As the coronavirus pandemic continues to cause mass death and upheaval around the world, there has been an unexpected side effect: it has unmasked capitalism. In the U.S., this unmasking can be seen in both the Federal Reserve’s actions as well as Congress’ coronavirus aid legislation, the CARES Act, both of which reveal critical truths about an economic system that has been sold to working people as one thing and as quite another to banks and corporations. To shed some much needed light on the intricacies of our financial situation during the latest crisis, “Scheer Intelligence” host Robert Scheer spoke with acclaimed economist and attorney Ellen Brown.
There are plenty of parallels to be drawn between the last financial crisis and the coronavirus pandemic, with the clear exception being that now we’re not just dealing with a broken economy but with a deadly virus. Brown, who has written over a dozen books on economics and is the founder of the Public Banking Institute, explains how, unfortunately, the Covid-19 bailouts will once again betray Americans just as the 2008 stimulus did.
“In 2008 the bailout was basically of the banks, or we had quantitative easing that went to the banks,” the author tells Scheer. “And then the idea was that the banks were supposed to lend that into the real economy, but of course, they didn't do it. … But now we have even more credit facilities [and] the problem is, they're all going to help the big corporations, and the hedge funds, and virtually every sort of shady business. Things the Federal Reserve couldn't lend to before, [but] now they have new ways of doing it.”
The nefarious uses of the CARES Act have been blasted all over the press, and now news has emerged that the Federal Reserve is planning on handing big corporations a whopping half a trillion dollars with “no strings attached” and zero interest. As Scheer points out, however, this seemingly miraculous economic response at times of crisis, when money is suddenly conjured out of thin air, is nothing new.
“The fact is, this is like what happens in wartime. You know, you had the Great Depression, [and when ] we went to war, suddenly [Franklin Delano] Roosevelt was able to really spend money,” says the “Scheer Intelligence” host, “And as a result, we got out of the Great Depression. In wartime, the government just prints money, finds it somewhere, and no questions asked.
“And that's what happened now,” Scheer goes on. “Because of this pandemic, Congress just said, OK, we're going to find--what, you said $4 trillion; I'm sure it'll grow to $8 trillion. They don't do that ever about, say, dealing with poverty or education, or any of these things; they always are very tight with the dollar. But now, because we have this warlike situation, they can suddenly find this money, and they can spend it in a totally unaccountable way.”
But just as the deadly pandemic is becoming yet another opportunity for Wall Street and corporations to swindle the public with the help of the government, it’s also finally made one thing very clear: Universal Basic Income is absolutely possible.
“As you say, if they could find the money for all that,” Brown tells Scheer in response to his summary regarding how money has always been funneled to the top, “they could clearly find the money for the people. My preferred option [is what] they call ‘helicopter money.’ Money that's just created by the Federal Reserve and flown--theoretically, the original term came from flying helicopters over the people and just dropping the money equally on everybody. And we could still do that, and that's called a Universal Basic Income.”
Brown goes on to explain in detail why it’s not only affordable, but won’t cause the massive inflation that critics so often write about whenever the measure is suggested.
“It's not going to be inflationary,” she explains, “and that's because of the way money comes into existence. We don't really have a money system; we have a credit system. All of our money is credit; it's created as credit on the books of banks, and it's extinguished when the loans are paid off.”
Perhaps her most shocking calculation is that were the current stimulus money to be divvied up and sent directly to families, it would end up being $13,000 per person, not the measly $1,200 the government is sending out as a one-off. Where, you may ask, did all the rest of that money go? As Brown and Scheer continually remind us, it’s been sent to the companies that pull all the strings in our rigged system.
Listen to the full conversation between Brown and Scheer as they discuss everything from public banking options to the hidden economic meaning of “The Wizard of Oz.”