear to have been bolstered more significantly than other aspects of the economy, including those aspects protecting or promoting the fate of those most vulnerable to the catastrophe. In short, the investor class seemed to reap the greater benefit of their actions.

Though maybe unintended, the bailout encouraged hungry investors to devour stock market opportunities, with bond yields decimated and other interest-generating instruments foreclosed by the Federal Reserve’s actions. Capitalists must land their capital somewhere in order to preserve the accumulation process-- the system’s blood flow; the impact of institutional intervention by the Fed left them few promising alternatives outside of the equity markets. And that is where they put their money.

As for “expectations” of a quick recovery, any notion that such expectations could be built on anything more solid than hope and faith must be discarded. This singular event-- a crisis of public health, economics, politics, and racial conflict-- generated profound fear more than expectations.

The WSJ correctly located the outsized influence of Tech stocks-- principally, Apple, Amazon, Microsoft, Alphabet (Google), and Facebook-- in the stock boom. Without the investment flowing into tech stocks, mainly the big five, there would be no notable market rally. Apple, alone, has gained 57% in 2020 and now has a valuation greater than the FTSE 100, an index of the top companies on the London Stock Exchange. At the same time, the frenzy for tech stocks frightens pundits and advisors. Apart from Amazon, tech stocks play in a virtual universe that challenges real-world valuation. Moreover, they have been notoriously volatile. And the gains have been concentrated in the Big Five, with other companies far less successful. 

Past stock market collapses have been preceded by a dramatic increase in individual investors bent on taking advantage of an overheated market. The return of the “rubes” has always been a signature benchmark of an impending decline. From the casual dabbler before the Great Depression to the day trader and dilettante of today, the engagement of “amateurs” is always a harbinger of market disaster. 

Some would be surprised to learn that in the modern era, individual investors-- day traders and the like-- only account for roughly one in ten trades. The rest are made up by institutional investors, funds, etc. But, in 2020, the number of trades by individual investors has doubled, accounting for about 20% of equity market action. 

With social media tipsters and discussion boards, the born-again investors have accounted for many stock valuations that puzzle and concern wiser investors. Tesla, for example, has gained 438% this year, establishing the maverick car company as the highest valued auto company in the world and the eighth largest corporation in the US by market value.

Fed by social media gossip, investors jacked up share prices of Eastman Kodak by as much as 614% before losing most of the gains! This kind of euphoria-driven investment has mature investors and advisors shaking in their boots.

Creating momentum through bets on overheated valuations only generates greater momentum. Easy money and the fear of missing a surge amplifies the momentum. Add the attraction of derivatives and the likelihood of a market bubble increases dramatically. 

Stock options-- the purchase of a contract to buy a stock at a price fixed before the actual purchase of the stock-- have exploded in 2020. They are attractive to investors who want to risk their capital on a bet of future gains and increase the potential return on the bet by spreading the capital over more, less costly options. Goldman Sachs reports that the volume of option trades exceeded the volume of stock trades for the first time this year. Three years ago, option-trading volume was only 40% of stock volume. In August, option trading topped 120% of stock trading. Small investors bought half of a trillion dollars’ worth of options in August alone, five times the amount bought in any previous month, as reported in the WSJ.

Much of this market craze is occurring against a backdrop of over three weeks of net decline in the US stock market indexes. Moreover, the employment recovery is stagnating, with new unemployment claims remaining at an historic high, and the pace of retail-spending growth slowing. Earnings-- the crucial factor in capitalist behavior-- is expected by some to fall by as much as 22% in the third quarter. 

Conditions are ripening for another market crisis not unlike that brought on by the 2000-2001 dot.com collapse. Billions, if not trillions, of nominal value stand to disappear.

Likely such an October Surprise would be fatal to Donald Trump’s reelection prospects, since most polls show that respondents see the economy is his greatest strength against Biden.

But whether Biden or Trump wins, the depth of the emerging crisis will make it almost impossible for either to rule effectively. Neither offers a way out. Only a profound, radical political realignment will blaze a path forward.

Greg Godels

zzsblogml@gmail.com

Treading in Deep Water

With less than two months remaining before the US elections, expectations are growing. Even the most indifferent citizen senses that the US (and much of the world) is faced with a host of seemingly intractable crises, unprecedented in scope. These crises-- epidemiological, social, political, and economic-- have intensified and brought greater divisions, heightened tensions among the people. Fear and confusion reign when people sense a loss of direction and an absence of clarity. Since little bold, far-sighted, and imaginative leadership is emerging prominently, people predictably put their fate in the hands of the two political parties that are vying for power in November.

There is little reason to believe that either party offers much beyond the feeble, inadequate answers that have already surfaced. Moreover, the mounting pressures of the two-party horse race have placed electoral victory ahead of any meaningful, deeper public discussion of the unfolding catastrophe. The two presidential campaigns spar while health, welfare, and economic prospects fall.

For his part, Trump trades on both the basest fears and hatreds and the frustrations of those largely taken for granted for years by the Democrats. He hopes to win the disgruntled economic “losers” from the devastating corporate deindustrialization that plagued and still plagues the Midwest. While racism and nativism are important factors in the voting of this constituency, inequality, neglect, and powerlessness play a decisive role. 

One example shows this well: Kenosha County, Wisconsin, focal point over the past weeks of outrage over a police lynching and vigilante murders and the former home to now-lost manufacturing jobs, supported the Democrats until 2016, giving large majorities to Obama/Biden in 2008 and 2012. But the county gave Trump a slight majority in 2016. 

The example of solidly Democratic constituencies supporting Obama in two elections, but turning in desperation to Trump in 2016, is repeated frequently in the Midwest, where a treasure trove of key electoral college votes lie. The convenient explanations offered by Democratic elites of viral racism and know-nothing ignorance is not sustainable. Better to look at desperate self-interest.

With his previous promises of reindustrialization and the restoration of industrial jobs unfulfilled, Trump is now resorting to race-baiting and crime-hysteria. Polls show that the media’s sensationalism over urban uprisings has given Trump a slight lead over Biden on how he would handle crime, an issue that he is pressing aggressively and recklessly.

Large sectors of the capitalist ruling class have made pragmatic peace with Trump, enjoying his tax regimen, a charging stock market, and the fruits of his nationalist extortion of global imperialist rivals. Unlike in 2016 when all but a few wealthy donors dared back Trump, his campaign coffers are filling more rapidly. In July, Trump raised $72 million to Biden’s $63.5 million, an obscene amount in both cases. By comparison, in July of 2016, Clinton outraised Trump by over 42%. (Early results for August show Biden-- Trump’s numbers are yet to be reported-- raising $364.5 million, a monthly election record. And people still believe our pay-to-play politics is a democracy.)

Trump’s team has substituted a screeching negative message warning of an assured disaster under Biden in place of the 2016 positive, but vacuous and unintentionally revealing “Make America Great Again.” In 2016, “...Again” said it all to those who gave it a thought: the empire was in decline, the US was losing its way, no longer the anointed City on the Hill. In that election, Trump was trading on mass dissatisfaction, the ridiculous notion that Trump would put the US back on the rails of destiny.

Today, facing a formerly unimaginable disaster, Trump’s message has turned negative: Biden will make everything far worse. 

This is where the evolution of US politics has taken us. 

And the Democrats are today counting on their own unspoken version of Trump’s simple message “Make America Great Again.” A vote for Biden will restore the era of the beloved Barack Obama, a time-- we are told-- of social justice and prosperity. The election results of 2016 and the Sanders phenomenon should have taught the Democratic Party elite that the Obama era was not perceived by everyone in just that way.

In any case, Obama-nostalgia cannot put that metaphorical toothpaste back into the tube, and that tube would be impotent in the face of the catastrophe ahead.

The Democrats are running on the idea that everyone sees that the Trump postures conjure the image of a home-grown Mussolini. That is, Biden is making the election a vote against Trump’s buffoonery and not an election for anything substantial. The Democrats have long cast away their last ideological pillar, the remnants of the Rooseveltian New Deal. In its stead, the party opportunistically cobbles together real, immediately felt grievances against coalition constituents with the promise of costless, painless remedies. The Democratic Party has become the party of shallow identity empathy.

Ideologically, the Democratic Party is so bankrupt that it featured Republican speakers at its recent convention. The party warmly welcomed former Ohio governor John Kasich, a Neanderthal who opposes virtually every traditional Democratic social, labor, and economic position: abortion rights, marijuana legalization, abolishing the death penalty, collective bargaining, public schools, etc. 

The late Senator John McCain’s wife was similarly feted. A former rodeo queen, Cindy McCain is purportedly the richest woman in Arizona. Apart from hating Trump, her most notable policy position was denouncing Bush for not sending more troops to Iraq.

And of course Colin Powell, who also spoke, was one of Bush’s great prevaricators on weapons of mass destruction. Former NJ governor Christine Todd Whitman, former H-P CEO Meg Whitman, and former Congresswoman Susan Molinaro were other prominent Republicans featured. 

The welcome, active support of the self-styled Lincoln Project-- a gaggle of prominent Bushite Republicans-- captures the flavor of the Biden campaign.

In addition, a group of 300 ex-Bush officials have formed a PAC in support of Biden. And much of Bush’s foreign policy apparatus and Obama’s foreign policy interventionists are offering their support and “expertise” to continue the USA’s active, and often violent, meddling in the affairs of every other nation. As they are absorbed into any Biden administration, they promise an even more reactionary, more dangerous foreign policy than Trump’s sometimes-isolationism. 

By contrast, the Democratic Party’s progressive wing, the ascendant social democrats, were largely shunted by the party’s convention managers. After such a sharp, insulting rebuke to the party’s left, it is a wonder that they didn’t demonstrate their disapproval or disavowal of the virtual spectacle. Spineless or soaked in Trump-hatred?

With the race tightening, the Democratic operatives are pressuring Biden to begin the ritualistic Democratic Party retreat to the right (believed to bring the center voters into the tent) that cost former candidates like Dukakis and Mondale their late leads in the poll. Biden has qualified his support for the popular and persistent anti-racist actions and backed away from his pledge to ban fracking. Undoubtedly, he will move farther to the right as the election grows closer.

Since the post-Civil Rights movement loss of the South to the Republicans, the Democrats have relied more and more upon the white, suburban vote. This demographic swung sharply to Carter in 1976 out of disgust with Nixon’s dishonesty and vulgarity exposed by Watergate.

Since that time, the Democrats have courted this vote intensely, one explanation for the extreme timidity of their program. 

Once again in 2020, Party elites are renewing that courtship. Trump hopes to deny the Democrats that vote by brazen appeals to racial safety and fear of all things urban.

One healthy development appearing on the political scene was the recent People’s Convention for a new People’s Party, a fresh attempt to build a new party around dissatisfied progressives alienated from or disgusted by the Democrats. According to RT, the virtual convention drew over 400,000 virtual participants. One speaker, Chris Hedges, astutely summarized what a vote for Biden means:

[B]y voting for Biden you do vote for something.  You vote for the humiliation of courageous women such as Anita Hill who confronted their abusers. You vote for the architects of the endless wars in the Middle East. You vote for the apartheid state in Israel. You vote for wholesale surveillance of the public by government intelligence agencies and the abolition of due process and habeas corpus. You vote for austerity programs, including the destruction of welfare and cuts to Social Security. You vote for NAFTA, free trade deals, de-industrialization, a decline in wages, the loss of hundreds of thousands of manufacturing jobs and the offshoring of jobs to underpaid workers who toil in sweatshops in Mexico, China or Vietnam. You vote for the assault on public education and the transfer of federal funds to for-profit and Christian charter schools. You vote for the doubling of our prison population, the tripling and quadrupling of sentences and huge expansion of crimes meriting the death penalty. You vote for militarized police who gun down poor people of color with impunity.  You vote against the Green New Deal and immigration reform. You vote for limiting a woman’s right to abortion and reproductive rights. You vote for a segregated public-school system in which the wealthy receive educational opportunities and the poor are denied a chance. You vote for punitive levels of student debt and the inability to free yourself of debt obligations through bankruptcy. You vote for deregulating the banking industry and the abolition of Glass-Steagall. You vote for the for-profit insurance and pharmaceutical corporations and against universal health care. You vote for bloated defense budgets. You vote for the use of unlimited oligarchic and corporate money to buy our elections. You vote for a politician who during his time in the Senate abjectly served the interests of MBNA, the largest independent credit card company headquartered in Delaware, which also employed Biden’s son Hunter.

I can only answer with one good reason for voting for Biden: should he win, Democrats will not be able to continually blame all of our sorry politics and capitalism’s contradictions on Trump. And the experience of a Biden government might well hasten the defection from a moribund Democratic Party.

Greg Godels

zzsblogml@gmail.com

Liberty: Theirs and Ours

What can we say about 250,000 people who, despite the best advice of the top scientists in the US, established a virtual honeypot for the most dangerous virus of the last century? Why would people travel hundreds, even thousands of miles to Sturgis, South Dakota, risking their lives for a week-long frolic? And why would people in villages, towns, and cities display a similar contempt for the threat of the coronavirus?

It would be easy to dismiss this behavior as ignorant or irrational, but there are many signs that it is based on a deeply embedded notion of freedom or liberty operating below the surface, an idea shared by many in the so-called “liberal democracies.” Especially in the US, many who defy the virus explain their behavior with an appeal to an earnestly felt right to “do as I please,” a right that lives and breathes in the latest round of US culture just as much as in its foundational mythology.

This notion of liberty was attached to the US settler-colonists’ myth, an idea that granted freedom to pry away the lands and resources of the original peoples of North America. It was this notion that sustained the Westward expansion and migration, mythologized as the so-called pioneering spirit, allowing restless settlers to find places where they could “do as they please,” heedless of the interests of others already occupying the ever-shifting “frontier.” 

The original US myth of “doing as one pleases” clashed with another version of liberty in a great Civil War that emancipated-- liberated-- the slaves of the Confederacy. The Southern states stood on a similar very selective concept of liberty-- State’s Rights-- that allowed the enslavement of an entire race. An entirely different view of liberty, freedom from oppression-- a concept dating back to antiquity-- clashed with slaveholders’ freedom to hold humans as property. It is seldom noted by those intoxicated with the founding lore of the US republic that much of US history is, in fact, the clash of different concepts of liberty or freedom.

Popular movies, television shows, and novels create a fantasized Old West, with fearless individuals nobly fighting Native Americans for free access to their homeland or fighting each other for the liberty to breed cattle, grow crops, or raise sheep. Similarly, cultural images of unfettered free spirits driving their convertibles or motorcycles toward a distant horizon define a popular, romantic idea of liberty or freedom. Never mind the consequences for friends, family, safety, security, the environment, etc. 

These are all part of today’s cultural legacy based upon liberty, broadly conceived as “doing what one wants to do.” Nowhere has the idea of the liberty (or license) of “doing what one wants to do” taken as deep roots as in the US; nowhere does it seem as irresponsible today as in a US racked with a death-dealing pandemic.

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The Western notions of liberty, freedom, and rights have been shaped by the rise of capitalism and carry with them the class perspective dominant in the age of capitalism. By and large, they have become individual and not collective; they locate the boundaries of permissible actions and institutions well beyond the activity and structures that will allow capital to flourish; and they serve to legitimize the socio-economic institutions and worldview that accompany capitalism.

The twentieth-century competition between capitalism and socialism saw the most advanced capitalist countries attempt to appropriate the ideas of liberty, freedom, and rights, interpreting them in a particular way that glorified capitalism, while diminishing the values of socialism.

This conflict of interpretation became most embarrassing to the West in the period after World War II when the core socialist concept of liberty-- self-determination or collective liberation-- served as a consistent moral foundation for the decolonization of much of the world. At the same time, the Western imperialist countries, including one of the newer members of the club, the US, either rabidly clung to their colonial possessions or desperately sought to establish new neo-colonial relations of subjugation. The West showed little taste for this flavor of liberty, resisting national liberation movements to this day.

At the same time, the socialist community and its international friends pressed for the acceptance of a broad-based concept of freedom that transcended the “do as I please” logic of the capitalist worldview, advocating for freedom from want, from exploitation, from racism, from lack of the basic material equalities that guarantee a safe, productive life. 

The battle over liberties took place in the early crafting of United Nations’ charters on human rights. Thanks to the post-war liberation of the former colonial empires, the newly emerged nations-- quickly the majority of the world’s population-- sided with the more robust concept of liberty advocated by the socialist countries. That concept remains alive in the UN Universal Declarations of Human Rights of 1948, though diminished by the US and its allies. Thanks to subsequent de-colonization, the UN commitment was strengthened in 1976 with the International Covenant on Economic, Social, and Cultural Rights.

But capitalism never reconciled to the substantive rights-- the liberties promising equality and social justice. Instead, the Western canon of freedom, liberty, and human rights as crafted by the capitalists, their apologists, hired intellectuals, and NGOs is limited to the well-known, celebrated conditional rights: rights that are only of use when the right-holder has sufficient means to exercise them. Such rights as free speech, travel, property, education, or legal process are beneficial if, and only if, their bearer has sufficient means to take advantage of them. Otherwise, they are meaningless to their bearer. The liberty to speak freely is of no value to a worker denied a rudimentary education. The right to travel is irrelevant to a poverty-stricken peasant. The freedom to own a home is a taunt to a deeply indebted college graduate.

That is why the Western view of liberty would be more attractive to, say, a well-to-do Oxford don. And that is why an Oxford don, Isaiah Berlin, published a 57-page essay in 1958 that remains the cornerstone of the capitalist vision of liberty, freedom, and rights.

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The social guarantees achieved in the socialist countries proved a formidable attraction to the newly independent states during the Cold War. The capitalist countries desperately needed a staunch defense of their vision of liberty. More importantly, they wanted a vigorous attack on the Cold War alternative-- substantive liberty, as advocated by Communists, many socialists, and some (New Deal) liberals. They found both in Berlin’s essay: Two Concepts of Liberty.

At the time, few knew or exposed Berlin’s profound, deep-seated anti-Communism or his engagement with covert propaganda work for the UK government. Instead, he was portrayed simply as a reflective Oxford professor sharing his measured thoughts on a key concept in Western political philosophy. To this day, few of his academic counterparts have challenged his work.

Two Concepts of Liberty is neither carefully written, nor tightly argued; it meanders over a select history of Western political philosophy, but seldom connects with the actual history of the lives of flesh-and-blood humans. Central to Berlin’s case is the distinction between what he calls negative and positive liberty. Negative liberty, in his view, is the protective bubble that surrounds the citizen from the inference of others and, especially, the caprice of the state. It is the guarantee that someone “can do as he or she pleases.” Paradoxically, the state, the same government that Berlin fears, is to be the guarantor of negative liberty.

In capitalist society, the individual is sovereign. Except when individual interests collide, the liberty of the individual trumps every other interest, including group or collective interests. Karl Marx saw this concept of liberty as embodied by “the rights of egoistic man, of man separated from other men and from the community.” Negative liberty embodies this separation, establishing the barest minimum of constraint upon behavior (limited only by conflict with other people’s negative liberty and the authority necessary to protect and enforce it). 

Berlin is at pains to point out that possessing negative liberty is a good unto itself; it does not matter whether it is exercised for good or evil. That is to say, reckless speech, obscene monopoly of property, exploitation of the labor of others, refusal to wear a protective mask, nonetheless, increase liberty, even if they have awful consequences: “Such acts may be unjust, they may also involve violence, cruelty, the enslavement of others, but it can scarcely be denied that thereby the agent is able in the most literal sense to increase his own freedom.”

In contrast to this concept of extremely personal negative liberty, Berlin warns of the danger lurking with positive liberty. His characterization of positive liberty is murky, defying any explicit definition. Nonetheless, he flags some features that trouble him.

Unlike negative liberty, positive liberty measures the worthiness of actions by their moral or political consequences. Positive liberty is the freedom that comes from escaping the bonds that hold people from enjoying a better life, the bonds of exploitation, debt, poverty, ignorance, etc.1 The danger of positive liberty, as Berlin sees it, lies in the question of who decides what constitutes a better life and how to achieve it. 

He fears that imposing positive liberty will strip individuals of their inestimable negative liberty. His fears of interlopers are rather broad, stretching from social movements, intellectual elites, and Marxists to reason itself. Those committed to reform or revolution should not be allowed to challenge the sovereignty of the man or woman in the protective bubble of negative liberty. No one should seek to weigh an individual’s freedom against that of the greater good:

This [intervention] is the positive doctrine of liberation by reason. Socialized forms of it, widely disparate and opposed to each other as they are, are at the heart of many of the nationalist, communist, authoritarian, and totalitarian creeds of our day.

The idea of positive liberation is an idea that anthropologists tell us stretches back four millennia. We first find “liberty” mentioned in the debt cancellations of King Enmetena, where “...he instituted freedom (amargi) in Lagash [Sumeria]. He restored the child to its mother, and the mother to her child; he cancelled all interest due.”2 Such an act of freedom, Berlin warns us, is a dangerous idea, should it impinge on the King’s autonomy.

After all, Berlin asserts, what “oppressed classes or nationalities” want is not “equality of social or economic opportunity” or the other benefits of positive liberty. “What they want is… simply recognition (of their class or nation, or colour or race)... as an entity with a will of its own… and not to be ruled, educated, guided, without however light a hand…” [my emphasis]

So our distinguished professor, later to be rewarded with a knighthood for his service to the established order, professes to know what oppressed classes or nationalities really want. The son of a wealthy timber trader who never left the company of the better classes, after much deliberation, concludes that the less fortunate are not in search of material benefits, but status and recognition. They must have their dignity over everything else. They, too, want to share the kind of liberty treasured by the Oxford don.

What snobbish nonsense.

Some 60 years later, it is hard to believe that Berlin’s essay remains the wellspring of Western, capitalist thinking on the meaning of liberty-- the ideological infrastructure for Western human rights organizations and NGOs.

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The people’s liberty-- the substantive liberty that has roots in the concept of liberation from oppression, exploitation, slavery, feudalism, and, yes, capitalism-- is the fundamental concept of liberty or freedom. It traces its roots back to antiquity and marches through history in the struggles of Roman slaves, French Jacquerie, German peasants, English serfs, Indigenous North American and Australian peoples, African slaves, colonial subjects, wage slaves and every other group denied social justice. This is the kind of liberty understood and sought by most of humanity. Thus, To be free from want-- readily dismissed by Berlin and his latter-day followers-- resonates with the billions lacking adequate housing, food, sanitation, education, etc.

In an important sense, the positive liberties are the true preconditions for the worth of Berlin’s negative liberties. If being free to do what one wants is to have any meaning for most people, a just and equitable world must empower people with the means to fully enjoy freedom of speech, of legal redress, of personal belief, of travel, of education, etc. 

Without realizing the positive freedom from poverty, hunger, ignorance, and oppression, the liberty to do as one wants is merely a privilege for the few, a promissory note for the rest of us. Berlin’s negative liberties were weaponized in the Cold War to attack countries more committed to creating material conditions for all citizens to enjoy the full panoply of rights and liberties that are possible with prosperity for all. Cynically, their progress was measured in the West by the rights available only to the few, the elites in capitalist society. 

Sadly, the mythology of a fundamental liberty to do as one wants takes deep roots in a society of ultra-individualism, crazed consumerism, and celebrity worship. Where the collision of interests is made apparent to all-- such as with a raging pandemic-- the fetish that everyone is at liberty to do as they please becomes a disgusting obscenity.

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1 Counter intuitively, Berlin takes negative liberties to be formally expressed as “liberty from…” governments and others while positive liberties are “freedoms to…” “one prescribed form of life”. Common sense would suggest that the logic of negative liberties are freedoms to do as one likes, while positive liberties are freedoms from oppression, exploitation, want, etc. The latter captures a real, and not a contrived, distinction.

2 As quoted in David Graebner, Debt, The First 5000 Years, page 216.

Greg Godels

zzsblogml@gmail.com

Trouble Ahead! Detour!

There is little good news to digest in the US. 

We are deep in the midst of an epidemiological crisis, with the US leading the world in infections and deaths. The daily totals have grown to 65,000 or more infections and over 1,100 deaths. To give context to the numbers, the total number of US Covid-19 deaths so far this year amounts to over 22% of all the US battle deaths since 1775. In the worst year of the Vietnam War (1968), combat deaths averaged over 1,400 per month. Those monthly totals are surpassed today in a day and a half, with the virus killing the most vulnerable, especially the elderly, African Americans, Latinos y Latinas, and the poor.

The US is losing the war against the coronavirus.

US infections account for as much as one-fourth of all infections globally, an embarrassing number for the supposed wealthiest country in the world, the self-styled beacon of democracy. How can a state claim to be democratic that cannot minimally guarantee the health and safety of its most vulnerable citizens? How can a state lecture, even intervene in other states to bring them the bounty to be won by emulating the US?

If democracy has anything at all to do with delivering the will of the people, then it must answer to the poor US showing against the coronavirus. A robust democracy would deliver a robust public health service, a universal and comprehensive system available to all, and not a broken, overwhelmed, profit-infected, catch-as-catch-can, class-privileged monstrosity. A real democracy would recall the failed career politicians, deny the soulless lobbyists, and sweep away the preening consultants who pollute our political system.

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The failed response to the coronavirus is only one aspect of the acute political crisis sweeping the US. With a little over three months to the national election, the two-party circus is reaching new lows. What has been a bi-partisan fiasco in response to the virus, has been politicized into universal finger-pointing. Democrats overlook the disastrous earlier outcomes in New York, much of New England, and now in California, while witlessly blaming Trump. Republicans refuse ownership of the deadly results coming from states suffering Republican governance, while boasting of mindless allegiance to Trump. And President Trump stumbles through contradiction after contradiction, while candidate Biden wins support through reticence, with a shamefully inadequate answer to the coronavirus.

When not blaming each other, the two parties blame The People's Republic of China (PRC).

With the compliance of the media, the two parties are ginning up a new Cold War hysteria against PRC and Russia unlike any seen since the missile-gap panic of the early 1960s. Trump and Biden are sparring over who can produce the tougher policy against PRC. This senseless conflict can only end in disaster for the world. 

It’s increasingly clear that the anti-PRC project reflects the growing consensus among US elites that the PRC economy is dynamic and resilient and the US economy is declining, posing a threat to US global dominance. Nor is it a secret that previously secure ties to international “friends” are fraying. While the UK remains supplicant, Germany, France, and many other allies are reluctant to turn on PRC or Russia, and resent the US’s demands for conformity. A stronger PRC and a weaker US will only accelerate this trend. The US is an empire in decline.

Trump’s previous renegacy-- rapprochement with Russia, the DPRK, and PRC, deserting NATO, leaving Syria and Afghanistan, etc.-- has been tempered or extinguished by the security services, the military, and the political Old Guard, leaving him an unconventional, conventional politician. Domestically, his tax policies won the allegiance of Wall Street and the super-rich, dispelling the illusion that the ruling class could not live with him, his vulgarity, and his ill-manners. 

While it may be understandable that sectors of the working class would have viewed him as representing an alternative to the unfriendly globalist, corporate vision offered by the Democratic Party, that illusion should now be crushed as well. And as his poll numbers shrink, his “wilding”-- his erratic behavior-- only intensifies. In conventional times, Trump would be a dead fish.

But this is not a conventional time. The Democrats have attributed their past failures to intervention and subversion. The last refuge for a decadent political party is to place the blame elsewhere: Julian Assange, Wikileaks, dirty tricks, RussiaGate, the Chinese, etc. etc. The Democrats have no electoral strategy other than to ridicule and demonize Trump. Their pre-convention set of issues is unremarkable. It will be further diluted when it becomes a platform. And it will be turned into tepid dishwater when it becomes policy, should Biden be elected. This is a pattern repeated election after election, and Democratic Party loyalists learn nothing from it.

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Looming over the election like an ominous storm cloud is a US economic crisis of unprecedented potential. Despite the stock market’s seeming independence from any reality, the collapse of employment and economic activity is real. 

Just as pundits think they see a flash of light from amongst the billowing clouds, the coronavirus strangles any tentative economic recovery. In the US, the great contradiction of 2020 is between a sinking economy and the deeply ingrained, wide-spread ideology of immediate satisfaction and narrow, individual self-interest that produces and reproduces tens of thousands defying the virus protocols. Decades of voracious, immoderate consumerism and the demagoguery of unqualified, personal rights have produced an allergy to selfless collective action. 

But the coronavirus is ideologically biased: it retreats before rational collective action and advances against self-centered, self-serving choices. Thus, the dogma of liberty as action without restraint, reason, or responsibility so widely preached in the US since the country’s birth comes face-to-face with a danger that devours its true believers.

Since the 1980s, finance capital has accounted for a greater and greater share of putative US economic activity. The character of that activity is further and further removed from productive activity and more and more engaged in accumulating and valorizing the chits of future and potential economic activity (speculation). Obviously, the viability of this process rests on thin subjective factors: public confidence. In a moment, economic disruptions can wash away the necessary confidence, resulting in a collapse as occurred in 2000-2001 and 2007-2009. We are there again.

Of course capitalism is resilient. But the disruptions of 2020 are far more dangerous than in the past, unleashing enormous, latent deflationary pressures. As investor and consumer confidence recedes, speculative “values” come into question, further eroding confidence and perceived value. A deflationary spiral ensues. And the tools available to Central Banks and Treasuries are depleted and less effective today. 

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If there is an encouraging development in the US, it is the remarkable burst of anti-racism activism that has spread from major urban areas to small Midwestern towns.

Impressively, white people in large numbers have joined, even organized these actions which began as outrage at police violence against Black people and enlarged to tackle the systemic racism of US society. This may well be the most significant counter to the crisis of racial justice since the Civil Rights Movement of the last century.

As a result of these actions, US public opinion has undergone a striking shift. A recent Wall Street Journal/NBC poll (July 9-12) shows that 56% of the US people “hold the view that American society is racist”! 

Significantly, the most popular explanation for US racism with respondents was: “People of color experience discrimination because it is built into our society, including into our policies and institutions.”

In addition, 57% of the people surveyed “totally” support the “protests and demonstrations” that emerged after George Floyd’s murder.

Other significant findings of the survey include: 

● 75% of respondents “are encouraged that America is finally addressing long standing issues about racism in our society and working to ensure that all Americans are treated equally.”

● 71% of respondents “feel angry because our political system seems to only be working for the insiders with money and power, like those on Wall Street or in Washington, rather than it working for everyday people to get ahead.” [This number has only slightly changed since 2015].

● 50% of respondents “feel concerned that the protests on racial issues are creating social unrest and bringing too much change to the country, including erasing America’s history and significant figures in the country’s story.”

Arguably, there has never been a time in US history when a majority deemed US society to be racist and supported street action to oppose the injustices associated with racial injustice.

Surely this moment offers great opportunity and should not be wasted.

Fundamental to seizing this moment is clarity about the essence of racism, avoiding false steps, dead ends, and foolishness. Too many of today’s anti-racism warriors scratch away at the margins, confusing language, symbols, and postures with racial inequality. They attack straw men, words, statues, and buildings rather than the many barriers to equality. They fail to grasp that jobs, homes, security, and health are the substance of racial equality, and not the attitudes and interactions that spring from inequality. In the immortal words of the great Nina Simone: “You don’t have to live next to me, just give me my equality.”

Sensitivity training, street drama, and verbal hand-wringing will not remove the burden of low income, the absence of wealth, decaying neighborhoods, poor schools, and inadequate health care. They require political and economic solutions, redistributive solutions. The polls show that the US people are ready for a modern version of “forty acres and a mule,” a dedicated and effective round of economic affirmative action. Are the politicians? The leaders? The pundits? 

If this potentially historic moment is not to be lost, it must not be appropriated by Democratic Party politicians bent on using it as a bludgeon against the Republicans and subsequently cast aside. It must not serve as a frivolous expression of youthful rebelliousness, only to offend the forces now supportive of fundamental change.

The interdependence of these four crises--- epidemiological, political, economic, and racial-- offer a unique opportunity to enact fundamental change in the US. Does anyone believe that either Biden or Trump is up to the task?

The challenge requires a mature, committed, and ideologically sound Left to drive it. It is hard to disagree with BAR’s Glen Ford: “...the U.S. Left is so weak, it has been unable to put forward a narrative that explains the multiple crises that have been so devastating to the American people, or to even minimally fulfill our obligations in solidarity with victims of U.S. imperialism around the world.”

But that doesn’t change the urgent need to now forge a Left that understands the severity of the crisis, a Left that has a vision beyond capitalism, a Left that has a well formed notion of a socialist future, and a Left that has a proposal on how to get there. That is the job before us.

Greg Godels

zzsbloml@gmail.com