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Last week US Treasury Secretary, Mnuchin, ordered the Federal Reserve to Return $455 billion of unspent stimulus funds given the Fed in last March’s ‘Cares Act’ passed by Congress. Today’s Alternative Visions show discusses the politics of the move within the context of the history of the relationship between the Treasury and the Fed, going back to the early attempts to create a central bank in the 1780s, 1790s, and beyond up to the creation of the Fed finally in 1913. Dr. Rasmus restates some of these major themes in his recent book, ‘Alexander Hamilton and the Origins of the Fed’ (2019) and its sequel book, ‘Central Bankers at the End of Their Ropes: Monetary Policy and the coming Depressions’ (2017). What are the central bank ‘functions’, whether administered by a formal central bank, like the Fed, or by the Treasury? Why the Fed was created by the big private bankers. How it functions today in 21st century US global capitalism to ensure the subsidization of financial interests and corporations among the US capitalist class. Why the so-called ‘rift’ is no rift at all. And what are the politics of Mnuchin’s recall of the $455 billion given to the Fed last March and still unspent–even as unemployment remains in excess of 25m today in the US, food lines grow, rent evictions accelerate, and hundreds of thousands of small businesses are failing and closing.

To Listen to the Hour Long Alternative Visions show GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-us-treasury-vs-us-federal-reserve-rift-functions-of-capitalist-central-banks/

This past week the US Treasury and the US Federal Reserve Bank engaged in a rare public disagreement. US Treasury Secretary, Mnuchin, in a letter to Jerome Powell, chair of the Federal Reserve, last week directed the Fed to return $455 billion that the Fed was holding in reserve should future lending to banks and non-bank businesses become necessary if the US economy and markets further deteriorate in 2021.

Fed chair Powell initially balked at Mnuchin’s request, replying that the Fed needed the funds to ensure market stability since the US economy was entering a “difficult period” in late 2020 and early 2021. According to Powell, the $455 billion was essential “as a backstop for our ill-stressed and vulnerable economy”. Returning the funds therefore was “not appropriate”. To do so now was not the right time. Not “yet”, replied Powell. Not even “very soon.”

The Fed’s initial response to Mnuchin no doubt reflected Powell’s concern the US economy may very likely weaken in the current 4th quarter, compared to the 3rd. That means possibly more defaults and bankruptcies could be on the agenda for the 1st quarter 2021—in particular for junk bond heavy businesses and state and local governments that appear most vulnerable at the moment. The Fed therefore needs to keep the $455 billion funds in reserve to address a potentially worsening economic situation.

If the differences between Mnuchin and Powell represented a ‘rift’, as the mainstream media often reported, it was undoubtedly the shortest Treasury-Fed rift on record. It wasn’t twenty-four hours after Powell’s initial resistance statement that the Fed capitulated to the US Treasury. Powell quickly retreated publicly, saying the Fed would comply. In retracting his position of the day before, Powell declared the US Treasury had “sole authority”. The Fed would return the funds. The ‘rift’ was over in less than 24 hours.

What then were Mnuchin’s rationale for insisting the funds be returned to the US Treasury? What were his public reasons given for taking back $455 billion at a time of intensifying Covid impact on the economy; as fiscal stimulus appeared dead for months to come; and as 12 million workers were about to lose unemployment benefits in December while simultaneously hundreds of thousands were experiencing rent evictions, lines for food banks were growing throughout the country, and student loan forebearance for millions was about to end?

Mnuchin’s Rationale

To deflect critics Mnuchin floated a number of obviously false narratives to justify his decision to take back the $455 billion. He said it was Congress’s intent to end all the funding by December 31, 2020. Even so, he added, he was allowing Fed programs like the Fed’s commercial paper and money market mutual fund special lending facilities to continue for an additional 90 days into 2021. Then there was the $74 billion in the Fed’s Financial Stabilization Fund (FSF) which would remain at the Fed. He puffed up the $74 billon saying the Fed “would still have $800 billion”, assuming the $74 billion represented a fractional reserve that allowed the Fed to fund up to 10X that amount. The central bank could also keep another $25 billion to cover distribution of funds in progress. He further noted that the $455 billion was needed to fund spending in what might be an eventual fiscal stimulus bill later negotiated in 2021 between the US House and the Senate.

It is perhaps interesting to note that Mnuchin’s retraction of the funds came barely a month after in October he wrote a letter indicating that all the Fed’s funds, including the $455 billion, could be retained by the Fed into 2021. The October letter, followed by his November decision to retract the $455 billion, suggests strongly that some kind of decision was made by the Trump administration, or McConnell in the Republican Senate, or perhaps both, sometime after the November 3 election in order to make it as difficult as possible for the incoming Biden administration to address the deteriorating US economic situation.

McConnell had signaled quickly after November 3 there was no chance for a new fiscal stimulus in 2020; Mnuchin then retracted the $455 billion and McConnell was among the first to publicly endorse his move. The timing of both was unlikely merely coincidental.

The Reactions

The Democrat and mainstream media reactions to Mnuchin’s move were swift and to the point.

Typical was Democrat Maxine Waters’, a key player in the US House of Representatives: “It is clear that Trump and Mnuchin are willing to spitefully destroy the economy and make it difficult as possible for the incoming Biden administration”.

Even more to the point were business media editorialists and comments that followed Mnuchin’s announcement: The Financial Times declared Mnuchin has “aligned himself with Mr. Trump’s ‘burn the house down’.” The Wall St. Journal added “The termination is also important to limite the demands by politicians to use the Fed for policies they can’t get through Congress”. Fidelity Investments’ Market Watch online news service concluded the “intent of the Mnuchin move appears to be to prevent the next Treasury Secretary extending relief to state and local governments”.

In other words, the real rationale of Mnuchin was Politics, first and foremost. One might add a close second: i.e. improving Bank profits. Stripping the funds from the Fed would now force borrowers to turn more to capital markets to raise funds, instead of relying on government funding programs made available through the Fed.

The Politics of $455 Billion

Despite Mnuchin’s various explanations to the contrary, his withdrawal of the funds from the Fed is clearly about denying the incoming Biden administration from perhaps convincing the Fed to expend the $455 billion to provide loans to hard pressed state and local governments in 2021 and/or for making additional loans & grants available to small businesses.

For the Biden administration, getting the Fed to provide the financial assistance in loans to local governments and small business would obviate the need for the Biden administration to have to fight a Republican Senate, led by McConnell, to pass the same amount of aid targeting local governments and small businesses as part of an eventual Biden fiscal legislative package.

Mnuchin and McConnell have long opposed fiscal support for state and local governments, which they view as heavily weighted toward Democrat ‘blue’ states and cities. They preferred these governments raise money in capital markets instead of getting financial aid via government programs. Providing loans via government programs, with terms and conditions more favorable to borrowers (and not to banks), means less profits for private banks and private lenders. The same applies to small businesses as well as local governments. Republicans want to redirect their financing needs to private markets, instead of through government programs.

That economic motive fits nicely with the political objective of Mnuchin, McConnell, and other Republicans to deny the Biden administration access to funding already on the Fed ‘books’, i.e. funding that was already established in March 2020 as part of the Cares Act passed at the time.

The fact that $455 billion has not been spent as part of Cores Act after almost nine months is of course a related question of importance. Given the great distress of small businesses and 22 million still unemployed in the US as of late November, one might well ask why hasn’t that $455 billion been provided to businesses and their employees still in need? Why has the Trump administration not comitted it, given the growing stress on small business and expiring unemployment benefits? And why have the Democrats not more insisted it be spent, as was intended in March. Congress and the Trump administration have been at stalemate for months over passing a new fiscal stimulus bill, when $455 billion in funds was, and still remains, available.

In recalling the Fed’s funds back to his Treasury, Mnuchin’s strategy is clearly to force the Democrats to confront McConnell and Republicans directly via renewed fiscal stimulus negotiations sometime in 2021, and to do so starting from scratch. Biden and the Democrats won’t have that $455 billion potentially available from the Fed. And they’ll have to in effect ‘renegotiate it all over again’.

Moreover, should the Republicans retain control of the majority of the Senate in 2021—to be determined after the Georgia state Republican Senator election runoffs—McConnell can dictate with his Senate veto the scope and magnitude of any future fiscal stimulus in 2021. The Fed and its $455 billion ‘back door’ possible funding source for state and local governments and small businesses will be denied to Biden and the Democrats.

The Mnuchin move is therefore political—i.e. to deny Biden the availability of nearly a half trillion in bailout financing especially for small businesses and state and local governments—and to force the Democrats to renegotiate it with McConnell again. A corollary gain for the Republicans is to force the same governments and small businesses to access the private capital markets for future financing needs, thus benefiting private lenders more than they would otherwise by simply playing ‘middle men’ distributing government program loans for a fee.

Banks have consistently complained since March that the Cares Act lending programs did not provide them sufficient profits. Their interest rate spreads are too narrow. Redirecting lending from Fed programs to private capital markets would prove more profitable.

Just What is the $455 Billion?

The $455 billion represents the unspent funds left over from the Cares Act passed in March 2020. That Act consisted of four parts. One part provided $500 billion in emergency unemployment assistance and $1200 per person checks for households whose annual income was less than $75,000. The checks were spent within 60 days. A good part of the unemployment benefits later expired at the end of July 2020; the rest will expire around Christmas and thus leave 12 million workers without any unemployment benefits any longer. It is estimated the August partial ending of the benefits reduced US GDP household spending by $65 billion a month; the December expirations will reduce it another $150 billion per month.

Another part of the Cares Act amounted to $350 billion to provide loans to small businesses, called the Payroll Protection Program or PPP. That $350 billion initially proved insufficient, as larger businesses quickly scammed and exhausted the funds with the help of their banks that were responsible for distributing the funds. Many of the banks simply disbursed the funds first to their larger, preferred customers even if they didn’t qualify as ‘small business’ under the PPP program. As a result, another $320 billion supplement to the PPP was passed by Congress in April. That brought the total available in the PPP to $660 billion ($10B of which was put aside for administration). The PPP was shut down in early August 2020, even when only $525 of the $660 billion was distributed. So $135 billion of the PPP remains unspent. That remainder is apparently part of Mnuchin’s order for the Fed to return $455 billion.

As a third element, the March Cares Act provided for another $600 billion for medium sized corporations, and for a host of special directed financial bailouts of financial institutions and corporations. A number of the bailouts were created under the umbrella of what is called the ‘Main St. Program’.

The Main St. program included Fed purchases of corporate bonds for the first time in its history, including Exchange Traded Funds (ETFs) which are traded like stocks. It also included Fed financial support for the Municipal Bond market, for asset backed securities, for nonprofit businesses, commercial paper issuers, and for money market mutual funds, among others.

Most of these were special lending facilities resurrect from the 2008-09 experience, with the exception of funding for corporate bonds and ETFs which were historically new and unprecedented. What was also precedent setting was none of the above markets had actually collapsed in March. The Fed resurrecting of the special lending facilities was in anticipation of a possible collapse. So much of the Fed lending to big corporations and financial markets was a pre-emptive bailout before an actual crash! So too was the Fed lending to non-financial corporations!

In short, there was at least $1.1 trillion put aside in the Fed—supported by Treasury funding—for the purpose of bailing out medium and larger corporations and targeted financial asset markets like commercial paper, asset backed securities, corporate bonds, municipal bonds, etc. But it mostly wasn’t used.

Why Big US Corporations Didn’t Need Fed Loans

Medium and large corporations didn’t require emergency liquidity from the Fed. They were able to accumulate trillions of dollars to add to their balance sheets quickly as the real economy began to crash in March-April. The Fed enabled their liquidity accumulation in significant part by pumping $120 billion a month via its QE program into the economy, and by other measures, which drove interest rates to record lows. That enabled large businesses to issue record levels of new corporate bonds. For the Fortune 500 alone it raised $2 trillion in funds. Hundreds of billions of dollars more were added by big firms drawing down their credit lines at their banks, again enabled by low rates thanks to the Fed. Nearly all big corporations suspended their dividend payouts, which in prior years had exceed more than $500 billion a year. Still other firms boosted available liquidity by saving on their daily costs of operations as workers were either laid off or allowed work remotely and facilities were shuttered.

In other words, most medium and large US businesses were fat with cash, could borrow at lower rates in private markets, and simply didn’t need the $1.1 trillion in emergency loans provided for them, through the Fed, as a result of the March Cares Act. So Mnuchin’s request for the $455 billion returned from the Fed included the funds the Treasury had given the Fed in March for possible lending to medium and large corporations—lending that never materialized because it was never needed.

About $100 billion was loaned by the Fed to date for various ‘Main St.’ lending facilities and other programs. In March the US Treasury provided $195 billion for Main St. programs. Another $25 billion was allowed the Fed to complete funding in progress. That left $70 billion of the $195 billion that Mnuchin now wants back. Add to that $70 billion the roughly $135 billion in unused PPP funds. And to that total ($70 + $135) another approximate $250 billion in funds allocated for large corporations and for other sources, and the grand total is the $455 billion that Mnuchin told Powell he wants back.

Jerome Powell’s Conundrum

The Fed will be left with the $25 billion to cover Main St. loans still being disbursed, as well as $74 billion in its ‘Financial Stabilization Fund’ (FSB) for future emergencies.

Cleaned out of most of its emergency funding originally allocated under the Cares Act, the Fed will be forced to address any future financial instability and emergencies by providing even more QE in addition to the $120 billion a month already. But that’s quite ok with financial investors and markets, since it will mean even lower (and longer duration) interest rates on Fed government securities. It may even force the Fed to introduce nominal negative interest rates, as have other central banks in Europe and Japan.

By his action, Mnuchin signaled the Republican preferred policy is to force monetary policy to again play the lead role in any future recovery. Fiscal stimulus is not primary, or even likely, in 2021. That explains in large part why both the Trump administration and McConnell’s Republican Senate have stonewalled any fiscal stimulus package subsequent to the March Cares Act. The Democrats’ ‘Heroes Act’ of $2.4 trillion passed back in June 2020 by the Democrat majority US House of Representatives has been thwarted and delayed by various tactics and means by McConnell and Trump coordinated maneuvers. Nor will McConnell permit any reasonable fiscal stimulus in what remains of 2020. Should he agree on anything, moreover, it will be to ‘give’ the Democrats back the $455 billion he took from the Fed with the assistance of Mnuchin. Moreover, should the Republicans retain control of the Senate by winning the run off elections in Georgia on January 5, 2021, McConnell’s Republican Senate majority will continue to oppose any fiscal stimulus proposed by the new Biden administration. It will mean a continuation of virtual veto of fiscal stimulus proposals that McConnell and Republicans have adhered to since at least 2012-14.

The Cares Act March 2020 fiscal stimulus was an aberration to this strategy. Immediately after, the Republicans returned to their monetary policy/central bank as primacy policy that has been in effect ever since the 2008-09 great recession 1.0. But even that generalization may be an exaggeration, since by monetary policy in this Republican strategic view is meant only QE and near zero rates—and does not include special lending to small businesses or employment assistance. In short, soon after the passage of the Cares Act it was back to monetary policy designed to benefit private markets and investors and not to benefit small business or wage earners.

The GDP Effect of Fiscal-Monetary Policy in 2020

The Cares Act has been consistently estimated as a $2.4 trillion stimulus event (or $3 trillion if one counts the $650 billion in business-investor tax cutting also provided by that legislation). But in fact the actual fiscal stimulus—in the form of PPP $525 billion and $500B employment assistance—amounted only to around $1 trillion! Add another $200 billion in direct spending assistance to hospitals and for Covid emergency health care, plus the minimal $125 billion or so in Main St. and other corporate lending, and the total actual fiscal stimulus to the general economy has totaled less than $1.5 trillion under the Cares Act. That’s around only 7% of GDP!

That compares to roughly $5.5% stimulus in the 2009 Obama recovery act, which proved grossly insufficient to generating a sustained economic recovery for most of the real economy after 2009. The 2020 contraction of the real economy has been at least four times as deep as the 2008-09 contraction. So the stimulus in GDP terms in the Cares Act was even less sufficient than was the Obama 2009 recovery package. How long it will take the 2020 great recession to recovery in employment and business activity terms with this even less sufficient stimulus to date remains to be seen. But history suggests recovery in the current great recession 2.0 will be measured in more years than the last 2008-09 great recession 1.0.

There has been much hype by politicians and media about the so-called economic recovery 3rd quarter in the USA. But the facts show the economy contracted sharply by 10.8% from March through June. It then ‘rebounded’ (not to be confused with ‘recovered’)in the 3rd quarter by 7.4%. More importantly, many key economic indicators have been flashing in the 4th quarter that the 3rd quarter recovery will weaken appreciable in the 4th. And some predict even more so in the 1st quarter 2021. Like Europe, the US Economy may be headed toward a double dip contraction over the winter months ahead. That will result in a clear ‘W-shape’ recovery (not V-shape) that is typical of all great recessions—which this writer has been predicting since last March.

The economic ‘relapse’ to a slower growth path in the 4th quarter is all but ensured by the current failure to quickly pass a sufficient fiscal stimulus bill at year’s end 2020, by the intensifying negative impact on the US economy by the Covid 3rd wave surging in America today, and for months still to come, and by the continuing political instability and gridlock in policy impacting the economy as well.

Much is made by optimists of the strength of recovery of US manufacturing and Construction sectors—i.e. the goods sectors—in the US economy. But together they constitute only 20% at best of the total US economy and GDP. Moreover, the recovery here is deceptive. Manufacturing is still 5.6% below 2019 and employment not recovered by any estimate. And Construction recovery is limited to new single family housing—with apartment and multiple housing barely improving—and commercial property construction still mired in a deep recession with no end in sight. This is not the basis for a sustained full economic recovery by any means. Especially since much of the services sector will lag in recovery for some time as well.

It is in the context of this questionable ‘recovery’ of the US economy in late 4th quarter 2020 that a fiscal stimulus package appears dead on arrival in Congress for the rest of the year; that Covid continues to surge with its expected economic impact; that the last vestiges of the Cares Act will soon expire before year end; and political instability threatens to create more business investment uncertainty.
In the midst of all this, Mnuchin and Republicans have acted to pull much needed funding from the Fed, making it even more difficult to restore economic resources needed in 2021.

Dr. Jack Rasmus
November 24, 2020

Dr. Rasmus is author of the recently published book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, January 2020. He blogs at jackrasmus.com. His website is http://kyklosproductions.com and his twitter handle @drjackrasmus.

Today the political crisis in America may be entering an even more dangerous phase–a phase that I predicted was possible months ago. Today reportedly Trump has asked Republican state legislators in Michigan, where he lost the popular vote, to come to the White House. Trump no doubt wants them to select electors who will vote for him, not for the winner of the vote in Michigan, Biden.

The veil of Democracy in America is being ripped away from the body politic right before our eyes. Not only can the Electoral College thwart the popular vote for president; but there are even more nefarious ways for political elites to circumvent the Electoral College if they don’t like it.

The electoral college is, of course, the means by which the popular vote for the president is prevented. Instead of Democracy’s principle of ‘one person, one vote’, we have electors who are selected by their state legislatures who then cast their vote for president. That’s the appearance. But it’s even worse than that.

The timeline for the Electoral College to meet and cast their votes for president is December 8. Each state’s vote in the Electoral College’s must then be sent by December 14 to their state’s governor, who must send that decision to Congress by December 23. Congress then confirms the president by January 6. That’s the actual process how presidents are ‘elected’.

The problem is that state legislatures select the electors who vote in the electoral college. But the electors they select don’t necessarily have to vote for the candidate the majority of the people of their state vote for. The legislature can select electors, or direct the electors they already selected, to vote for a candidate who the people of the state didn’t vote for. Court decisions prohibiting this are not clear cut, so it can be argued the legislatures can select the electors who can vote for whatever candidate they want. Even recent US Supreme Court decisions on this are ambiguous.

By calling Republican state legislatures from Michigan today to the White House–an act that in itself is intimidating, since Republican politicians know Trump can unseat them next primary–Trump is clearly attempting to ‘convince’ them to select, or order, electors to vote for him instead of Biden. If successful in Michigan, Trump will no doubt target another couple Republican majority state legislatures to do the same between now and December 14. Like Michigan, Wisconsin, Pennsylvania, and Georgia are all Republican state majority legislatures. That’s how he’ll try to ‘reverse’ the electoral college vote in his favor, or at least he clearly now thinks he can or he wouldn’t bother ‘inviting’ Republican state legislatures from Michigan to the White House. He’s not doing so for any other obvious reason.

Those who disagree with this analysis may say, ‘even if he convinces Republican state legislators to select electors for him, the governors of those states will not send the vote of those ‘reversed’ electors to Congress on December 23′. So he won’t get away with that maneuver.

But wait. Not so fast. Trump can then use that refusal of a governor to send Trump electors to Congress as an excuse to call in the US Supreme Court to decide the issue. Trump’s lawyers will then argue to the Court there isn’t a complete electoral college vote total to determine the outcome of the election if one or more governors don’t send in the results. The Supreme Court would then likely ‘pass the buck’ and order the decision on the election referred to the US House of Representatives, per the US Constitution.

Here’s where US Democracy is further revealed as the ‘fig leaf’ it is. In the House of Representatives the vote for president is done by one vote per state, not by total representatives. 435 Representatives don’t vote if the election is thrown into the House, which has a majority of Democrat legislators. No. Each state in the House gets just one vote. All the states with a majority Republican state legislature get to cast one vote for president. With Republican politicians cowering everywhere, fearful of Trump’s 70 million Republican voters, guess how they’ll vote in the House?

And if Trump has more red state Republican majority legislatures–which he does–the majority of red states would out-vote blue states by a vote of around 27 or so to 23. Trump wins!

If this sounds incredible it is nevertheless arguably legal and politically possible. And we know Trump will go to any length over the next 60 days–regardless if it results in the destruction what’s left of even the fig leaf of Democracy in America. Even if it leads to a political breakdown of the system or violence in the streets between Trump’s supporters and the rest of the country’s voters and citizenry (which Trump would no doubt like to see as well).

By calling Michigan state legislatures to the White House today it is clear this is the trajectory Trump now has in mind. We should all be forewarned! The fight to restore what’s little left of American Democracy may just be beginning.

Dr. Jack Rasmus
November 19, 2020

On the lighter side, I was recently asked by a twitter friend why the US stock market is at record high levels and now more than fully recovered from its lows in March. I explained it was because the Fed so far this year has pumped more than $7 trillion into investors, bankers, and big corporations, who then conveniently diverted most of that ‘free money’ into financial markets, driving up stock price values to current record levels.

The Fed’s $7T breaks down thus:

* $3.2T of QE bond buying from the Fed so far this year (including $120B more each month for Nov.-Dec.)

* $1.5T more the Fed pumped into Repo markets for banks and shadow banks this past year

* $2T in corporations’ issuing new corporate bonds at super low interest rates since February, made possible by the Fed reducing interest rates to near zero

* $300B in corporations borrowing down their credit lines at banks due to Fed enabled super low rates.

That’s $7.0 trillion, compared to the $.5T that small businesses got in PPP loans and $.5T workers got in unemployment benefits and checks from the Cares Act in March which is now totally expired.

That ‘$7 for you and $1 for me’ reminded me of the 1960s Beatles Song, ‘The Taxman’–a period when the rich actually were taxed at least a little, unlike today, when Fed rates were always more than 5%, and there was no such thing as QE. The US alone has reduced investor-business taxes by $15 Trillion since 2001, including Trump’s 2018 tax cuts costing more than $4T. Then there’s another $650B in taxes that were cut just this past March in the Cares Act as well. QE and low rates have been the norm since at least 2009.

By the way, $15T in tax cuts since 2001 would reduce the federal debt almost exactly back to its $4T level in 2000. Federal Reserve bank monetary policies and the $15T tax cuts for business fiscal policies since 2001 together account not only for most of the US federal government’s roughly $20T debt before 2020, but also account for 3/4s of the escalation in income inequality in the USA since 2000.

So to illustrate the Fed’s role in providing ever increasing amounts of virtually free money to bankers & investors in order to pump up financial markets, I re-wrote the lyrics to ‘The Taxman’ song below and renamed the song, ‘The Fed Man’.

The new lyrics go like this (using the Beatles’ Tax Man musical score):

THE FED MAN

“One Two Three Four One Two….

“Let me tell you how it will be
No money for you, for them it’s free
‘Cause I’m the Fed Man, yeah, I’m the Fed Man

Should your bailout appear too small
Be thankful or you get nothing at all
‘Cause I’m the Fed Man, yeah, I’m the Fed Man

If you own a Bank, the money is free
If you own a Fund, whatever you need
If you own a Bond, I’ll guarantee
If you want more Stock, come see me

‘Cause I’m the Fed Man, yeah, I’m the Fed Man

Don’t ask me why I give them more
Just go and vote, we own the store


I’m the Fed Man, yeah, I’m the Fed Man

(Jack Rasmus
Lyrics, copyright 2020)

Critical_Hour_593_Seg_3.mp3

https://www.spreaker.com/user/radiosputnik/economist-says-gop-voter-suppression-sch

https://soundcloud.com/wpkn895/wpkns-election-coverage-2020 (Go to timeline 34:30 for my segment of the election night coverage)



For my assessment of the major ‘takeaways’ from the November 3 US elections, listen to my Friday, November 13, Alternative Visions radio show:

TO LISTEN GO TO:

http://alternativevisions.podbean.com

SHOW ANNOUNCEMENT

Dr. Rasmus reviews the significant political & economic takeaways 10 days now after the election. Then discusses the four dates in December that amount to milestones for Trump to try to overturn the election. How each offers an opportunity for Trump to reverse, or at least delay, the certification of the election and create more political and economic chaos in the interim. Rasmus briefly also discusses what’s going on with Trump’s firings in his Defense Dept and national intelligence agencies? Is he preparing a foreign policy ‘October Surprise’ in December? A review of key issues in the Supreme Court’s upcoming ACA decision & why tax cuts for the rich is really at its core. The Pfizer vaccine and its possible disappointment. The China-US Trade War deal one year after. The show concludes with comments on an early look at Bidenomics and why it will likely be Obamanomics 2.0 warmed over—and therefore insufficient to stimulate the economy in 2021

Media pundits and others have been deeply perplexed as to why so many Americans in this election–70 million in fact– nonetheless voted for Trump.

But it’s not all that difficult to understand. There are 3 major explanations: One economic. One health. And the third, and most important, a matter of culture and racism manipulated by clever politicians for the past quarter century at least.

The first explanation—economics—is that the red states (Trump’s base) did not ‘suffer’ as much economically from the recession as have (and are) the blue states and big urban areas. The red states shut down only in part and for just a couple weeks then quickly reopened as early as May. A few hot spots in New Orleans and Florida were quickly contained. By reopening quickly they economically minimized the negative effects of the shutdowns and quarantines. They would eventually pay the price in health terms for early reopening, but they clearly chose to trade off later health problems for early economic gains. At the same time they quickly reopened, the red pro-Trump states still received the economic benefits of the March-April Cares Act bailout that pumped more than a $trillion into the economy benefitting households directly–i.e. this was the $670 billion in small business PPP grants, the $350 billion in extra unemployment benefits, the $1,200 checks, and other direct spending on hospitals and health providers. The Trump states got their full share of the bailout, even if they didn’t need it as much after having reopened early. Finally, if Trump supporters lived in the farm belt sector of Red State America, they additionally got $70B more in direct subsidies and payments from Trump that was designed to placate the farm belt during Trump’s disastrous China trade war. That’s 3 main sources of added income the red states as a general rule received that the blue states, coasts, big cities elsewhere did not get. In short the economic impact of this recession was therefore far less severe in the geographic areas of the greatest concentration of Trump’s political support.

Second, Covid did not negatively impact the red states as much as it did the blue states and major urban areas of America—at least not until late in Sept-Oct after which much voting had already begun and political positions had hardened. And then when Covid did hit the red states late, it impacted relatively more the larger cities and not as much initially in the small towns and rural areas of Trump’s red states. Covid’s impact economically was therefore relatively worse in big urban areas, especially in the coasts.

But even more important than these relative economic and health effects, the continued support that exists for Trump in his base of red states—i.e. in the small town, rural, small business, and religious right areas—is grounded in the ‘ethnic’ composition of his mostly White European heritage followers who are fearful ‘their’ white culture is being overwhelmed by the growing numbers and diversity of people of color in America.

This fear is the foundation of his—and their—white nationalism which is really a form of racism. So too is their anti-immigration. It is anti-immigration directed against people of color–whether latinos, blacks, muslims or whomever. White European heritage, small town, rural, evangelical, small business ‘heartland’ of the south & midwest America sees ‘their America’ disappearing or at least having to share more equally with people of color America. The latter are now almost equal in population to White Europeans but are not equal politically or economically. They are knocking on the door and want in. They want their equal share.

But clever politicians have convinced White European America that it’s a zero sum game: what people of color America may get will be only at their expense! Sharing is not possible. Trump and others, who are manipulating this fear and discontent for their own political careers, have convinced them that it’s an ‘Us vs. Them’ zero sum game. That way those with wealth and real power redirect discontent from their four decades of obscene wealth accumulation at the expense of everyone else, white or non-white Americans. Whipping up and redirecting discontent into identity and racial identity themes means the super well off won’t have to share with either White European or non-White European people of color.

Pit the one against the other, while they–those of wealth and power–continue to ‘pick the pockets’ of both. That was, and remains, Trump’s strategy in a nutshell. It’s also the strategy of his wealthy backers. It’s the age old American ruling class racism ‘shell game’. Just now in the form of ‘old wine in new bottles’, as they saying goes. ‘America First’ means in effect White America of his political base comes first. Trump and financial backers and power brokers–like the Adelsons, Mercers, Singers and their allies–have convinced White European America in the heartland to be fearful and oppose equality for Americans of color elsewhere. That’s why Trump sounds very much like a ‘White Nationalist’, and even at times as pro-fascist because that’s the message of the far right as well. His theme of ‘Make America Great Again’ is really, when translated, make White European America safe again and stop the hoards of people of color taking ‘their America’ from them.

Here’s why they fundamentally support him: Trump has become their ‘bulwark’ against this demographic change which they fear above all else. That’s why Trump could do or say whatever he wanted and move increasingly to further extremes, and they’d still support him. They would support him even in dismantling what remains of truncated Democracy in America, if it were necessary in their view. And they still will continue to support him. Neither Trump nor Trumpism is going away. It has taken deep root in the 70 million, waiting for a resurrection in 2024 or even 2022.

All this is not unlike what happened in the USA in the 1850s decade. The USA is about at 1854 in terms of historical times and events. The 2024 election may therefore be even more ‘contentious’, should Biden and the Democrats fail to aggressively resolve the economic and health dual crises deepening this winter in America. Should Biden adopt a minimalist program and solution–in the name of a renewed ‘bipartisanship’ strategy aimed at placating Mitch McConnell’s Republican Senate–then ‘Bidenomics’ is doomed. It will result in a midterm 2022 election sweep return of Trump forces, maybe under the leadership of Trump, or maybe a Ted Cruz, or maybe a Marco Rubio. Or maybe some clever new face. A minimalist Biden program will suffer the fate of Obama’s minimalist economic stimulus program of January 2009, which resulted in a massive loss of electoral support for Democrats in the midterm elections of 2010 and in turn led to the loss of the US House of Representatives Democrat majority and then the Senate soon after. The economic consequences of that particular gridlock following that are all well known. There is a great risk of the same occurring in 2021-22.

The 2020 election looked in some fundamental ways a lot like 2016, with the differences today being the working and middle classes in the swing states of Wisconsin, Michigan, Pennsylvania flipped back to Democrats in 2020 after having voted for Trump in 2016. It was a 3 state flip. That flip was because Trump simply did not deliver on his 2016 promises to bring good paying industrial jobs back to those states after 20 years of free trade, offshoring, and the de-industrialization of the region. A good example of Trump’s failed promises was the Asian Foxconn Corp., maker of Apple iphone parts. Trump and Foxconn promised to bring 5000 jobs to the US upper midwest. It never happened. Foxconn’s operation in the US today is limited to only 250 jobs in a warehouse. So the upper midwest again slipped back by narrow margins to the Democrats. But if the Democrats now can’t deliver jobs either, they’ll just as easily slip back again in 2022 and 2024.

The other difference in 2020 from 2016 is the emergence of real grass roots movements in Georgia and in the southwest in Arizona-Nevada; Black folks and their allies in Georgia and Latinos and Native Americans in the southwest. Also new organizing and mobilizing of people of color and workers in places like Philadelphia, Detroit, Erie, Pittsburg, and elsewhere.

These new growing grass roots movements are the real political forces that determined Biden’s win, along with the working class and middle classes disenchantment with Trump’s failed promises. Biden’s win had therefore less to do with Nancy Pelosi’s strategy of targeting suburban white women, vets, professionals and independents. That strategy failed to produce any ‘blue wave’ whatsoever. In fact, it resulted in Democrat loss of seats in the House of Representatives, while wasting tens of millions of dollars on futile Senate races like that in Kentucky against Mitch McConnell. Just think if that money was spent in Georgia. If it was, there might not be the need to have runoff elections there this coming January for the state’s two Senate seats.

No, the Democrat leadership grand strategy was a definite failure; the strategy of mobilizing the grass roots in Georgia and the southwest, a strategy not supported much financially by the Democrat party leadership, is what has put Biden in the White House.

What remains to be seen is whether Pelosi, Shumer and the moneybag corporate donors of their party will understand what has really happened this election cycle and really why Biden won (and the House and Senate campaigns largely failed). If the leaders of the party now go the route of a minimalist program in 2020, as did Obama in 2009, they will no doubt come 2022 suffer a similar fate as Obama and they did in 2010. Then we will all be back to ‘square one’ with a resurgence of Trump and Trumpism once again.

The Democrats are at an historical crossroads. They can either understand the real forces behind the 70 million supporters who voted for Trump, or they can ignore history in the making and repeat history of the past of 2009-10 and subsequently suffer the same consequences in 2022 and certainly 2024. But don’t expect the media pundits to understand any of this, any more than they can even now comprehend why Trump’s followers number in the tens of millions despite his loss. They and Trump are not defeated yet. They have been merely ‘checked’ for a while.

Dr. Jack Rasmus
November 8, 2020

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Listen to my friday, November 7, Alternative Visions radio show in which I provide my post-election analysis of last Tuesday’s, November 3 US national election–as well as the state of the US economy this past week as it enters the post-election period.

I review the past week’s unemployment and jobs numbers reported by the US Labor Dept. and what’s the likely outcome now for fiscal stimulus negotiations–i.e. a much delayed and smaller (and insufficient stimulus) package is now likely. Also raised and discussed are questions: why did the Federal Reserve bank this past week refuse to extend loans to businesses that were at risk of insolvency? And why did the stock market this past week surge to new record levels after Tuesday’s election? My election analysis includes why the 2020 election looks very much like 2016, with minor shifts-but just enough to defeat Trump. And why Biden governing will look much like 2012-16 period. What is the likely composition of Biden’s future economic measures, amidst America’s continuing ‘Triple Crisis’ of failing stimulus, slowing US economy at year end, escalating Covid threat, and potential for serious political instability generated by Trump in the next 75 days until January 20, 2021. The show concludes with some potential (desperate?) but nonetheless possible political moves by Trump in coming weeks. The show concludes with my analysis why Trump continues to have such a large following (70m voting for him) despite his past actions, policies, and countless verbal missteps and why media pundits just can’t get it why Trump is not an individual but ‘Trumpism’ is a social movement not about to disappear.

TO LISTEN GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-election-analysis-economic-consequences/

In my article last week, ‘Why the Record Vote Turnout May Not Matter’, I predicted the election via electoral college would look very much like 2016: the 3 swing states (PA, MI, WI) would determine the outcome again, and maybe one other state could flip (either Arizona or, less likely, North Carolina). I predicted, as of a week ago, the electoral college vote was very close, with 244 votes for Biden and 248 for Trump.

As of last night, Nov. 3 late, it was exactly that, according to CNN. 44 to 248. This morning, Nov. 4, it’s come down to NV, AZ, WI, MI likely ending up for Biden once final votes are counted; and GA, NC likely for Trump. With Pennsylvania undetermined for days yet. And maybe weeks should Trump take legal action to stop the mail in vote count, which is likely.

As I also predicted last week, Trump came before the TV cameras late last night Nov. 3 and declared the election was a fraud, that the vote counting of mail in ballots should halt in all the swing states only, and that he was going to the US Supreme Court.

Democrats’ naive prediction during the election that they would carry several of the big red states: Texas, Florida, Ohio turned out, as I predicted in my article last week, to be ‘wishful thinking’. As I argued then, these states were long time notorious voter suppression states and would remain Trump’s. Georgia and Florida each already prevented the right to vote, or have impounded, hundreds of thousands of eligible voters in each of those two states, as reported by investigative journalist, Greg Palast.

As of noon today, Nov. 4, should Biden win MI, WI, NV, AZ, where he now leads, and also carry the one special district in Nebraska, he will then have 269 electoral college votes. He won’t win GA or NC. And Pennsylvania is undetermined.

So where could Biden get votes to put him over the required 270? Only one state left: Maine with its 4 votes.

If this scenario holds, the US election will be therefore determined by less than five votes. The country remains fundamentally split and divided.

The policy gridlock concerning economic stimulus will likely continue as a result, as the Senate appears will remain in Republican hands and Senate votes will be driven by the Republican right wing led by Rand Paul who wants no more stimulus but wants more austerity cuts to government spending.

Republicans in Senate will continue their stacking of the Federal courts, and will rely on the ideological partner of the US Supreme Court, with its 6-3 Trump majority, from time to time, to help them block and undermine legislation already passed.

In many ways the election map now looks very much like 2016, with one or so states flipping Democrat but not much change except two ‘blue wall’ swing states going Biden by very thin margins.

In terms of government policy to follow, however, the country will look more like 2012–with McConnell’s Republican Senate thwarting initiatives on economics (stimulus, health, jobs, taxes, etc.) by the US House of Representatives and President (presuming Biden wins).

Consequences for the US economy are not good. The chances are less than 50-50 that a stimulus bill of necessary proportions will be passed before January 2021, just as Covid worsens and dampens household spending and business investment. But big corporations will be happy with this continued gridlock, since it means it is unlikely their massive 2018 tax cut of $4 trillion plus will be reversed for another four years, as the McConnell Senate now prevents all efforts to raise revenues for stimulus spending.

Another important outcome of the election is that the Democrats have actually lost seats in the US House, but not yet control. They expected a ‘blue wave’ that did not occur. The Democrats also failed to take back the US Senate. And Biden as president has no clear mandate. They are in a very weak position to make changes but in a position to be blamed for the failure to make changes which will have negative impact on them in 2022 midterm elections.

The Democrats failure in general, apart from maybe squeaking out a presidential win, shows their election strategy was wrong. As I argued back in November 2018 after the midterms, their strategy of focusing on the suburbs and upper middle class professionals and independents, would not succeed in a general election. It hasn’t.

So where does the country go politically from here?

First, Trump will not go away. That means not just leave office quietly–but also Trump as a social-movement will remain and likely grow stronger as his base believes the election was ‘stolen’ from him as he so often warned. Trump is an unstable, reactionary social movement, not just an unstable individual.

Second, both political parties may split before 2024 (and certainly before 2028) causing a basic party realignment in the US.

Trump’s wing will grow more radical and possibly split from the Republican party should that party’s big corporate leaders use Trump’s loss as an opportunity to ‘take back’ their party. The Democrats may also split. If Biden and the corporate wing of his party introduce ‘go slow’, minimal program and measures in 2021 it may force the Sanders-Warren-‘Squad’ progressives to finally leave as well. After disastrous 2016 and 2020 campaigns it is clear the Democrats as a party cannot deliver change needed to confront the growing multiple crises–economic, health, climate, and political.

Third, this election and likely consequent crises in the US continuing now make it further clear that the American global economic empire has entered a declining stage. It began in 2008-09 but will now become more clear. China will continue to rise in power and influence. Europe will continue to decline and reorient from the US hegemony. More emerging market countries will shift away from the US.

The 2020 election has heralded in a new decade where fundamental changes domestically and internationally will now accelerate.

Dr. Jack Rasmus
Nov. 4, 2020

By Dr. Jack Rasmus
Copyright 2020

Mainstream media is pounding out an incessant drumbeat: ‘Get Out and Vote! Mail in Your Ballot! Do It Now! Vote Early!’

But what may well determine the outcome of the election on November 3 may not be the current record voter turnout now underway. That is, not how many actually vote. But rather how many votes get actually counted.

While Democrats are pushing voter turnout, Trump and Republicans are planning to prevent the counting of the votes that do turnout—at least in the three, or at most four, key swing states of Pennsylvania, Michigan, Wisconsin that will in the end determine the results of the 2020 election in the Electoral College.

If the Electoral College were to cast its votes today Trump and Biden would be virtually tied!

Contrary to the mainstream media and the popular vote trend, Biden does not have a comfortable lead in Electoral College votes. By this writer’s estimate, Trump has 248 Electoral College votes, while Biden has 244! Barely 40-50 potential Electoral College are therefore actually ‘in play’ as they say. These 40-50 are in the true swing states: Pennsylvania, Michigan, and Wisconsin that together account for a total of 46 votes. The three are also the states in which Trump’s legion of hundreds of lawyers have been preparing for weeks to demand from pro-Trump recently appointed judges that they halt the counting of mail in ballots.

That 248 to 244 close tie in the Electoral College today all but ensures that Trump moves forward on November 3 to implement his plans to stop the mail in ballot vote count in the key swing states. Further encouraging that plan is the fact that those same three swing states don’t start counting mail in ballots until midnight on November 3. Trump could potentially stop the count of virtually all the mail in ballots in those key swing states.

The Electoral College As Bulwark Against Democracy

The Electoral College is an abomination on Democracy. Nevertheless, it will determine the outcome of the 2020 election less than a week from now.
Most election polls, according to mainstream media, show Biden has a commanding lead in the popular vote of 8% to 10%. But the popular vote is irrelevant in America’s 21st century truncated Democracy. All that matters is the total Electoral College vote and which candidate wins a total of 270 Electoral College votes across all the 50 states wins the November 3 election.

Wait. Check that. All that matters is the Electoral College count in the three swing states this time around. Well, let me correct that further: All that matters is the mail-in ballot vote count in those three states.

Trump plans to declare himself the winner late evening November 3, or at latest early morning November 4—i.e. well before the mail in ballots are counted in those 3 states. Before the sun comes up on November 4 he’ll launch his hundreds of lawyers already ensconced in those states—and McConnell’s handpicked judges there—to stop the mail in ballot counting with preliminary injunctions and other legal legerdemain! That will be done before most folks wake up for breakfast on the 4th. The injunctions and legal motions filed in federal district courts will then be quickly kicked upstairs to the Appeals Courts, both dominated by McConnell’s rushed appointees in recent years. The Appeals Courts will pass it on eventually to Trump’s now 6-3 majority US Supreme Court to rule!

That’s what American electoral Democracy has come down to: the next president will be determined by mail in ballots in just three states; more correctly, whether those mail in ballots in those three states are counted or not.

CNN’s Election Myopia

Both the pro-Trump right wing media like Fox news, as well as the more mainstream CNN, like to play the ‘who’s winning the electoral college’ vote game every day. But their guestimates are no better than yours or mine.

CNN has its daily color-coded ‘Electoral Map’ showing which states are firmly for Trump or Biden (red or blue), which states are leaning toward Trump or Biden (light blue or pink), and in which ‘battleground’ state (yellow color coded) is neither candidate leading.

Amazingly CNN has Biden leading with 290 solid or strongly leaning ‘blue’ states. To get to 290 CNN assumes that Biden will eventually win the light blue ‘leaning’ states of Pennsylvania, Michigan, Wisconsin, Arizona, Nevada, Colorado, Minnesota, and even New Hampshire. Apart from these ‘leaning blue’, Biden has 204 other electoral college votes solid blue and thus wrapped up for Biden.
The eight states ‘light blue’ and leaning Biden total 86 electoral votes which, when added to the solid 204, result in CNN’s assumed 290 for Biden. So it looks like Biden’s a strong lead in the Electoral College, per CNN analysis. Of course, CNN also assumes all votes for Biden will be actually counted, including mail in ballots.

But will all the ballots get counted? Or will the SCOTUS suspend and stop the counting of mail in ballots—just as it did ballot recounting in 2000 in Florida?

All Trump has to do is succeed in stopping the mail in ballot vote counting in just Pennsylvania (20), Wisconsin (10) and Michigan (16) and Trump wipes out 46 of Biden’s 290 total, leaving Biden with just 244 electoral college votes and well short of the required 270 to win!

CNN assumes further the remaining 5 states’ leaning blue’ actually go blue: That means Colorado (9), Arizona (11), Minnesota (10), Nevada (6), and New Hampshire (4). It also assumes all (4) votes from Maine go for Biden—i.e. are not ‘split’ between Biden and Trump which is possible in only that state (and Nebraska which also can split its 5 votes).

This is a list off some big assumptions! That is, Trump won’t succeed in stopping the mail ballot count in the 3 states; the 3 states will all go Trump on November 3; and the other 5 ‘leaning blue’ states will all go Biden.

Doing the Electoral College math still further, Trump only needs to stop the mail ballot count in two of the three states of Michigan, Wisconsin, Pennsylvania in order to deprive Biden of 270. And should no halt to mail ballot counting occur in any of the three, Biden still needs to win two of the three fairly nevertheless.

In other words, halting the vote count in just two states is all it will take to give Trump another four years. If you think Trump, McConnell & friends haven’t done this calculation, you’re mistaken!

CNN’s analysis of Trump’s solid and ‘leaning’ red states is no less naïve than its analysis of Biden’s.

It has Trump with only 163 solid red state electoral votes, with Texas’s 38 votes indicated as only ‘leaning red’ toward Trump. So Trump only has 201 electoral college votes.

CNN then describes Florida (29), Georgia (16), Ohio (18), and North Carolina (15) as neutral ‘battleground’ states that are up for grabs. Really? Who believes that? These 5 states are the notorious five (when including Texas) states that have a long history of voter suppression by various means. With no limits put on their vote suppression activities for years, including the last four in particular, these five states will almost certainly go for Trump again. Their legislatures are all solid rabid Republican! And if anything they’ve intensified their voter suppression activity since 2016.

The notorious five are ‘battlegrounds’ only in CNN and the Democrat Party’s wildest dreams. Hundreds of thousands of eligible, potential Democrat voters have been purged from their voting rolls in recent years and months. Maybe millions. These five are where voters cannot register by mail, nor at the poll on voting day. Where mail in ballots must be received by election day, not merely post marked before. Where drop boxes for ballots are limited one to a county sometimes covering hundreds of square miles. Where witnesses must accompany a voter to get registered. Where a de facto poll tax must be paid in many cases. Where Trump supporters are allowed to ‘stand guard’ at polling sites with their guns if they want, in order to intimidate voters. Where votes in pro-Democrat precincts are often ‘lost’. Where voting machines supposedly break down when voters are kept waiting in line for six and more hours to vote. The list is long and disgusting. No. These five notorious voter suppressor states are not battlegrounds. They’re Trump’s. They are not ‘yellow code’ battleground states; they are Trump states kept in his camp by suppression and voter intimidation.

Voter suppression in these five allowed Trump to win in 2016, just as much as Hillary’s terrible campaign permitted Trump to grab Michigan, Pennsylvania, and Wisconsin by smaller margins. Eight states turned the election in 2016. The five voter suppressor states will repeat. And instead of Hillary giving away the three upper Midwest swing states, this time around Trump’s plan is to deny them to Biden by stopping the mail in ballot vote count there.

When the notorious ‘vote suppressor big five’ states’ 116 electoral college votes are added to Trump’s solid 132 small red states’ votes, Trump has 248 potential votes—to Biden’s 244!

That means the election in the Electoral College today is a virtual tie at 248 to 244! It’s not CNN’s 290 to 163!

Both Biden’s and Trump’s campaign strategists know the election will be close, very close. The virtual tie with less than one week to go explains in large part why both Trump and Biden are paying attention to Maine and Nebraska, both making stops there despite their minimal 4 and 5 electoral votes, given that both states are the only ones allowing a split in their electoral college votes across candidates. Picking up one or more votes from either may play a role in this election before it’s over as well. Trump knows it. So does Biden.

In summary, what the election appears coming down to is two things:

First, will Trump prove successful in halting the mail in vote count in at least two of the three key states leaning blue: Michigan, Wisconsin, and Pennsylvania? If so, he wins.

Second, will the notorious five voter suppression states—Florida, Georgia, North Carolina, Ohio, and Texas—pull off enough suppression in order to deliver their states’ electors to Trump yet again? If they don’t, Biden wins.

In other words, it’s not getting more voter turnout that will determine the election. It is voter suppression plus vote count prevention that together will determine the fate of the USA for another four years! That’s what Democracy in America has come down to.

Let’s Fundamentally Restructure the College & the Supreme Court


None of the above abomination of Democracy would be possible were there no Electoral College; and if the US Supreme Court had not have become in recent decades a handmaiden of the right and business interests.

Trump’s strategy to pull off an electoral coup d’etat would not be possible without both institutions working ‘hand in glove’, as they say, to thwart the will of the majority of the American people.

The two institutions, captured by a president like Trump, now make Trump’s planned legal coup a possibility.

So how do we change these two great anti-Democracy enabler institutions—i.e. the Electoral College and the Supreme Court?

Growing popular today is the movement to amend the US Constitution to abolish the Electoral College. But that requires the vote of three fourths of state legislatures and therefore many of the small ‘red’ states in Trump’s camp who enjoy a preferential advantage and influence beyond their population numbers due to the Electoral College. They are not about to vote to eliminate their advantage by voting for a Constitutional amendment to abolish the Electoral College.

But the Electoral College doesn’t need to be abolished in order to break the stranglehold of the small red states! There is another way to radically restructure it to re-balance it to reflect the population changes and popular vote.

The Electoral College is composed of 535 members, one each for the number of US House of Representatives plus 2 Senators from each state. That’s 435 Representatives and 100 Senators. The 435 representatives is based on the population of the country. The US Constitution calls for adding representatives as the population rises. The last time Congress did that was in 1913. It is long overdue to add representatives and House districts to reflect that increase in representatives. That would result in more representatives in the more populous blue states, and therefore more blue state Electors. That would effectively break the back of the small, red state lock on the Electoral College and in turn end Trump-Republican red state total electors advantage in presidential elections—an advantage that consistently now is out of line with the popular vote for the presidency.

Another, less effective way perhaps is just to add more states, which would add more electors by adding more representatives and Senators alike. Proposals are already floating around to add Washington DC as a state and perhaps even Puerto Rico if its citizens so voted to do so.

Either or both of these alternatives to change the current Electoral College could result in a less lopsided and imbalance favoring smaller, less populous, Trump dominated red states. Just doing what the Constitution calls for, which Congress has avoided since 1913, is the better restructuring solution.

And what about the growing imbalance favoring the radical right in the US Supreme Court? Public discourse is already raising the possibility of adding 2-3 or more SCOTUS judges, from the current 9 to 11 or 12. Congress has the Constitutional authority to do that since it created the Supreme Court, not the US Constitution. But reform should go well beyond just adding numbers. The terms of the judges should be reduced from lifetime to no more than 10 years. And SCOTUS judges should be elected not appointed. 12 or 15 districts could be created across the USA and a judge elected from each. And what gets elected can get recalled. The founders of the country and framers of the US Constitution feared that lifetime appointments of what amounts to nine never elected lawyers could thwart the will and sovereignty of the American people. And that’s what’s been happening in recent decades and is now happening today.

Without a basic restructuring—if not outright abolition—of the Electoral College, American Democracy will continue to result increasingly to produce abominations like the 2000 election and its likely repeat in the upcoming November 3 election. Instead of one person one vote—i.e. true Democracy—we keep getting presidents elected without the support of the majority of the American people. At some point that will explode.

And the same may be said for the rightward and pro-corporate drift of the US Supreme Court. It has already lost serious legitimacy in the eyes of the majority of the American people. And it’s about to exacerbate that loss in the wake of next week’s election when it likely comes to the aid of Donald Trump to halt the mail ballot vote counting.

The Court’s myths about being a co-equal branch of government created by the US Constitution, with the authority to overturn the laws passed by the Congress, and with the usurped power to interfere with elections and ‘select’ a president will eventually blow up in the face of the US elite, as Americans come to understand the Supreme Court’s true origins and its truer functions—i.e. origins and functions that have little to do with ensuring Democracy and, increasingly in recent years, far more to do with ensuring its decline.

It is worth concluding one more time: next week’s election is not about ‘getting everyone out to vote’. It’s going to be about preventing the full counting of that record vote turnout!

Dr. Jack Rasmus
October 28, 2020