A week ago in Minneapolis, for all the world to see, a black man, George Floyd, was murdered by a policeman, Derek Chauvin. Protests broke out in nearly 100 American cities, and even worldwide, and have continued now for more than a week.
Murders of black men by police in America are not new. They are endemic. So why the deep, widespread, and sustained protests this time?
Certainly the nature of this particular murder explains in large part the especially angry protests and response. But it’s not the entire explanation. Youth of all color, race and ethnicity are leading the demonstrations.
A Sadistic, Merciless & Intentional Killing
The killing of George Floyd was a particularly reprehensible police murder. It was clearly intended. It was merciless. It was sadistic. As the world has watched, Floyd was cuffed, face down on the street, pleading for his life. And the more he pleaded, the more Derek Chauvin, the cop, seemed determined and unrelenting, intent on keeping his knee on Floyd’s neck. The first six minutes, as Floyd pleaded for his life, even pitifully calling out for his mother at the end, a sure indication he felt he was nearing his last moments of life. But for almost 3 minutes more Chauvin’s knee remained after Floyd had already lost consciousness.
What angers those who observed the murder most is the lack of mercy shown by Chauvin and his three complicit partner officers. What they showed was clearly an intention to kill. Chauvin appeared almost to take pleasure in keeping his knee on Floyd’s neck for three minutes more after he lay motionless. That made it a particularly sadistic murder.
It suggested to observers of the video, especially to black folks, that the police in 2020 will show you no mercy. Plead all you want for your life when cuffed, helpless, face down in the dirt. They’ll still murder you. And apparently enjoy it in the process!
The murder act was followed soon by another typical series of events, also all too often occurring in America today: Minneapolis police and the city’s district attorney (DA) office prevaricated and hesitated taking action, only responding when protests erupted. That delay suggested a typical cover up was underway, as is so often the response of local authorities in such cases.
There’s a big problem in America today: the cozy relationships that exist between police and DA offices. Both ‘scratch each others’ backs’, as the saying goes: The DA depends on police testimony to get convictions in court; in turn the DAs go light and help protect the police in exchange for their favorable testimonies. Police unions frequently provide significant campaign donations to District Attorney candidates that favor them, creating a kind of political ‘conflict of interest’ by DAs. Coroner offices play a contributing role, by providing whatever autopsy results are necessary to support the DA. Carefully selected Grand Juries, should legal challenges to murder get that far, then endorse their joint mutual cover ups. It’s an institutional arrangement that too often thwarts the process of Justice.
So it’s not just an occasional racist cop. It’s institutionalized racism. A pattern that repeats over and over again. This is what the protesters of Floyd’s murder also realize and demonstrate against. They’ve seen it before. Time and again.
Black folks today know that pleading for your life when about to be murdered—like pleading for Justice after the fact—will more often than not fall on institutional deaf ears when police brutality is concerned. No mercy and no justice come in the same institutionalized racist package.
Protests As Acts of Solidarity
The immediate and increasingly angry protests that followed the murder of George Floyd are not due solely to the police killing of Floyd. The media would have you think so. That it’s only about the murder of Floyd and policy brutality. The politicians would like you to think so. All those leaders calling for calm and dialogue want you to believe so.
Floyd may have been murdered in nine minutes. But many youth in America today, especially but not only youth of color, feel their own lives are slowly and steadily being drained on a daily basis, sucked dry by the unfairness and injustice of ‘the system’. They feel that system—a capitalist system that increasingly rewards the wealthy and ignores the rest as never before in its history—has its knee on their necks too. And that system, that knee, is no less unrelenting, shows no mercy, and has no intent on relieving the pressure.
Working class youth of all color today know their lives are being destroyed more insidiously, step by step, year by year, as they struggle to survive: laid off and moving from low paid job to job, accumulating crushing debt laid upon debt, lacking minimal health benefits, changing apartment to apartment as rents are continually raised, with no hope of ever having a normal family life, of ever paying off student loans, in effect having to live a 21st century form of economic indentureship, a second or even third class economic citizenship—while they watch multimillionaires and billionaires almost exponentially add to their wealth.
In just the last three years under Trump, corporations registered record profits, wealthy investors and 1% were given $4.9T in tax cuts and $3.4T in stock buybacks and dividend payouts. While the rich and their corporations get richer, the rest make due with stagnant or falling wages, working two and three jobs, and constant job loss and turnover.
All those protestors on the streets this past week—virtually all young folks—are not just demonstrating against the murder of Floyd and institutionalized racism. That’s the tip of the protest spear. But it’s more than that. It goes deeper than that. There’s a deeper frustration and desperation behind it all, affecting tens of millions but especially American youth.
The youthful protesters looked at Floyd and they saw themselves. The protests are thus an eruption of social solidarity among wide sections of American youth! Not just among black and minority youth but American youth in general. Look at the composition of the demonstrators city after city. They are mostly Millennials and GenZers of all races and ethnicities and gender who feel they have been left behind by ‘the system’. Left out and declared disposable. They are virtually all working class youth. What the protests show is that Class and Race are coming together! Especially among the youth.
They are fearful of police brutality, especially blacks and youth of color. But they are fearful as well of being condemned to a life of low paid, no benefits, insecure and futureless part time and temp work. Working often two and even three jobs cobbled together just to get by.
And now, with the advent of the Coronavirus pandemic, even those mostly low paid service jobs have been wiped out by the virus and recent economic crash—many of which, they sense, aren’t coming back soon or even at all. The Congressional Budget Office today, June 2, 2020 announced it will likely take ten years for the jobs now being lost to come back, and many won’t return at all! There will be no V-shape quick recovery. It will be W Shape, extended over a decade or more, with periodic brief and weak recoveries followed by repeated relapses and recessions—whether or not there are subsequent waves of the virus. The economic die is cast. The US economy (and global) have entered a phase of chronic, long run decline.
What the protestors don’t realize yet, but will soon, is that more of their low paid jobs with no future are about to be wiped out by the coming Artificial Intelligence revolution and automation now ramping up. According to McKinsey Consulting, AI will eliminate 30% of all occupations in the next five to ten years. Even their low pay, futureless service jobs will be eliminated.
Add to all the above fears of the worsening climate crisis the protesting youth know they will have to live through. And to that the growing public awareness of a deepening political crisis in America, as the nation drifts into tyranny driven by the Trump wing of the US political elite.
The USA has entered a ‘triple crisis’: health care & environment, jobs and the economy, and a growing political crisis of Democracy in America itself. The protestors know this. They sense and feel it and are growing frustrated, angry and desperate. The youth of America are growing increasingly desperate. All that ‘social crisis kindling’ is feeding the protests. Police brutality, institutional racism, and murder is just the spark that has set it all off. It’s not just about George Floyd any more.
WHAT TO DO? SOME PROPOSALS
So what’s the solution(s)? To escalating police murders; to white supremacist provocateurs who are intent on stoking a race war (as they say in their own words); to the sub-classless looters that prey upon the protests and demonstrations; to the local institutionalized racism. What might be done?
It’s no longer acceptable to say, as elites of both parties and their media declare daily, that demonstrators should calm down, go home, and let’s dialogue about how to reform the police. That’s been done before. Many times. With little result. It’s time for black folks, protestors and demonstrators on the streets today to develop their own independent solutions to the problem of police brutality.
There are three general actions that might be undertaken immediately to confront institutional racism in America that chronically gives us murders of George Floyds:
1. Break the iron nexus between Police Departments and District Attorney Offices
2. Launch a National ‘Policing the Police’ Movement
3. Form Local Community ‘Committees of Safety’
At the core of institutional racism is the relationship between local police departments and District Attorneys. The police rely on the DAs to smother, delay and defuse investigations and prosecutions of police who have engaged in brutality and murder against black and other minorities. The DAs depend in turn on police testimony in court cases to enable them to win their cases and advance their personal careers. In exchange for police assistance, the DAs go light on police charged with brutality. Knowing they are covered, police feel more inclined to shoot first and not worry about the outcome. It’s a ‘scratch my back-I’ll scratch yours’ mentality that permeates both institutions—police departments and DA offices—nearly everywhere in America today.
Coroner’s offices play a secondary but important role in the process when a murder is involved. They assist the DA by rendering a decision of the cause of death that conveniently points away from the police action in question. The decease died of a heart attack and had underlying heart problems is often the official cause of death. It wasn’t choking of the defendant by the police. It was a heart attack that would have occurred regardless of the choke hold. The guy had a bad heart or some other underlying condition was the cause of death—not the police tactic employed.
Another institutional player in the charade is often a local Grand Jury. This archaic institution is nothing like a real ‘jury’, although called that. It is a selected group of often pro-police and so-called ‘upstanding citizens’—meaning more often than not white, conservative and business oriented. Grand juries often rule to throw out charges, giving the DA cover not to proceed to prosecution. Should the DA still proceed, the charges are reduced from murder to something less based on Grand Jury lesser recommendations. If convicted, the police in question’s penalty is often reduced to only employment termination. But he is then eligible to go to another police dept. and rehired. Police departments often have a silent understanding to rehire each other’s ‘bad apples’. Thus a cop with a long record of abusing blacks and minorities continues to work somewhere ‘down the road’. It’s not unlike the Catholic church simply moving some pederast priest to another parish.
Breaking the Police-District Attorney Cover-Up Nexus
• Local DA’s must be prohibited from prosecuting their local police in cases of racist related brutality and murder. The prosecution responsibility must be moved to an independent source outside the county or city.
• Police department unions and organizations should be prohibited from contributing to DA election campaigns
• Coroners should be selected by the murdered party’s family to ensure impartiality
• Grand Juries should be abolished, especially and starting with cases involving police brutality and killing
• A police discharged for cause, involving a racist brutality case, should be prevented from rehire by another police department anywhere
Launching a national ‘Policing the Police’ Movement
• A national ‘Policing the Police’ movement should be launched. Wherever a cop confronts and stops someone, the public should use smartphones or other photo devices to record the interaction. This is now done haphazardly and occasionally. There should be a general education effort nationwide to get everyone to engage in the practice of video recording police whenever they see a police interaction with any citizen.
• An independent national database of photos and video recording of confrontations should be created.
• A public education campaign should be launched as well, encouraging the public to immediately send all videos to the independent national database.
• The public database should be accessible to everyone online
Forming Local Community ‘Committees of Safety’
• All cities should form local community ‘Committees of Safety’ to police the police, to gather information on confrontations and make the information available to the general public
• The Committees should organize protests and demonstrations and coordinate with other Committees outside their local area to organize larger protests and demonstrations
• During protests and demonstrations, Committee members should undertake the task of identifying, confronting, and rooting out provocateurs. And distribute photo leaflets of known white supremacists and provocateurs to participants in the protests and demonstrations
• The Committees of Safety should publicize to the community at large those identified as looters during the protests and demonstrations
• Committees should endorse and run candidates for city councils, city managers, DAs, and local elected judgeships that are committed to, and supportive of, black lives matter and other minority civil rights
• Committees would raise demands for local ordnance changes and state wide legislation to protect the rights of demonstrators, and organize recalls of politicians who do not
• Committees would undertake other measures as necessary to ensure the safety of protestors from provocateurs, white supremacist violence, and other proponents of violence against people or property during demonstrations
Many of these proposals are not new. Others are being introduced by protestors right now. But the point is the protests and demonstrations should be taken to the next organizational level. They cannot go on as just spontaneous events. They will eventually dissipate without organization. Or be captured by provocateurs and looters. Or manipulated by politicians for purposes of personal election and careers. Or all the above.
Without organization, the ‘I Can’t Breathe’ anti-racist, anti-policy brutality movement that has swept the country runs the risk of eventually fading—just as had other promising popular movements like ‘Occupy’ in 2011 and the ‘Yellow Vests’ in France of a few years ago. Without organization, the provocateurs and looters will also increasingly displace the protestors in the media–providing cover for a ‘law and order’ right wing reaction that will use the violence to crush the demonstrations while ushering in still further restrictions on civil liberty rights of assembly and expression. Nor will the police and politicians rid the protests of provocateurs and looters. The protestors must do so themselves. But that cannot be done without organization.
The other even greater risk, absent organization, is that mainstream politicians will divert the energy and anger of the protestors into channels to get themselves elected.
Organization is needed as well simply in order to expand and build the protests and demonstrations, and to ensure they continue with ever larger turnout.
Forming local community ‘Committees of Safety’ are the core organizational element necessary for building the organizational power of the protests and demonstrations. Launching a ‘policing the police’ movement is a way to connect the general ranks of the demonstrators—and the public in general—to the work of the Committees of Safety. And the Committees and the public Policing the Police movement are together the means by which to independently politically attack the institutionalized racism embedded today in the relationships between police departments, district attorneys, coroners, and Grand Juries.
Breaking institutional racism requires an independent political movement, with a grass roots organizational structure. That independent movement is on the streets of America right now. Will it take the movement to the next level, a level necessary to break the embedded local institutions of racism?
Dr. Jack Rasmus
June 3, 2020
This past week two events highlighted economic news (along with the continuing rise of jobless, now approximately 50m). The first event of note was the intensifying debate within Congress on the next economic mitigation-stimulus bill called the Heroes Act. With corporations fat with cash from the bailout and wage earning households facing the expiration of effects from income checks and extra unemployment benefits, Congress and the two parties are at a crossroads. McConnell and his Republicans don’t want further stimulus for wage earners. He and they want ‘to wait and see’ the effects of the prior $1.74T bailout of business and the ‘opening of the economy’ first. Meanwhile, Pelosi and the Democrats want more income stimulus and unemployment benefits extended to January 2021 for households now beginning to face a ‘fiscal cliff’. The choice is whether a floor is still extended under 120m households to prevent economic depression, or whether that floor is allowed to collapse. The US economy is at a crossroads the next 90 days that will determine whether we experience just another ‘great recession’ or slip into a bona-fide great depression. Today’s Alternative Vision show discusses the state of the ongoing debates and concessions in Congress with regard to the Heroes Act.
The show also leads the hour with a comment about the second major economic event of the past week: Trump’s pre-declaration of economic war with China. Using the virus crisis as an excuse and diversion for his abject failure to lead the US during the current health and economic crisis, Trump threatened financial warfare and sanctions on China. How the US employs financial measures to attack other economies and countries is noted, including manipulation of the dollar (the world’s trading and reserve currency), its control over the international payments system (the SWIFT system), and sanctions to prevent other countries and economies from trading with its imperialist target (e.g. China in this case). These and other levers of financial power are increasingly employed by the US in the 21st century. With the US-China trade agreement of last December in shambles, and China not buying US goods nor likely to buy much in the future, Trump now sees China as a convenient scapegoat in an election year.
https://alternativevisions.podbean.com/e/alternative-visions-heroes-act-negotiations-us-financial-imperialism-china/
Today’s show continues in more depth the discussion last week on the pending Heroes Act in Congress. Is it another mitigation bill, stimulus bill, or a growing subsidy for business bill. What are Republicans proposing to change the original House proposals in the bill? Senate Democrat responses in progress? What’s the true unemployment rate in the US today. Why has the $1.7T in corporate loans under the March ‘Cares Act’ not being taken up by big business? And why is only $95B of the Fed’s $1.7T liquidity provisions to banks being used so far? Is the bailout of households being converted to more subsidies for business? The show concludes with a discussion of how US financial imperialism works, and why Trump is now preparing to leverage it against China marking a new stage in the China-US economic war. Some commentary on Trump’s emerging 2020 election strategy: election fraud.
The show also leads the hour with a comment about the second major economic event of the past week: Trump’s pre-declaration of economic war with China. Using the virus crisis as an excuse and diversion for his abject failure to lead the US during the current health and economic crisis, Trump threatened financial warfare and sanctions on China. How the US employs financial measures to attack other economies and countries is noted, including manipulation of the dollar (the world’s trading and reserve currency), its control over the international payments system (the SWIFT system), and sanctions to prevent other countries and economies from trading with its imperialist target (e.g. China in this case). These and other levers of financial power are increasingly employed by the US in the 21st century. With the US-China trade agreement of last December in shambles, and China not buying US goods nor likely to buy much in the future, Trump now sees China as a convenient scapegoat in an election year.
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TO LISTEN GO TO:
https://alternativevisions.podbean.com/e/alternative-visions-heroes-act-negotiations-us-financial-imperialism-china/
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SHOW ANNOUNCEMENT
Today’s show continues in more depth the discussion last week on the pending Heroes Act in Congress. Is it another mitigation bill, stimulus bill, or a growing subsidy for business bill. What are Republicans proposing to change the original House proposals in the bill? Senate Democrat responses in progress? What’s the true unemployment rate in the US today. Why has the $1.7T in corporate loans under the March ‘Cares Act’ not being taken up by big business? And why is only $95B of the Fed’s $1.7T liquidity provisions to banks being used so far? Is the bailout of households being converted to more subsidies for business? The show concludes with a discussion of how US financial imperialism works, and why Trump is now preparing to leverage it against China marking a new stage in the China-US economic war. Some commentary on Trump’s emerging 2020 election strategy: election fraud.
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Listen to my recent radio interview with ‘The Critical Hour’ explaining why current US jobless are 50 million: 40m getting benefits+7.3m in the pipeline applying+5m more ‘not in labor force’ and thus not calculated in unemployment numbers.
Also, what’s going on in current negotiations in US Senate to end $600/wk supplemental unemployment benefit in July and replace it with a massive wage subsidy to business–US govt to directly pay business 80% of wages up to $45k per year or more! Is this the beginning of the end of unemployment insurance program? Why Senate Democrats are falling for the Republican drive to replace unemployment benefits with subsidizing business wages. .
Critical_Hour_484_Seg_2.mp3<br />
Also, what’s going on in current negotiations in US Senate to end $600/wk supplemental unemployment benefit in July and replace it with a massive wage subsidy to business–US govt to directly pay business 80% of wages up to $45k per year or more! Is this the beginning of the end of unemployment insurance program? Why Senate Democrats are falling for the Republican drive to replace unemployment benefits with subsidizing business wages. .
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TO LISTEN GO TO:
Critical_Hour_484_Seg_2.mp3<br />
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Watch my 60 minutes May 27, 2020 interview on the US economy with ‘Other Voices’ TV, Paul George.
TO Watch GO TO:
https://youtu.be/M70H0ziTovc— /wp:paragraph –>
TO Watch GO TO:
https://youtu.be/M70H0ziTovc— /wp:paragraph –>
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Mainstream economics consistently fails to predict the future. I’m talking about those ‘schools’ of mis-thought, ranging from Paul Krugman on the ‘left’ to Glenn Hubbard and other apologists of business and neoliberalism on the ‘right’.
One of the favorite myths they perpetrate is that ‘wages are sticky downwards’. That means that in conditions of recession or worse, because workers won’t accept lower wages the recession tends to continue. If only workers would allow wage reductions it would mean business would have more disposable income (from wage cost savings) on hand. Business would then reinvest the extra income. Investment would rise. Workers would be rehired. Wage income would then recover and the economy would grow from more investment and consumption.
This fiction has ruled for more than a century. The economist John Maynard Keynes debunked it in the 1930s. But it was retained by the mainstream economics profession nonetheless, even to this day. Just read most of the entry college level textbooks. It’s still there. Along with at least a dozen other false propositions (like free trade benefits all; inflation is caused by too much money chasing too few goods; income inequality is due to workers not educating themselves and making themselves more productive; business tax cuts create jobs–and a host of other nonsense statements with no support in reality.
The notion that ‘wages are sticky downward’ is a clever way to argue that workers are responsible for the lack of a quick recovery from a recession. If they only would reduce their wages it would all be ok in a short while.
But take a look what’s going on right now. As of late May 2020 at least 45 million American workers are unemployed. In just two months they have lost $1.3 trillion in income. More than $1 trillion due to unemployed. Another $260B due to shorter hours of work. That’s a wage reduction of -$1.3 trillion! As in all recessions, workers do experience severe wage reduction–in joblessness (no wages), shorter hours of work, cuts and loss of benefits, lower pension contributions by employers, wage theft, etc. etc. So wages do fall, and are falling today faster and deeper than ever. And is business and investors spending and investing given the wage reductions? No. They’re hoarding the $1.74 trillion in Congressional loans and grants bailouts. And hoarding the $650 billion in business tax cuts also in the bailout legislation thus far (which one hears very little about in the media, I might add).
As journalist David Cay Johnson just revealed in a piece today, the short term cash deposits by business in just institutional money funds (only one source) has risen from $2.3 trillion before March 1, 2020 to $3.3T today. That’s a $1T rise in cash deposits by businesses, just in institutional money funds. More is being deposited in commercial banks. The long run average of business deposits in commercial banks has been around 5% (6% under Obama and 4.6% under Trump 2016-19) to 15.8% since March 1. Businesses and investors are hoarding their cash and stuffing it in their short term accounts in banks, funds, and who knows where else, on and offshore. No doubt some of that will be committed at some point to stock buybacks, dividend payouts, mergers & acquisitions, derivatives speculation, and all the rest of the financial gambling that in the 21st century defines capitalism. Don’t expect much to get into real investment that increases production, requiring the rehiring of workers, that generates wage incomes.
So wage cuts and reductions, now underway, will not result in renewed business investment and general rehiring of the 45 million laid off. Wage cuts don’t result in real investment and growth.
The nonsense economics notion that wages are sticky downwards is just pure economic bullshit today, as it has always been! And so is the parallel mainstream idea that if you can just find a way to boost business cash (via tax cuts or bailout loans) it will lead to economic recovery as well.
Dr. Jack Rasmus
March 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, where the empirical record on wages, investment, taxes, employment thoroughly debunks the various myths and misrepresentations of mainstream economics.
One of the favorite myths they perpetrate is that ‘wages are sticky downwards’. That means that in conditions of recession or worse, because workers won’t accept lower wages the recession tends to continue. If only workers would allow wage reductions it would mean business would have more disposable income (from wage cost savings) on hand. Business would then reinvest the extra income. Investment would rise. Workers would be rehired. Wage income would then recover and the economy would grow from more investment and consumption.
This fiction has ruled for more than a century. The economist John Maynard Keynes debunked it in the 1930s. But it was retained by the mainstream economics profession nonetheless, even to this day. Just read most of the entry college level textbooks. It’s still there. Along with at least a dozen other false propositions (like free trade benefits all; inflation is caused by too much money chasing too few goods; income inequality is due to workers not educating themselves and making themselves more productive; business tax cuts create jobs–and a host of other nonsense statements with no support in reality.
The notion that ‘wages are sticky downward’ is a clever way to argue that workers are responsible for the lack of a quick recovery from a recession. If they only would reduce their wages it would all be ok in a short while.
But take a look what’s going on right now. As of late May 2020 at least 45 million American workers are unemployed. In just two months they have lost $1.3 trillion in income. More than $1 trillion due to unemployed. Another $260B due to shorter hours of work. That’s a wage reduction of -$1.3 trillion! As in all recessions, workers do experience severe wage reduction–in joblessness (no wages), shorter hours of work, cuts and loss of benefits, lower pension contributions by employers, wage theft, etc. etc. So wages do fall, and are falling today faster and deeper than ever. And is business and investors spending and investing given the wage reductions? No. They’re hoarding the $1.74 trillion in Congressional loans and grants bailouts. And hoarding the $650 billion in business tax cuts also in the bailout legislation thus far (which one hears very little about in the media, I might add).
As journalist David Cay Johnson just revealed in a piece today, the short term cash deposits by business in just institutional money funds (only one source) has risen from $2.3 trillion before March 1, 2020 to $3.3T today. That’s a $1T rise in cash deposits by businesses, just in institutional money funds. More is being deposited in commercial banks. The long run average of business deposits in commercial banks has been around 5% (6% under Obama and 4.6% under Trump 2016-19) to 15.8% since March 1. Businesses and investors are hoarding their cash and stuffing it in their short term accounts in banks, funds, and who knows where else, on and offshore. No doubt some of that will be committed at some point to stock buybacks, dividend payouts, mergers & acquisitions, derivatives speculation, and all the rest of the financial gambling that in the 21st century defines capitalism. Don’t expect much to get into real investment that increases production, requiring the rehiring of workers, that generates wage incomes.
So wage cuts and reductions, now underway, will not result in renewed business investment and general rehiring of the 45 million laid off. Wage cuts don’t result in real investment and growth.
The nonsense economics notion that wages are sticky downwards is just pure economic bullshit today, as it has always been! And so is the parallel mainstream idea that if you can just find a way to boost business cash (via tax cuts or bailout loans) it will lead to economic recovery as well.
Dr. Jack Rasmus
March 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, where the empirical record on wages, investment, taxes, employment thoroughly debunks the various myths and misrepresentations of mainstream economics.
Posted in Uncategorized | 11 Comments »
Listen to my Alternative Visions radio show of friday, May 22, and my background analysis of the recently proposed ‘Heroes Act’, the fifth in the series of US House of Representatives (i.e. Democrats) economic mitigation bills for the US economy. Will it stimulate recovery? Is it a stimulus bill or still a mitigation bill? What’s the background leading up to the Heroes bill? What has the March ‘CARES Act’ accomplished thus far. Why businesses and corporations will commit very little of the $1.74 trillion loans & grants to investment, production and hiring back of the unemployed. Why the unemployment totals are now well over 45m, or about 30% of the work force. (Part 2 of the Heroes Act described in detail to follow next week’s Alternative Visions show on friday, May 29)
TO LISTEN GO TO:
http://alternativevisions.podbean.com
Dr. Rasmus explains the latest Congressional bill to try to stimulate the US economy, called the Heroes Act, passed a week ago. What are the elements? Will they continue to ‘mitigate’ the virus impact on the economy or actually stimulate recovery? Why is McConnell in the Senate, Republicans, and Trump opposed and blocking it? What are their arguments and are they accurate? Rasmus provides a background analysis of the four previous ‘mitigation’ bills, the central CARES ACT passed in April in particular. Why are the large corporations not taking up the $500B in loans, why is the Main St. provision for medium sized corps not even implemented yet? Why and how the small business PPP provision being ‘gamed’ by larger companies? Problems with a primary monetary stimulus strategy that is the CARES ACT.
TO LISTEN GO TO:
http://alternativevisions.podbean.com
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SHOW ANNOUNCEMENT:
Dr. Rasmus explains the latest Congressional bill to try to stimulate the US economy, called the Heroes Act, passed a week ago. What are the elements? Will they continue to ‘mitigate’ the virus impact on the economy or actually stimulate recovery? Why is McConnell in the Senate, Republicans, and Trump opposed and blocking it? What are their arguments and are they accurate? Rasmus provides a background analysis of the four previous ‘mitigation’ bills, the central CARES ACT passed in April in particular. Why are the large corporations not taking up the $500B in loans, why is the Main St. provision for medium sized corps not even implemented yet? Why and how the small business PPP provision being ‘gamed’ by larger companies? Problems with a primary monetary stimulus strategy that is the CARES ACT.
Posted in Uncategorized | 1 Comment »
Listen to my radio interview of 5-19-20 with ‘By Any Means Necessary’ Radio and my explanation why current health-economic crisis will continue for years, in ‘W-Shape’ recovery with relapses later this year and in 2021. Why Fed central bank monetary policy will NOT lead to more investment, restoration of bank lending, business production, and return of consumer spending (given current 47m jobless and actual 28% unemployment rate). The limits of Fed monetary policy solutions, including MMT. What happens to the additional 45m now jobless health coverage come August? Or when extended unemployment benefits expire in August? Comment on Mark Cuban’s proposal for a $4k/mo guaranteed income to be spent within one week of receipt.
TO
https://www.spreaker.com/user/radiosputnik/economist-medicare-for-all-stimulus-for-
TO
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Listen GO TO
https://www.spreaker.com/user/radiosputnik/economist-medicare-for-all-stimulus-for-
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Listen to my Alternative Visions radio show of friday, May 15, when guests Nick Brana and Jerry Perez are interviewed. Topic is the break away of the Los Angeles Sanders’ Our Revolution grass roots organization and move to form an independent political party. Other ‘Our Revolution’ groups status. OR-LA merging with Peoples Party’s 70,000 members.
Today’s show invites former Sanders’ grass roots organizers, Nick Brana (senior staff member of Sanders’ 2016 campaign) and Jerry Perez (current field director for Sanders’ Our Revolution grass roots organization in Los Angeles) , to discuss the emerging formation of an independent political party in the wake of Sanders’ capitulation, who abruptly dropped out of the Democrat party primary race and endorsed Joe Biden. Rasmus briefly explains the dimensions of the ‘triple crisis’ today: the economic crisis now deepening; the health (virus) crisis accelerating the economic decline that began late 2019; and the political crisis about to intensify even further between the two wings of the corporate party of America—aka Trumpublicans and Democrats. Rasmus reviews the dimensions of the emerging political crisis and the recent trajectory of the Sanders campaign and its collapse. Guests Nick Brana and Jerry Perez discuss what’s happening now with the growing movement to form an independent political party. Brana’s ‘Peoples Party’ with 70,000 members throughout the US and Perez’s LA Our Revolution group and other interested OR groups current considering and discussing going independent. What’s happening at the grass roots with regard to independent party formation. (For more information, go to http://peoplesparty.org and to http://ourrevolutionLA.com )
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TO LISTEN TO THE DISCUSSION GO TO:
http://alternativevisions.podbean.com
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SHOW ANNOUNCEMENT
Today’s show invites former Sanders’ grass roots organizers, Nick Brana (senior staff member of Sanders’ 2016 campaign) and Jerry Perez (current field director for Sanders’ Our Revolution grass roots organization in Los Angeles) , to discuss the emerging formation of an independent political party in the wake of Sanders’ capitulation, who abruptly dropped out of the Democrat party primary race and endorsed Joe Biden. Rasmus briefly explains the dimensions of the ‘triple crisis’ today: the economic crisis now deepening; the health (virus) crisis accelerating the economic decline that began late 2019; and the political crisis about to intensify even further between the two wings of the corporate party of America—aka Trumpublicans and Democrats. Rasmus reviews the dimensions of the emerging political crisis and the recent trajectory of the Sanders campaign and its collapse. Guests Nick Brana and Jerry Perez discuss what’s happening now with the growing movement to form an independent political party. Brana’s ‘Peoples Party’ with 70,000 members throughout the US and Perez’s LA Our Revolution group and other interested OR groups current considering and discussing going independent. What’s happening at the grass roots with regard to independent party formation. (For more information, go to http://peoplesparty.org and to http://ourrevolutionLA.com )
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The current pandemic is wrecking havoc with the US and global economy, accelerating and deepening the general economic crisis–and threatening to provoke a global financial crisis that will exacerbate the decline and usher in a great depression no doubt even worse than the 1930s. We are now somewhere between the Great Recession of 2008-09 and the depression in the 1930s in depth of contraction and duration. Today’s Great Recession 2.0 is no doubt already worse than 2008-09 and approaching (and in some already exceeding) the depression of the 1930s.
As 40 million plus of US workers find themselves unemployed and barely able to cover their rents, food and other bills, their ability to afford or even secure fundamental health care services is a growing problem. Most of the 40 million will lose their employer health insurance coverage. Millions more will be unable to afford it, or to acquire even minimal ACA or Medicaid health services.
This writer was asked the following questions by an International News Agency about what happens to health care services in the near future, given not only the health but the economic crisis.
Here’s the questions, followed by my commentary and analysis where US health care is likely going in the foreseeable future:
QUESTION:
“We’re discussing the US health insurance crisis. Millions of Americans have been hit by a double blow, being out of work and without health insurance if they get sick. Prior to the pandemic, 160 million Americans received their medical insurance through their job. The wave of layoffs triggered by quarantine measures now threatens that coverage for millions. Up to 7 million of those people are unlikely to find new insurance as poor economic conditions drag on, researchers at the Urban Institute and Robert Wood Johnson Foundation think tanks predict. Such enormous insurance losses could dramatically alter America’s healthcare landscape, and will probably result in more deaths as people avoid unaffordable healthcare.
In this respect, we’d be happy if you could share your opinion in a short commentary on the pros and cons of Obamacare: 1. why the system failed to cope with multiple healthcare issues, 2. what prevented it from being as successful as was expected and 3. what do you think could have been an alternative, especially now, when the pandemic is ruining the already fragile healthcare system.”
REPLY & COMMENTARY by Dr. Rasmus
Obamacare should be understood as a program that attempted to resolve the decades-long growing health care system crisis in America by means of privatization. In the early 1990s Bill Clinton’s effort to pass legislation to correct a national insurance program was defeated by massive lobbying by the healthcare industry (insurance companies, hospital chains, clinics, physicians, pharmaceutical companies, medical device manufacturers, etc.). Clinton’s response was to pass what was called Health Maintenance organizations, or HMOs. But also part of his market solution was to allow insurance companies to merge with other financial institutions (previously prevented) and allow hospitals to acquire each other without anti-trust liabilities, which were exempted in this industry. A concentration of insurance and hospital chains followed. Concentration led to oligopoly and higher prices. In order to buy up each other, hospitals and insurers went to Wall St. for financing of the deals. Wall St. demanded higher profit margins, at least 22% of revenues, in order to provide the merger financing. That led to still further price increases after the mid-1990s, and insurers dropping from coverage households with pre-existing conditions. Prices rose and coverage (costs) fell. As insurance prices rose, companies providing health insurance shifted more and more of the rising cost burden to its workers in the form of higher monthly premiums, more co-pays, more deductibles. Big companies that used to provide retirement health care benefits to their workers (e.g. AT&T, IBM, etc.) began dropping those benefits. The courts supported them. Millions of retirees lost benefits, while for the still employed prices rose, as insurers expanded price increases while reducing coverage. BY 2000, 50m workers were without health insurance coverage; and those that still had it were paying higher prices for less coverage. In 2000, Clinton arbitrarily redefined what it meant to not have insurance coverage, reducing the total without health insurance from 50m to 40m. This was a repeat of what he had done to reduce poverty: he simply defined it lower, if not away.
The dynamic of health insurers and hospital chain concentration—driving oligopoly and inflation higher as coverage declined—continued in the 2000s decade under George W. Bush. More and more were dropped from coverage by insurance companies for dubious reasons like pre-existing conditions, in order to satisfy Wall St. they were attaining 22% margins as a qualification for getting loans to buy up their competitors. As insurers gouged the public and got away with it, other sectors of the health industry followed suit “to get their share” as they said. Hospitals raised prices. So then did doctors and clinics and medical device manufacturers and pharmaceutical companies.
In 2005 the big pharma companies got a second boost from government policy. George W. Bush passed the addition to Medicare called ‘Part D’ that meant the government provided drug prescriptions in part to seniors on Medicare. The problem, however, was that the politicians, Republican and Democrat alike, did not pass any funding for Part D. The cost of the program was paid out of general tax revenues, not a specific addition to the payroll tax earmarked just for Part D. That would add $50b a year to the US budget deficit and debt every year thereafter. Big Pharma got $50B a year more customers. Big Pharma and health insurance companies are among the top 3 or 4 biggest campaign contributors and lobbyist spenders in Washington. Part D became a big subsidy program to the industry.
The economic crash of 2008-09 then exacerbated the problem of ever escalating health care costs amid falling affordability by households. On top the above secular trends driving up prices and the uninsured, cyclical collapse of the economy drove tens of millions more households into the ranks of the uninsured. A major healthcare reform package was proposed in 2010 to try to rectify this. It was called Obamacare, or officially the Affordable Care Act, or ACA.
It should be noted that the historic Democrat Party proposal for health care reform and accessibility to all since the 1930s, which was called Medicare, was not allowed even for discussion in the then Democrat controlled US House of Representatives and Senate. Medicare for seniors was passed in 1965 and the party’s platform always called for extending it to all,but when the opportunity came in 2010, Obama and his business advisers prevented it from even being discussed. Instead, Obama offered what was called the ‘public option’ in lieu of Medicare for All. The public option was simply to have the federal government offer its own competing health insurance to the private insurance companies. But the private insurance industry demanded Obama pull it from proposed legislation as a condition for their support for the legislation. Obama quickly then pulled the public option. There would be no government competitive offering—even if in the form of an insurance solution and not a Medicare for All solution. What resulted was an ACA (Obamacare) that was in effect a proposal to subsidize the health insurance industry to the tune of nearly $1 trillion a year more revenue by having the US government and states manage private health insurance offerings with certain restrictions concerning price changes and health coverage minima and guarantees. Under the ACA, pre-existing conditions requirements were ended. Students up to age 26 could now also get coverage under parents’ insurance plans. The big improvement under the ACA was expanded coverage for the working and non-working poor under the Medicaid (not Medicare) program. This is a bare bones minimal doctor and hospital access provided to the poor who could not afford an insurance plan. There are few doctors who will provide services to Medicaid patients (who are mostly single mothers with children, minorities households earning less than $20k a year, and homeless, and some students). Typically only one hospital in a county accepts Medicaid patients. But it was better than nothing. However, more than a dozen states, run by Republican governors or legislatures, refused to participate in the expansion of Medicaid benefits to the poor, mostly for ideological reasons. These were Trump ‘red states’ predominantly.
In terms of uninsured, the ACA was able to add fewer than 17m to the health coverage rolls, out of the 50 million previously uninsured. It cost the government $900B a year to add these. Not a very cost efficient solution, but one which the health insurance companies liked. As one nurse I spoke to described it, the ACA was not a health insurance reform program; it was a health insurance industry subsidy program.
The ACA was financed by an amalgam of measures that raised the money for the $900b. Among these included a tax on medical devices, a tax on private high cost and often union-negotiated health insurance plans with their employers, a 3.8% surtax on investors income, a mandate that non-insurance companies had to buy into the program if they didn’t have equivalent coverage already, a mandate that individuals had to buy into the government managed plans if they didn’t have employer coverage, and dozens of other money raising measures. Immediately, business interests opposed the taxation and mandates and organized against the ACA, not just lobbying but directly as well, including in the streets demonstrations, protests, etc. The growing right wing media, led by Fox News and right wing social media, launched a constant attack against the ACA. This was encouraged by the fact that Obama and the Democrats allowed four years of ‘commentary’ before the ACA actually took effect. Passed in 2010, the law would not become effective until 2014. In the meantime, a window was allowed for opposition to grow. Lobbyists also picked away and reduced the law as well. Over time, even after 2014, court challenges chipped away at the funding and financing of the ACA. Mandates disappeared, taxes were reduced or eliminated, and only half or so of the states actually joined up.
By the time Trump entered office, Obamacare was a shell of its even limited intent. Without a public option, private insurers could, and did, ‘game the system’. Health care coverage was reduced and, most importantly, the costs of monthly premia, co-pays, and deductibles were allowed to rise significantly. What exists today is high unaffordable private industry offerings, with extremely high deductibles. It amounts for most to only extreme disaster insurance. Those covered amount to no more than 10-15 million at best who were previously uninsured. There therefore remain at least 30 million still uninsured in the US, while the health insurance companies continue to reap at least a half trillion dollars in new revenues a year from the program.
The big failure of the ACA, as this writer forewarned back in 2010-11, was it would fail to control health care rising costs and declining coverage. And that is true as well to this day. The other problem was the willingness of Obama and corporate Democrats to scuttle the public option, and prevent any discussion of Medicare for All being far more cost efficient and beneficial to households.
Now in the wake of the near collapse and deep failure of Obamacare—which repeated the failure of all prior health care privatization solutions—overlaid on the US health care affordability and coverage (and quality of health care for most) crises is the Covid-19 health crisis. Now tens of millions more are losing their health coverage, as poor as it has proven. Mass industry layoffs will result in mass decline in health care services. And re-employment will not occur rapidly, as Trump and other media declare a V-Shape quick recovery. Job losses will continue for years. Only some will come back in 2020-21. Most won’t. Health coverage crisis will continue.
The left wing of the Democrat party has been proposing Medicare for All as the only cost effective and moral alternative solution. But corporate wing Democrats refuse to consider it. And Trumpublicans consider Medicare for All anathema and will vigorously oppose it, labeling all you advocate it as ‘socialists’. And soon the massive budget deficits now being run up to bail out businesses and investors ($3.7T this year and another $2.2T in i2021) will no doubt result after the November 2020 elections in a major drive b y business interests to cut Medicare and Medicaid in order to reduce the deficits caused by business bail outs and America’s current 2nd Great Recession underway at present.
In short, it is clear that US elites since Clinton have only envisioned private, market based solutions to the US growing and continuing health care affordability crisis. All such have failed to date, as will those that may come. Whomever wins in November—Trump or Biden—there will be no Medicare for All solution considered. (Biden, like Trump, has publicly rejected it). That means that tens of millions more American workers and families will be uninsured and do without fundamental health services as the pandemic continues in inevitable second and third waves in the coming months. Those disproportionately affected by loss of medical services, insured and not, are the working poor, single female heads of households, and black and Latino households. The ranks of the uninsured will almost certainly surge once again, and quickly, above 50m and most likely much higher. That means nothing has changed or improved for the last 25 years since Clinton’s abysmal failure at health care reform, through Obama’s failed ACA, through Trump’s virtual disregard for doing anything except to continue to ensure insurance companies are taken care of first and foremost.
Private market solutions to the healthcare crisis, past present and future, have not only failed. They are in effect a central cause of the crisis. The US spent more than $3.5 trillion a year on health care services even prior to the current pandemic. It’s now spending well over $4 trillion ! More than a $1 trillion a year was being paid to paper pushers and middlemen call the health insurance industry. Today at least $1.5T will be paid to the paper pushers who provide not one iota of health care services. The health insurance industry is giant rentier profits industry sucking money out of the economy on a massive scale. The big pharmaceuticals are a close second. They continue to do so because they continue to buy elected politicians and lobby them and the rest in between elections, in the era in America where Citizens United and other court decisions mean corporations are first class citizens and the rest of households are second class (and minority households third class). And nothing will change except for the worse after the November 2020 elections, regardless which candidate of either wing of the Corporate Party of America prevails in the election.
Dr. Jack Rasmus
May 17 2020
As 40 million plus of US workers find themselves unemployed and barely able to cover their rents, food and other bills, their ability to afford or even secure fundamental health care services is a growing problem. Most of the 40 million will lose their employer health insurance coverage. Millions more will be unable to afford it, or to acquire even minimal ACA or Medicaid health services.
This writer was asked the following questions by an International News Agency about what happens to health care services in the near future, given not only the health but the economic crisis.
Here’s the questions, followed by my commentary and analysis where US health care is likely going in the foreseeable future:
QUESTION:
“We’re discussing the US health insurance crisis. Millions of Americans have been hit by a double blow, being out of work and without health insurance if they get sick. Prior to the pandemic, 160 million Americans received their medical insurance through their job. The wave of layoffs triggered by quarantine measures now threatens that coverage for millions. Up to 7 million of those people are unlikely to find new insurance as poor economic conditions drag on, researchers at the Urban Institute and Robert Wood Johnson Foundation think tanks predict. Such enormous insurance losses could dramatically alter America’s healthcare landscape, and will probably result in more deaths as people avoid unaffordable healthcare.
In this respect, we’d be happy if you could share your opinion in a short commentary on the pros and cons of Obamacare: 1. why the system failed to cope with multiple healthcare issues, 2. what prevented it from being as successful as was expected and 3. what do you think could have been an alternative, especially now, when the pandemic is ruining the already fragile healthcare system.”
REPLY & COMMENTARY by Dr. Rasmus
Obamacare should be understood as a program that attempted to resolve the decades-long growing health care system crisis in America by means of privatization. In the early 1990s Bill Clinton’s effort to pass legislation to correct a national insurance program was defeated by massive lobbying by the healthcare industry (insurance companies, hospital chains, clinics, physicians, pharmaceutical companies, medical device manufacturers, etc.). Clinton’s response was to pass what was called Health Maintenance organizations, or HMOs. But also part of his market solution was to allow insurance companies to merge with other financial institutions (previously prevented) and allow hospitals to acquire each other without anti-trust liabilities, which were exempted in this industry. A concentration of insurance and hospital chains followed. Concentration led to oligopoly and higher prices. In order to buy up each other, hospitals and insurers went to Wall St. for financing of the deals. Wall St. demanded higher profit margins, at least 22% of revenues, in order to provide the merger financing. That led to still further price increases after the mid-1990s, and insurers dropping from coverage households with pre-existing conditions. Prices rose and coverage (costs) fell. As insurance prices rose, companies providing health insurance shifted more and more of the rising cost burden to its workers in the form of higher monthly premiums, more co-pays, more deductibles. Big companies that used to provide retirement health care benefits to their workers (e.g. AT&T, IBM, etc.) began dropping those benefits. The courts supported them. Millions of retirees lost benefits, while for the still employed prices rose, as insurers expanded price increases while reducing coverage. BY 2000, 50m workers were without health insurance coverage; and those that still had it were paying higher prices for less coverage. In 2000, Clinton arbitrarily redefined what it meant to not have insurance coverage, reducing the total without health insurance from 50m to 40m. This was a repeat of what he had done to reduce poverty: he simply defined it lower, if not away.
The dynamic of health insurers and hospital chain concentration—driving oligopoly and inflation higher as coverage declined—continued in the 2000s decade under George W. Bush. More and more were dropped from coverage by insurance companies for dubious reasons like pre-existing conditions, in order to satisfy Wall St. they were attaining 22% margins as a qualification for getting loans to buy up their competitors. As insurers gouged the public and got away with it, other sectors of the health industry followed suit “to get their share” as they said. Hospitals raised prices. So then did doctors and clinics and medical device manufacturers and pharmaceutical companies.
In 2005 the big pharma companies got a second boost from government policy. George W. Bush passed the addition to Medicare called ‘Part D’ that meant the government provided drug prescriptions in part to seniors on Medicare. The problem, however, was that the politicians, Republican and Democrat alike, did not pass any funding for Part D. The cost of the program was paid out of general tax revenues, not a specific addition to the payroll tax earmarked just for Part D. That would add $50b a year to the US budget deficit and debt every year thereafter. Big Pharma got $50B a year more customers. Big Pharma and health insurance companies are among the top 3 or 4 biggest campaign contributors and lobbyist spenders in Washington. Part D became a big subsidy program to the industry.
The economic crash of 2008-09 then exacerbated the problem of ever escalating health care costs amid falling affordability by households. On top the above secular trends driving up prices and the uninsured, cyclical collapse of the economy drove tens of millions more households into the ranks of the uninsured. A major healthcare reform package was proposed in 2010 to try to rectify this. It was called Obamacare, or officially the Affordable Care Act, or ACA.
It should be noted that the historic Democrat Party proposal for health care reform and accessibility to all since the 1930s, which was called Medicare, was not allowed even for discussion in the then Democrat controlled US House of Representatives and Senate. Medicare for seniors was passed in 1965 and the party’s platform always called for extending it to all,but when the opportunity came in 2010, Obama and his business advisers prevented it from even being discussed. Instead, Obama offered what was called the ‘public option’ in lieu of Medicare for All. The public option was simply to have the federal government offer its own competing health insurance to the private insurance companies. But the private insurance industry demanded Obama pull it from proposed legislation as a condition for their support for the legislation. Obama quickly then pulled the public option. There would be no government competitive offering—even if in the form of an insurance solution and not a Medicare for All solution. What resulted was an ACA (Obamacare) that was in effect a proposal to subsidize the health insurance industry to the tune of nearly $1 trillion a year more revenue by having the US government and states manage private health insurance offerings with certain restrictions concerning price changes and health coverage minima and guarantees. Under the ACA, pre-existing conditions requirements were ended. Students up to age 26 could now also get coverage under parents’ insurance plans. The big improvement under the ACA was expanded coverage for the working and non-working poor under the Medicaid (not Medicare) program. This is a bare bones minimal doctor and hospital access provided to the poor who could not afford an insurance plan. There are few doctors who will provide services to Medicaid patients (who are mostly single mothers with children, minorities households earning less than $20k a year, and homeless, and some students). Typically only one hospital in a county accepts Medicaid patients. But it was better than nothing. However, more than a dozen states, run by Republican governors or legislatures, refused to participate in the expansion of Medicaid benefits to the poor, mostly for ideological reasons. These were Trump ‘red states’ predominantly.
In terms of uninsured, the ACA was able to add fewer than 17m to the health coverage rolls, out of the 50 million previously uninsured. It cost the government $900B a year to add these. Not a very cost efficient solution, but one which the health insurance companies liked. As one nurse I spoke to described it, the ACA was not a health insurance reform program; it was a health insurance industry subsidy program.
The ACA was financed by an amalgam of measures that raised the money for the $900b. Among these included a tax on medical devices, a tax on private high cost and often union-negotiated health insurance plans with their employers, a 3.8% surtax on investors income, a mandate that non-insurance companies had to buy into the program if they didn’t have equivalent coverage already, a mandate that individuals had to buy into the government managed plans if they didn’t have employer coverage, and dozens of other money raising measures. Immediately, business interests opposed the taxation and mandates and organized against the ACA, not just lobbying but directly as well, including in the streets demonstrations, protests, etc. The growing right wing media, led by Fox News and right wing social media, launched a constant attack against the ACA. This was encouraged by the fact that Obama and the Democrats allowed four years of ‘commentary’ before the ACA actually took effect. Passed in 2010, the law would not become effective until 2014. In the meantime, a window was allowed for opposition to grow. Lobbyists also picked away and reduced the law as well. Over time, even after 2014, court challenges chipped away at the funding and financing of the ACA. Mandates disappeared, taxes were reduced or eliminated, and only half or so of the states actually joined up.
By the time Trump entered office, Obamacare was a shell of its even limited intent. Without a public option, private insurers could, and did, ‘game the system’. Health care coverage was reduced and, most importantly, the costs of monthly premia, co-pays, and deductibles were allowed to rise significantly. What exists today is high unaffordable private industry offerings, with extremely high deductibles. It amounts for most to only extreme disaster insurance. Those covered amount to no more than 10-15 million at best who were previously uninsured. There therefore remain at least 30 million still uninsured in the US, while the health insurance companies continue to reap at least a half trillion dollars in new revenues a year from the program.
The big failure of the ACA, as this writer forewarned back in 2010-11, was it would fail to control health care rising costs and declining coverage. And that is true as well to this day. The other problem was the willingness of Obama and corporate Democrats to scuttle the public option, and prevent any discussion of Medicare for All being far more cost efficient and beneficial to households.
Now in the wake of the near collapse and deep failure of Obamacare—which repeated the failure of all prior health care privatization solutions—overlaid on the US health care affordability and coverage (and quality of health care for most) crises is the Covid-19 health crisis. Now tens of millions more are losing their health coverage, as poor as it has proven. Mass industry layoffs will result in mass decline in health care services. And re-employment will not occur rapidly, as Trump and other media declare a V-Shape quick recovery. Job losses will continue for years. Only some will come back in 2020-21. Most won’t. Health coverage crisis will continue.
The left wing of the Democrat party has been proposing Medicare for All as the only cost effective and moral alternative solution. But corporate wing Democrats refuse to consider it. And Trumpublicans consider Medicare for All anathema and will vigorously oppose it, labeling all you advocate it as ‘socialists’. And soon the massive budget deficits now being run up to bail out businesses and investors ($3.7T this year and another $2.2T in i2021) will no doubt result after the November 2020 elections in a major drive b y business interests to cut Medicare and Medicaid in order to reduce the deficits caused by business bail outs and America’s current 2nd Great Recession underway at present.
In short, it is clear that US elites since Clinton have only envisioned private, market based solutions to the US growing and continuing health care affordability crisis. All such have failed to date, as will those that may come. Whomever wins in November—Trump or Biden—there will be no Medicare for All solution considered. (Biden, like Trump, has publicly rejected it). That means that tens of millions more American workers and families will be uninsured and do without fundamental health services as the pandemic continues in inevitable second and third waves in the coming months. Those disproportionately affected by loss of medical services, insured and not, are the working poor, single female heads of households, and black and Latino households. The ranks of the uninsured will almost certainly surge once again, and quickly, above 50m and most likely much higher. That means nothing has changed or improved for the last 25 years since Clinton’s abysmal failure at health care reform, through Obama’s failed ACA, through Trump’s virtual disregard for doing anything except to continue to ensure insurance companies are taken care of first and foremost.
Private market solutions to the healthcare crisis, past present and future, have not only failed. They are in effect a central cause of the crisis. The US spent more than $3.5 trillion a year on health care services even prior to the current pandemic. It’s now spending well over $4 trillion ! More than a $1 trillion a year was being paid to paper pushers and middlemen call the health insurance industry. Today at least $1.5T will be paid to the paper pushers who provide not one iota of health care services. The health insurance industry is giant rentier profits industry sucking money out of the economy on a massive scale. The big pharmaceuticals are a close second. They continue to do so because they continue to buy elected politicians and lobby them and the rest in between elections, in the era in America where Citizens United and other court decisions mean corporations are first class citizens and the rest of households are second class (and minority households third class). And nothing will change except for the worse after the November 2020 elections, regardless which candidate of either wing of the Corporate Party of America prevails in the election.
Dr. Jack Rasmus
May 17 2020
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Dr. Jack Rasmus
Copyright 2020
This past Friday, May 8, the US Labor Dept. released its latest jobless figures. The official report was 20 million more unemployed and an unemployment rate of 14.7%.
Both mainstream and progressive media reported the numbers: 20 million more jobless and 14.7%. But those numbers, as horrendous as they are, represent a gross under-estimation of the jobless situation in America!
One might understand why the mainstream media consistently under-reports the jobless. But it is perplexing why so many progressives continue to simply parrot the official figures. Especially when other Labor Dept. data admits the true unemployment rate is 22.4% and the officially total unemployed is 23.1 million.
Here’s why the 20 million and 14.7% is a gross under-representation of the magnitude of jobless today:
Only Half Month Data
First, the 20 million for April is really only for data collected until mid-April. Nearly 10 million more jobless workers filed, and received, unemployment benefits after mid-April. And likely millions more jobless have been attempting to get benefits but haven’t. Even officially, more 33.5 million have filed for benefits, with several millions more in the pipeline. So the April numbers of jobless—both receiving benefits and not yet getting them—are more than 20 million!
Only Full Time Employed Layoffs
An even greater misrepresentation is that the official 20 million unemployed represents only full time workers becoming unemployed. It’s the figure from the government report that is the category called U-3, or full time workers. There are between 50-60 million more workers who are part time, temp, contract, gig and otherwise ‘contingent’ workers (i.e. not full time) who are not considered in the 20 million and 14.7%.
Check out the Labor Dept’s own data, in Table A-8, which shows for March and April no fewer than 7.5 million part time workers became unemployed. In April jobless in this group doubled over the previous month, rising by about 5 million in April, according to the Labor Dept.’s own monthly ‘Employment Situation Report’. 5 million to 7.5 million represent what’s called the U-4 government unemployment rate.
But there’s still more. It’s what’s called the U-5 and U-6 unemployed. Who are they? They are what the government calls workers without jobs who are ‘marginally attached’ to the labor force and workers who are too ‘discouraged’. They are just as ‘jobless’ as full time and part time workers. But they’re put in another category simply because they haven’t actively looked for a job in the most recent four weeks.
You see the US government defines unemployed as that subset of jobless who “are out of work and actively looking for work”. If you haven’t looked in the last four weeks, you may be jobless but aren’t considered unemployed! Go figure. Add them to the U-3 unemployed, and the totals for unemployed in America rise to 22.4%. Add in those who filed for benefits in the last half of April, or tried to, and we get closer to the publicly admitted 33.5 million without jobs and receiving unemployment benefits.
The Disappeared 8 Million Unemployed
But that’s not even the whole real picture. The way the government defines unemployment a worker must be part of the labor force. The labor force is composed of two groups: those who have jobs and those who are officially unemployed—i.e. out of work and looking for work in past four weeks. If you are not looking, you’re ‘marginally attached’ (U-5, U-6). It assumes if you have stopped looking in the past four weeks you are part of the 850,000 ‘marginally attached’. But that figure is not credible. Somehow there are less than a million jobless who simply haven’t tried to find a job in the last four weeks? Really? There are many millions.
A government stat that suggests there are likely millions more not in the labor force who are jobless nonetheless is called the ‘Labor Force Participation Rate’. It estimates the percent of the working age population who either have a job or are officially unemployed.
There’s approximately 164.5 million employed/officially unemployed in the US labor force as of May 1, 2020. In February 2020 the labor force participation rate was 63.4% of the US labor force. As of May 1, that had dropped to only 60.2%. Roughly 8 million had dropped out of the labor force over the past year ending this April 2020. And remember: if they aren’t in the labor force they can’t be counted as unemployed. So where did the additional 8 million dropping out go?
The US government doesn’t consider them unemployed so they don’t show up in the U-3 or even U-6 statistics! But if they aren’t in the labor force they are jobless by definition. Perhaps 850,000 are counted as the ‘marginally attached’. But what about the remaining 7.2 million or so? The government has no category for them except the estimation of them in the labor force participation rate. It tries to explain the large number away by saying they retired or went back to school. But did 7.2m (63.4% in Feb. drop to 60.2% in April) retire in 2 months? And they certainly can’t have gone back to school in mid-March/April 2020.
Another government statistic that corroborates this ‘missing 8 million’ in the labor force participation rate is called the Employment to Population Ratio stat. It measures how many are in the labor force as a percent of the total US population of nearly 340 million.
If the EPOP percentage goes down, then fewer are working even though they’re obviously still alive and part of the US population. That figure has declined from 61.1% of the US population employed to 51.3% of the population employed as of May 1, 2020. That’s a nearly 10% drop. 10% of 340 million is about 34 million. And 34 million is not 20 million for April, or even the Labor Dept.’s total 23.1 million.
So both the labor force participation rate and the employed to population ratio both suggest the Labor Dept.’s official U-3 (or even U-6) unemployed figures are grossly under-representations of the total Americans without jobs today.
Voluntary Jobless Are Not ‘Unemployed’
One possible reason for the discrepancies between the official unemployed of 23.1 million vs. the 33.5 million receiving benefits, or the 7-8 million not being counted per the labor force participation rate and EPOP ratio, may be due to the government in this current crisis choosing not to count as unemployed those workers forced to leave work since February to care for dependents.
Remember the government’s driving definition of unemployed is the worker must be ‘out of work and actively looking for work’. Millions of workers who have been forced by the current crisis to leave their job to care for elderly and disabled family members, or to care for young children forced to stay home due to school closures, are not ‘actively looking for work’. Few Americans can afford nannys to watch their young children so they can work. But those in this situation are not considered unemployed by the US Labor Dept. because they don’t fit the definition of ‘actively looking for work’! It’s not clear how many in this category the Labor Dept. has recently refused to acknowledge as officially unemployed.
In America you may be jobless, but that doesn’t necessarily mean per the government you are unemployed!
The above stats and data show that the under-reporting of the jobless in the US is not some kind of conspiracy by the Labor dept. and the government. The data are there, buried in the monthly labor reports beyond the executive summaries. The government stats, moreover, are not perfect. There are serious problems related to raw jobs data recovery, to the various assumptions on that raw data the government makes to come up their jobs ‘statistics’ (always operations on raw data with assumptions which data to count and how). There are conflicting conclusions often between this or that data or statistic. Furthermore, in recent years changes in statistical processing have sought repeatedly to change definitions and processes in order to ‘smooth out’ swings in the statistics—whether employment, unemployment, wages, or inflation. The government has a vested interest in ensuring the smoothing. It reduces government (and especially business) costs of programs and operations.
If there’s a conspiracy of sorts, it’s in the media that purposely seems to always ‘cherry pick’ the most conservative stat to report. Thus we get the media trumpeting every month the nearly worthless statistic of the U-3 unemployment rate—a stat that applies only to full time workers and ignores part time, temp and other contingent labor who make up now nearly a third of the US labor force; a statistic based on a narrow definition of unemployed that has become an oxymoron when estimating unemployed; a statistic based on questionable assumptions and data gathering; and a statistic that can’t be reconciled with other statistics like the labor force participate rate.
The real unemployment rate is not the U-3 figure of 14.7% but easily 25% today. And the real total jobless are not the U-3 20 million, or even 23 million, but somewhere between 35-40 million… and rising!
However, what’s really disappointing is that many progressive and left economists simply parrot the government’s and mainstream media’s misleading U-3 statistic. One can understand why the corporate mainstream media keep pushing the U-3 stat and thus trying to make the unemployment situation look better than it is (or today not as bad as it is). But progressive economists should know better.
Dr. Jack Rasmus
May 11, 2020
Copyright 2020
Dr. Rasmus is author of the just published book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, January 2020; and the previously published ‘Central Bankers at the End of Their Ropes, Clarity Press, August 2017. He blogs at jackrasmus.com and tweets at @drjackrasmus and hosts the weekly radio show, Alternative Visions, Fridays at 2pm eastern time.
Copyright 2020
This past Friday, May 8, the US Labor Dept. released its latest jobless figures. The official report was 20 million more unemployed and an unemployment rate of 14.7%.
Both mainstream and progressive media reported the numbers: 20 million more jobless and 14.7%. But those numbers, as horrendous as they are, represent a gross under-estimation of the jobless situation in America!
One might understand why the mainstream media consistently under-reports the jobless. But it is perplexing why so many progressives continue to simply parrot the official figures. Especially when other Labor Dept. data admits the true unemployment rate is 22.4% and the officially total unemployed is 23.1 million.
Here’s why the 20 million and 14.7% is a gross under-representation of the magnitude of jobless today:
Only Half Month Data
First, the 20 million for April is really only for data collected until mid-April. Nearly 10 million more jobless workers filed, and received, unemployment benefits after mid-April. And likely millions more jobless have been attempting to get benefits but haven’t. Even officially, more 33.5 million have filed for benefits, with several millions more in the pipeline. So the April numbers of jobless—both receiving benefits and not yet getting them—are more than 20 million!
Only Full Time Employed Layoffs
An even greater misrepresentation is that the official 20 million unemployed represents only full time workers becoming unemployed. It’s the figure from the government report that is the category called U-3, or full time workers. There are between 50-60 million more workers who are part time, temp, contract, gig and otherwise ‘contingent’ workers (i.e. not full time) who are not considered in the 20 million and 14.7%.
Check out the Labor Dept’s own data, in Table A-8, which shows for March and April no fewer than 7.5 million part time workers became unemployed. In April jobless in this group doubled over the previous month, rising by about 5 million in April, according to the Labor Dept.’s own monthly ‘Employment Situation Report’. 5 million to 7.5 million represent what’s called the U-4 government unemployment rate.
But there’s still more. It’s what’s called the U-5 and U-6 unemployed. Who are they? They are what the government calls workers without jobs who are ‘marginally attached’ to the labor force and workers who are too ‘discouraged’. They are just as ‘jobless’ as full time and part time workers. But they’re put in another category simply because they haven’t actively looked for a job in the most recent four weeks.
You see the US government defines unemployed as that subset of jobless who “are out of work and actively looking for work”. If you haven’t looked in the last four weeks, you may be jobless but aren’t considered unemployed! Go figure. Add them to the U-3 unemployed, and the totals for unemployed in America rise to 22.4%. Add in those who filed for benefits in the last half of April, or tried to, and we get closer to the publicly admitted 33.5 million without jobs and receiving unemployment benefits.
The Disappeared 8 Million Unemployed
But that’s not even the whole real picture. The way the government defines unemployment a worker must be part of the labor force. The labor force is composed of two groups: those who have jobs and those who are officially unemployed—i.e. out of work and looking for work in past four weeks. If you are not looking, you’re ‘marginally attached’ (U-5, U-6). It assumes if you have stopped looking in the past four weeks you are part of the 850,000 ‘marginally attached’. But that figure is not credible. Somehow there are less than a million jobless who simply haven’t tried to find a job in the last four weeks? Really? There are many millions.
A government stat that suggests there are likely millions more not in the labor force who are jobless nonetheless is called the ‘Labor Force Participation Rate’. It estimates the percent of the working age population who either have a job or are officially unemployed.
There’s approximately 164.5 million employed/officially unemployed in the US labor force as of May 1, 2020. In February 2020 the labor force participation rate was 63.4% of the US labor force. As of May 1, that had dropped to only 60.2%. Roughly 8 million had dropped out of the labor force over the past year ending this April 2020. And remember: if they aren’t in the labor force they can’t be counted as unemployed. So where did the additional 8 million dropping out go?
The US government doesn’t consider them unemployed so they don’t show up in the U-3 or even U-6 statistics! But if they aren’t in the labor force they are jobless by definition. Perhaps 850,000 are counted as the ‘marginally attached’. But what about the remaining 7.2 million or so? The government has no category for them except the estimation of them in the labor force participation rate. It tries to explain the large number away by saying they retired or went back to school. But did 7.2m (63.4% in Feb. drop to 60.2% in April) retire in 2 months? And they certainly can’t have gone back to school in mid-March/April 2020.
Another government statistic that corroborates this ‘missing 8 million’ in the labor force participation rate is called the Employment to Population Ratio stat. It measures how many are in the labor force as a percent of the total US population of nearly 340 million.
If the EPOP percentage goes down, then fewer are working even though they’re obviously still alive and part of the US population. That figure has declined from 61.1% of the US population employed to 51.3% of the population employed as of May 1, 2020. That’s a nearly 10% drop. 10% of 340 million is about 34 million. And 34 million is not 20 million for April, or even the Labor Dept.’s total 23.1 million.
So both the labor force participation rate and the employed to population ratio both suggest the Labor Dept.’s official U-3 (or even U-6) unemployed figures are grossly under-representations of the total Americans without jobs today.
Voluntary Jobless Are Not ‘Unemployed’
One possible reason for the discrepancies between the official unemployed of 23.1 million vs. the 33.5 million receiving benefits, or the 7-8 million not being counted per the labor force participation rate and EPOP ratio, may be due to the government in this current crisis choosing not to count as unemployed those workers forced to leave work since February to care for dependents.
Remember the government’s driving definition of unemployed is the worker must be ‘out of work and actively looking for work’. Millions of workers who have been forced by the current crisis to leave their job to care for elderly and disabled family members, or to care for young children forced to stay home due to school closures, are not ‘actively looking for work’. Few Americans can afford nannys to watch their young children so they can work. But those in this situation are not considered unemployed by the US Labor Dept. because they don’t fit the definition of ‘actively looking for work’! It’s not clear how many in this category the Labor Dept. has recently refused to acknowledge as officially unemployed.
In America you may be jobless, but that doesn’t necessarily mean per the government you are unemployed!
The above stats and data show that the under-reporting of the jobless in the US is not some kind of conspiracy by the Labor dept. and the government. The data are there, buried in the monthly labor reports beyond the executive summaries. The government stats, moreover, are not perfect. There are serious problems related to raw jobs data recovery, to the various assumptions on that raw data the government makes to come up their jobs ‘statistics’ (always operations on raw data with assumptions which data to count and how). There are conflicting conclusions often between this or that data or statistic. Furthermore, in recent years changes in statistical processing have sought repeatedly to change definitions and processes in order to ‘smooth out’ swings in the statistics—whether employment, unemployment, wages, or inflation. The government has a vested interest in ensuring the smoothing. It reduces government (and especially business) costs of programs and operations.
If there’s a conspiracy of sorts, it’s in the media that purposely seems to always ‘cherry pick’ the most conservative stat to report. Thus we get the media trumpeting every month the nearly worthless statistic of the U-3 unemployment rate—a stat that applies only to full time workers and ignores part time, temp and other contingent labor who make up now nearly a third of the US labor force; a statistic based on a narrow definition of unemployed that has become an oxymoron when estimating unemployed; a statistic based on questionable assumptions and data gathering; and a statistic that can’t be reconciled with other statistics like the labor force participate rate.
The real unemployment rate is not the U-3 figure of 14.7% but easily 25% today. And the real total jobless are not the U-3 20 million, or even 23 million, but somewhere between 35-40 million… and rising!
However, what’s really disappointing is that many progressive and left economists simply parrot the government’s and mainstream media’s misleading U-3 statistic. One can understand why the corporate mainstream media keep pushing the U-3 stat and thus trying to make the unemployment situation look better than it is (or today not as bad as it is). But progressive economists should know better.
Dr. Jack Rasmus
May 11, 2020
Copyright 2020
Dr. Rasmus is author of the just published book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, January 2020; and the previously published ‘Central Bankers at the End of Their Ropes, Clarity Press, August 2017. He blogs at jackrasmus.com and tweets at @drjackrasmus and hosts the weekly radio show, Alternative Visions, Fridays at 2pm eastern time.
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