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The US elections: an internal war against financial capitalism

BY Alessandro VOLPI

In the US presidential election, the challenge between Harris-Walz and Trump-Vance should rather be defined as a clash between the financial capitalism of the "Big Three" and those who want to weaken its monopoly. Without bothering with the "left" - "right" opposition.

After the announcement of Joe Biden's withdrawal from the presidential race, a permanent conflict within financial capitalism in the US has become increasingly clear. I will try to summarize it and perhaps even simplify it. After the choice of Vance as vice president, after Musk's positions, the ranks of Trump supporters - and financiers - are growing. Issues that refer to a capitalism that is trying to stem the overwhelming power of the Big Three, that is to say the superfunds, Vanguard, Black Rock and State Street, now resolutely linked to the Democrats. Biden and Kamala Harris have had and still have personalities from Black Rock in their team. A character like Jamie Dimon, CEO of J.P. Morgan, the superfund bank, whitewashed by Trump, has long been a candidate for the Democrats. The Fed chairman, with the support of Yellen, has supported the strategies of these same superfunds, by buying their ETFs [Exchange Traded Funds, listed investment funds that follow the performance of an index: editor's note].

The Trumpian rope team against the "Democratic" financial oligopolies.

Faced with this symbiosis, a rope team of figures has emerged, as has been said, who want to use the political power of the Trump presidency to combat or limit precisely the overwhelming power of the Big Three. In this sequence appear some large speculative funds, like that of John Paulson, worried about the progressive marginalization of a "market" standardized by superfunds, some oil companies not directly linked to the energy giants in the hands of the Big Three, like Timothy Dunn and Harold Hamm of Continental Resources, but also long-time billionaires like the Mellons, annoyed by Fink's excessive power, and people like Bernie Marcus, the founder of Home Depot, a behemoth of 500,000 employees, hostile to the fabless model of the big technology companies that he sees emerging in his creation, sold to Vanguard, Black Rock and State Street. Among Trump's capitalists, we also find casino owners, like Steve Wynn and Phil Ruffin, frightened by the advance of the big funds even in their sectors, and typically Trumpian characters like Linda McMahon, founder with her husband of World Wrestling Entertainment. In short, the possibility of Trump's success has triggered a brutal shock within American capitalism, destined to change its internal balance and weaken it.

Now, if we go through the list of Kamala Harris’s donors, we find many representatives of finance linked, in various capacities, to large funds. Indeed, the names of Reid Hoffman, creator of LinkedIn, sold in 2016 to Microsoft for 26 billion dollars and, since then, member of the board of directors of Microsoft itself, of which, as we know, Vanguard, Black Rock and State Street hold more than 20%. Hoffman himself, today, has a significant stake in Airbnb, where the Big Three are major shareholders. Alongside Hoffman, we find Roger Altman, long-time Democratic financier, associated with Carter and Clinton in very delicate roles, who worked for Lehman and Blackstone, and who is today director of the bank Evercore, of which Vanguard holds 9.46%, Black Rock 8.6 and State Street 2.6. Next come Reed Hastings, chairman of Netflix, of which Vanguard holds 8.5%, Black Rock 5.7% and State Street 3.8%, Brad Karp, longtime legal adviser to Jp Morgan, Ray McGuire, chairman of Lazard Inc, of which Vanguard is the largest shareholder with 9.5%, followed by Black Rock with 8.5%, Marc Lasry, CEO of Avenue Capital Group, the hedge fund close to the Big Three, and Frank Baker, owner of a private equity firm. Kamala Harris’ donors also include several members of the Soros family and several key players in major American consulting firms such as Jon Henes and Ellen Goldsmith-Vein. In short, the new potential candidate has gathered a vast cordon of donors who see in Trumpian finance a danger to the "soothing" monopoly carefully cultivated by the super funds, central shareholders of the main companies in the S&P 500 index: one could thus imagine a line-up that intends to defend the main players in global asset management and the shareholders of the giants in the name of protecting savers against the shocks generated by a Republican victory. With, however, signs of "cross" conditioning.

Kamala's "short rope"

Kamala Harris ran in North Carolina to present her program aimed at defending the middle class, identified as those whose income does not exceed $400,000 per year, by committing to supporting private social housing, and by indicating a strategy to curb price speculation. In short, a very generic program, which the Democratic candidate described as an opportunity economy. However, the reference to the desire to hamper price speculation has frightened the Big Three, who, as noted, invested in the Democrats to avoid the "other capitalism" domiciled in the Trump clan. Thus, the New York Post published, shortly after mid-August, a blatant headline in which Mrs. Harris was called a communist, precisely because she wanted to control prices and increase federal spending. In this regard, it is worth noting that the "Post" is owned by News Corp, of which Rupert Murdoch and the Big Three are shareholders, the latter holding more than 20% of the capital. It seems clear that the super funds have been diligent in using a Trumpian vehicle to make Harris understand what he cannot do. In practice, he cannot make policy against the monopoly of speculation. In fact, some seem to think that Mr. Harris is a bit of a communist.

Interesting misunderstandings

In the August 21, 2024 issue of La Repubblica, Paolo Mastrolilli interviewed, with a certain complacency, Bernie Sanders, the “only socialist senator” of the United States. Mastrolilli’s complacency is explained by the fact that Sanders declared that he supported Harris with conviction, almost with adoration. Starting from the premise that Trump is a dangerous fascist, Sanders praised Biden, the most “progressive” president in modern US history, and urged people to vote for Harris so that she could continue her work. Of course, he added, Bernie will have to overcome the resistance of the 1% of the population made up of the super-rich who, he candidly said, “have never been so well off.” Perhaps because the last presidents have done everything to facilitate them? Sanders had written a book on the US economic system, attacking big business; he must have forgotten it when moving.

We are therefore indeed facing the internal shock of a capitalism that, on the one hand, builds its fortune on the financial monopoly understood as an instrument of risk reduction for citizens who have become financial subjects through their policies, and on the other hand, experiences the formation of a bloc intended to weaken this monopoly in the hope of not being excluded from the current bubble and which needs politics, starting with monetary policy, with decidedly more favorable rates, to count. Beyond the popular narratives, which are nevertheless fundamental, these elections conceal a fierce war between financial groups.

The Democrats' political-economic model has been, until now, very understandable. Jerome Powell, the chairman of the Federal Reserve, has announced several times that American interest rates would remain high. The Powell affair, in this sense, is very interesting. Collaborator of Nicholas Brady, Deputy Secretary of the Treasury under Bush, he joined the Carlyle group and created his own private investment bank, then joined the board of directors of the Federal Reserve, with Jeremy Stein, on the nomination of President Obama. Appointed by Trump in February 2018 to head the Federal Reserve, replacing Janet Yellen, considered too close to the Democrats, he was confirmed by Biden, whose line of fighting inflation through a restrictive monetary policy he adopted during his presidency, which certainly favored the large holders of administered savings - the Big Three, in fact - withdrawing liquidity from the markets and contributing, at the same time, to slowing down the dollarization pursued by Biden himself to finance his enormous federal spending, built on debt.

High rates and geopolitics

It is clear that the United States wants to continue to drain savings from around the world to finance its economy, but to pay such high rates to attract savers from around the world, it needs the dollar to be the only global currency, accepted both in financial and geopolitical terms. With this in mind, Joe Biden preferred the path of increasing federal spending to finance the recovery of a productive economy in the United States, made possible by the strength of the dollar, to a competitive dynamic facilitated by lower interest rates. This is also why at the NATO summit in June 2024, the entry of Ukraine was proclaimed, with the immediate support of a Europe very satisfied with its Atlanticism, which imposes the dollar with which the United States finances its economy to the detriment of the European economy. If the United States flexes its muscles and the European "allies" fall into line, the greenback will remain the only currency in the West and the American economy will be able to start producing again, and not just paper. Meanwhile, the rating agencies, owned by major funds, have downgraded the debt of "socialist" France because prevention is better than cure. NATO, rating agency reports and an aggressive foreign policy are the three cornerstones of the democratic "model" that cannot accept any form of isolationism and must pursue global military supremacy, according to Harris' own statements.

Trump's hostility towards NATO, on the other hand, is a sign of tangible political opposition to the Democratic project and expresses the idea that the military alliance cannot be used for economic and monetary purposes, for which other strategies are necessary. The Republican candidate at the Nashville "Miners" conference declared himself in favor of bitcoin and cryptocurrencies, announcing the creation of an ad hoc strategic reserve and a presidential council on the subject. He argued, modifying his old positions, that cryptocurrencies can represent an asset for the American economy, capable of protecting the dollar itself from the risks of international disinterest. Trump does not appreciate the Federal Reserve's high interest rate policy, which generates a dollar that is too strong for the exports of star and striped companies, burdened precisely by the cost of credit, and which risks limiting the spread of the greenback, because it is excessively expensive for its users, especially emerging countries. Trump, cryptocurrencies and the project of a new US monetary centrality

In this perspective, bitcoin and cryptocurrencies become not only an object on which to build speculative operations, perhaps carried out by hedge funds close to Trump himself, but also the means to define a new monetary instrumentation, "ideologically" more popular and anti-state, capable of maintaining monetary centrality by moving it to the digital plane. In this sense, Trump wants to "Americanize" crypto and, consistent with this attitude, he has made it known that he will not put back into circulation the cryptocurrencies seized by the federal authorities, almost 9 billion dollars, in order to constitute the aforementioned strategic reserve and avoid shocks to the approximately 50 million Americans in possession of cryptocurrencies. Above all, he has declared that he will replace the leaders of the SEC, the stock market supervisory authority, starting with Gary Genser, who has always been hostile to this type of payment instrument. Trump himself has also mentioned the possibility of logistically linking energy-intensive AI factories with Miners, in order to optimize the exploitation of otherwise dispersed energy peaks, to aim for global leadership in artificial intelligence and mining. In the same vein, he indicated that government purchases of bitcoins should reach 4 or 5% of the total available volume. The strategy of stablecoins with stable value cryptocurrencies goes in the same direction: companies that issue dollar-linked stablecoins must buy the equivalent in government bonds of the. Thus, by replacing the eurodollar circuit with that of stablecoins, the United States would in fact regain control of the monstrous dollar money supply scattered around the world and today mainly controlled by the City.

Such a clear-cut position can be read as yet another polemic of wild capitalism against the Big Three, which use bitcoins to create ETFs but have always shown great distrust of the entire crypto landscape because bitcoin and cryptocurrencies would reduce the monopoly on liquidity held by the Big Three themselves through managed savings. Multiplying payment instruments favors those who are outside the monopoly on liquidity and opens up a free space, including in speculative terms, outside the choices of Vanguard, Black Rock, State Street and their armed wing J.-P. Morgan. The position taken in Nashville was therefore, once again, aimed at building a consensus towards the Republican candidate on the part of this large part of Americans who did not recognize themselves in the "democratic" model of the large funds, which were able to reduce risk thanks to their monopoly status and were thus able to guarantee millions of Americans health and social protection policies not covered by the State. Cryptocurrencies are a piece of the libertarian paradigm and the "competitive" spirit of capitalism that Trump wants to decline in a patriotic sauce against the Wall Street of the elites, according to candidate Vance. It is likely, in view of these elements, that in addition to Gary Genser, Trump, in the event of victory, would also get rid of Jerome Powell, precisely because of his high-rate policy, currently fueled by a huge amount of short-term emissions, designed to keep long-term rates high without depreciating securities. Trump's victory would be a real financial earthquake on the institutional side that would force the "masters of the world" to accommodate politics, perhaps by modifying the upper structure of financial capital; a "reshuffle" necessary to define the tensions with the Chinese communist economy, currently totally irreconcilable with the democratic-Big Three ensemble.

Progressivism is not synonymous with "left".

Almost the entire Italian press, including Il Manifesto, celebrated Tim Walz’s vice-presidential candidacy as a “left” choice. This is a decidedly far-fetched definition for a figure who, in terms of economic and financial policy, largely aligns himself with Harris. It is no coincidence that, to support this definition, the local media cited Trump’s statements and the support of an increasingly confused Sanders. The real problem is that for the Italian press, “left” is a narrow synonym for “progressivism”; a category that combines broad openings on rights and freedoms with a deeply rooted capitalist faith. Therefore, Harris-Walz vs Trump-Vance should be defined in terms of a clash between capitalisms, without bothering with the term “left” and without having to mention Dick Cheney’s support for Harris, who has even declared himself in favor of hydraulic fracturing.

October 5, 2024

https://www.legrandsoir.info/les-elections-americaines-une-guerre-interne-contre-le-capitalisme-financier.html

TRANSLATION BY JULES LETAMBOUR.

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YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.