By Rudy Barnes, Jr.
Brave New World is a dystopian novel written by Aldous Huxley in 1931. Dystopian fiction is akin to apocalyptic literature in that they both speculate on the future. It’s interesting to consider dystopian politics, the economy and religion in America’s post-pandemic world.
A demagogue like Donald Trump and the crony capitalists of Wall Street fit Huxley’s dystopian vision of politics and the economy in a post-pandemic America. Joe Biden, not so much. I had thought that a world-wide crisis like the pandemic would force America to reset its overly materialistic and hedonistic values. I was wrong.
We’re only three months into the pandemic and our politics and economy are already in disarray. Trump and Wall Street are the primary beneficiaries when small businesses can’t do business. America is evolving into a kleptocratic democracy ruled by crony capitalists with one of their own in the white House and with a Congress they have bought and paid for..
With millions of jobs lost and many small businesses shut down, future prospects look dim with shortages of consumer goods and the short tempers of consumers. Surprisingly the stock market has ignored this economic tsunami and regained most of its losses from the March crash, thanks to Wall Street receiving massive injections of cash from Congress and the Fed.
Wall Street is thriving in the pandemic, but its mega-banks and mega-corporations were caught with their hands in the cookie jar of government aid intended for small businesses. It’s just another example of how crony capitalism continues to be the primary beneficiary of the largesse of Congress and the Fed--and that suits investors just fine.
Ever-increasing deficits have created a massive national debt that defies repayment. Keynesian economists tell us that’s not a problem, but what if it requires a devaluation of the dollar? The crony capitalists would do just fine, but those of us who rely on savings would be at the mercy of a Congress controlled by crony capitalists. So much for libertarian democracy.
What about religion? Most Americans still claim to be Christians, but they ignore the altruistic teachings of Jesus and favor the self-centered and materialistic values of Ayn Rand’s objectivism and the prosperity gospel. They have displaced the altruistic values taught by Jesus that were once at the heart of America’s civil religion.
We’re well into the pandemic and Congress can’t get its act together, leaving the President in charge. The Fed tells us that the economy is in dire straits, but the stock market continues to rise thanks to the Fed. Is there something wrong with that picture? Will Americans ever be able to reclaim control of their political and economic future from crony capitalism?
Don’t hold your breath--but we will have an opportunity for change in November.
Wall Street’s mega-corporations were caught with their hands in the cookie jar of government aid when public companies received $1 billion in stimulus funds meant for small businesses. The Washington Post has reported that “Publicly traded companies have received more than $1 billion in funds meant for small businesses from the federal government’s economic stimulus package, according to data from securities filings compiled by The Washington Post. Nearly 300 public companies have reported receiving money from the fund, called the Paycheck Protection Program, according to the data compiled by The Post. Recipients include 43 companies with more than 500 workers, the maximum typically allowed by the program. Several other recipients were prosperous enough to pay executives $2 million or more. After the first pool of $349 billion ran dry, leaving more than 80 percent of applicants without funding, outrage over the millions of dollars that went to larger firms prompted some companies to return the money. As of Thursday, public companies had reported returning more than $125 million, according to a Post analysis of filings. Other companies have said they plan to keep the funds, saying the loans had been awarded according to the program’s rules and that they would use most of it to pay workers, as required, in order for the loans to be forgiven.
The Small Business Administration has refused to release the names of companies that have received the loans, despite having released such information on its loan programs for years. Some of the companies that received the loans were large in another way: Their CEOs have been making millions.”
The Pandemic has caused Americans to hoard more than toilet paper. Americans are hoarding cash. Savings rate hits its highest level since 1981, CNN has reported “Americans are so nervous about the state of the economy that they are stashing cash in the bank at a rate not seen since the first year of Ronald Reagan's presidency. The United States government's Bureau of Economic Analysis reported Thursday morning that the savings rate surged to 13.1% in March -- up from 8% in February. That's the highest savings rate since November 1981. Americans had $2.17 trillion in savings last month. Consumers are putting more money away at a time when bank savings, money market accounts and Treasury bonds are yielding next to nothing after the Federal Reserve slashed rates to zero last month and launched numerous lending programs in the wake of the Covid-19 pandemic.
At a press conference on Wednesday, Fed chair Jerome Powell was asked about what savers should do since rates are at zero. He conceded that for people "really just relying on their bank savings account earnings, you're not going to benefit from low interest rates."