By Chris Fry
All past history proves that whenever such a depreciation of money occurs, the capitalists are on the alert to seize this opportunity for defrauding the workman. – Karl Marx, Value Price and Profit
The Trump and Biden policies around the current pandemic that we are suffering through proves Marx correct. The slimy collection of 730 or so billionaire parasites that make up the U.S. ruling class have feasted profit-wise on this deadly disease and the current inflation spike, more than 7 per cent year to year. A CNN Business January 16 article reported that:
[T]he total wealth of billionaires jumped from $8.6 trillion in March 2020 to $13.8 trillion in November 2021, a bigger increase than in the previous 14 years combined. The world’s richest 10 men saw their collective wealth more than double, shooting up by $1.3 billion a day.
“Billionaires have had a terrific pandemic. Central banks pumped trillions of dollars into financial markets to save the economy, yet much of that has ended up lining the pockets of billionaires riding a stock market boom,” Gabriela Bucher, Oxfam’s executive director, said in a press release.
The combined wealth of the top 10 billionaires — including Tesla (TSLA) CEO Elon Musk and Amazon (AMZN) founder Jeff Bezos — doubled during the pandemic and is now six times greater than that of the world’s poorest 3.1 billion people, according to the report.
“Inequality at such a pace and scale is happening by choice, not chance,” Bucher said. “Not only have our economic structures made all of us less safe against this pandemic, they are actively enabling those who are already extremely rich and powerful to exploit this crisis for their own profit.”
And what are these “captains of industry”, these “wizards of high finance” doing with these new fountains of cash? A January 19 CNN Business article describes how the billionaire owners are busy consolidating their positions:
But each of them — with the notable exception of Amazon — have been recently putting cash to work to buy back stock. Investors typically love buybacks because they lower the number of shares a company has, which tends to boost earnings per share.
According to S&P Dow Jones Indices, Apple, Alphabet, Meta Platforms, software giant Oracle (ORCL) and Microsoft accounted for the most stock buybacks in the third quarter. And it’s likely that top companies will continue to repurchase stock, especially if the market remains volatile.
“At this point, a slight market downturn or correction could also see additional buying, as companies with strong (and expected strong) cash-flow stock up on shares,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said in a report last month.
By shutting down competitors, these corporate giants are increasingly enabled to raise the prices of the goods and services that they sell, which hikes their profit margins while at the same time reduces the “real” wages of the whole working class.
For the Workers: Income Cuts, Rent Hikes and Massive Debt
The situation is becoming dire for the working class, particularly for the oppressed communities. The meager government programs to tide them over during 2020-21 have mostly dried up, with Congress ready to go back to “austerity mode”. As a January 29 Market Watch article points out:
Incomes are now dropping like a stone. Most of the support Congress provided last year and the year before has been withdrawn. Real disposable incomes (adjusted for purchasing power) fell at a 5.8% annual pace in the fourth quarter and are on target to fall further in the first quarter as the refundable child tax credit goes away and inflation eats up any wage gains workers manage to get.
As workers’ families endure freezing temperatures and piles of snow, landlords are using this as an opportunity to jack up rents:
Average rents rose 14 percent last year, to $1,877 a month, with cities like Austin, New York and Miami notching increases of as much as 40 percent, according to real estate firm Redfin. And Americans expect rents will continue to rise — by about 10 percent this year — according to a report released this month by the Federal Reserve Bank of New York. At the same time, many local rent freezes and eviction moratoriums have already expired.
The debt for workers has exploded. As a January 12 article in TheCapitalist.com explains:
Presently, the average American household debt is $155,622. This amounts to $15 trillion in total household debt for the US. The debt covers purchases for credit cards.
It also includes mortgages, home equity lines of credit, auto loans, student loans, and other household obligations. The total is up 6.2% compared to a year ago.
Tariffs and War Spending: Workers Suffer as U.S. Imperialism Seeks Global Hegemony
Trump imposed massive tariff increases starting in 2017, nearly all as part of his trade war against China. While many hoped that this policy might change under Biden, it has not. Trump’s and now Biden’s massive tariffs, particularly on goods imported from China, play a secondary but nonetheless significant role in hiking the rate of inflation. It is estimated that around 0 .5 percent of the current rate of inflation can be traced directly to the tariff-caused rise in prices.
Much of the corporate media describes one main cause of the current spike in inflation as the “supply chain problem.” Under corporate pressure, Biden’s new tariff against Chinese-made truck chassis is making the problem much worse. An October 27 industry report states:
[A] harder-to-spot problem contributes to the mess: the shortage of truck chassis equipment, the skeletal platform that holds the rest of the truck in place, including the engine, axle, cab, and fuel tank.
The largest manufacturer of truck chassis in the world is China, and the United States is one of the largest importers. In May, fears of product dumping led the US Department of Commerce to impose a 221.37% tax duty on imported Chinese chassis – in addition to the 25% tariffs the Trump administration imposed on various Chinese products – with the aim of “allowing US producers to be competitive again in a fair market. This adds about $ 25,000 to the price of a standard chassis, which typically costs around $ 12,000.
This increase reflects two issues: pressure on terminal operations struggling to handle extraordinarily high freight volumes, and a shortage of trucking chassis complicating transportation operations.
“The shortage of drafts at ports is extremely difficult and is just another example of the supply chain capacity shortage and resulting delays,” said Adam Compain, senior vice president of information on the supply chain to the Supply Chain Visibility Platform Project44. “The inability to get enough truck chassis has ripple effects that make downstream operations difficult: staffing in the warehouse, ensuring high speed of inventory, and shortages of inventory in the warehouse due to slow replenishment. “
Of course, much of the corporate media blames the spike in inflation on the emergency government programs that provided a modest amount of cash to families thrown out of work because of the pandemic. Right-wing pundits hyperventilate over Biden’s modest and shrinking $1.9 trillion “Build Back Better” social spending program, less than $200 billion per year over ten years.
Yet very few voices were raised in December when Congress passed the Pentagon budget far in excess of the combined total of social programs spending, four or five times larger than Biden’s “Build Back Better” plan, which is going nowhere in Congress. As a December 22 Vox.com article points out:
President Joe Biden withdrew from Afghanistan in fiery pandemonium this summer and has continued his predecessor’s scaling down of the US presence in Iraq. Yet Congress last week approved what is by some measures the biggest defense spending bill in history, to the tune of $768 billion. It’s bigger than those passed during the Vietnam and Korean War years, and bigger than Ronald Reagan’s military buildup. The only time this bill has been larger, adjusted for inflation, was in 2011, at a moment when the US had a peak in troops in Afghanistan and Iraq.
How could it be that even with those wars ending, Congress has authorized about $30 billion more than President Donald Trump’s last budget?
Biden’s and Trump’s trade war and Pentagon spending for a shooting war are both part of the same U.S. imperialist policy, with the goal of global capitalist domination by Wall Street, paid for by the increasingly impoverished working class and oppressed, who gain nothing from this.
Workers fight back
Individually, the current “Great Resignation” and collectively, the ongoing union organizing drives such as at Amazon and Starbucks show that the working class is actively engaged in the struggle to fight this wave of inflation, designed by the ruling class to further erode our living standard. In Detroit and other cities, retirees on fixed incomes are joining that struggle by organizing a campaign for an immediate $1,400 payment to offset this spike in inflation.
This resistance movement will only grow stronger and more widespread, reaching around the globe. But in that same book cited in this article’s beginning, Karl Marx, who supported every struggle by the workers to increase wages, stated that we must go further:
At the same time, and quite apart from the general servitude involved in the wages system, the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day’s wage for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!“
Forward to revolutionary socialism!