Donald Trump Is What Happens When You Screw the Middle Class

http://republicbroadcasting.org/news/donald-trump-is-what-happens-when-you-screw-the-middle-class/

Indiana Governor Mike Pence’s non-endorsement of Donald Trump last week was about a lot more than resolving the 2016 GOP nomination.

“I particularly want to commend Donald Trump,” said Pence, “who I think has given voice to the frustration of millions of working Americans with the lack of progress in Washington D.C. and I am also particularly grateful that Donald Trump has taken a strong stand for Hoosier jobs when we saw jobs in the Carrier Company abruptly announce leaving Indiana, not for another state, but for Mexico.”

Taken along with Senator Bernie Sanders win over former Secretary of State Hillary Clinton in Indiana Tuesday night, and Main Street is roaring back against Congress’s bi-partisan embrace of global free trade that for decades has put multinational corporate profits over the well being of their own constituents.

For decades now, irrespective of which political party was in power, this bi-partisan agreement molded our nation to fit the demands of globalization, which we were told was powered by bareknuckled competition between the world’s leading nations. It was just a matter of basic survival, went the argument. Let free and unfettered capital sail around the earth, looking for the most profitable place to land and watch the wave of wealth and wellbeing swell to embrace all of humanity, the boosters promised. To stand in its way would be to impede its genius.

This was a mega-trend that was as undeniably real as gravity itself, said the promoters like Presidents Bill Clinton, George W. Bush and Barack Obama. If we chose to ignore it, we would be banished from prosperity, left cold and naked, in a sort of continent-wide fetal position. “Get with it, or be condemned to a world of want and deprivation,” went the free-trade mantra.

So it was that a nation that birthed itself into being in the 18th century by revolting against the tyranny of the British Empire would, three centuries later, willingly surrender its sovereignty to World Trade Organization tribunals, so as to insure our big corporations got their global market share, for surely their fate was ours.

For all these years, we have dutifully passed one free-trade bill after another, as our leaders cracked the whip and got paid-off to keep us in line. We chased an era of prosperity and abundance that was always just around the corner. We bet the farm on a multilateral arrangement that improved the profitability of our multinationals at the expense of the survival of our Main Streets, reckoning that we would prosper longer term as these corporations played for global domination.

Would we not all be winners?

To buy into this we would have to ignore the increasing wealth concentration at the top, the erosion of benefits, and our own growing household debt that papered over the deflation of our wages. We were told that the closing of tens of thousands of our factories was just a necessary sacrifice at the altar of a brighter tomorrow. Yes, went this logic, there would be local pain and suffering, but we would prosper in the aggregate and democracy would flourish.

And so now, all these years after NAFTA, and an alphabet soup of subsequent trade deals, our biggest corporations are global players. They have no national loyalty, having bought off the elites of both political parties, and have mastered ways to reduce their U.S. tax liability, shifting it back to America’s Main Streets, which are increasingly falling into disrepair.

In the immediate aftermath of the Wall Street meltdown, Washington spent billions of taxpayers dollars to bail out the multi-national car industry, branded as “Detroit,” while it allowed the actual City of Detroit, which had launched the industry, to fall into bankruptcy. Tomorrow has come in a 21st century America, where once-mighty industrial cities like Flint are now sad shadows of their former selves, where the public water is not fit to drink.

But this mad rush for globalization, and reckless lust for profits above all else, did not just hollow out much of our urban base, it led to the massive environmental contamination of places like China, which global capital decided should become the world’s factory.

The most recent comprehensive air-quality mapping done by Berkeley Earth, a scientific research nonprofit, documents that China’s air pollution is so toxic that it is responsible for 4,000 deaths a day —roughly 17 percent of the nation’s mortality rate.

In 2014, Chinese officials disclosed that close to two‐thirds of their sub‐surface waters were contaminated. In 2011, testing data documented that more than half of the nation’s lakes and reservoirs were so contaminated that their water was unsuitable for human consumption. Roughly half of all Chinese living in rural communities have no access to potable water.

Over the last 50 years, China lost almost a quarter of its freshwater swamplands and more than half of its coastal wetlands. This loss of water storage and recharge capacity and the wholesale short‐circuiting of the natural water cycle has increased the incidence of catastrophic flooding and chemical contamination.

Much of this industrial expansion in China, and in so-called emerging-market nations, was funded with hundreds of billions of dollars in corporate and public debt. Last year, the IMF warned that as a consequence, a $18 trillion debt bubble was now looming on the horizon, no doubt also a consequence of the Federal Reserve’s years of zero percent interest rates, meant to re-float Wall Street.

What did the world get for all that borrowing? 553 million tons in excess global steel making capacity, equal to the weight of 11,000 Montana class battleships. So much for the ability of that all-knowing and unfettered capital to set our collective agenda.

Decades into this free-market global free-for-all, what we have is a planet worse for the wear, with grotesque wealth inequality and increasing geopolitical insecurity that has produced millions of displaced persons and refugees.

According to a 2015 report from Oxfam, 1 percent of the world’s richest people own 48 percent of the world’s wealth, leaving just 52 percent to be shared with 99 percent of the rest of the adults on the planet. Almost all of the balance of that global wealth is held by the earth’s richest 20 percent, with just 5.5 percent of the planet’s wealth to be shard by the bottom 80 percent.

On this side of the 21st century, it looks like global free trade was nothing more than a pyramid scheme retread.

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NYT: Trump's Idea to Cut $19 Trillion National Debt Is to Get Creditors to Accept Less

http://www.newsmax.com/Finance/StreetTalk/donald-trump-national-debt-economy-creditors/2016/05/07/id/727686/

By Newsmax Wires | Saturday, 07 May 2016 10:54 AM

Donald Trump has proposed that he will slash the $19 trillion national debt by persuading creditors to accept less than full payment.

Trump, the presumptive Republican nominee for president, recently told CNBC he could use his business savvy to reduce America’s debt burden by pushing creditors to accept write-downs on their government holdings.

"I am the king of debt. I do love debt. I love debt and I love playing with it,” he told CNBC on Thursday. “But of course now you're talking about something that's very, very fragile, and it has to be handled very, very carefully," he said.

The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, “and any cracks in investor confidence have a long history of costing American taxpayers a lot of money,” the New York Times explained.

However, rates are expected to continue rising over time.

“What do we do with all of the money that we owe everybody when rates go up and now all of a sudden we have to borrow at two points more. One point more even is devastating. But two, three, four, five points more. It's a real dilemma,” he told CNBC.

"I would borrow, knowing that if the economy crashed, you could make a deal," Trump said. "And if the economy was good, it was good. So therefore, you can't lose."

Bloomberg News noted that “since the founding of the country Treasury secretaries have been unwavering in their commitment to always make good on government obligations, an assurance that’s helped make U.S. debt a haven from risk around the world.”

A default would put that status in jeopardy, sinking the value of the dollar and sending yields surging, according to David Ader, head of government-bond strategy at CRT Capital Group LLC. Growth could stall as borrowing costs for holders of mortgages and other consumer loans -- which are tied to government debt yields, spiked.

“This is stupid and ridiculous and never going to happen,” Ader said from Stamford, Connecticut. “But it’s not impossible that he could be president, and could try all the seemingly ludicrous and impossible things he’s talked about. You can’t just dismiss it when the guys got his finger on the button, so to speak,” he told Bloomberg.

Experts also told the Times that Trump’s proposal was “fanciful,” saying there was no reason to think America’s creditors would accept anything less than 100 cents on the dollar, regardless of Trump’s deal-making prowess.

“No one on the other side would pick up the phone if the secretary of the U.S. Treasury tried to make that call,” said Lou Crandall, chief economist at Wrightson ICAP. “Why should they? They have a contract” requiring payment in full, he told the Times.

Many other Wall Street veterans doubted Trump would actually try to renegotiate U.S. debt.

"No chance," William Lee, head of North American economics at Citigroup, told CNBC. "There's no chance unless he pulls a miracle. The miracle he would have to strike is for Congress to restructure entitlements and reform the tax system. That's the holy grail of fiscal reform and he — even the great negotiator — is unlikely to do that."
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Many experts also explained that U.S. debt is held by many foreign governments and other entities, including U.S. pension funds.

"Imagine the most risk-free asset suddenly becoming not a risk-free asset. By the way, S&P and Moody's would have to downgrade it if you could renegotiate the value of the debt you hold or try to force it down. What are we, Argentina?" David Ader, chief Treasury strategist at CRT Capital, told CNBC.

Others have been even more harsh in their assessment of Trump’s plan.

Trump is a businessman, and in terms of thinking like a businessman his idea makes sense,” said Matthew Yglesias of Vox.

“This is how businesspeople think — especially those who work in capital-intensive industries like real estate. And for good reason. This is the right way to run a real estate company,” he said. Applying this idea to the United States would destroy the economy, Vox proclaimed.

“This is irresponsible talk,” Patrick Chovanec, New York-based chief strategist for Silvercrest Asset Management Group, told Bloomberg. “If there was a belief that he would actually do it, I don’t know how markets would react. Clearly, they’re dismissing it at the moment as simply rhetoric, and not particularly well thought-out rhetoric.”

The U.S. has never defaulted on its obligations in modern history. Already, some on Trump’s team are walking back his statement.

“The government has to honor its debts,” Trump finance chairman Steven Mnuchin said Friday on CNBC.

Meanwhile, other prominent financial voices think Trump just may be onto something concerning his debt strategy, while not supporting the billionaire’s latest controversial proposal.

DoubleLine Capital’s Jeffrey Gundlach said Trump, if he’s elected president, would help the U.S. economy recover by going further into debt, just as Ronald Reagan fueled growth in the 1980s, Bloomberg reported.

“Trump is going to win, and Trump is going to increase the deficit,” Gundlach said during a panel discussion Thursday in New York. Reagan “did it by taking three or four decades of stable nonfinancial debt-to-GDP ratio and putting it on a hockey stick higher.”

Under Reagan, the U.S. debt grew to more than $2.3 trillion at the end of 1988 from $807 billion eight years earlier, according to data compiled by Bloomberg. The total U.S. debt as of Dec. 31 was $15.1 trillion.

“What’s going to happen is you’re going to get a Reagan response with Donald Trump," Gundlach told the New York crowd. “He promises a wall, he promises to bring jobs back, and he promises a lot of infrastructure spending. Let’s face it: Trump is extremely comfortable with debt."

(Newsmax wire services contributed to this report).

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Recall, that the national debt, and all countries debts, are the result of fraud or compelled financial interactions, by the barrel of a gun. Thus they are all illegitimate. Someone tricking you into an unfair exchange, or putting a gun to your head and telling you to cosign for a loan, does not deserve any repayment. What is deserved, is a bigger gun pointing at the control-freak or financial-junky's head, and telling her/him that s/he can promptly fuck off or die.

Does this make the decision easier?