News Release Archive - Capitalism

How Behemoth BlackRock Rigs Finance

ELLEN BROWN, ellenhbrown at gmail.com, @ellenhbrown
Brown is an attorney, founder of the Public Banking Institute, and author of twelve books, including the best-selling The Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free.

She just wrote the piece “Meet BlackRock, the New Great Vampire Squid,” which states: “To most people, if they are familiar with it at all, BlackRock is an asset manager that helps pension funds and retirees manage their savings through ‘passive’ investments that track the stock market. But working behind the scenes, it is much more than that. BlackRock has been called ‘the most powerful institution in the financial system,’ ‘the most powerful company in the world’ and the ‘secret power.’ It is the world’s largest asset manager and ‘shadow bank,’ larger than the world’s largest bank (which is in China), with over $7 trillion in assets under direct management and another $20 trillion managed through its Aladdin risk-monitoring software. BlackRock has also been called ‘the fourth branch of government’ and ‘almost a shadow government’, but no part of it actually belongs to the government. Despite its size and global power, BlackRock is not even regulated as a ‘Systemically Important Financial Institution’ under the Dodd-Frank Act, thanks to pressure from its CEO Larry Fink, who has long had ‘cozy’ relationships with government officials.

“BlackRock’s strategic importance and political weight were evident when four BlackRock executives, led by former Swiss National Bank head Philipp Hildebrand, presented a proposal at the annual meeting of central bankers in Jackson Hole, Wyoming, in August 2019 for an economic reset that was actually put into effect in March 2020. Acknowledging that central bankers were running out of ammunition for controlling the money supply and the economy, the BlackRock group argued that it was time for the central bank to abandon its long-vaunted independence and join monetary policy (the usual province of the central bank) with fiscal policy (the usual province of the legislature). They proposed that the central bank maintain a ‘Standing Emergency Fiscal Facility’ that would be activated when interest rate manipulation was no longer working to avoid deflation. The Facility would be deployed by an ‘independent expert’ appointed by the central bank.

“The COVID-19 crisis presented the perfect opportunity to execute this proposal in the U.S., with BlackRock itself appointed to administer it. In March 2020, it was awarded a no-bid contract under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to deploy a $454 billion slush fund established by the Treasury in partnership with the Federal Reserve. This fund in turn could be leveraged to provide over $4 trillion in Federal Reserve credit. While the public was distracted with protests, riots and lockdowns, BlackRock suddenly emerged from the shadows to become the ‘fourth branch of government,’ managing the controls to the central bank’s print-on-demand fiat money. How did that happen and what are the implications? …”

Brown concludes: “If the corporate oligarchs are too big and strategically important to be broken up under the antitrust laws, rather than bailing them out they should be nationalized and put directly into the service of the public. At the very least, BlackRock should be regulated as a too-big-to-fail Systemically Important Financial Institution. Better yet would be to regulate it as a public utility. No private, unelected entity should have the power over the economy that BlackRock has, without a legally enforceable fiduciary duty to wield it in the public interest.”

Brown’s other books include The Public Bank Solution: From Austerity to Prosperity and most recently, Banking on the People: Democratizing Money in the Digital Age.

Billionaires Deforming Education?

KEVIN KUMASHIRO, kevin at kevinkumashiro.com
Author of ten books on education, Kumashiro is former dean of the School of Education at the University of San Francisco and co-founder of Education Deans for Justice and Equity,

He has helped organize a statement signed by over “650 educators of color and educational scholars of color across the U.S.” calling for a “retreat from the market-based initiatives (like the so-called ‘portfolio model,’ expansion of choice, and deprofessionalizing of teaching) being foisted by billionaires upon poorer communities of color.”

The statement — “This Must End Now: Educators & Scholars of Color Against Failed Educational ‘Reforms’” begins: “The public is being misled. Billionaire philanthropists are increasingly foisting so-called ‘reform’ initiatives upon the schools that serve predominantly students of color and low-income students, and are using black and brown voices to echo claims of improving schools or advancing civil rights in order to rally community support. However, the evidence to the contrary is clear: these initiatives have not systematically improved student success, are faulty by design, and have already proven to widen racial and economic disparities. We must heed the growing body of research and support communities and civil-rights organizations in their calls for a more accurate and nuanced understanding of the problems facing our schools, a retreat from failed ‘reforms,’ and better solutions.”

Kumashiro recently wrote the piece “Corona-Capitalism and the Racialized Looting of Public Schools,” which states: “As the COVID-19 crisis unfolds, proponents of market-based reforms have wasted little time capitalizing on the same two conditions that propelled privatization post-Katrina, except at a scale and level without precedent: school closures and federal funding.”

Lack of Union Jobs “Obliterated an Emergent Black Middle Class”

WILLIAM LAZONICK, william.lazonick at gmail.com
Lazonick is professor emeritus of economics at the University of Massachusetts Lowell and president of the Academic-Industry Research Network.

He co-authored a new paper: “How the Disappearance of Unionized Jobs Obliterated an Emergent Black Middle Class” for the Institute for New Economic Thinking.

See summary blog post: “The COVID-19 pandemic has laid bare the deep-rooted racial divide that infects American society. According to APM Research Lab, the Covid-19 mortality rate for blacks has been 61.6 per 100,000 compared with 28.2 per 100,000 for Latinos, and 26.2 per 100,000 for whites. It’s another abhorrent statistic to add to the highly disproportionate number of African Americans who are poor, unemployed, and incarcerated.

“The longer life-expectancy of white men compared with black men in the United States has narrowed in recent years, but that is because of a significant drop in longevity of white working-class males, who, even before the pandemic, were succumbing to ‘deaths of despair.’ The fact is that blacks are doing terribly in a nation wracked by extreme economic inequality, which is dragging down the whole working class, irrespective of race or ethnicity. In a nation that once advertised itself as the land of upward socioeconomic mobility through equal employment opportunity, intergenerational downward mobility has become the norm.

“As a new generation has taken to the streets with demands for social transformation, we need to look back a half century to a time when the quest for equal employment opportunity gave rise to an African American blue-collar middle class. During the 1960s and 1970s, blacks with no more than high-school educations gained significant access to well-paid unionized employment opportunities, epitomized by semi-skilled operative jobs in the automobile industry, to which they previously had limited access. Anti-discrimination laws under Title VII of the 1964 Civil Rights Act with oversight by the Equal Employment Opportunity Commission (EEOC) supported this upward mobility for blacks in the context of a growing demand for blue-collar labor in the United States.

“From the late 1970s, however, the impact of global competition and the offshoring of manufacturing combined with the financialization of the corporation to decimate these stable and well-paid blue-collar jobs. Under the seniority provisions of the increasingly beleaguered industrial unions, blacks tended to be last hired and first fired. As U.S.-based blue-collar jobs were permanently lost, U.S. business corporations and government agencies failed to make sufficient investments in the education and skills of the U.S. labor force to usher in a new era of upward socioeconomic mobility. This organizational failure left blacks most vulnerable to downward mobility.

“Central to this corporate failure was a transformation of corporate resource allocation from ‘retain-and-reinvest’ to ‘downsize-and-distribute.’ Instead of retaining corporate profits and reinvesting in the productive capabilities of employees, major business corporations became increasingly focused on downsizing their labor forces and distributing profits to shareholders in the form of cash dividends and stock buybacks. Legitimizing massive distributions to shareholders was the flawed and pernicious ideology that a company should be run to ‘maximize shareholder value.’ Eventually, the downward socioeconomic mobility experienced by blacks would also extend to devastating loss of well-paid and stable employment for whites who lacked the higher education now needed to enter the American middle class. By the twenty-first century, general downward mobility had become a defining characteristic of American society, irrespective of race, ethnicity, or gender.”

Workers Line up for Unemployment; Billionaire Wealth Skyrockets

AP reports this morning: “1.5 million more laid-off workers seek unemployment benefits.”

CHUCK COLLINS, chuck at ips-dc.org; also via Bob Keener, bobk at ips-dc.org
Collins is co-author of the recently released study “Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers.”

U.S. billionaires saw their wealth “increase by 20 percent, or $584 billion, roughly since the beginning of the pandemic, as 45.5 million Americans lost their jobs and the economy cratered,” according to a new report by Americans for Tax Fairness (ATF) and the Institute for Policy Studies — Program on Inequality, where Collins works.

Overall, “between March 18 — the rough start date of the pandemic shutdown, when most federal and state economic restrictions were in place — and June 17, the total net worth of the 640-plus U.S. billionaires jumped from $2.948 trillion to $3.531 trillion, based on the two groups’ analysis of Forbes data. Since March 18, the date Forbes released its annual report on billionaires’ wealth, the U.S. added 29 more billionaires, increasing from 614 to 643.

“The top five billionaires — Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett and Larry Ellison — saw their wealth grow by a total of $101.7 billion, or 26 percent. They captured 17.4 percent of the total wealth growth of all 600-plus billionaires in the last three months. The fortunes of Bezos and Zuckerberg together grew by nearly $76 billion, or 13 percent of the $584 billion total.”

“The last thing U.S. society needs is more economic and racial polarization,” said Collins. “The surge in billionaire wealth and pandemic profiteering undermines the unity and solidarity that the American people will require to recover and grow together, not pull further apart.”

Challenging Monuments to “Colonialism and Slavery”

Several statues of Christopher Columbus have recently been brought down. In Albuquerque, Steven Ray Baca shot someone at a protest at a monument to a conquistador. Baca has reportedly been charged with aggravated battery with a deadly weapon.

ROXANNE DUNBAR ORTIZ, rdunbaro pacbell.net@rdunbaro
Author of An Indigenous Peoples’ History of the United StatesRoxanne Dunbar Ortiz said today: “As the movement for black lives protests against police violence … has spread to every part of the United States and around the world, some have turned to the glaring public symbols of the history that empowers such violence — colonialism and slavery. Statues celebrating Confederate officers and slavers have come down, as well as those of Columbus, who is best known for pioneering European colonialism in the Western Hemisphere and genocide of the Indigenous Arawaks in the Caribbean; he also brought the transatlantic African slave trade, as well as returning to Spain with enslaved natives who were sold on the European slave market.”

Dunbar also wrote the book Roots of Resistance: A History of Land Tenure in New MexicoShe continued: “In New Mexico, which was first colonized by the Spanish in 1598, the descendants of those first settlers have in the past several decades erected statues of the genocidal conquistador, Don Juan de Oñate, as well as annually celebrating what they call the entrada, the arrival of the gifts of Christianity and European culture to people they considered savages. Actually, the Indigenous Peoples in New Mexico, called Pueblos, live in small city states with multi-storied communal homes made of adobe or cut granite and practiced irrigation agriculture all along the North Rio Grande River. The Spanish reduced the 98 city-states to 21 within ten years of ‘arrival.’ Today, most of the New Mexico state, county, and cities/towns, as well as the police are controlled by the Hispanos, as the descendants of the Spanish invaders call themselves. On Monday, June 15, one of these Hispanos shot into a group protesting the Oñate statue in Albuquerque, seriously injuring two protestors.”

Statues Tumble

Sam Gillies via Storyful

ADAM HOCHSCHILD, adamhochschild at earthlink.net
Hochschild has written about the conquest of the Congo in his King Leopold’s Ghost: A Story of Greed, Terror and Heroism in Colonial Africa.

He said today: “As the impact of the video of George Floyd’s killing continues to ricochet around the world, one result has been an epidemic of toppling statues. In the United States, longstanding monuments to Confederate generals have fallen. In Belgium, statues of King Leopold II, the ruthless colonizer of the Congo, have been splashed with red or taken down, and in Australia a mountain range named after him lost its name. In Britain, a statue of Edward Colston, a Bristol merchant and slave trader, was tossed into the city’s harbor.”

Hochschild specifically mentions the statue of Edward Colston in his book on the British antislavery movement, Bury the Chains: Prophets and Rebels in the Fight to Free an Empire’s Slaves.

“When people get shocked by an injustice today,” says Hochschild, “it’s only natural that they look around and realize that, on all sides of us, we have symbols of injustices in the past. We would be shocked if Germany had statues of Hitler in prominent places, but Leopold, like Hitler, was responsible for millions of deaths. I sympathize with the Belgians who want to see him gone. Congo today still suffers from the legacy of its ruthless colonization, and some modern corporations — Unilever, for instance — have roots that go back to the forced labor system founded by Leopold. And in so many ways, in Britain, the United States, and other countries, we are still dealing with the heritage of slavery.”

Hochschild teaches at the Graduate School of Journalism, University of California, Berkeley, and is the author of ten books.

Pandemic “Billionaire Bonanza” Swells as Unemployment Escalates

CHUCK COLLINS, chuck at ips-dc.org; also via Bob Keener, bobk at ips-dc.org, @chuck99to1
Collins is co-author of the study “Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers,” which came out in April. He is with the Institute for Policy Studies and is co-editor of Inequality.org.

They have updated the analysis and find that “between March 18 and May 28, over 40 million applied for unemployment. Over the same ten weeks, the wealth of U.S. billionaires surged $485 billion, a 16.5 percent increase.” See “Updates: Billionaire Wealth, U.S. Job Losses and Pandemic Profiteers.”

Collins said today: “The surge in billionaire wealth during a global pandemic underscores the grotesque nature” of inequality in the U.S. today. “While millions risk their lives and livelihoods as first responders and frontline workers, these billionaires benefit from an economy and tax system that is wired to funnel wealth to the top.”