By Robert A. Vella
The glory days of unrestrained capitalism begun during the Reagan-Thatcher era are coming to an end and the world’s elite now realize it. The endeavor was doomed from the start because it was based on two flawed principles: 1) that wealth and power could be extracted from the then-prosperous middle classes without destabilizing the existing social order, and 2) that civilization’s capacity for expansion and growth was unlimited. The concurrent and related dual-crises of rising political extremism/social unrest and accelerating climate change have shattered those two misguided philosophical myths. The world today is far removed from the feudal societies of the past when oppressive regimes had little to fear except from each other; and, that was exactly what the economic neoliberalism of capitalism’s currently failing glory days was intended to be – a modernized remaking of those controlled, hierarchical medieval societies.
This unwelcome realization was slow in coming, but it had to happen eventually. Today’s icons of capitalism, many of the leading executives of the world’s largest and most successful corporations, have issued a remarkable statement which would have been unthinkable just a few years ago. It abandons neoliberalism’s profit-at-all-costs mentality and calls for more social responsibility which, by the way, was encoded into corporate charters during the first century of United States history. But, before getting to that surprising story, here are the news stories to kickoff the week which all support the theme of this post.
More troubling signs for the global economy
An unprecedented surge in sovereign debt across the world has driven 10-year yields in the Iberian nations to record lows just shy of 0%. With about $16 trillion of global debt now paying negative rates, investors are snapping up positive yields wherever they can find them — even if that means getting into some of the euro area’s riskier markets.
While that marks an extraordinary turnaround for countries once on the brink of bankruptcy, it also highlights a new era for bond markets where yields are perpetually low and central banks can do little to revive inflation. And it comes with its own perils — the growing fear that a bond bubble is in the making.
Yields have turned negative in the highest-rated euro-area markets, as pessimism deepens over global growth prospects. The rally is also being fueled by rising expectations of policy easing by the European Central Bank. The ECB should come up with an “impactful and significant” stimulus package at its next meeting in September, policy maker Olli Rehn was reported as saying on Thursday.
HONG KONG —Hundreds of thousands of protesters, facing an intensifying police crackdown and threats of military force from Beijing, responded Sunday with a huge and peaceful march, underscoring continued mass support for the pro-autonomy movement here.
Although authorities did not grant permission for a march and a torrential downpour soaked demonstrators, the spontaneous procession made its way haphazardly across the city, participants defiantly chanting calls for freedom and repudiating alleged police brutality.
Organizers estimated the turnout at more than 1.7 million — among the largest demonstrations seen here in weeks. It was marked by restraint from protesters, who urged one another to avoid confrontations with police.
As Hong Kong seethes with protests against China’s rule, Beijing is increasingly pressuring the business world to take its side. Businesses, both global and local, are falling in line — and their employees are caught in the crossfire.
The most dramatic example came on Friday, when Rupert Hogg, the chief executive of Hong Kong-based Cathay Pacific Airways, resigned in the face of Chinese pressure after some of the airline’s workers participated in the demonstrations .
Now, global accounting firms are coming under the same pressure.
The Big Four firms — PwC, Deloitte, KPMG and Ernst & Young, now known as EY — put out statements distancing themselves from a full-page ad supporting the demonstrations that appeared in Hong Kong’s Apple Daily newspaper on Friday. The ad was signed and paid for by a group of anonymous employees of the firms.
Riots broke out and a local parliament building was torched in Indonesia’s restive Papua region on Monday, as thousands protested against the weekend detention of dozens of Papuan students.
Demonstrators took to the streets of Manokwari, the capital of West Papua province, bringing the city of some 130,000 to a standstill as its civic building was nearly reduced to ashes.
The riots marked the latest flashpoint in a region hit by a decades-old insurgency against Indonesian rule and allegations that its security forces committed widespread rights abuses against its ethnic Melanesian population.
Tumultuous weather is expected to continue across much of the middle of the country after a weekend of heavy summer weather.
There were 422 damaging storm reports over the weekend from the central Plains into the Northeast corridor, including wind gusts of 94 MPH in Texas and winds topping 60 mph in Indiana, Ohio and Illinois.
The hot and humid air mass currently sitting over the Midwest will fuel storms expected to hit the Ohio Valley and the Northeast Monday and into Tuesday. Strong winds, lightning and heavy rain are expected.
Anthony Scaramucci, a former White House communications director who has recently withdrawn his support for President Donald Trump, said Monday that he is putting together a coalition of former Trump Cabinet officials to denounce the President ahead of the 2020 election.
“I’m in the process of putting together a team of people that feel the exact same way that I do. This is not a ‘Never Trump’ situation. This not just screeching rhetoric. This is — OK, the guy is unstable. Everyone inside knows it, everyone outside knows it. Let’s see if we can find a viable alternative,” Scaramucci told CNN’s Alisyn Camerota on “New Day.”
“Moreover, I have to get some former Cabinet officials in unity to speak up about it. They know it’s a crisis,” he added. Scaramucci did not provide any names of people associated with the coalition he said he is assembling, but predicted that by “middle to late fall” there will be a “trove” of people willing to speak out against Trump.
In an interview with CNN’s John Berman, FEC chair Ellen Weintraub says President Trump’s baseless claims of election fraud undermine people’s faith in the system.
The choice for thousands of union workers at Royal Dutch Shell’s petrochemical plant in Beaver County was clear Tuesday: Either stand in a giant hall waiting for President Donald Trump to speak or take the day off with no pay.
“Your attendance is not mandatory,” said the rules that one contractor relayed to employees, summarizing points from a memo that Shell sent to union leaders a day ahead of the visit to the $6 billion construction site. But only those who showed up at 7 a.m., scanned their ID cards, and prepared to stand for hours — through lunch but without lunch — would be paid.
“NO SCAN, NO PAY,” a supervisor for that contractor wrote.
BLOOMINGTON, Ind. — Justin Williams was baking a tray of gluten-free seeded bread for the next morning’s farmers’ market when his phone buzzed. It was a friend who grows organic sprouts, nervously wondering if he should bring along a shotgun to market.
It has been a summer of fear, protest and tension in this crunchy college town ever since the popular Saturday morning farmers’ market was jolted by allegations that a husband and wife who had been longtime sellers of organic tomatoes and kale were also white nationalists.
The accusations exploded into public view after activists and online sleuths used federal court records and the leaked archives of a far-right message board to uncover a digital trail they say connects the couple who own Schooner Creek Farm to an organization that promotes white nationalism and “white American identity.”
The rumors of white supremacy amid the stalls of clover honey and sweet corn left farmers and shoppers reeling: Not even their seemingly placid farmers’ market was immune from the battles over extremism convulsing the country at a time of rising alarm over whitesupremacist violence.
Capitalism tries to save itself
Shareholder value is no longer the main focus of some of America’s top business leaders.
The Business Roundtable, a group of chief executive officers from major U.S. corporations, issued a statement Monday with a new definition of the “purpose of a corporation.”
The re-imagined idea of a corporation drops the age-old notion that corporations function first and formest to serve their shareholders and maximize profits. Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement.