- A “class inflection” to the unvaxxed lockdown in Austria
- The Rittenhouse trial: One more distraction from the COVID economy
- Our favorite chart and the Fed’s favors for the 1%
- Vaccine mandates are “a line in the sand” like nothing else
- Now comes the “revolt of the essential workers.”
“It’s eerie — and talking to people I can’t escape the feeling that the measure is more punitive than practical,” journalist Freddie Sayers writes from Vienna.
As perhaps you’ve heard, the government of Austria imposed a “lockdown for the unvaccinated” yesterday. About 30% of the adult population is under orders to stay inside their homes.
“They are allowed to leave only to buy essential food, to travel to and from essential work and for physical exercise. Leisure of any kind is forbidden. In effect, this means that 2 million Austrians are currently under partial house arrest.
“What strikes me most is the class inflection to the whole thing,” Sayers continues, describing his Viennese video shoot for the UnHerd website.
“We started [yesterday] morning on one of the fancier shopping streets in the old town, full of Rolex and Karl Lagerfeld stores in which well-heeled locals lined up to express their support for the lockdown. There is very little sympathy for a truculent minority that is seen as ‘stupid’ and ‘having brought it on themselves.’
“On the same street, however, if you approach the people wearing fluorescent vests, guarding the stores and making deliveries, you tend to get a different response. They are more reluctant to speak to us, but decidedly less supportive. ‘It is bull****,’ was one man’s pithy response.”
Sayers came away from his interviews with the impression that pro-lockdown voters are motivated in part by a thirst for punishment. “They don’t understand people who are not taking the vaccine, they don’t like them and they are slightly afraid of them — so the simplest thing is to remove them from society altogether.”
We’ll come back to the subject of vaccine mandates later in our 5 Mins.
But in the meantime…
“As the country again prepares to go to war with itself, this time over a high-profile trial, a bigger story goes unnoticed,” says the subhead to an article by Matt Taibbi — the writer who forever linked the name Goldman Sachs with the term “vampire squid.”
Unless you’re living under a rock, you’re likely aware the trial of Kyle Rittenhouse in Kenosha, Wisconsin, goes to the jury today.
Taibbi devotes a fair chunk of his Substack article to how Rittenhouse became a touchstone in the culture wars — “a symbol of so many things to so many people that the specifics of his legal case have ceased to be relevant.”
But money and markets being our beat here, it’s the rest of Taibbi’s piece that captures our attention.
“On the day the Rittenhouse trial began, the financial data firm FactSet released an eyebrow-raising report about the COVID-19 economy,” Taibbi writes.
“The firm noted that companies in the S&P 500 were set to post a net 12.9% profit in the third quarter of 2021. They pointed out this was the second-highest result since the firm began tracking the number in 2008.
“The only better result? The previous quarter, i.e., Q2 2021, when net profits sat at 13.1% overall.”
In an era when the media stir the culture-war pot at every opportunity, “these results track with the true great story of the pandemic era, which not-so-mysteriously hasn’t made the news much… the massive widening of our already-obscene wealth gap.”
All told, corporate profits swelled 71% from the second quarter of 2020 to Q2 2021. On a long-term chart, it’s nothing less than astonishing…
Meanwhile, “compared with how often you heard pundits rage about the ‘insurrection,’” Taibbi writes, “how regularly did you hear that billionaire wealth has risen 70%, or $2.1 trillion, since the pandemic began?”
Well, that’s why you read The 5 to supplement your consumption of the mainstream business press: We told you way back in June 2020 how the wealth of America’s billionaire class had swelled 20% in only three months.
And we linked it directly to the explosive growth of the Federal Reserve’s balance sheet, as the Fed bought up Treasuries, mortgage bonds, corporate bonds and municipal bonds.
But that’s not a new story. “The Fed’s monetary policies have failed to boost the real incomes of most people but have had an enormously favorable impact on just 0.1%, or the ‘1%,’ as they are commonly referred to,” wrote the estimable Marc Faber in 2013.
Faber’s evidence was a chart we’ve shared many times in the years since. We can’t unearth a more current version, but we have no reason to believe matters have gotten better — and every reason to believe they’ve gotten worse.
Look closely at how the bottom 90% experienced a decline in inflation-adjusted income from 2002–2012… and the 5% above them were merely treading water.
“In fact,” Faber wrote, “I would argue that the Fed is fully responsible for the fact that 90% of U.S. families have had declining real incomes (inflation adjusted) over the last 10 years or so (as money printing raised the prices of energy, food, education, transportation, health care, insurance, etc.) and have experienced a decline in their net worth.
“After all, it was the Fed that repeatedly and deliberately created and continues to create bubbles, which benefit only a minority, while hurting the majority.”
And to think that was at a time when inflation was “low” — at least compared with now.
But few everyday Americans grasped that cause and effect. They merely knew they were getting a raw deal.
And so the ones who were outraged enough to take to the streets cleaved into two factions — the tea party movement and Occupy Wall Street.
A decade ago, we shared a Venn diagram of the two worldviews and how they intersected…
We did so to illustrate how the power elite had disenfranchised diverse groups of people — and how the two movements had more in common than either side was willing to admit.
Eventually we’d run it just to jerk the chain of our tea party readers who resented being lumped in with those dirty freaking hippies — heh.
Which, unfortunately, brings us back to Taibbi’s main point. “Keeping the volk at each other’s throats instead of pitchforking the aristocrats is an old game, one that’s now gone digital and works better than ever.”
In the very late pre-internet years, the late great George Carlin skewered this phenomenon during his 1992 Jammin’ in New York appearance.
“That’s all you ever hear about in this country is our differences,” he said. “That’s all the media and the politicians are ever talking about: the things that separate us, things that make us different from one another.
“That’s the way the ruling class operates in any society: They try to divide the rest of the people; they keep the lower and the middle classes fighting with each other so that they, the rich, can run off with all the ****ing money. Fairly simple thing… happens to work.
“You know, anything different, that’s what they’re gonna talk about: race, religion, ethnic and national background, jobs, income, education, social status, sexuality, anything they can do to keep us fighting with each other so that they can keep going to the bank.”
But starting around 2008, the year Carlin died, a peculiar thing started to happen: The ruling classes became more brazen in how they looked down on their inferiors.
In decades gone by, the Democratic Party valued its members who owned a firearm and went to church. But by 2008, Barack Obama felt comfortable telling campaign donors in San Francisco about people who “cling to guns or religion.” By 2016, Hillary Clinton ventured that half of her opponent’s supporters were a “basket of deplorables.” (Again, the audience was donors.)
This rarefied crowd scoffed at the notion that “economic insecurity” had anything to do with the groundswell of support for Donald Trump (and, among the Occupy types on the left, Bernie Sanders). How could anyone not thrive in Barack Obama’s bailed-out nation? If they weren’t thriving, it must be the result of a character flaw.
They really thought — and think — this way. Shocking, when you realize it’s the same way many conservatives talked about “lazy” or “shiftless” people of color 40 or 50 years ago.
Now in the pandemic era, this phenomenon manifests itself in pictures of elite public events like the Met Gala in New York two months ago… where unmasked guests were attended to by masked servants.
Now that we’re talking about the virus again, there’s a bone we have to pick with Taibbi’s takes — and it’s a serious one.
As he tees up the topic of how the culture wars serve as a distraction from the ruling classes’ consolidation of wealth and power… he lumps in “vaccination policy” with matters such as white privilege, gender-neutral pronouns and whatnot.
No. “Vaccination policy” is on a whole other level. It transcends the culture-war divide. It touches nearly every level of human interaction — commerce not the least of them.
In recent weeks we’ve chronicled how mandates and the resistance to them have (in all likelihood) scrambled airline schedules. And if they start to scramble the nexus of already-fragile supply chains at FedEx, UPS and Walmart… well, that’s a whole other level of chaos in the offing.
That’s because “vaccination policy” is a “line in the sand” like nothing else.
“When you thought about your line in the sand I’ll bet you never thought about this,” writes the venerable freedomista author Claire Wolfe at her blog this week.
“I bet you thought about gun confiscation or internment camps or invasion by blue-helmeted ‘peacekeepers.’ Maybe you believed your line in the sand would be reached if your religion was outlawed or your son or daughter was drafted to fight in one of the empire’s future foreign wars. Your personal line in the sand could be any one, or two, or three of a million acts of government overreach.
“But who thought of this?
“I’ve asked around and nobody I’ve spoken with has said, “I thought I’d reach my line in the sand when the government ordered millions to submit to an inoculation — or else lose their jobs and potentially starve.”
But here we are.
Still, it’s not happening without opposition — or what writer Alex Gutentag calls the “revolt of the essential workers” in an article at the online magazine Tablet.
At the outset of lockdown, he writes, “the ‘nonessential’ ordered delivery from home while farmhands harvested crops, workers in meatpacking plants processed and packaged products, truckers shipped food across the country, cooks prepared dishes, DoorDash ‘dashers’ dropped off takeout on doorstops and sanitation workers picked up the trash.
“This division allowed the professional class to be protected from exposure to the virus and set the stage for a two-tier society. These tiers are now upheld by medieval protocols that require service workers to remain masked while patrons show their bare faces, and by vaccine pass systems that disproportionately impact and exclude poor and working-class people, especially people of color.”
But with the vaccine mandate as a line in the sand — don’t forget the legions of health care workers losing their jobs at hospitals and clinics that get Medicare/Medicaid funding — that’s starting to change.
“Now,” writes Gutentag, “after treating so many people as disposable pawns, the professionals who provided justifications for lockdowns and vaccine mandates may experience the repercussions of these policies in the form of strikes and shortages.
“If workers can create enough inconvenience for the intelligentsia and enough loss of revenue for corporations and elites, they may be able to gain some ground.”
Meanwhile, back in Austria…
OK, so it’s hard to envision random vax-checks happening in these United States, barring an outright suspension of the Constitution. The Fourth Amendment bars “unreasonable searches and seizures.” Over time, the courts have recognized that law enforcement can’t accost you unless they have “reasonable suspicion” you’re breaking the law.
In addition, there are legions of law enforcement who are themselves resisting vaccine mandates… and even if they’re complying, many of them might be liable to “slow-roll” their patrols.
Nonetheless, as our favorite political reporter Michael Tracey tweets, “Does anyone really doubt that certain Democratic elected officials in the U.S. would do this in an instant — ‘lock down’ and forcibly segregate ‘the unvaccinated’ — if they could get away with it politically/legally/logistically?”
After all, that’s what their well-heeled donors and professional-class supporters would want, right?
They’re no different from the elites in Vienna decked out in Rolexes and Lagerfeld designs, who would just as soon deal with the unvaccinated by “removing them from society altogether.”
Dave Gonigam
The 5 Min. Forecast
P.S. We dumped on Democrats a lot today. But never forget, as our colleague Jeffrey Tucker often reminds readers, that Donald Trump made this hellscape possible by caving so readily at the outset to the “experts.” All his performative opposition later was meaningless.
P.P.S. Back to that chart: The top 0.1% are the only people who are substantially better off now than they were at the dawn of the 21st century.
Meanwhile, the 9.9% below them are holding their own because the top 10% combined own 85% of all the stocks. But the 45% who own the other 15% of the stocks continue struggling… and the 45% who own no stocks at all are sinking further into a permanent underclass.
Once more, we reaffirm our commitment to you as a subscriber to one of our paid newsletters and/or premium trading services: Our objective is to help you move from wherever you are now to the next highest level.
Thanks for indulging us with one of our single-topic rambles today. Back to regular programming tomorrow.
