In the 1920s, Argentina was a nation with one of the great middle classes in the world, equal with most Europe nations. Then corruption sunk in and now Argentina is a nation filled with desperate people. We may be at such a tipping point in the United States.
The rich learned a valuable lesson from the Great Depression. Never let the stock market drop in value for too long. Otherwise, their economic and political clout will falter and open up the door for allowing democracy for the vast majority of citizens. Political corruption is so massive in the United States that members of both major political parties enacted the CARES Act in March 28, 2020. This was a $2.2 trillion economic rescue package that was actually a rescue package of over $6 trillion, most of which is making the top 0.01 percent of the U.S. population richer, while keeping political and judicial corruption at elevated levels.
The rich are receiving $4.95 trillion from the $2.2 trillion stimulus bill. You read that right. The $2.2 trillion includes more than $450 billion for large corporations, allegedly in loans. The bill includes a proviso that the Federal Reserve can print up to ten times that amount and lend that $4.5 trillion with a nod and a wink to large corporations. The combined profits of all US corporations in 2018 and 2019 were slightly over $4 trillion before taxes. The rich and their corporations, in other words, are getting more than two years’ worth of profits from the stimulus bill. This money will mainly go to the the 100 to 150 largest corporations, which will then funnel the money to the billionaires and multi-millionaires.
The Fed has been buying corporate bonds by the truckload every day. This money has been used in a large degree to providing dividend payments and keeping share prices up, which enriches the billionaires.
The primary purpose of this program has been to stifle democracy for the vast majority of citizens. If the stock markets had been allowed to continue falling in March 2000, the political, judicial and economic power of the rich would have evaporated and opened the door for democracy for the rest of us.
With the coming of the Great Depression and the New Deal programs of President Franklin Delano Roosevelt (FDR), Kim Phillips-Fein writes in her book Invisible Hands: The Businessmen’s Crusade Against the New Deal, “Many of these programs were measures that American’s business class had resisted for a generation, and the government enacted them at a moment when the power and prestige of business was at its nadir. The employer’s paradise had been lost.” The rich wanted it back in a big way. So they organized over a few generations and brought us to the economic disaster that has been unleashed upon us now.
The 1 percent derive 2/3rds to 100 percent of their income and wealth from owning shares of corporations. During the Depression, they had lost their power and prestige because corporate profits and the stock market had dropped 90+ percent from 1929 to 1933. This opened the door for FDR’s innovative socialist programs, such as Social Security, unemployment insurance, the minimum wage, controlling Wall Street’s depravity with the Securities and Exchange Commission, raising tax rates on the rich so they had less money with which to corrupt all three branches of the federal government and which also functioned to set maximum take-home wages, etc…. The rich appear to have learned a lesson the rest of us have plainly not learned.
The stock market must not be allowed to fall in value for the billionaires to continue their dictatorship of the United States. Both major political parties, the Federal Reserve, the United States Supreme Court, they’re all corrupted to the bone and the only thing allowing the 1 percent to continue corrupting government at all levels is the stock market, the fortunes of which have been disconnected from the real economy for at least a dozen years, and probably more. So long at the rich can use the Fed and the federal government to keep the value of the stock market disconnected from real world economic fundamentals, the door is open to enter that Argentine moment for the vast majority of United States citizens. We will become a nation of desperate people, if we have not already become so.
John Hively's Blog: News and Analysis of the War Against the Middle Class 