Those Who Can’t and Those Who Should Know Better

 

UPDATED 10/3/2021

“To Serve and Infect”

Pfizer-Biontech has submitted its very positive clinical trials of a reduced dosage COVID vaccine for 5- to 11-year-olds, that last mass of school-aged children who have yet to have a qualified and available anti-coronavirus injection. We know that both Johnson & Johnson and Moderna are also on a successful clinical trial path. We also already know that pregnant women who have received one of the approved vaccine tracks pass the resultant immunity to their unborn child.  Children represent 25% of new COVID infections

That expansion of eligible 5- to 11-year olds will leave, for the time being, the youngest of the young still exposed… a grouping that is more easily contained than those who attend school, work or gather with others (in events large and small) or are forced to be in close quarters with others (inmates, hospital patients, nursing home residents, detainees, those who depend on mass transit). There are also too many parents of school-aged children, supported by red state governors banning any school mask or vaccine mandates, who continue to pledge resistance even when the relevant vaccines become available for their youngest school-age children. Children have been required to be vaccinated for various diseases for decades as a condition of school attendance. Will that practice continue against COVID? Or do science skeptics prevail?

We have been living in an era where scientific facts roil with bad news. Pandemics. Man-induced global warming. Intrusive digital data collection. A replacement of so many jobs, white and blue collar, by automated systems often governed by artificial intelligence. Changing technology and reduced demand for certain goods and services, with a large, pressured downgrade on the fossil fuel sector. A rising requirement of greater skills and higher education for even the most basic jobs. Educated elites generating disproportionately more and more wealth from these changes.

With the advent of highly-biased news services and unbridled social media brimming with conspiracy theories and false narratives, it is too easy for too many to pretend that these problems do not exist – a little ostrich in the sand time, with blind hope that all this cannot be true – that those giving us fact-based warnings are from simply out-of-touch ivory tower liberals and out-of-control bureaucrats… and to find large segments of our society to blame. Immigrants. Science. Educated people (“elites”). Deep state bureaucrats. China/Asians. Non-whites, non-Christians. People who do not work with their hands, respect the earth God gave us. People who want to take what is ours… to “replace us.” A trend that began well before the advent of Donald Trump; he just figured out how to embrace their political power. 

There seem to be such simple solutions for exceptionally challenging, changing and complex issues. There are even many parents of school-aged children, supported by red state governors banning any school mask or vaccine mandates, who continue to pledge resistance even when the relevant vaccines become available for their youngest school-age children. Mythology and political fealty still trump common sense and facts.

With a political system that is not geared to defend against a carefully orchestrated attack on a more purely majority rule democracy… in a nation that skewed in favor of farmers over city dwellers (as with the limit of two US Senators from each state regardless of population), we are now fundamentally divided into three camps: blue, red and those in the middle. So far, it is the battle of the squeakiest wheels that captivates the headlines. Symbols are now flaunted – masks and civil rights protests on the left of center, brazen vaccine/mask resistance and MAGA hats on the other side – culture wars controlling what we teach and what we hold dear and a willingness to decimate the hallmarks of representative democracy to get “our way.”

Meanwhile, experts predict that despite a momentary respite, particularly in states that have adopted the most stringent COVID preventative measures, the coronavirus will still surge again this winter. We will easily pass the current aggregate US COVID death toll – in spite of some states (like Florida) attempting to label COVID deaths as due instead to a symptomatic aspect of COVID (e.g., COVID-infected people who succumb to pneumonia being listed only as a “pneumonia” mortality statistic) – of 700,000 and will probably be hitting close to 800,000 in the very near future. You can actually determine which states have the worst per capita COVID infection and mortality rates, the lowest vaccination rates and the greatest exhaustion of hospital resources by the way they voted in the 2020 election. Those states that carried Donald Trump uniformly have the worst numbers… by far. 

With over three quarters of eligible adults in the United States having received at least one anti-COVID vaccine, we seemed to have hit a wall of stubborn denial among the rest. Fed up with vaccine and mask resisters, supported by most red state governors, the federal government and more than a few blue state and city governments, have resorted to mandatory vaccination in vast categories of workers. Mostly large companies and federal vendors, the military, and most notably unvaccinated first responders, from uniformed police/fire services to healthcare workers.

As my September 28th blog, Private Sector Vaccine Mandates – Job or No Job, explains, employers have a reasonable basis to require their workers to be vaccinated as a condition of employment… and may even be held responsible for creating a COVID-risk workplace that infects their employees. My September 17th and 18th blogs, Attitude Shift – When Over 75% of American Adults Have Received At least One Vaccine Shot and Living in a Parallel Universe, respectively, cite Supreme Court rulings that crush the notion that there is some individual right, supported by the constitution, to refuse a vaccination during a serious medical crisis. 

Yet still, anti-vax protestors cite their legally unsupported individual right not to be vaccinated. As the federal district court judge said in a lawsuit by vaccine-resisting healthcare workers at a hospital in Northern Kentucky, "If an employee believes his or her individual liberties are more important than legally permissible conditions on his or her employment, that employee can and should choose to exercise another individual liberty, no less significant – the right to seek other employment." 

In bright blue Los Angeles, a significantly large group of unvaccinated firefighters and police officers are suing to prevent the city from imposing its vaccine mandate on them as a condition of their employment. The September 29th Los Angeles Times tells us: “[Despite a city vaccine mandate, Los Angeles Police Chief Michel] Moore said that as of Monday [9/27], a total of 3,142 LAPD personnel had tested positive for the coronavirus since the start of the pandemic, out of a current workforce of 12,152 employees… He said 7,380 — or 60.7% — had been fully vaccinated, compared with the 68% of L.A. County residents 12 and older who are fully vaccinated, according to county data… [The Los Angeles Times noted that] repeated coronavirus outbreaks had struck police and fire agencies across L.A. County since the start of the pandemic, including 37 identified outbreaks accounting for 1,061 cases within the LAPD.”

Teachers and healthcare workers in blue states and cities face comparable local vaccine mandates as pockets anti-vaxxers among them also threaten to resign. In New York, the Governor made it clear that the state vaccine mandate for healthcare workers will be enforced with suspensions or termination, even if it requires calling up the National Guard to replace those refuseniks. In New York City, a local mandate requires proof of vaccination just to enter a business or public venue. Recently, Brazil’s unvaccinated President Jair Bolsonaro, in New York City to address the United States General Assembly, was forced to dine on street vendors’ fare when he was not allowed to enter a restaurant. The entire state of California extended the vaccine mandate to all healthcare workers, with exceptionally high compliance even with skeptics threatening to resign.

Still, in states where employers require workers to be vaccinated, threats of resignation if forced to vaccinate are everywhere. Many anti-vaxxers don’t believe they will be fired if they fail to comply with these mandates. Many have also asserted obviously bogus claims of religious/personal beliefs to avoid the needle. But as Michael Hiltzik points out in his September 28th OpEd in the Los Angeles Times, despite the significant attention accorded to these refuseniks in the press, when push came to shove, the number of workers who actually refused the shots at the risk of losing their jobs was significantly lower than anyone expected. In short, the vaccine mandates appear to be working. Hiltzik reports: 

“One lesson arising from the actual record of resignations over mandates is that talk is cheap, but action is expensive. Promises to resign are common, but when push comes to shove, the majority of holdouts get their shots… So let’s look at how vaccination mandates are working out. To begin with, we should note that these mandates are getting tougher.

“Just this week [last week in September], New York Gov. Kathy Hochul put her foot down on her order that all healthcare workers were to receive at least one shot by Monday or face termination… Hochul’s order didn’t provide an escape clause allowing workers to undergo regular testing instead of vaccination.

“Hochul was prepared to allow professionals licensed by other states or countries to practice in New York if the mandate produced staff shortages. Her administration also warned that healthcare workers who were terminated for flouting the order wouldn’t be eligible for unemployment benefits.

“Northwell Health, New York City’s largest private hospital system, said it fired about two dozen workers Monday for refusing to get their shots. They were the last holdouts among a few hundred unvaccinated workers who had been warned to meet the state’s deadline. Northwell has 73,000 employees, so the terminations represent about three-hundredths of a percent of its workforce.

“Similar outcomes have been reported across the country. In Massachusetts, where the union representing State Police troopers asserted last week that ‘dozens of troopers have already submitted their resignation paperwork,’ the police administration says it has received only a single resignation.” 

So far, this anti-COVID effort has been most effective in blue cities and states where these mandates exist and are taken seriously. Where President Biden has control of federal employees and vendors, even in the reddest of the red states, there is measurable progress. But where there continues to be statewide support for the vaccine resisters, those horrific COVID infection, mortality and hospital overcapacity rates continue to skyrocket. While there is new hope with a Merk/ Ridgeback Biotherapeutics oral anti-viral symptom-reducing COVID treatment drug, molnupiravir, which is in clinical trials, vaccines still remain the most dependable and consistent COVID containment strategy. Mandates work!

I’m Peter Dekom, and it does appear that vaccine mandates just might be the only near-term path to containing and defeating this horrific and continuing pandemic plague, at least in the United States.

Callous Carbon Credit Climate Con

Effectively, a carbon credit exchange officially allows a participating company a government sanctioned permit to emit a specified amount of greenhouse gas provided it sufficiently supports – by purchasing carbon “offset” credits – an entity that that engages in an activity to reduce carbon emissions (like a tree farm). The credit is specifically calculated based on tons of greenhouse emissions to be applied against calculations of tons of offsetting absorption of greenhouse gasses.  Such carbon credit systems can be set up internationally: 

“The Clean Development Mechanism (CDM) is one of the systems introduced under the [1992] Kyoto Protocol to help developing countries create sustainable development projects and enable Annex 1 countries [richer countries with a historical responsibility for climate change] to achieve emissions targets by purchasing carbon credits.

“Accredited CDM projects are awarded a Certified Emissions Reduction (CER) credit for each tonne of CO2e avoided. The CERs are also referred to as carbon offsets and are bought by businesses seeking to comply with the EU ETS [European Union Emissions Trading System] and other regional schemes (compliance buyers) and traders, brokers and fund managers (speculators) as well as by Annex 1 governments (sovereign buyers).” Native.eco  

Or non-international governmental transaction within individual nations. California has created an in-state carbon credit system, but one which does not bear scrutiny upon detailed analysis. Refineries that emit gasses (there are several within Los Angeles County, mostly near the harbor area) are obvious customers. California has traditionally found offsetting growers of carbon emission trees and plants, such as the Eddie Ranch in Mendocino with rich forest assets. Indeed, according to Evan Halper (writing for the September 19th Los Angeles Times), in 2018 Eddie Ranch petitioned the state to be accorded the right to sell that cherished offset carbon credits to polluters. Millions of dollars worth. Well, the application looked pretty good. On paper. But in reality… 

“As fire ripped through the Mendocino County hills the summer of 2018, burning a vast expanse of forest and turning buildings to ash, a curious thing was happening at Eddie Ranch, a sprawling property scorched by the flames… Its owners were petitioning the state to allow it to be paid millions to preserve trees destroyed by the inferno.

“Eddie Ranch said the trees would fight climate change, asserting in its application for California’s carbon ‘offset’ program that they would absorb some 280,890 tons of greenhouse gases. Polluters use the program to outsource their obligations to fight global warming: The credits purchased from faraway forests allow them to claim that the greenhouse gases they release at their facilities are not hurting the planet… The bulk of the Eddie Ranch carbon credits would be bought by PBF Energy, which was looking to erase — on paper — emissions from its hulking oil refineries in Torrance and Martinez [California] and the gasoline they sell to the motoring public.

“Incinerated trees, of course, can’t help the climate. But months after the 2018 fire that burned enough of Eddie Ranch to make nearly all of its planned carbon credits useless in the fight against global warming, the state of California allowed the operation to sell those credits to polluters, basing its decision on the state of the ranch before the fire…

“Eddie Ranch was one more puzzling transaction at a time the state’s entire multibillion-dollar market of carbon offsets — most of them generated in distant forests — is under siege… To comprehend what went down at Eddie Ranch, said Grayson Badgley, a postdoctoral fellow at Columbia University and Black Rock Forest in New York’s Hudson Valley, ‘imagine a general contractor finalizing the sale of a soon-to-be-completed home while the house under construction is actually in flames.’

“California is leading the world in confronting climate change. Its push toward renewable electricity is inspiring other states and countries to step up their goals. The state’s strict rules on tailpipe emissions and its plans to ban sales of new gas-powered cars and SUVs by 2035 are forcing the auto industry to reckon with its outsize role in global warming…. Yet the opaque carbon trading scheme that is a linchpin of the state’s climate efforts — California is leaning on it to meet as much as half of its greenhouse gas reductions — is under serious strain at home even as it is getting copied far beyond California.

“The U.S. Senate in late June passed a measure that would substantially expand the market for government-certified offset credits, helping farmers sell them to polluters for practices that many scientists worry won’t help the climate. Such credits could allow the owner of a refinery or plastics factory or power plant in one part of the country to pollute more if they give a farming operation in another part of the country money to tend to their soil in a certain way or use specific types of manure.

“The state of Washington is launching a carbon market modeled after California’s, and China is opening its own marketplace. Both allow companies to pollute more if they pay faraway landowners to plant and preserve trees… Meanwhile, an unregulated cottage industry of firms selling credits to corporations eager to brand as ‘carbon-neutral’ is exploding in the U.S., peddling offset projects that many experts warn quite frequently are not soaking up the greenhouse gases claimed.” Farmers (heavily from conservative communities) are obviously lobbying Congress and state legislatures to support this bizarre trading system, even though it is fraught with inefficiencies that call into question the very nation of the concept. But as we are witnessing the ravages of climate change, it seems pretty obvious that we are kidding ourselves that this is remotely a good way to deal with an issue that is profoundly out of control. 

“‘One of the insidious aspects of the [California] program is it hooks conservation and Indigenous groups on a source of funds,’ said Neil Tangri, who in February resigned in protest from his post as the environmental justice representative on the state’s offset task force. ‘So you have a constituency that will fight for this program whether or not it is doing anything meaningful in a larger sense… They may be using the money for good things,’ Tangri said. ‘But in the end, it is a Ponzi scheme.’” Halper. The problem is the trading exchange itself.

I’m Peter Dekom, and if you want to contain greenhouse gasses, ban the emissions and reward the absorbing businesses… separately!!!!

Private Sector Vaccine Mandates – Job or No Job

 

 "If an employee believes his or her individual liberties are more important than 

legally permissible conditions on his or her employment, that employee can and should choose 

to exercise another individual liberty, no less significant – the right to seek other employment." 

U.S. District Judge David Bunning in Covington, Kentucky

We are watching a growing trend in many red states: laws or executive orders banning employers from requiring employee COVID vaccine or mask mandates, many such regulations with serious fines or defunding consequences. Politicians usurping medical professionals to enforce a litany of conspiracy theories and false claims of clearly nonexistent individual constitutional rights. For a more detailed analysis of the U.S. Supreme Court’s rejection of this false claim of constitutional entitlement, see my September 18th blog, Attitude Shift – When Over 75% of American Adults Have Received At least One Vaccine Shot. Bottom line: reasonable vaccine and other medical mandates imposed by government to counter serious medical epidemics are unequivocally constitutional. It’s been the law for well over a century.

As if such political interference with medical reality were not enough, this red state plague – reflected in record-breaking infection/mortality numbers and exhaustion of hospital capacity to deal with the serious infections of the unvaccinated – has added sweeping movements to expand those bans to cover any and all vaccine mandates, including those which have been public school enrollment requirements for over half a century. This anti-science, anti-medical reality force, clearly against the will of a majority of Americans, is uniquely happening with significance only within red states. Bringing new outbreaks of old and once-extinguished diseases combined with an accelerant for COVID variants to propagate threaten all of us. After, people can travel across state lines without restriction.

Surely, anti-vaccine mandate believers hold, even applying federal law under the aegis of the Equal Employment Opportunity Commission (EEOC), government cannot mandate employees to be vaccinated. But the EEOC has ruled that subject to certain limitations, employers may indeed require vaccine immunization of their workers without violating the Americans with Disabilities Act (ADA), Title VII or other federal anti-discrimination laws. According to the EEOC’s guidance, this is true even though the COVID-19 vaccine is only authorized under the FDA’s Emergency Use Authorization (EUA), although full approval has now been given. The Federal Occupational Safety and Health Administration (OSHA) has also imposed employer COVID infection reporting requirements with a clear continuing obligation to maintain a safe workplace for its employees. 

The above under-title quote is taken from a September 22nd federal trial court in Northern Kentucky ruling against issuing a sought-after injunction against a COVID vaccine mandate for its healthcare employees by a private employer – St Elizabeth Healthcare. In that lawsuit, 40 of its hospital employees claimed in their 93-page pleading that the vaccine mandate constitutes “a fraud upon the entire American public,” that hospital workers were “coerced to participate in a medical experiment,” that such workers now “live in fear” from the risks of vaccination, and that St Elizabeth manipulated “their Covid and vaccine issues, including [hospital] occupancy, to spread fear in the community” and were “fully aware and/or recklessly ignored the inaccuracy of both the internal and external reporting regarding COVID-19” in order to fit the hospital's “intended narrative” regarding the vaccine. The workers lost, and the mandated vaccination by October first remained in place. It seems as if attorneys for St Elizabeth were correct in describing the plaintiff’s lawsuit as stating, “incoherent causes of action.”

“Employer vaccine requirements have spawned numerous lawsuits, although most are still in the initial stages…  In recent weeks, numerous large employers have begun to impose deadlines for employees to get vaccinated as COVID-19 infections remain elevated in the United States… Also on Friday [9/24], the Biden Administration spelled out plans to require federal contractors to get vaccinated, which will apply to tens of millions of Americans. 

“The [above noted] class action on behalf of St. Elizabeth employees was based in part on concerns about the safety and efficacy of the COVID-19 vaccines, among other claims… Those suspicions cannot override the law, said [Judge] Bunning.” Reuters, September 26th. But judicial tolerance for these attempts to use the judicial system have consistently fallen on deaf ears. 

“Students suing Indiana University over a vaccine mandate failed to persuade the federal courts to block the requirement, the most recent ruling from a federal appeals court coming [in August]… In June, in the first federal ruling on vaccine mandates, a Texas judge dismissed a lawsuit by hospital employees who declined the COVID-19 shot… The case involved Houston Methodist, which was the first hospital system in the country to require all its employees get vaccinated.” Louisville Courier Journal, September 3rd. For the safety of most of us, let’s hope these courts continue to resist inane efforts to defy medical science during this killer pandemic.

I’m Peter Dekom, and it continues to be disheartening to witness frontline medical employees buy into the false narrative of conspiracy theories, putting the patients who trust them at additional unnecessary risk.

Governments, Stability & Cryptocurrencies

 

Is bitcoin a security, a risk but potentially lucrative, or a parallel money universe that attempts to sidestep governmental scrutiny and creates a currency that is no longer subject to the vagaries of governmental monetary and fiscal policies? Is this form of payment a criminal’s paradise of money laundering, financing illegal transactions, or simply a modern-day digital convenience whose time has come? Increasingly, American companies are willing to accept bitcoin, the most prominent cryptocurrency, as payment, and some states are beginning to accommodate that rising trend.

“With the signing of Texas House Bill 4474 (‘H.B. 4474’), Texas becomes the latest state—joining Wyoming and Rhode Island—to recognize cryptocurrency and other blockchain-based virtual currencies (‘Virtual Currencies’) in its Uniform Commercial Code (‘UCC’). As Virtual Currencies become more common on corporate balance sheets, such statutory updates will ensure both borrowers and secured lenders have a clear understanding of the requirements for pledging Virtual Currencies as security for loans and perfecting against such Virtual Currencies to establish priority and facilitate orderly foreclosure if necessary.” September 9th Lexology.com article by O'Melveny & Myers LLP attorneys Sung Pak, Jennifer Taylor and Joshua Chow. And one step closer to having a viable parallel currency not subject to American monetary and fiscal controls.

Merriam-Webster defines “cryptocurrency” as “any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.” This is very different from moving paper money and coinage into a mobile phone app (the m-pesa system common in Kenya today); it is an entirely separate currency. Bitcoin has thus become globally ubiquitous.

Ever since the United States went off the gold standard in 1971, when then President Richard Nixon realized that our gold reserves were insufficient to back the currency that we had issued, the notion of a monetary system, one that relies totally on the full faith and credit of the nation issuing their currency to determine trading value, is now standard globally. 

Wild gyrations in bitcoin values, evidenced as Elon Musk’s Tesla bought and sold volumes of bitcoins, sent the market into major upward and downward swings. Relying on little beyond “faith” and a desire not to be left out of the upside opportunities, bitcoin traders do not seem to be dissuaded by tales of serious loss and manipulation. The risks are everywhere. 

“Cryptocurrency investors in South Africa may have lost nearly $3.6 billion in Bitcoin following the disappearance of two brothers associated with one of the country’s largest cryptocurrency exchanges. According to Bloomberg, a law firm in Cape Town says it can’t locate Ameer and Raees Cajee, the founders of Africrypt. In April, the exchange told its investors it was the victim of a hack and asked them not to report the incident to the authorities on account it would “slow down” the process of recovering their missing money.” Engadget.com, June 23rd.  

Although governments have subsequently pushed back, “Virtual currency bitcoin hit the mainstream in 2014. Bitcoin ATMs started springing up all over the world … , allowing people to exchange cash for the cryptocurrency, a secure digital payment outside of conventional financial institutions.” Merriam-Webster. Secure? Blockchain encryption maybe. Unpredictable volatility not. In the United States, the cryptocurrency trade is currently the target of the Securities and Exchange Commission and the Internal Revenue scrutiny. There is a new notation on American tax forms that asks it the relevant taxpayer has engaged in cryptocurrency trades, an invitation to traders to commit perjury and/or tax evasion should they falsify their answer.

The obvious threats engendered in cryptocurrencies have moved other nations to act. For example, “China first moved in 2013 to restrict its banks from using Bitcoin as currency, citing concerns its inherently speculative nature threatens the country's financial stability. Over the years, the government has become even more wary. Since May, Beijing moved to effectively shut down all crypto mining operations in the country. In late June, the central bank also required payment firms and banks shut down the accounts of individuals involved in crypto transactions.” Voice of America News, July 6th.

But in purported narco-states, the desire to create a global exchange currency that is out of reach of governmental scrutiny and control, particularly of wary regulators in major nations everywhere, seems to have captured more than just than those in the narcotics trade. The Northern Triangle of Central America – Honduras, Guatemala and El Salvador – has become so violent, so unstable and dramatically under the control of regional gangs and cartels (government corruption from top to bottom) that the United States no longer trusts those governments to distribute American humanitarian aid to their people. For example, U.S. State Department spokesman Ned Price said in a statement that El Salvador’s “decline in democratic governance damages the relationship that the United States strives to maintain with the government of El Salvador and further erodes El Salvador’s international image as a democratic and trustworthy partner in the region.” Kate Linthicum in the Los Angeles Times, September 7th.

So many of those asylum-seekers knocking at our southern border are refugees fleeing the dire poverty and ultra-violence within this Northern Triangle. Their plight is directly linked to the continuing demand for illicit drugs in the United States and the tsunami of assault weapons easily purchased in the United States and funneled down to local gangs and cartels, criminal organizations with direct links, if not outright participation from the highest levels of their national governments. Funded in substantial part through the use of cryptocurrencies.

As the above quote from the U.S. Department of state suggests, the nexus between drug trading organizations (DTOs) and governments is particularly exemplified with the populist president of El Salvador, Nayib Bukele, who has overcome term limits and attempts to rein in his rising autocratic control of the nation. His alleged links to DTOs seem to be an open secret. He has systematically purged his government of any opposition, including dismembering the judiciary.

To keep his narco-state as far from U.S. regulations as possible in a state where the U.S. dollar is still an official currency, as of “Tuesday [9/7], El Salvador becomes the first country to accept bitcoin as legal tender — a controversial move pushed by its young, headstrong and exceptionally popular president, Nayib Bukele… [But] the bitcoin plan is unpopular. A recent survey by the University of Central America found that 56% of Salvadorans did not trust bitcoin, and 71% said they did not plan to use it.

“In June, Bukele pushed through Congress a law, drafted in part by the American chief executive of a bitcoin-based cash application, that businesses will be required to accept the digital currency for goods and services by Sept. 7. The law leaves the U.S. dollar as the country’s other official currency…

“But critics say bitcoin’s extreme volatility could devastate El Salvador’s economy overnight, bankrupting communities that are already among the poorest in the hemisphere. Then there’s concern that the plan will lead to illegal activity. The Central American Institute for Fiscal Studies said it would turn El Salvador into a ‘money-laundering paradise.’

“Under the new law, consumers can pay for anything — from a soda to federal taxes — using a variety of smartphone apps created for small bitcoin transactions. The law established a $150-million government trust fund that Bukele said would give Salvadorans the option to convert their bitcoin to dollars if they wish.” LA Times. Cryptocurrencies are the obvious trading value of choice for DTOs. El Salvador’s impact on bitcoin the day after: “Angry protests, technological glitches and a plummet in value marked the first day of El Salvador adopting Bitcoin as legal tender… The price of Bitcoin on Tuesday crashed to its lowest in nearly a month, falling from $52,000 (£37,730) to under $43,000 at one point.” BBC.com, September 8th. Get used to it!

But there are other macro-economic dangers inherent in the widespread use of cryptocurrencies, one that China seems to recognize but one that seems to elude American policymakers. Institutions like our Federal Reserve, a quasi-governmental controller of American monetary policy, and the Bank of England, plus the fiscal planning prerogatives of national legislatures all over the world, face the prospect of a parallel currency that is not subject to such governmental control. Attempts merely to regulate cryptocurrencies, treating them as securities, miss the point. Can they be legitimized at all?

Even overlooking the difficulty of enforcing tax laws, legitimate government interests in setting monetary and fiscal policies can be thwarted. Where governmental policies may require unpopular or controversial decisions (like debt ceilings or money supply), resort to a parallel cryptocurrency frees the user from such governmental control. The potential for undermining national currency values and destabilizing the national economies is obvious. While governments can step in to curtail cryptocurrencies, sooner or later, the longer such non-governmental currencies have to settle into the routine pathways of global commerce, legal and illegal, the more difficult it will be to control their impact later.

I’m Peter Dekom, and what passes for an inevitable modernization of global currency standards just might form the basis for massive global economic destabilization.

Political Distraction – China Style

 

When Chinese leader Deng Xiaoping took the reins in 1981, China made a rapid acceleration into a modern economic world. “Some must get rich first,” said Deng as he noted that his predecessor – Mao Zedong – glossed over what Deng called a necessary interim step from basic feudalism to communism (which I define as “socialism by force”): some form of capitalism. With the autocracy intact, China only took three decades to lift one billion people out of dire poverty. As shinny architectural high rises, chichi shops, superhighways crowded with a global panoply of cars and fine dinning became common in China’s biggest cities, someone asked Deng’s successor, Jiang Zemin, how China could call itself a communist country in light of what appeared to be vast super-capitalism? Perhaps leaning on a Chinese notion of the “harmony of opposites,” he replied, “Communism is what we say it is.”

Privileged classes with deep connections to the autocratic political elite, entrepreneurs exploiting a system with wide open opportunities, always kept a careful eye on China’s political reality. These super-successful-mega-capitalists were always members of the Communist Party. 80% of the major companies in the nation wore a “red hat” (with direct Party or government ownership or significant board control). The Party was very much in control. Corruption was a way of life, even as annually tens of thousands found themselves in People’s Republic of China prisons, some facing execution, for that common crime. But those at the top were protected by the Party… unless they became an embarrassment or offended leaders at the top.

China’s growth pushed it to the point where it was clear that its GDP would make it the largest economy in the world, surpassing the United States within the near future. Hardly a free society, China was seemingly free of the unlimited rule of a doctrinaire autocrat. The prospect of a “cult of personality” – the legacy of Chairman Mao – was mitigated by a powerful military, the enhanced status of the Standing Committee at the top of the Politburo and, most of all, a limited single term of ten years. And then came Xi Jinping, elected (anointed) Communist Party General Secretary in 2012 and President in 2013.

Xi reconfigured (contracted) the Standing Committee to suit his needs and spent his initial years atop the nation purging critics and potential opponents (often eliminated under corruption laws). The big boys were deposed “tigers,” the small fry were labeled “flies.”  Xi seemed determined to push China back to a stricter and more repressive policy that was beginning to resemble a wealthier nation with a Mao-like singular vision under one man’s control. A “New Era” of “socialism with Chinese characteristics,” as the Politburo succumbed (in 2018) to Xi’s demand to eliminate the requirement of a single 10-year term. A new personality cult was in full sway.

“Under Xi’s leadership China was increasingly assertive in international affairs, insisting upon its claim of territorial sovereignty over nearly all of the South China Sea despite an adverse ruling by the Permanent Court of Arbitration in The Hague and promoting its ‘One Belt, One Road’ initiative for joint trade, infrastructure, and development projects with East Asian, Central Asian, and European countries.” Encyclopedia Britannica.  

A new uniformity of acceptable culture and expression gripped the nation. Xi crushed Muslim Uighurs in the west and, ignoring his treaty commitment with the UK, dramatically eliminated freedom of speech in Hong Kong. There was now one vision, one language, one philosophy and one dear and cherish leader throughout China. Xi eyed Taiwan’s desire for continued independence from the PRC with increasing hostility. It would be formally united as an integral PRC territory, he pledged.

As China’s standard of living rose, its labor costs became less competitive. China shifted its economic policies to prioritize technology-based industries, the more sophisticated the better, even if that mean escalating the theft of valuable intellectual property anywhere China could find it. Donald Trump, at first attempting a bromance with Xi, found himself in a trade war with China. Tariffs rose. PRC businesses in the United States were investigated and limited. China retaliated against US companies operating in China while cutting back on its massive dependence on American agricultural imports to the consternation of Midwest American farmers. It was clear that China would never again rely on the US as its agricultural mainstay, now an “unreliable” exporter of foodstuffs subject to shifting political whims.

The pandemic slammed into China in so many ways. Trump amped up the blame game calling COVID-19 the “Kung Flu” and accusing a Chinese laboratory in Wuhan as being the source of the virus. The rising and falling patterns of infection roiled through every corner of China, slowing the PRC economy to a crawl not seen since the Mao era. The election of Joe Biden added a ray of hope to the Chinese leadership, and everyone was acutely aware that tackling climate change could not be done without China’s very active participation. Yet only a feeble Biden-Xi dialogue began, amidst China’s human rights abuses and her aggressive entré into the South China Sea. Sino-American relations remained strained at best, hitting their lowest point in the modern era.

This double economic slam – from the pandemic to the trade wars – threatened a generally accepted notion in the PRC: The people would tolerate autocratic rule as long as their economic well-being was improving. Not that there would be a violent revolution against Xi… but his autocratic hold would lose support, from bottom to top. Xi was quite aware of this unwritten edict.

Was it time for a symbolic effort, a show for the people that China’s infamous wealth gap was being addressed? Mimicking a Trumpian proclivity to find people to blame for his failings? Signs of destabilization are growing everywhere. One falling giant was big enough to pull the global stock market down with it (the Dow dropped 1.7%, the worst fall since May, on September 20th). Evergrande, one of China’s largest property developers — now was staggering under more than $300 billion in debt and potential collapse. Dozens of small vendors, including more than a few employees, gathered at the company’s massive headquarters in Shenzhen with vociferous demands against Evergrande’s defaults. But the highly visible entertainment industry was too tempting for blame-seeking Xi. 68-year-old Xi has initiated a crackdown on the superrich and what many believe are overly visible mega-wealthy celebrities from the entertainment world.

Governmental agencies cooperated in formulating Xi’s new plan of enforced economic modesty. Alice Su, writing for the September 16th Los Angeles Times, explains this new attempt by Xi to salve economic wounds and purge cultural impurities: “Celebrity names are vanishing from the credits of TV shows. Effeminate male idols — ‘sissy boys’ — have been vilified. Tech moguls have been urged to donate billions of dollars to philanthropy. And kids went back to school last week with new rules banning foreign textbooks and requiring more classes on the ideology of leader Xi Jinping.

“‘The changes are part of Xi’s new ‘common prosperity’ campaign to narrow the gap between rich and poor and create ‘material and spiritual wealth.’… It’s a noble-sounding slogan. But it looks more like a top-down purification than a strategy for economic reform. Xi is fixed on purging society of greed, corruption and moral failings he views as threats to socialism. Freewheeling capitalists and Western influences have become targets, while structural issues such as bloated state-owned companies and a weak social safety net are left unaddressed.

“‘That has raised questions about whether common prosperity is less a design to reduce inequality than a way to concentrate political power and ideological control while blaming the rich and famous for the nation’s ills.

“‘Over the last month, Xi has cracked down on tech, education and entertainment. He has called for corporations and wealthy individuals to ‘give back more to society’ at a time when the Communist Party is under pressure as the economy cools… Tech titans have scrambled to respond. Tencent and Alibaba have each pledged more than $15.5 billion to ‘common prosperity’ initiatives. The founders of ByteDance, Pinduoduo and Xiaomi have also donated millions to charity.

“Entertainers and entrepreneurs have attracted cult followings in China over the last few decades as their wealth burgeoned along with the country’s rapid growth. Bookstores sold stacks of memoirs by tech billionaires who preached a gospel of self-made success. Alibaba co-founder Jack Ma opened an elite academy to cultivate entrepreneurs…

“The National Radio and Television Administration has released an eight-point plan to purge the entertainment sector of celebrities of ‘fake, ugly and evil values.’… Entertainers should not use their fame for profit or be well paid, the plan said. They should promote traditional culture and ‘establish a correct beauty standard,’ it said, singling out ‘sissy idols,’ or men who wear makeup or act feminine, as a particular offense.” Famous actors and cultist business leaders have simply disappeared from view. Is Xi a cornered cat fighting back or simply escalating his dominion and control of the most populous nation on earth? Time will tell.

I’m Peter Dekom, and is PRC President Xi a reincarnation of the brutal autocratic era of Chairman Mao or is he simply running scared?