USA: from wall street to main street

Wall Street demands still more Fed money
Nick Beams, WSWS, Sep 19 2020

When Wall Street receives a major boost from the US Federal Reserve it can always be relied upon to come back and demand more. This phenomenon, one could say a law of political economy, has been on display again this week. On Wednesday, the central bank’s Federal Open Market Committee set out its new framework for monetary policy. It committed itself to maintaining interest rates at near zero levels, for as far as the eye can see. It would also maintain its purchases of financial assets, at least to the tune of $120b a month, nearly $1.5t a year, and intervene even more aggressively should there be a return of financial turbulence. Since the market freeze in mid-March, the Fed has pumped in more than $3 trillion, sending the stock indexes back to their record highs in August. But this month, the markets have been on a steady decline. In the past three weeks, the S&P 500 index has lost 5.4%, and the tech-heavy NASDAQ has dropped by 7.7%, its biggest decline since March.

Market indexes have dropped over the past three days, with the Dow, the S&P 500 and the NASDAQ all down by around 1% yesterday. With expectations of lower profits in the third quarter—analysts have forecast a 22% decline in earnings, compared to the same period last year—and the prospect of further government corporate stimulus packages being tied up in Congress, Wall Street was looking for more action from the Fed in order to push shares prices higher. The FOMC’s decisions last Wednesday were in line with Wall Street’s demands for “strong and powerful forward guidance,” to use Fed chair Jerome Powell’s words. But they were deemed to be insufficient. James Athey, senior investment manager at Aberdeen Standard Investments, told the WSJ, following the FOMC meeting:

The Fed said it would keep rates low for ages. But that’s not enough. Not taking away is no longer sufficient for this market. You need to do more, more, more.

Another hedge fund manager told the WSJ:

You need fiscal policy to come through.

This is a demand that Congress pass legislation to extend the more than $3t provided in corporate bailouts under the CARES Act. The director of equity trading at KBW, R J Grant, said the Fed had acted swiftly and decisively, but now:

People are kind of pivoting to see if Congress can step up to the plate here and get something done.

The concern of the financial markets is not over the economic devastation being inflicted on millions of workers. It is that, with the deep recession in the economy set to continue for the foreseeable future, corporations must have still more support. Dissatisfaction with the Fed’s pronouncements extends across the board. When the Fed massively intervened in financial markets in mid-March, the Financial Times reported:

Investors took comfort from knowing that the Fed and its chairman Jay Powell had their back. But this week they were frustrated by his reluctance to promise more specific actions.

The main cause of dissatisfaction is that, apart from saying that the Fed would maintain its asset purchases, at least at their current level, there was no indication of how it would adapt its balance sheet. Michael Kushma, chief investment officer of global fixed income investment at Morgan Stanley, told the FT:

That was something the market was hoping to get clarity on and they failed to deliver it.

According to the newspaper, one cohort of investors wants the Fed to shift the focus of its asset purchases of long-dated Treasuries, in order to ensure that borrowing costs remain low, “while another subset thought a larger program was warranted.” Krishna Guha, vice-chairman at Evercore ISI, told the FT the Fed’s current approach to bond-buying was “weak.” He said the Fed had to “deploy all its instruments.” In other words, the Fed’s massive expansion of its balance sheet from $4t in March, to more than $7t by June, is deemed to be insufficient. Still more money must be pumped in. That is because of complete uncertainty about the direction of the economy. In its economic outlook, the FOMC’s median prediction for contraction this year was 3.7%, compared to its forecast of a 6.5% contraction in June. Its median jobless rate for the end of the year is now 7.6%, compared to 9.3% in June. A WSJ editorial scathingly commented that “even discounting for the uncertainties of COVID-19 these are large misses” over the space of 90 days.

The large variations underscore the fact that none of the official bodies, including the Fed, has any clear idea about the economic future. Under these conditions, the demand is being made that whatever the state of the underlying economy, the Fed must expand its intervention so that money can continue to be raked in. This week, the FT published a report revealing how the increase in corporate debt, made possible by the Fed’s ultra-low interest rate regime, is being used. Private equity groups were “taking advantage of blockbuster demand for corporate debt by loading companies they own with fresh loans and using the cash to award themselves a bumper payday.” So far this month, almost 24% of the money raised in the US loan market had been used to fund dividends paid to private equity owners. This was up from an average of less than 4% over the past two years. The numbers involved are not small. The article reported that just over $4b of the $15b borrowed in the loan market so far this month would be paid out in dividends, with a further $2b to come in the next two weeks.

Biden in Minnesota: A phony “pro-worker” spin on a right-wing campaign
Barry Grey, WSWS, Sep 19 2020

In a televised town hall on CNN Thursday night and a speech Friday in Minnesota, Biden sought to put a “pro-worker” spin on his right-wing election campaign. Many polls are showing Biden’s lead in mid-western battleground states slipping and there are mounting statements of concern from within the Democratic Party over the lack of enthusiasm among workers and young people for the decades-long senator and former vice president. Under these conditions, Biden is doubling down on his ludicrous self-promotion as a “working stiff” from “hard-scrabble” Scranton, Pennsylvania, in contrast to the billionaire Donald Trump. Biden is proposing no significant social reforms to go along with his pseudo-populist demagogy, refraining even from demanding the restoration of the $600/wk federal unemployment benefit in the midst of the worst jobs crisis since the Great Depression. The Democrats and Republicans in Congress allowed the benefit to expire at the end of July, threatening millions of workers with destitution, hunger and homelessness. Nor does Biden oppose the deadly back-to-work and back-to-school campaign in the midst of a rampaging pandemic being led by Trump at the behest of Wall Street.

The actual content of Biden’s supposed defense of working people is economic nationalism, promotion of the pro-corporate trade unions, anti-Chinese and anti-Russian agitation and the glorification of the US military. All of these themes were on display in his campaign events this week. On Thursday night, Biden took questions from both Democrats and Republicans at a televised town hall event held near Scranton and hosted by CNN’s Anderson Cooper. In an effort to underline his plebian roots, he criticized an unnamed reporter who remarked that if elected, Biden would become the first president in many years not to have an Ivy League college degree. Biden, who graduated from the University of Delaware and received his law degree from Syracuse University, demanded:

Who the hell makes you think I have to have an Ivy League degree to become president?

Biden failed to mention that he attended Archmere Academy, an elite private prep school in Claymont, Delaware. He then raised a theme upon which he expanded in his speech Friday in the Minnesota iron range town of Hermantown. he said:

I really do view this campaign as a campaign between Scranton and Park Avenue. All he (Trump) thinks about is the stock market.

In the course of the town hall he repeated what has become part of his standard stump speech: a denunciation of Trump for his alleged slur on US soldiers killed in battle as “suckers” and “losers.” He evaded a direct answer to a direct question as to whether he supported the so-called Green New Deal, which is promoted by the “progressive” Bernie Sanders wing of the Democratic Party. But he made clear his subservience to corporate oil and energy interests when he said he would not ban fracking. He made much of his support for an expanded child tax credit, offering $3k per child a year for all but the wealthiest families. This paltry measure would do little to reverse the decline in working class living standards and the ever-increasing concentration of wealth at the very top of the income ladder. In any event, as Biden well knows, it would stand virtually no chance of being adopted in a Biden administration. Biden repeated these themes in his Friday speech in northern Minnesota. They were, however, joined by a heavy dose of “Made in America” economic nationalism intended to outdo Trump’s “America First” protectionism.

As in his speech last week to assembled bureaucrats at a UAW union hall in Warren, Michigan, Biden spoke after touring an apprentice training program at a facility of the United Brotherhood of Carpenters and Joiners. Hermantown is located in a region that voted for Trump in 2016, largely because of massive job losses on the iron range during the Obama-Biden administration. Whenever the Democratic Party seeks to make an appeal to workers, it inevitably takes the form of economic nationalism, national chauvinism and implied or open anti-communism. All of this was in evidence on Friday. Introducing Biden, Minnesota Senator Any Klobuchar declared, “We need ‘Buy American.’” She boasted that the Obama-Biden administration “did something about Chinese steel dumping.” Playing the populist card, Biden contrasted the plight of laid-off workers struggling to meet their mortgage or rent payment with the “people at the top.” He said:

Billionaires in America during the pandemic made another $300b. Hear what I just said? In the middle of the pandemic. You’re left to wonder who is looking out for ordinary folks.

What he left out is the fact that congressional Democrats voted nearly unanimously for the Trump administration’s CARES Act, which provided trillions of dollars to the corporations and banks in the biggest bailout in world history, making possible the stock market explosion that funneled hundreds of billions into the pockets of the billionaires. This looting of society continues in the form of ongoing Federal Reserve money-printing, while the already inadequate relief measures for workers and small businesses have ended.
Biden then recycled his Scranton vs. Wall Street trope, amending it to say:

I view this campaign as between Scranton and Park Avenue. All Trump sees from Park Avenue is Wall Street. That’s why the only metric of American prosperity for him is the value of the Dow Jones.

This was followed by his attack on Trump for denigrating soldiers, to which he added Trump’s badmouthing of John McCain, the deceased Vietnam War pilot and prisoner of war-turned Senate warmonger. Boasting of his friendship with McCain, Biden said, “John McCain was no ‘sucker’ or ‘loser,’ he was a war hero.” Touting his “Buy American, Build American” plan, he said, “When the government spends taxpayers’ money, we should use that money to buy American products, made by American workers, in American supply chains to generate American growth. My plan would tighten the rule to make ‘Buy American’ a reality.” This would be the core, Biden explained, of his policy to “reward work, not wealth.” To which he hastened to add:

I’m not looking to punish anybody, not to penalize wealth, but to make sure the wealthy and big corporations finally begin to pay their fair share.

In other words, Biden will do nothing that challenges the basic profit interests of the corporate-financial oligarchy, whose real “fair share” to pay would be 100%, since it is the working class, not the capitalist exploiters, who produce all of the wealth of society. Biden’s only substantive reform proposal was a $400b infrastructure program, itself entirely inadequate to reverse the decay of America’s social infrastructure and address the lack of decent-paying and secure jobs. Only a small fraction of the trillions handed over to big business, it would, in any event, never be implemented.

Despite the pseudo-populist rhetoric, the Biden campaign has continued to move to the right since the party conventions in August and the official start of the fall campaign on Labor Day. Earlier this month, Biden told Stars and Stripes that he would keep US troops in Afghanistan, Iraq and Syria indefinitely and would likely increase the military budget; he used an interview on CNN to attack Trump for failing to uphold US “national security” and disrespecting the military; and he gave a speech in Pittsburgh followed by a campaign ad in which he denounced “violent” protesters and demanded that they be criminally prosecuted. At both events this week, Biden continued his policy of saying virtually nothing about Trump’s threats to hold onto power regardless the outcome of the Nov 3 vote and to declare martial law and mobilize troops to put down protests after Election Day. Nor did he mention Trump’s defense of police and fascist murders of anti-police violence protesters in Washington state and Kenosha, Wisconsin; Attorney General Williams Barr’s call for protesters to be charged with sedition, as well as the Democratic mayor of Seattle; and the call by Trump’s Asst Sec for Public Affairs at the DHSS, Michael Caputo, for Trump supporters to arm themselves in preparation for the election.

Colorado police conduct militarized arrests of Party for Socialism and Liberation members
Jacob Crosse, WSWS, Sep 19 2020

In an alarming escalation of state retaliation against opponents of unending police violence and murder, at least six protesters, four of whom are members of the Party for Socialism and Liberation (PSL), were arrested by police and SWAT officers with the Aurora, Colorado police department on Thursday. As part of an attempted frame-up, the protesters were arrested and jailed in a series of coordinated militarized raids while they were out in public or at home. Those arrested face a plethora of charges, which, if they are convicted, could mean decades in prison for their alleged roles in four protests and vigils against police violence that took place over the summer. All those arrested have either organized or taken part in demonstrations in Denver’s largest suburb. The protests in Aurora are part of the global wave of multiracial and multiethnic protests by youth, students and workers following the release of video depicting the Memorial Day murder of George Floyd by Minneapolis police officers. Nine months prior to Floyd’s murder, Aurora police were facing widespread anger for their role in the killing of black 23-year-old Elijah McClain last year.

Everyone who was arrested in Thursday’s raids, Joel Northam, Terrance Roberts, Lillian House, Whitney Lucero, John Ruch and Trey Quinn, faces felony charges connected to four separate demonstrations held in Aurora on Jun 27, Jul 3, Jul 12 and Jul 25. A statement from PSL confirms that Ruch, Northam, Lucero and House are members of the party, while Roberts, according to the Denver Post, is the co-founder of the Front Line Party for Revolutionary Action. A statement released by the PSL claims that Ruch was the first to be arrested while sitting in the parking lot of Home Depot. Later that same morning, five police cars surrounded and arrested Lillian House while she was driving. In the afternoon, Northam reports his home was invaded by SWAT teams and a Mine-Resistant Ambush Protected (MRAP) military vehicle, designed to withstand improvised explosive device (IED) attacks. In a PSL Facebook event discussing the arrest, members claimed that Northam was never shown a warrant. Lucero was also arrested Thursday afternoon. As of this writing only one person has been released. The PSL is organizing a rally and march outside the Colorado state capitol in Denver today demanding that all the charges be dropped and their remaining comrades released.

The PSL has been among the groups organizing protests in the Denver metropolitan area throughout the summer, demanding justice for McClain. While the official sequence of events that led to McClain’s death might never be known—police purposefully shielded and removed their body cameras during the interaction—it is undisputed that McClain, who never committed a crime, was rendered unconscious after police applied a “carotid hold” to his neck. Once paramedics arrived, the police lied about the sequence and character of events. McClain, who at this time was already handcuffed and had vomited after being choked out, was then injected with 500 milligrams of ketamine, a powerful sedative, by a paramedic with Aurora Fire Rescue. The dosage, nearly double the recommended amount for someone of his diminutive stature, caused McClain’s pulse and breathing to stop before he went into cardiac arrest. Three days later, after being declared brain-dead, McClain passed away. Afterwards, a cover-up ensued with an “independent investigation” finding no fault on the part of the officers or paramedics. An inconclusive autopsy report, which failed to determine the exact cause of death, conveniently left the state blameless.

Protests ignited in June after it was discovered that the “independent” city investigation into McClain’s murder was being led by attorney Eric Daigle, a former police officer in Connecticut who advertised himself on his website as someone experienced in “defending municipalities, police chiefs and individual officers from law enforcement liability claims.” After over two million people signed a petition demanding a reopening of the investigation, Democratic Governor Jared Polis announced that his administration would reexamine the case. There are currently five separate investigations in McClain’s murder by various state and federal agencies. Millions of dollars and thousands of hours are being spent to give the appearance of “justice,” while at the same time Aurora police continue to assault, intimidate, maim and jail protesters, and McClain’s murderers have yet to spend a single hour behind bars. In contrast to the police who killed McClain, the protesters who were arrested remain in jail after district attorneys stacked up to a dozen charges per person, a clear act of intimidation by the ruling class against all those determined to put an end to police violence and racism.

The charges are being spearheaded jointly by the 17th judicial district attorney, Dave Young (Democrat) and the 18th judicial district attorney, George Brauchler (Republican). The most serious and ludicrous were levied by Young against Northam, Lucero, and House, for their alleged role in “kidnapping” police officers outside the Aurora District One police station on Jul 3. That day, hundreds of protesters had gathered outside the police station demanding the arrest of officers Nathan Woodyard, Jason Rosenblatt, and Randy Roedema. The protests were sparked after a photo was publicly released that showed three Aurora cops, Erica Maerrero, Jaron Jones and Kyle Dittrich, grinning and laughing as they reenacted choking McClain. The photo was sent to Rosenblatt who responded to the disgusting image with a text that read: “ha ha.” The demonstration outside the police station went into the evening before riot police cleared the roughly 600 protesters with impact and chemical munitions. Attorney Young in his statement alleges that because protesters had surrounded the building, preventing police from leaving “for seven hours,” Northam, Lucero and House are responsible for attempting to commit first-degree kidnapping, a class 3 felony that carries with it a minimum 1-3 year prison sentence if found guilty. While neither attorney has yet to file an affidavit, in a short statement, Young alleges of these three:

The defendants unlawfully and feloniously attempted to imprison or forcibly secrete 18 officers with the intent to force them or another person to make a concession to insecure their release.

District Attorney Brauchler has also charged House with inciting a riot, conspiracy to commit inciting a riot, theft from a person, conspiracy to commit theft from a person, engaging in a riot, conspiracy to commit engaging in a riot, obstructing a highway or other passageway and conspiracy to commit obstructing a highway or other passageway. Northam has been charged with inciting a riot, conspiracy to incite a riot, theft, conspiracy to commit theft, engaging in a riot, conspiracy to engage in a riot, obstructing a highway or passageway, conspiracy to obstruct highway or passageway, attempted first-degree kidnapping, and obstructing government operations. Lucero was charged with: attempted first-degree kidnapping, inciting a riot, engaging in a riot, obstructing government operations. Quinn is facing riot charges, false imprisonment and obstructing government operations, while Ruch is charged with theft and conspiracy to commit theft. Finally, Roberts is facing riot charges, obstructing, and conspiracy to obstruct a highway as well as obstructing government operations. All told the six protesters face 33 felony counts and 34 misdemeanor charges. In addition to the “stacking of charges” against the protesters, the manner in which they were arrested represents an escalation of the police-state tactics carried out by federal paramilitaries in cities such as Portland, Oregon, Spokane, Washington, Pittsburgh, Pennsylvania, New York and Kenosha, Wisconsin. These fascistic maneuvers, directed by President Donald Trump and Attorney General William Barr, are being dutifully carried out by police departments and federal agencies throughout the country, demonstrating the bipartisan attitude of the ruling class towards those who stand up to police terror.

However, those who think that a Democratic presidency under a Joe Biden administration would be any less vicious in their persecution of the working class would be sorely mistaken. Throughout the summer, Biden has condemned “anarchist,” “violent protesters” and “rioters” while remaining silent on the state assassination of Portland protester Michael Reinoehl. Biden, like Bernie Sanders, advocates increasing funding to murderous police departments while state budgets are being slashed across the country. While a disproportionate number of minorities, particularly Native American and African-Americans, are victims of police violence, the determining factor if one is going to be a victim of police terror is that they are working class or poor. The police are the enforcers of the capitalist system. They defend the property rights and interests of the ruling class against all threats. In the end, appeals to the capitalist state for reform or justice are less than helpful. Youth, students and all who oppose unending police murder must orient themselves to the social force which creates all of society’s wealth, the working class, in an international struggle for the abolition of the capitalist system and its replacement with a socialist society.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.