Federal Reserve Pumps $1.5 Trillion Into Markets, Slows Bleeding for All of 20 Minutes
Corporate socialism is once again on full display, concurrently student debt sits at $1.5 trillion, & thousands across the nation can’t get tested for coronavirus as a result of ineffectual leadership and profiteering
The stock market continued its bloody march downwards, triggering a -7% circuit-breaker only 4 minutes after opening Thursday morning. The circuit-breaker, which results in a 15-minute halt on all trading to prevent a more severe reflexive meltdown, was the second of its kind triggered just this week with the first occurring three days prior on Monday. The novel coronavirus, Covid-19, is primarily being scapegoated by many for the ongoing capitulation with the precipitous drops in oil prices being the secondary culprit. Of course, our economy was largely broken before Covid-19 came onto the scene and in reality, the virus was merely the straw that broke the camels heavily overburdened back. Taking five minutes to look at price fundamentals prior to last February, one could easily deduce that the stock market, a pageant show at this point, was ostensibly destined to take a hard fall from grace once economic conditions inevitably forced a “correction”.
Today at roughly 1 pm EST, the highly esteemed and conspicuously politically-motivated Federal Reserve announced its latest effort in the fight to keep Donald Trump electorally viable. The Fed made plans for multiple “repo operation” purchases of $500 billion totaling $1.5 trillion. Mind you, this comes not even 10 days after The Fed announced in a rare inter-meeting press conference that it was cutting already historically low interest rates by an astounding 50 more basis points in order to provide a “meaningful boost” to the economy according to Fed Bank chairman Jerome Powell. 9 days later I think we can all agree the “boost” was not very “meaningful” if it even existed at all. Likewise, the $1.5 trillion injection of capital announced today aimed to assuage the bleeding in the markets and only did so for all of half an hour. The problems facing the market aren’t due to lack of demand but rather a lack of supply due to the global supply shortage. Trying to pump the already grossly inflated equities market with even more cheap debt is plain desperation on the part of The Fed. Desperation largely fueled by the need to keep Donald Trump viable in November. If a prolonged recession occurs between now and November, even the walking corpse of Joe Biden will look good next to the presidential incumbent. Of course, Trump’s been keenly aware of this dynamic since he’s taken office and regularly pressures The Fed to lower rates as a result. The past two weeks of action by The Fed are the most recent manifestations of this desperation by the President. Meanwhile, the student loan debt crisis looms over Americans’ heads more than ever before. According to The Fed’s own recent credit and debt report, total student debt eclipsed $1.5 trillion with more than $100 billion of that belonging to people over the age of 60. But, by all means, please continue to espouse the inability of the U.S to cancel student loan debt. And do continue dismissing other basic economic reforms as “pie in the sky” pipedreams. It seems we may never learn the lessons of 2008 pertaining to the government's penchant for procuring available funds to bail out Big Business before its citizenry.
Elsewhere in the nation, Covid-19 lurks heavily on the minds of many Americans. Earlier today in a press conference, Ohio Health Dept. Director Amy Acton stated that there is evidence to believe community spread of Ohioans currently carrying coronavirus is 1%. That’s 117,000 people. So far only 5 people have tested positive for the virus in the entire state. Acton concluded the press conference by describing the worst-case scenario in which 40–70% of Ohioans would end up carrying the virus. That’s 4.7 to 8.2 million people. The U.S has yet to test 10,000 people in total for the virus, meanwhile, South Korea has been testing 10,000+ daily, even setting up drive-through clinics that offer free testing regardless of citizenship status (this is huge). Experts still place widespread testing in the U.S at least two weeks away. Suffice to say, the U.S response has, whether wittingly or not, been wholely disastrous. With the dismal state of the social safety net and our gutted public health infrastructure, this crisis, something that the government had plenty of time to prepare for, is poised to boil over into virtually all aspects of life in catastrophic ways. The Senate GOP has even blocked an emergency paid sick leave bill from moving forward. Sick workers who lack the ability to stay home (as prescribed by the CDC) will continue to report to work, inevitably enabling the virus’ spread to exacerbate. If this contrived dilemma isn’t the perfect distillation of the current sclerotic leadership plaguing this nation than I don’t know what is.
With the fate of the nation, and veritably the world, as uncertain as ever, I can’t help but reiterate the same tired old sentiments. That the unequal system we inhabit is not equipped to face the worsening crises of the 21st century. How many economic crashes do we need to crawl our way out of before we decide enough to be enough? How many bailouts need to be given to precisely those who need them least before acknowledging that our institutions serve a ruling few by way of reinforcing a destructive status quo? Regarding the destructive status quo, how many natural disasters manufactured by capitalism’s utter disregard for the environment need to occur before we collectively arrive at the conclusion that the capitalist modality has run its course and is no longer compatible with the continuation of organized social order as we currently know it? I genuinely hope these questions aren’t lost amidst the chaos of the current and future crises we face. Indeed, the ever-important Dr. King himself was committed to illuminating these kinds of contradictions present within the facade of the American Dream — many of which still exist today as they did then, unfortunately.
This country has socialism for the rich, rugged individualism for the poor. — Rev. Martin Luther King Jr.