by Harley Schlanger — While most of the attention on the situation in the United States since November 3 has been focused on the charges that the election was stolen from President Trump, and the ongoing legal cases brought by his attorneys, there is now visible panic building over the direction of the U.S. economy.  This has heightened over the last days, as the battle over the second COVID relief bill became a scene of tense drama, reflecting the failure of any leaders to come to grips with the profound confluence of crises facing the nation.

BATTLE OVER COVID RELIEF

The economic uncertainty then intensified when, after weeks of wrangling, the Congress passed a relief bill which offered far less than Trump wanted, so he threatened to veto the bill.  Leaders of both parties played games with the legislation, as Democratic House Speaker Pelosi and Senate Minority leader Schumer admitted they held it up until after the election to hurt Trump among voters most negatively affected by the latest round of lockdowns, and Republicans reverted to being "austerity hawks", pushing neoliberal dogma that government aid is a false solution and will just add to an already out-of-control budget deficit.  The latter argument did not stop Republicans from supporting a $700+ billion bloated defense budget, which most Democrats also backed.

Even though Trump's team, led by Treasury Secretary Mnuchin, negotiated to include in the bill a $600 payment per adult making under $75,000 per year, Trump insisted, after the bill passed both Houses, that the payment should be $2,000 per adult, and he threatened to veto it.  He eventually relented, and signed the bill, but is continuing to fight for more funds for families, denouncing the $600 figure as "too little to make much of a difference."  On this point he was joined by a number of Democrats who belatedly and hypocritically agreed on the $2,000 figure for symbolic reasons, as it was obvious that the Republican Senate would never increase the payouts.  Many of those who will receive the $600 have gotten no funds from the government in more than six months, since the initial CARES bill was passed, and are in desperate need of aid.

With unemployment still high, and uncertainty about whether there will be any more money from the government, it is estimated that, when the Center for Disease Control Eviction Moratorium expires on December 31, more than 12 million renters who are behind in rent payments could be evicted, affecting up to 30 million people.  There are estimates that an additional 2 million home owners may face foreclosure when government forbearance programs expire, leading to a dramatic increase in homelessness during winter months, in the midst of a pandemic.  Many families lost their health insurance when they lost their jobs, and will now have to choose between paying mortgage or rent payments, buy food for the family, or pay medical costs.

WHAT HAPPENS WHEN THE STOCK BUBBLE BURSTS?

Adding to the overall uncertainty is that no one knows what Joe Biden will do when faced with this onslaught of crises, should he become President.  Both he and his prospective Vice President Kamala Harris have been mostly invisible in recent weeks, saying little about this deepening crisis.  The one program he has been touting, a Green New Deal, would replace productive jobs which pay decent wages with low-wage non-productive jobs, while replacing efficient sources of energy such as nuclear, coal and natural gas with inefficient sources such as wind and solar.

Biden's economic cabinet and advisory posts are being filled by an assortment of former members of the Obama administration, many with a record of putting the interests of insolvent banking and financial institutions ahead of the needs of those losing jobs, homes and health care.  When faced with the Crash of 2008, they chose to bailout the banks and financial institutions which created the housing and mortgage-backed securities bubble, instead of putting them through bankruptcy reorganization, and used various forms of Quantitative Easing to provide these institutions with huge volumes of liquidity to enable them to continue to buy and sell assets of indeterminate value, such as financial derivatives.  The much-touted Obama recovery was based primarily on a stock bubble which resulted from liquidity provided by the Federal Reserve, directly into the hands of speculators.

Biden's choice for Treasury Secretary, Janet Yellen, was appointed chairman of the Federal Reserve by Obama in 2014.  During her term, which ended in 2018, she continued the flood of liquidity to the big banks and financial institutions, and the appreciation of stock values boosted by virtually unlimited liquidity continued to rise under President Trump.  As a candidate in 2016, Trump correctly identified the Obama "recovery" as a fraud, based largely on the creation of a stock bubble.  He called for restoring Glass Steagall banking separation and major funding for new infrastructure, to create productive jobs and upgrade overall economic productivity.

Unable to get these policies through — in part due to Democratic Party efforts to remove him using the fabricated Russiagate narrative, as well as resistance from neoliberal Republicans — he ended up taking credit for the Fed-funded stock bubble as a sign of economic recovery. (see footnote 1 below)  But the stock market appreciation included valuations of companies which depended on the tsunami of cheap credit from the Fed, which they used to buy their own stocks, and to rollover unsustainable debt payments on corporate bonds, which increasingly declined to the level of junk status.  Many of these firms are now technically "zombie corporations," unable to make enough profit to pay the interest on their debt!

A potential crash of these liquid — thanks to Fed funds — but insolvent firms could drive stock market valuations through the floor, as the housing crisis explodes and private debt family debt implodes.

One other hint of what a Biden administration might do: Yellen is on the record as supporting the call for a "Great Reset", to increase the power of the central banks, so they will possess the power to determine not just monetary and credit policy, but also spending.  Yellen advocates using this increased power of private central banks, which operate on behalf of the largest global financial institutions, to fund the Green New Deal.  In testimony last week to the Senate, Federal Reserve chair Jerome Powell endorsed this approach, and the new budget just passed by the Congress includes language committing the U.S. to the Paris Climate Accord's demand of moving to zero carbon emissions as quickly as possible.  This puts Biden in league with the Davos billionaires and City of London/Wall Street swindlers in their efforts to establish a global banker's dictatorship — not surprising, since they funded his campaign, and were engaged in the regime change coup efforts against Trump.

Footnote 1.) There were marginal economic gains made under Trump through regulatory relief and his use of tariffs and his dumping the Bush-Obama approach to free trade, but those were declining by the summer of 2019 — before the economic impact of COVID19.  On his campaign promise to fund infrastructure, he was undermined by Republican austerity hawks, who joined forces with Democratic Party "pay-as-you-go" fraudsters, who are committed to infrastructure spending only if it makes a direct return to cover costs, as in constructing private toll roads and bridges!