Archive for August, 2020

The Current Industrial Cycle (Pt 2)

August 30, 2020

After Congress deadlocks, Trump issues decrees

On August 8, Donald Trump at a meeting of wealthy members of a New Jersey country club he owns announced a series of Executive Orders. These decrees supposedly dealt with the problems of unemployment insurance and mass evictions. Trump claimed they would protect the expanded unemployment insurance unemployed workers have received under the emergency CARES Act passed last March and extend the moratorium on evictions that was part of the Act. Trump also claimed he is giving workers earning less than $100,000 a year — essentially all people who can reasonably be considered “workers” — tax relief through a payroll tax cut. The tax cut is only a moratorium on the collection of the employee contribution — collected by the boss — to finance the Medicare and Social Security trust funds. Trump, however, indicated that if he is re-elected to a second term he will make the abolition of the payroll tax permanent.

The background to Trump’s announcement was the July 31 expiration of the expanded unemployment benefits of $600 a week and the moratorium on evictions. Under the CARES Act, the government handed out trillions of dollars to the capitalists under the pretext of counteracting the effects of the economic collapse associated with the COVID-19 pandemic. But the CARES Act also included a few “sweeteners” for the working class. These included expanded eligibility for unemployment insurance and an increase in unemployment payments by an extra $400 a week plus a federally mandated moratorium on home foreclosures and evictions.

These measures have indeed been a lifeline for the tens of millions of people who have become unemployed since March. However, there was a catch. Under the CARES Act, the moratorium on evictions and the extra $600 in unemployment insurance were to expire in only four months. The Democrats and Republicans, and above all Trump, “assumed” that the pandemic would be over by July 31 and that the millions of people who lost their jobs in March and April would be back at work by then.

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My rant in place of the regularly scheduled post

August 23, 2020

The next post will have to be delayed a week and I owe my readers an explanation. I realized after a little thought that this “explanation” is an opportunity to examine some of the economic laws we have been exploring throughout this blog.

In the early hours of Sunday, Aug. 16, a rare summertime cluster of thunderstorms, spun off one of the many tropical storms popping up like mushrooms this year due to global warming, swept the Bay Area in California where I live. Awakened by the storm, I noticed my clock radio was out indicating the power had failed. Normally, when the power fails it comes back on in a few hours at worst. I assumed that the power would be back on by the time the sun came up in the morning, or in the worst case shortly thereafter. The longest power outage I have experienced here was in December 1995 when a violent winter storm with near-hurricane-force winds caused the power to fail early in the evening. But even then the power came back on around dawn. Surely, I assumed, this power outage wouldn’t last longer than the one associated with the 1995 storm. I was wrong.

The block where I live seems to be prone to power outages. The power frequently fails for a few hours during winter storms, and sometimes it will go out when there is no storm or earthquake or for any other obvious reason while it stays on in surrounding blocks. Clearly, there is some weakness in the power delivery system for my block that has persisted over many years and Pacific Gas and Electric has done nothing to repair. Without power, I lose access to the Internet and thus normal fact-checking. With my laptop, I can still type, of course, but only at the cost of running down the battery. If the battery runs out of juice, I have no computer at all until the power comes back on.

The power finally came back on Monday morning but my schedule was in ruins. I have little reason to complain about what was personally a minor inconvenience and nothing more. In areas of the U.S. hit by major hurricanes and floods, power outages can last for weeks. And in many countries oppressed by U.S. imperialism, power might be on for only a few hours a day even under normal circumstances. However, there is a broader story here, far more important than some minor personal inconvenience that in and of itself would not be worth writing about.

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