Zombies: Ranks of world’s most debt-hobbled companies are soaring, and not all will survive



Shoppers enter exit a Bed Bath & Beyond store Monday, May 29, 2023, in Glendale, Colo. The big-box chain is staging store closing sales at its 360 locations after filing for bankruptcy in late April 2023. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. 

(AP Photo/David Zalubowski, File)


Shoppers enter a Bed Bath & Beyond store Monday, May 29, 2023, in Glendale, Colo. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States.

 (AP Photo/David Zalubowski)


Signage is outside the Bed Bath & Beyond corporate headquarters building in Union, N.J., on Wednesday, June 5, 2024. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States.

 (AP Photo/Stefan Jeremiah)

The rain comes down from the roof at the Old Trafford stadium at the end of the English Premier League soccer match between Manchester United and Arsenal, in Manchester, England, Sunday, May 12, 2024. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. 

(AP Photo/Dave Thompson, File)


BY BERNARD CONDON
 June 7, 2024Share

NEW YORK (AP) — They are called zombies, companies so laden with debt that they are just stumbling by on the brink of survival, barely able to pay even the interest on their loans and often just a bad business hit away from dying off for good.

An Associated Press analysis found their numbers have soared to nearly 7,000 publicly traded companies around the world — 2,000 in the United States alone — whiplashed by years of piling up cheap debt followed by stubborn inflation that has pushed borrowing costs to decade highs.

And now many of these mostly small and mid-sized walking wounded could soon be facing their day of reckoning, with due dates looming on hundreds of billions of dollars of loans they may not be able to pay back.

“They’re going to get crushed,” Valens Securities Managing Director Robert Spivey said of the weakest zombies.

Added Miami investor Mark Spitznagel, who famously bet against stocks before the last two crashes: “The clock is ticking.”

Zombies are commonly defined as companies that have failed to make enough money from operations in the past three years to pay even the interest on their loans. AP’s analysis found their ranks in raw numbers have jumped over the past decade by a third or more in Australia, Canada, Japan, South Korea, the United Kingdom and the U.S., including companies that run Carnival Cruise Line, JetBlue Airways, Wayfair, Peloton, Italy’s Telecom Italia and British soccer giant Manchester United.


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Takeaways from AP analysis on the rise of world’s debt-laden ‘zombie’ companies


Stock market today: Stocks slip and bond yields jump following a hotter-than-expected jobs report


US hiring and wage growth picked up last month in sign of sustained economic health


To be sure, the number of companies, in general, has increased over the past decade, making comparisons difficult, but even limiting the analysis to companies that existed a decade ago, zombies have jumped nearly 30%.

They include utilities, food producers, tech companies, owners of hospitals and nursing home chains whose weak finances hobbled their responses in the pandemic, and real estate firms struggling with half-empty office buildings in the heart of major cities.

As the number of zombies has grown, so too has the potential damage if they are forced to file for bankruptcy or close their doors permanently. Companies in the AP’s analysis employ at least 130 million people in a dozen countries.

Already, the number of U.S. companies going bankrupt has hit a 14-year high, a surge expected in a recession, not an expansion. Corporate bankruptcies have also recently hit highs of nearly a decade or more in Canada, the U.K., France and Spain.

Some experts say zombies may be able to avoid layoffs, selloffs of business units or collapse if central banks cut interest rates, which the European Central Bank began doing this week, though scattered defaults and bankruptcies could still drag on the economy. Others think the pandemic inflated the ranks of zombies and the impact is temporary.

“Revenue went down, or didn’t grow as much as projected, but that doesn’t mean they are all about to go bust,” said Martin Fridson, CEO of research firm FridsonVision High Yield Strategy.

For its part, Wall Street isn’t panicking. Investors have been buying stock of some zombies and their “junk bonds,” loans rating agencies deem most at risk of default. While that may help zombies raise cash in the short term, investors pouring money into these securities and pushing up their prices could eventually face heavy losses.

“We have people gambling in the public markets at an unprecedented level,” said David Trainer, head of New Constructs, an investment research group that tracks the cash drain on zombies. “They don’t see risk.”

WARNING SIGNS

Credit rating agencies and economists warned about the dangers of companies piling on debt for years as interest rates fell but got a big push when central banks around the world cut benchmark rates to near zero in the 2009 financial crisis and then again in the 2020-21 pandemic.

It was a giant, unprecedented experiment designed to spark a borrowing binge that would help avert a worldwide depression. It also created what some economists saw as a credit bubble that spread far beyond zombies, with low rates that also enticed heavy borrowing by governments, consumers and bigger, healthier companies.

The difference for many zombies is they lack deep cash reserves, and the interest they pay on many of their loans is variable, not fixed, so higher rates are hurting them right now. Most dangerously, zombie debt was often not used to expand, hire or invest in technology, but on buying back their own stock.

These so-called repurchases allow companies to “retire” shares, or take them off the market, a way to make up for new shares often created to boost the pay and retention packages for CEOs and other top executives.

But too many stock buybacks can drain cash from a business, which is what happened at Bed Bath & Beyond. The retail chain that once operated 1,500 stores struggled for years with a troubled transition to digital sales and other problems, but its heavy borrowing and decision to spend $7 billion in a decade on buybacks played a key role in its downfall.

Those buybacks came amid big paydays for top management, which Bed Bath & Beyond said in regulatory filings were intended to align with financial performance. Pay for just three top executives topped $140 million, according to executive data firm Equilar, even as its stock sunk from $80 to zero. Tens of thousands of workers in all 50 states lost their jobs as the chain spiraled to its bankruptcy filing last year.

Companies had a chance to cut their debt after then-President Donald Trump’s 2017 tax overhaul slashed corporate rates and allowed repatriation of profits overseas. But most of the windfall was spent on buybacks instead. Over the next two years, U.S. companies spent a record $1.3 trillion repurchasing and retiring their own stock, a 50% jump from the prior two years.

SmileDirectClub went from spending a little over $1 million a year on buying its own stock before the tax cut to spending $780 million as it boosted pay packages of top executives. One former CEO got $20 million in just four years. Stock in the heavily indebted teeth-straightening company plunged before it went out of business last year and put 2,700 people out of work.

“I was like, ‘How did this ever happen?’” said George Pettigrew, who held a tech job at the company’s Nashville, Tennessee, headquarters. ”I was shocked at the amount of the debt.”

Another zombie, JetBlue, suffered problems felt by many airlines, including the lingering impact of lost business during the pandemic. But it also was hurt by the decision to double its debt in the past decade and purchase hundreds of millions of dollars of its own stock. As interest costs soared and profits evaporated, that stock has dropped by two-thirds, and JetBlue has not made enough in pre-tax earnings to pay $717 million in interest over four straight years.

JetBlue said the AP’s way of screening for zombies isn’t accurate for airlines because big purchases of aircraft “are an intrinsic part of the business model” and don’t reflect an airline’s true health. The company added that it’s been shoring up its finances recently by cutting costs and putting off purchases of new planes. JetBlue also hasn’t done a major stock buyback in four years.

In some cases, borrowed cash has gone straight into the pockets of controlling shareholders and wealthy family owners.

In Britain, the Glazer family that owns much of the Premier League’s Manchester United soccer franchise loaded up the company with debt in 2005, then got the team to borrow hundreds of millions a few years later. At the same time, the family had the team pay dividends to shareholders, including $165 million to the Glazers themselves, while its stadium, the Old Trafford, fell into disrepair.

“They’ve papered over the cracks but we’ve been in decline for more than a decade,” fan lobbying group head Chris Rumfitt said after a recent downpour sent water cascading from the upper stands in what spectators dubbed “Trafford Falls.” “There have been zero investments in infrastructure.”

The Glazers, who separately own the NFL’s Tampa Bay Buccaneers, recently brought in a new part owner at Manchester United who has promised to inject $300 million into the business. The stock is falling anyway, down 20% so far this year to $16.25, no higher than it was a decade ago.

Manchester United declined to comment.

Zombie collapses wouldn’t be so scary if robust spending by governments, consumers and larger, more stable companies could act as a cushion. But they also piled up debt.

The U.S. government is expected to spend $870 billion this year on interest on its debt alone, up a third in a year and more than it spends on defense. In South Korea, consumers are tapped out as credit card and other household debt hit fresh records. In the U.K., homeowners are missing payments on their mortgages at a rate not seen in years.

A real concern among investors is that too many zombies could collapse at the same time because central banks kept them on life support with low interest rates for years instead of allowing failures to sprinkle out over time, similar to the way allowing small forest fires to burn dry brush helps prevent an inferno.

“They’ve created a tinderbox,” said Spitznagel, founder of Universa Investments. “Any wildfire now threatens the entire ecosystem.”

TIME RUNNING OUT?

For the first few months of this year, hundreds of zombies refinanced their loans as lenders opened their wallets in anticipation that the Federal Reserve would start cutting in March. That new money helped stocks of more than 1,000 zombies in AP’s analysis rise 20% or more in the past six months across the dozen countries.

But many did not or could not refinance, and time is running out.

Through the summer and into September, when many investors now expect the first and only Fed cut this year, zombies will have to pay off $1.1 trillion of loans, according to AP’s analysis, two-thirds of the total due by the end of the year.

For its calculations, the AP used pre-tax, pre-interest earnings of publicly-traded companies from the database FactSet for both years it studied, 2023 and 2013. The countries selected were the biggest by gross domestic product: the U.S., China, Japan, India, Germany, the U.K., France, Canada, South Korea, Spain, Italy and Australia.

The study did not take into account cash in the bank that a company could use to pay its bills or assets it could sell to raise money. The results would also vary if other years were used due to economic conditions and interest rate policies. Still, studies by both the International Monetary Fund and the Bank for International Settlements, an organization for central banks in Switzerland, generally support AP’s findings that zombies have risen sharply.

Most of the publicly traded companies in the countries studied — 80% of 34,000 total — are not zombies. These healthier companies tend to be bigger with more cash, and many have reinvested it in higher-yielding bonds and other assets to make up for the higher interest payments now. Many also took advantage of pandemic-era low rates to refinance, pushing out repayment due dates into the future.

But the debt hasn’t gone away, and could become a problem for these companies as well if rates don’t fall over the next few years. In 2026, $586 billion in debt is coming due for the companies in the S&P 1500.

“They aren’t on anyone’s radar yet, but they are a hurricane. They could be a Category 4 or Category 5 if interest rates don’t go down,” Valens Securities’ Spivey said. “They’re going to lay people off. They’re going to have to cut costs.”

Some zombies aren’t waiting.

Telecom Italia struck a deal last year to sell its landline network but debt fears continue to push down its stock, so it has moved to put its subsea telecom unit and cell tower business up for sale, too.

Radio giant iHeartMedia, after exiting bankruptcy five years ago with less debt, is still struggling to pay what it owes by unloading real estate and radio towers. Its stock has fallen from $16.50 to $1.10 in five years.

Exercise company Peloton Interactive has laid off hundreds of workers to help pay debt that has more than quadrupled to $2.3 billion in just five years even though its pretax earnings before the new borrowing weren’t enough to pay interest. Stock that had soared to more than $170 a share during the pandemic recently closed at $3.74.

“If rates stay at this level in the near future, we’re going to see more bankruptcies,” said George Cipolloni, a fund manager at Penn Mutual Asset Management. “At some point the money comes due and they’re not going to have it. It’s game over.”
___

AP Soccer Writer James Robson contributed from Manchester, England.
___

Contact AP’s global investigative team at Investigative@ap.org or https://www.ap.org/tips/

- A corner flag showing the logo of Manchester United is seen ahead of the English FA Cup 4th round soccer match between Manchester United and Reading at Old Trafford in Manchester, England, Saturday, Jan. 28, 2023. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. (AP Photo/Rui Vieira, File)

A view of the Tim Italia headquarters (Telecom Italia Mobile), in Rozzano, near Milan, Italy, Friday, May 24, 2024. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. (AP Photo/Antonio Calanni)

 The tail of a JetBlue Airways Airbus A321 is shown as the plane prepares to take off from Fort Lauderdale-Hollywood International Airport, Tuesday, Jan. 19, 2021, in Fort Lauderdale, Fla. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. (AP Photo/Wilfredo Lee, File)


A view of the Tim Italia headquarters (Telecom Italia Mobile), in Rozzano, near Milan, Italy, Friday, May 24, 2024. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. (AP Photo/Antonio Calanni)

Signs are outside the Bed Bath & Beyond corporate headquarters building in Union, N.J., Wednesday, June 5, 2024. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. (AP Photo/Stefan Jeremiah)

Weeds grow outside the entrance of the Bed Bath & Beyond corporate headquarters building in Union, N.J., Wednesday, June 5, 2024. An Associated Press analysis found the number of publicly-traded “zombie” companies — those so laden with debt they’re struggling to pay even the interest on their loans — has soared to nearly 7,000 around the world, including 2,000 in the United States. (AP Photo/Stefan Jeremiah)

LA REVUE GAUCHE - Left Comment: Search results for ZOMBIE CAPITALISM 

Gore Kulture

No not Al Gore.

Gore as in Grand Guignol as in a specific sub genre of horror movies; slasher films, blood and guts movies like Saw, Hostile, etc.

The Peculiar Charms of the Grand Guignol

by Gideon Lester

"At one performance, six people passed out when an actress, whose eyeball was just gouged out, re-entered the stage, revealing a gooey, blood-encrusted hole in her skull. Backstage, the actors themselves calculated their success according to the evening's faintings. During one play that ended with a realistic blood transfusion, a record was set: fifteen playgoers had lost consciousness. Between sketches, the cobble-stoned alley outside the theatre was frequented by hyperventilating couples and vomiting individuals."

-- Mel Gordon, The Grand Guignol:
theatre of fear and terror.

We can go back to Shakespeare to find the first real case of Grand Guignol in theatre;

Titus Andronicus is a play with "14 killings, 9 of them on stage, 6 severed members, 1 rape (or 2 or 3, depending on how you count), 1 live burial, 1 case of insanity and 1 of cannibalism--an average of 5.2 atrocities per act, or one for every 97 lines."

We seem to have moved from a rash of horror films to gore films in four short years. The gore phenomena is specific to the current mass culture we are experiencing.

We have seen an increase in horror films, just as we did during the depression and again during the Viet Nam war, horror films reflect the need for social catharsis during times of cultural stress.

The Gore film on the other hand was an underground phenomena, much like Grand Guignol. It first appeared not in film but in the fifties as crime and horror comics.

It existed since the early sixties, as a b-film phenomena in particular the films of Herschell Gordon Lewis, but became popular in the eighties with the works of Stuart Gordon and Sam Raimi. It expanded in the nineties with the work of Clive Barker, in particular the Hellraiser series, now coming to the small screen as a computer game.

But these were horror movies, there was gore, but there was also humour, atmosphere, the gore was incidental, there to frighten you as much as the thing that jumps out of the dark.

But today the movies are Gore for gore's sake. In that they hearken back to Herschell Gordon Lewis work and Romero's Night of the Living Dead. But unlike them they are major studio releases, a popular film phenomena on the big screen and the producers of the goriest of the gore films; Saw I, II and III are Canadian.

It is reflective of the current social crisis of sociopathology that is in the headlines. Man kills and BBQs girlfriend

Take for instance the Picton murder case and its Edmonton counter part the serial killing of prostitutes, or this recent Edmonton case that was in the news for weeks;

Michael Briscoe, acquitted in the rape and murder of Nina Courtepatte, is haunted by his failure to intervene and try to save her when she was brutally attacked 2 years ago

Edmonton, with its record-high murder rate, is quickly losing its reputation as a safe city.

But it's not just the creeping crime wave that's spooking people. It's the grim reality that we are now known for one of the most odious killings in the country.

Malls are supposed to be places where young people hang out, shop and flirt - not where a strikingly pretty 13-year-old girl is chosen at random to be raped and slaughtered for kicks.

I fear we are raising a society of sociopaths - kids who are so adrift, amoral and inured to violence that they have become completely indifferent to evil. They are drawn to it, it seems, out of twisted curiosity and sheer boredom.

How else to explain how a group of young people could lure Nina Courtepatte from West Edmonton Mall on the pretext of inviting her to a party, only to rape her and beat her to death on a golf course?

Brutality, savagery, gore, and cannibalism all underlie Grand Guignol and the Gore film today, as it does the headlines in your daily paper.

AN ALCOHOLIC who strangled his friend and then told police he did it so he could be sent to prison to exact revenge on a cannibal killer who murdered his girlfriend, was yesterday jailed for life. Alan Taylor said he never got over the murder of Julie Paterson, who was beheaded and partially eaten by psychopath David Harker in 1998.

New Delhi, Mar 22: The Central Bureau of Investigation (CBI) on Thursday gave a clean chit to Mohinder Singh Pandher, co-accused in the gruesome Nithari serial killings in the outskirts of Delhi. CBI blamed his servant for the macabre killings and also confirmed cannibalism in him. It said Pandher's servant Surinder Koli was a psychopath and blamed him for the killings

A religious cult leader who raped, murdered and ate at least three women in Papua New Guinea has been captured by a group of villagers.

Steven Tari, 35, who called himself the "black Jesus" was beaten by locals from the village of Matepi before being handed over to police.

The failed bible student had gathered around six thousand followers as he travelled through mountain villages promising disciples gifts from heaven if they joined his congregation.

But communities discovered he was indulging in cannibalism, sacrificing young women, drinking their blood and eating their flesh.

The Gore phenomena begins with Slaughter of the Lambs, and its overwhelming popularity. It is about the brutality of a serial killer who skins his victims, and the anti-hero is a cannibal; Dr. Hannibal Lecter. It coincides disturbingly with pig farmer Robert Pictons brutal murder and dismemberment of women in Vancouver, and its implication of cannibalism.

The disturbing fact is that our fascination with the Picton case is the same as our fascination with Dr. Lecter. Cannibalism being the final taboo leading to the mass media phenomena of Hannibal the Cannibal.

I'm not alone in my fascination with cannibalism — why else would there be five Hannibal Lecter movies? Soylent Green is made of people; the living dead will eat your brains at any time of dawn, day, or night; and the biggest blockbuster of 2006, Pirates of the Caribbean: Dead Man's Chest, featured droves of flesh-hungry islanders.

In fact cannibalism is American as Apple Pie. Even before the infamous Donner party case, the founders of America engaged in cannibalism and capitalism.

Jamestown aims for historic reign over Plymouth

JAMESTOWN, Va. -- The first permanent English settlement in North America has more personality than many other historic attractions.
Capt. John Smith, the pint-sized adventurer, left a breathless narrative of his exploits.
Commerce took root here, and so did tobacco and slavery.
Then there was the cannibalism.
Still, as the country prepares to commemorate Jamestown's 400th anniversary in May, many see this swampy outpost on the James River only as a coming attraction to the Pilgrims' arrival at Plymouth Rock about 13 years later.
New Englanders, for example, point to the Thanksgiving feast, the Pilgrims' pure pursuit of religious freedom and the Mayflower.
Jamestown, on the other hand, "is the creation story from hell," Karen Ordahl Kupperman writes in her new book, "The Jamestown Project." Conflict, disease, horrific killings and starvation are all part of the back story of Jamestown, founded in 1607 as a business venture.
But if not for Jamestown, scholars say, there may not have been a Plymouth, and we all might be speaking Spanish. The Spanish, intent on spreading Roman Catholicism, were turned away twice from the nearby Chesapeake Bay during the early years of the Protestant Jamestown settlement.
"There's no question that Jamestown throws down the gauntlet to the Spanish," said James Horn, who wrote "A Land as God Made It: Jamestown and the Birth of America."
Now, during an 18-month commemoration, Jamestown finally could outshine Plymouth and fully embrace what historian and writer Nathaniel Philbrick calls its proper claim as "the rightful birthing ground of America."
"Not only was the [Jamestown] settlement found more than a decade before, but the colony that developed from those beginnings was, in many ways, more quintessentially American since it was all about making money," said Mr. Philbrick, the author of "Mayflower: A Story of Courage, Community, and War."

Another gore phenomena in media is the popularity of the Zombie. Zombie parties are occurring across North America. In Edmonton there is a Zombie club of folks who dress up in gory zombie costumes and wander the streets groaning and moaning.

At the University of Alabama they are offering a course on Zombies.

Do you hope that when you die, your corpse will return to life and shamble around, wreaking havoc? Have you ever wanted to taste human flesh? Or do you just want to be able to live your life without that crippling fear of someone eating your brains?

Those who said yes to any of those questions will find a kindred spirit in Sean Hoade, a UA instructor currently teaching creative writing, literature and English. In May, during the interim, he will be teaching EN 311-001, titled, Zombies! The Living Dead in Literature, Film and Culture.

Hoade said zombies are the perfect choice because they are the ultimate metaphor for human life.

"Anything that you look at," Hoade said, "the way we know people by sight but don't really know our neighbors ... race relations and class warfare - all of that is reflected in zombies. And that's why they've become so incredibly popular. [There are] zombie movies, zombie books, zombie graphic novels, so I think that it's only right for the English department to offer a class looking at all things zombie."

Hoade said the class will also discuss what zombies being reanimated corpses indicates about people's fears.

"Death is so sanitized now that [even] being around a dead body that isn't reanimated is incredibly spooky. So we're going to look at how the fear of the zombie is actually a fear not just of death, because we're all afraid of death, but a fear, actually, of the dead also."

The class won't strictly focus on the intellectual aspects of zombies. Students will also be able to participate in a variety of zombie-related activities.

"We're going to engage in mock cannibalism," Hoade said. "We're going to [have] human-flavored tofu. It's based on what people who had to resort to cannibalism, like the Donner party and that plane crash and things like that, what they said human flesh tastes like.

"I ordered putrescine, which is the chemical that dead things give off," he said. Putrescine, which is a chemical compound used by the body for cellular division, is responsible for the smell of rotting flesh.

"We're probably going to do a zombie walk, which is we're all going to get made up as zombies and walk around campus and terrorize it. I'll have to see if that's allowed. We're also going to eat Jell-O brains. [The purpose of the activities are] just to try to get into the zombie mindset ... We might go over to the graveyard and lie down on the graves."

Zombie mindset? Zombies have no brains, no minds, thats why they eat brains, they lack intelligence. Just like the folks at PETA.

The folks in charge of PETA love all of God's creatures—with a few notable exceptions. Asked by BlackBook whether the animal-rights group opposes human cannibalism, Dan Mathews, the group's outrage-provoking vice president, quips, "No, as long as the person being eaten is Anna Wintour." It's far from the first time PETA has gone after the Vogue editor in chief, whom it accuses of doing more than anyone else to keep the wearing of animal pelts in style.

The aristocracy has a history of fascination with death and haute coutoure, they go together like art and suicide.

WHEN Victoria Beckham heard that the flamboyant fashion guru, design muse and socialite Isabella Blow had attempted to kill herself in 2005 by throwing herself off a bridge in London, she remarked, "What genius!"

After school, Blow lived in a squat in London and took cleaning jobs. Then she went off to New York, where Brian Ferry, an old friend - introduced her to Vogue editor Anna Wintour. Blow hung out with artists Jean-Michel Basquiat, Roy Lichtenstein and Andy Warhol, who wanted to know her when he saw she was wearing one pink and one purple shoe.

But for all the name-dropping, there have been two main role models in Blow's life. The first is the Duchess of Windsor, of whom a stylised portrait hangs in her hallway. "Wallis was ugly, like me, but she made the best of herself. I wish I'd lured a king." The other is Blow's aforementioned flesh-eating grandmother, Vera Delves Broughton, a photographer, explorer and big-game fisher. Until recently she held the record for catching the biggest fish in European waters (a tuna, which took 16 hours to reel in).

As for the cannibalism, Blow explains, "She was once in Papua New Guinea. She had some dinner and said, 'God, that was delicious. What was it?' It turned out to be a poor local tribesman who had been grilled up. In her Who's Who hobbies, my grandmother listed 'Once a cannibal'. Ha, ha! I'm so like her. Very wild!"

Christianity itself is based upon the disturbing concepts of cannibalism of its God and the idea of the Living Dead; the resurrection.

Or was Pope Benedict biding his time? Last week he published an Apostolic Exhortation on the Eucharist, Sacramentum Caritatis — The Sacrament of Love. In part it is a summary of the conclusions of the Synod of Catholic Bishops held in Rome in October 2005 — the start of the liturgical Year of the Eucharist promulgated by his predecessor, Pope John Paul II — and as such carries the authority of the whole Church. But it is also a theological tour de force showing the clarity and cogency that are particular to the writings of Joseph Ratzinger.

Sacramentum Caritatis opens with a lucid exposition of the Catholic belief on the Eucharist. The priest’s words of consecration during the Mass turn bread and wine into the body and blood of Christ — a transformation Pope Benedict describes as ‘a sort of “nuclear fission” which penetrates to the heart of all being, a change meant to set off a process which transforms reality, a process leading ultimately to the transfiguration of the entire world’.

This belief, with its connotations of cannibalism and human sacrifice, has always been hard to take. Even in Christ’s lifetime, many of his disciples, according to Saint John, regarded the idea as ‘intolerable ...and stopped going with him’. It was a defining bone of contention between Catholics at the time of the Reformation. Luther downgraded the change from transubstantiation (the bread and wine become the flesh and blood of Christ) to consubstantiation (bread and wine remain bread and wine but co-exist with the flesh and blood of Christ), and Calvin disbelieved it altogether.

The recent rash of zombie and gore films reflect a culture inundated with death. Senseless death, be it wars in Iraq, Afghanistan, Lebanon and through out the middle east, vast unimaginable death from starvation, mass rape and murder in Dafur, or disasters such as Tsunamis , hurricanes and earthquakes that slaughter thousands and decimate cities.

Our fears of death and the unknown are now amplified by our fear of pain. Gore movies are about pain. Blood and guts, yes but the Saw phenomena is about pain, torture and self inflicted pain.

It is Abu Gharib and Gitmo brought to the large screen. We know not what torture Arar Mehar went through, or those held in CIA black prisons. But when we watch Saw we get a gleaming, an inkling of what it feels like to be held incommunicado and tortured. For no good reason. What does the torturer want? Like those held in sensory deprivation in Gitmo, we do not know.

The horror film since its origins in the silent era was fear of the other, the monster. Today with the advent of the Gore film, the monster is us. We suffer the emotional plague of isolation and alienation in a capitalist culture out of our control and dashing headlong into oblivion.

See

Gothic Capitalism Redux

Jack the Ripper

Emotional Plague

Rape

Serial Murder

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Capitalism as we know it has failed. Not even the Tories can defend it

Nick Timothy
Sun, July 2, 2023 

Canary Wharf

Larry Summers, the former US treasury secretary, once explained why he thought inequality had risen. “One of the reasons,” he said, “is that people are being treated closer to the way that they’re supposed to be treated.”

That story is recounted in Hell to Pay, a brilliant new book by Michael Lind about how the suppression of wages is driving economic, social and political crises in America. The idea that we are paid what we deserve – and that the decline in mid-skilled, mid-paid jobs simply reflects the high-tech, globalised economy in which we live – derives from free market theory. But it is, Lind argues, utter nonsense.

In Britain, like in America, the labour market has bifurcated because of political choices and corporate behaviour. Businesses have reduced employment costs by offshoring production to countries with lower labour standards and wages, or by using immigration to import cheaper workers. They have replaced full-time employees with rights and pensions with part-time contractors and gig economy workers. The post-war militancy and overreach of trade unions, and the restrictive laws that followed, has given employers monopsony power: that is, the ability to lower the price of labour because of their relative power over workers.

At the heart of all these changes is a model of globalisation that has caused the economic elites of the West to get richer, and which has allowed millions of people in Asia to escape poverty, but which has also relentlessly and systematically damaged the interests of the Western working – and increasingly middle – class.

Our model of globalisation was not, as Tony Blair put it, as inevitable as summer giving way to autumn. Trade agreements were struck, international institutions created, and when the likes of China broke the rules, dumped goods, stole industrial secrets, and used the system the West had created against us, reality was ignored. In as much as anybody noticed the effects on British workers, the reaction was to subsidise low pay, through tax credits, or – better, but not enough – increase it through minimum wages.

Regardless of the model of globalisation, there always remained choices for domestic policies. We can see this, for example, in how the breakdown between improvements in productivity and increases in pay have differed from country to country. In the US, it is longstanding and chronic. In Britain, more recent yet acute. In Denmark and Sweden, recent and mild.

A recent academic study showed that, contrary to popular perception, Britain and America have tax systems more progressive than in Europe – based on the difference between the taxes paid by the top decile to the bottom half of earners – and redistribute a greater proportion of national income to the bottom half. The reason Europe is less unequal than Britain and America is that wages themselves are more equal.

But wages are not the only way in which capitalism is in crisis. In Britain, everything seems to be in the red: we have a trade deficit, a budget deficit, and a house-building deficit. Personal debt stands at around 130 per cent of household income. The only surplus we seem to run is in net migration: millions have been added to our population in recent years, and 606,000 in the last year alone. Since the financial crash, we have had anaemic growth and stagnant pay. Stuck in a rut of low investment, poor productivity and low pay, we earn no more in real terms, on average, than we did in 2005.

Globalisation is part of the story, but so too is the quality of British economic policy. George Osborne used to describe himself as a strict fiscal conservative but a “monetary policy radical”. But while a fiscal correction was necessary after the financial crash, austerity went too far and for too long. According to Andy Haldane, former chief economist at the Bank of England, “this ruptured growth and was self-defeating for debt”.

Radical monetary policy poisoned the well, inflating asset prices, keeping zombie companies alive, discouraging bank lending to businesses and slowing the circulation of money through the economy. The government and the country became addicted to cheap credit, and left us exposed now the music has finally stopped. It was regressive, hurting households with less, helping those with more, and making it harder for young people to get on to the property ladder. And it caused an orgy of financial restructuring, through share buybacks and leveraged debt.

This is part of the shameful story of the water companies – regulated monopolies that have racked up £65 billion in debt, even as they paid executives multi-million pound remuneration packages and their foreign owners large dividends, all while failing to modernise our creaking infrastructure.

As with the energy companies, this is not just a symptom of monetary policy, but a failure of regulation – which encourages systematic over-reward for investors.

We know capitalism, untempered, can be rapacious: brilliant, innovative and wealth-creating, but also exploitative and careless about the externalities of doing business. Think for example of those tech firms that profit from and care little about the algorithms that send inappropriate content to children. Our economic pain is sometimes caused by a failure to regulate – but when we do regulate we often get it horribly wrong.

From the absurd complexity of the planning system to the failure of pension regulations that drives our savings away from British equities, we have built an economic model that rewards the wealthy not the many, the incumbent not the challenger, the bureaucrat not the entrepreneur, the rentier not the risk-taker, the financier not the maker and the old and not the young. We are serfs to debt, trapped by low pay and bloated assets.

Conservatives should accept that to criticise capitalism is not to succumb to socialism, but turning a blind eye to the failures and excesses of capitalism – especially the crony capitalism we have brought on ourselves – makes defeat to Left-wing parties more likely.

It is often said that those without capital will not support capitalism, but if what we have today is capitalism, it should be up to conservatives to change it – and not just defend the indefensible.

WHY CORONAVIRUS COULD SPARK A CAPITALIST SUPERNOVA

By John Smith
APRIL 5, 2020
Republished from Open Democracy. This article is part of Open Democracy’s 'Decolonising the economy' series.

“Global yields lowest in 500 years of recorded history. $10 trillion of negative rate bonds. This is a supernova that will explode one day,” tweeted Bill Gross, the ‘bond king’, in 2016.

This day has come closer. Capitalism now faces the deepest crisis in its several centuries of existence. A global slump has begun that is already devastating the lives of hundreds of millions of working people on all continents. The consequences for workers and poor people in Asia, Africa, and Latin America will be even more extreme than for those living in Europe and North America, both with respect to lives lost to coronavirus and to the existential threats to the billions of people already living in extreme poverty. Capitalism, an economic system based on selfishness, greed and dog-eat-dog competition, will more clearly than ever reveal itself to be incompatible with civilisation.

Why is supernova – the explosion and death of a star – an apt metaphor for what could now be about to unfold? Why could the coronavirus, an organism 1000th the diameter of a human hair, be the catalyst for such a cataclysm? And what can workers, youth and the dispossessed of the world do to defend ourselves and to ‘bring to birth a new world from the ashes of the old’, in the words of the US labour hymn, Solidarity Forever?

To find answers to these questions, we need to understand why the ‘global financial crisis’ that began in 2007 was much more than a financial crisis, and why the extreme measures taken by G7 governments and central banks to restore a modicum of stability – in particular the ‘zero interest rate policy’, described by a Goldman Sachs banker as “crack cocaine for the financial markets” – have created the conditions for today’s crisis.


GLOBAL CAPITALISM’S ‘UNDERLYING HEALTH ISSUES’

The first stage of a supernova is implosion, analogous to the long-term decline in interest rates that began well before the onset of systemic crisis in 2007, which has accelerated since then, and which fell off a cliff just as coronavirus began its rampage in early January 2020. Falling interest rates are fundamentally the result of two factors: falling rates of profit, and the hypertrophy of capital, i.e. its tendency grow faster than the capacity of workers and farmers to supply it with the fresh blood it needs to live. As Marx said, in Capital vol. 1, “capital’s sole driving force [is] the drive to valorise itself, to create surplus-value… capital is dead labour which, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.”

These two factors combine to form a doom loop of awesome destructive power. Let us examine its most important linkages.

Many things both mask and counteract the falling rate of profit, turning this into a tendency that only reveals itself in times of crisis, of which the most important has been the shift of production from Europe, North America and Japan to take advantage of the much higher rates of exploitation available in low-wage countries. The falling rate of profit manifests itself in a growing reluctance of capitalists to invest in production; more and more of what they do invest in is branding, intellectual property and other parasitic and non-productive activities. This long-running capitalist investment strike is amplified by the global shift of production – boosting profits by slashing wages rather than by building new factories and deploying new technologies. This enables huge mark-ups, turbo-charging the accumulation of vast wealth for which capitalists have no productive use – hence the hypertrophy of capital.

This, in turn, results in declining interest rates – as capitalists compete with each other to purchase financial assets, they bid up their price, and the revenue streams they generate fall in proportion – hence falling interest rates. Falling interest rates and rising asset values have created what is, for capitalist investors, the ultimate virtuous circle – they can borrow vast sums to invest in financial assets of all kinds, further inflating their ‘value’.

Falling interest rates therefore have two fundamental consequences: the inflation of asset bubbles and the piling up of debt mountains. In fact, these are two sides of the same coin: for every debtor there is a creditor; every debt is someone else’s asset. Asset bubbles could deflate (if productivity increases), or else they will burst; economic growth could, over time, erode debt mountains, or else they will come crashing down.

Since 2008, productivity has stagnated across the world and GDP growth has been lower than in any decade since World War II, resulting in what Nouriel Roubini has called “the mother of all asset bubbles,” while aggregate debt (the total debt of governments, corporations and households), already mountainous before the 2008 financial crash, has since then more than doubled in size. The growth of debt has been particularly pronounced in the countries of the global South. Total debt for the 30 largest of them reached $72.5tn in 2019 – a 168% rise over the past 10 years, according to Bank of International Settlements data. China accounts for $43tn of this, up from $10tn a decade ago. In sum, well before coronavirus, global capitalism already had ‘underlying health issues’, it was already in intensive care.

Global capitalism – which is more imperialist than ever, since it is both more parasitic and more reliant than ever before on the proceeds of super-exploitation in low-wage countries – is therefore inexorably heading to supernova, towards the bursting of assets bubbles and the crashing of debt mountains. Everything that imperialist central banks have done since 2008 has been designed to postpone the inevitable day of reckoning. But now that day has come.

10-year US Treasury bonds are considered the safest of havens and the ultimate benchmark against which all other debt is priced. In times of great uncertainty, investors invariably stampede out of stock markets and into the safest bond markets, so as share prices fall, bond prices – otherwise known as ‘fixed income securities’ – rise. As they do, the fixed income they yield translates into a falling rate of interest. But not on March 9, when, in the midst of plummeting stock markets, 10-year US Treasury bond interest rates spiked upwards. According to one bond trader, “statistically speaking, [this] should only happen every few millennia.” Even in the darkest moment of the global financial crisis, when Lehman Brothers (a big merchant bank) went bankrupt in September 2008, this did not happen.

The immediate cause of this minor heart attack was the scale of asset-destruction in other share and bond markets, causing investors to scramble to turn their speculative investments into cash. To satisfy their demands, fund managers were obliged to sell their most easily-exchangeable assets, thereby negating their safe-haven status, and this jolted governments and central banks to take extreme action and fire their ‘big bazookas’, namely the multi-trillion dollar rescue packages – including a pledge to print money without limit to ensure the supply of cash to the markets. But this event also provided a premonition for what is down the road. In the end, dollar bills, like bond and share certificates, are just pieces of paper. As trillions more of them flood into the system, events in March 2020 bring closer the day when investors will lose faith in cash itself – and in the power of the economy and state standing behind it. Then the supernova moment will have arrived.


THE LEFT’S IMPERIALISM-DENIAL, AND ITS BELIEF IN THE ‘MAGIC MONEY TREE’

The gamut of the left in imperialist countries – the Jeremy Corbyn-led wing of the Labour Party in the UK; the motley crew of left-Keynesians such as Ann Pettifor, Paul Mason, Yanis Varoufakis; supporters of Bernie Sanders in USA – are united on two things: they all acknowledge, to one degree or another, that imperialist plunder of colonies and neocolonies happened in the past but do not acknowledge that imperialism continues in any meaningful way to define relations between rich and poor countries.

And they believe in one or other version of the ‘magic money tree’, in other words, they see the decline of interest rates into negative territory not as a flashing red light showing the extremity of the crisis, i.e. not as the implosion phase of a supernova, but as a green light to borrow money to finance increased state investment, social spending, a Green New Deal, and even a bit more foreign aid. In fact, there is no magic money tree. Capitalism cannot escape from this crisis, no matter how many trillions of dollars governments borrow or central banks print. The neoliberals rejected magical thinking, now they embrace it – this shows the extent of their panic, but it does not make magical thinking any less fantastical. The trillions they spent after 2007-8 bought another decade of zombie-like life for their vile system. This time they will be lucky to get 10 months, or even 10 weeks, before the explosion phase of the supernova begins.


CORONAVIRUS – CATALYST FOR CATACLYSM

The coronavirus pandemic occurred at the worst possible time: growth in the eurozone had shrunk to zero; much of Latin America and sub-Saharan Africa were already in recession; the sugar-high from Trump’s huge tax-giveaways to US corporations was fading; the US-China trade war was causing serious disruption to supply chains and was threatening to entangle the EU; and tens of millions of people joined mass protests in dozens of countries across the world.

Interest rates are now deep in negative territory – but not if you are Italy, facing an enormous increase in its debt/GDP ratio, not if you are an indebted corporation trying to refinance your debts, not if you are an ‘emerging market’. Since March 9, corporate interest rates have gone through the roof; in fact few corporations can borrow money at any price. Investors are refusing to lend to them. Corporations are now facing a credit crunch – in the midst of global negative interest rates! That’s why the ECB decided to borrow €750 billion from these same investors, and use it to buy the corporate bonds which these same investors now refuse to purchase, and why the USA’s Federal Reserve is doing the same on an even bigger scale. Italy’s (and the EU’s) fate now depends on the willingness of the Bundesbank to replace its private creditors. Their refusal to do this would be the final stage of the EU’s death agony.

During the middle two weeks of March, imperialist governments announced plans to spend $4.5 trillion bailing out their own bankrupt economies. An emergency online summit of the G20 (the G7 imperialist nations plus a dozen or so ‘emerging’ nations, including Russia, India, China, Brazil, and Indonesia) on 26 March, declared “we are injecting over $5 trillion into the global economy.” These are weasel words; by ‘global’ they actually mean ‘domestic’! The response of the ‘left’ in the imperialist countries is to clap its hands and say, we were right all along! There is a magic money tree after all! – apparently not realising that this is exactly what happened post-2008: the socialisation of private debt. Or that, unlike post-2008, this time it will not work.

Yet, as imperialist governments belatedly mobilise – and monopolise – medical resources to confront the coronavirus crisis in their own countries, they’ve abandoned poor countries to their fate. The left in the imperialist countries (or we could just say ‘imperialist left’, for short) has also ignored the fact that there is nothing in these emergency cash injections for the poor of the global South. If you are an ‘emerging market’, well, fuck off and join the queue for an IMF bail-out! As of March 24, 80 countries were standing in this queue, waiting for some of its $1tr lending capacity. $1 trillion sounds like a lot of money, and indeed it is, but, as Martin Wolf, chief economic correspondent for the Financial Times, points out, “the aggregate external financing gaps of emerging and developing countries are likely to be far beyond the IMF’s lending capacity.”

Furthermore, as Wolf suggests, the purpose of IMF loans is to help with “external financing gaps” – in other words, to bail out imperialist creditors, not the peoples of debtor nations; and they invariably come with harsh and humiliating conditions that add to the crushing burden already pressing down on the peoples of those countries. In this sense, they are just like the vast government bailouts of private capital in the rich countries – but without anything added on to finance welfare payments or partially replace wages. The aim of the latter is to purchase the docility of the working class in the imperialist nations, but they have no intention of doing this in Africa, Asia and Latin America.

On March 24, the United Nations issued an appeal for $2bn to fight the coronavirus pandemic in Africa, Asia and Latin America. This money, which the U.N. hopes to raise over the next nine months, is 1/80 of the annual budget of the U.K.’s NHS, and less than 1/2000 of the $4.5tr they plan to spend keeping their own capitalist economies alive. It is also less than 1/40 of the money which imperialist investors have taken out of ‘emerging markets’ during the first three weeks of March, “the largest capital outflow ever recorded,” according to IMF managing director Kristalina Georgieva.

The maximum extent of relief for the collateral effects of the coronavirus epidemic on the peoples of poor countries in Africa, Asia and Latin America was indicated by World Bank president, David Malpass, who said after the G20 summit ended that his board is putting together a rescue package valued at “up to $160 billion” spread out over the next 15 months – a minuscule fraction of the economic losses that the coming global slump will impose on the peoples of the absurdly-named ‘emerging markets’.


“WE HAVE A REVOLUTIONARY DUTY TO FULFILL" – LEONARDO FERNANDEZ, CUBAN DOCTOR IN ITALY

So, what is to be done? Instead of applauding the bailout of big corporations, we should expropriate them. Instead of endorsing a temporary moratorium on evictions and the accumulation of rent arrears, we should confiscate real estate so as to protect workers and small businesses. These, and many other struggles to assert our right to life over the rights of capitalists to their property, are for the near future.

Right now the priority is to do whatever is necessary to save life and defeat the coronavirus. This means extending solidarity to those who are most vulnerable to the pandemic – homeless people, prisoners, asylum seekers enduring ‘hostile environments’ – and to the dispossessed and victims of imperialism in the slums, shantytowns and refugee camps of the global South. Raghuram Rajan, former governor of the Bank of India, points out that “pending a cure or a reliable vaccine, the world needs to fight the virus into submission everywhere in order to relax measures anywhere.” The Economist concurs: “If covid-19 is left to ravage the emerging world, it will soon spread back to the rich one.”

The coronavirus pandemic is just the latest proof that we need not so much an NHS, but a GHS – a Global Health Service. The only country that is acting on this imperative is revolutionary Cuba. They already have more than 28,000 doctors providing free health care in 61 poor countries – more than the G7 nations combined – and 52 in Italy, 120 more to Jamaica, and are helping scores of other countries to prepare for the pandemic. Even the far-right Bolsonaro government in Brazil, which last year expelled 10000 Cuban doctors, branding them terrorists, is now begging them to return.

To defeat coronavirus we must emulate Cuba’s medical internationalism. If we are to defeat this pandemic we must join with its revolutionary doctors and revolutionary people, and we must prepare do what Cuba did to make this internationalism possible – in other words, we must replace the dictatorship of capital with the power of working people. The coronavirus supernova makes socialist revolution – in imperialist countries and across the world – into a necessity, an urgent practical task, a life and death question if human civilisation is to survive and if the capitalist destruction of nature, of which the coronavirus epidemic is merely the latest symptom, is to be ended.



Thanks to Andy Higginbottom, Shih-yu Chou, and Walter Daum for comments on earlier drafts of this article.

Dead Weight Of The State

Michael Taussig is one of the few Marxist Anthropologists to study magick. Over twenty years ago I came across his book;The devil and commodity fetishism in South America"; which deals with the beliefs of Bolivian Miners about the devil living in the caves they mine. Many of these miners are children as documented in the film;The Devils Miner.

And they are of course indigenous peoples, enslaved by their Spanish colonizers hundreds of years ago to mine for the old Empires of Europe. They have transfered the belief in animistic spirits from their earlier native religions, to the god forms of their adopted religion; Catholicism. As with most colonized peoples the old gods become the devils of the new religion.

Commodity Fetishism and the Devil had a major influence on me in looking at a historical materialist/dialectical interpretation of magick.

I recently came across an interview with Taussig, about his book The Magic Of the State and his comments are worth reprinting here, in light of my post on Gothic Capitalism.

In The Magic of the State, you write about the relation between traditional magical rites and rituals of spirit possession and the workings of the modern nation-state. You base this book on fieldwork on a magic mountain in the middle of Venezuela, where spirit possession is practiced, and where theres something about spirit possession which is amicable toward hierarchy, stratification, and maybe even the State.

This book concerns spirit-possession on the mountain of Maria Lionza in central Venezuela in the 1980s and 1990s, where pilgrims in large numbers become possessed by the spirits of the dead under the rule of an imaginary spirit queen, Maria Lionza. Especially important are the spirits of the Indians who allegedly fought the Spanish in the sixteenth century and the independence soldiers of the early nineteenth century, including many black foot soldiers as well as white officers, most notably Simón Bolívar—as highlighted in the state’s school textbooks, in the unending stream of state iconography from postage stamps to wall murals on bus stops and outside schools, from the standardized village, town, and city central square, the naming of mountain peaks, and of course in the physiognomy of authority wherever it be.

The dead are a great source of magical élan, grace, and power. This has been present in many cultures since the first burial. Indeed Georges Bataille (to whose ideas The Magic of the State is greatly indebted) argued from archaeological evidence and physical anthropology that the corpse is the origin of taboos, respect for the dead being what separates the human from the animal... Just imagine, then, the power that can accrue to the modern state, that great machine of death and war!

People today gain magical power not from the dead, but from the states embellishment of them. And the state, authoritarian and spooky, is as much possessed by the dead as is any individual pilgrim. The current president of Venezuela, Hugo Chávez, is the embodiment of this. In a sense he was predestined by this mystical foundation of authority as writ into the post-colonial exploitation of colonial history. The success of the Patriot Act and of the current US administration owes a great deal to this, too, after 9/11.

However my argument is that such spirit possession is a dramatization not only of the Great Events but also of the more subtle imageric- and feeling-states present in the artwork of the state any and everywhere, from the traffic cop and tax clerk to the pomp and ceremony of national celebrations, from a Latin American pseudo-democracy to the US and Western European states as well. Hobbess Leviathan is mythical yet also terribly real. This is where the rationalist analysis of the state loses ground. Foucault was amazingly short-sighted in dismissing blood and the figure of the Ruler.

It is not only the capitalist state which rules based on the rites of the dead but capitalism itself as Marx reminds us.

Capital is dead labor, which, vampire-like, lives only by sucking living labor, and lives the more, the more labor it sucks.
Karl Marx

If Capitalism is vampiric then the modern Terror State and its perpetual State of Terror (an extension of the Cold War) is very much a Zombie state, a state that has created a fictional monster; the terrorist, who once upon a time was the Anarchist of the 19th Century and today is Islamic Jihadists. Terrorists/Zombies are everywhere, they are out to get us, they are going to overwhelm us in shopping malls. The popularity of modern Zombie culture is a reflection of the cultural terror created by the politics of fear.


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The Politics of Emergency Time and the

 Emerging Threat of Fascism

BY HENRY GIROUX

 JANUARY 2, 2024
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Photo by Jason Leung

The underbelly of contemporary violence is colonialism, the politics of disposability, religious fundamentalism, neoliberalism, and raw militarism.  Violence seems to have engulfed the earth like a blinding sandstorm. Women and children are being killed en mass in Gaza, homelessness is increasingly spreading among youth in many countries, inequality exists at staggering levels, and a culture for justice has been replaced by a global culture of war. Gangster capitalism is waging a war on the working class, women’s reproductive rights, gay rights, people of color, and democracy itself–brazenly wrapping itself in the discourse of fascism.

 Morality increasingly collapses under the weight of historical amnesia, the repression of dissent, and the ruination of civic culture. Right-wing attacks on historical consciousness and memory shore up a defense against moral witnessing while providing a cover for willful ignorance. Language has lost its ability to awaken consciousness under the suffocating weight of the spectacle and the crazed vocabulary of demagogues. Social responsibility is adrift and is no longer associated with how American society functions. The politicians and entrepreneurs of death ignore the blood produced by their weapons and invest heavily without accountability in state and global terrorism. Entire families, children, schools, hospitals, and places of worship are bombed, women and children are killed as the barbarians of fascism and the arms industries gloat over their mounting profits made from bloodshed and unimaginable suffering.[1] As Chris Hedges has argued, gangster capitalism has reached its logical and toxic conclusion, “fertilized by widespread despair, feelings of exclusion, worthlessness, powerlessness and economic deprivation.”[2] The outcome is a slide into a fascist politics that portends the death of the idea of democracy in the United States.

 The Vichy journalists and media outlets now more than ever trade in “objectivity” and calls for even-handedness as violence escalates at all levels of society.[3] Trump is treated as a normal candidate for the presidency despite embracing nihilistic forms of lawlessness. He spews racism, hatred, and endless threats of violence, indifferent to calls for accountability, however timid. Cowardice hides behind the false appeal to a wobbly notion of balance. The mainstream media have a greater affinity for the bottom line than for the truth.[4] Their silence amounts to a form of complicity.

The Republican Party is now mostly a vehicle for fascist politics.[5] The United States has reached endpoint of a cruel economic and political system that resembles a dead man walking–a zombie politics that thrives on the exploitation of the working class, immigrants, the poor, dispossessed, and helpless children dying under the bombed-out rubble of state terrorism. White Christian nationalism merges with the most extreme elements of capitalism to enforce cruel and heartless policies of dispossession, elimination, and a politics of disposability. Mouthfuls of blood saturate the language of authoritarianism, and policies of destruction, exploitation, and utter despair follow. Public time based on notions of equality, the common good, and justice fades into the dustbin of a white-washed history. As James Baldwin once noted, until the Nazis knock on their door, these “let’s be balanced” types refuse to have the courage to name fascism for what it is.

In the face of emergency time, it is crucial to develop a great awakening of consciousness, a massive broad-based movement for the defense of public goods, and a mobilization of educators and youth who can both say no and fight for a socialist democracy.  The fight against fascism cannot take place without new ideas, vision, and the ability to translate them into action. Dangerous memories and the resuscitation of historical consciousness help. And are even more necessary as democracy is choking on the filth of demagogues, white nationalism, class warfare, militarism, and Christian nationalism.  Those Americans who believe in democracy and justice can no longer accept being reduced to a nation of spectators; they can no longer define democracy by reducing it to a voting machine controlled by the rich; nor they can equate it with the corpse of capitalism;  they can no longer allow the silence of the press to function as a disimagination machine that functions to largely depoliticize the public;  they can no longer allow education to be pushed as a machinery of illiteracy, historical amnesia, and ignorance.

 I am not engaging in a paralyzing pessimism, but rather highlighting the urgency of a historical moment that is on the verge of spelling the death knell for America as an idea, as a promise of what a radical democracy might presume for the future. We live in an era of emergency time—a time of crises in which time has become a disadvantage and public time a necessity and call for militant thought and action. Without agency there is no possibility of imagining a future that does not echo the fascism of the past, without possibility there is no reason to acknowledge the very real material and ideological threats to the United States and the rest of the globe now face.

Fascism is no longer interred in history. The spirit of Weimar 1933 is being replayed. How else to explain Trump’s openly fascist claim that he plans, once elected, to imprison political dissidents in the prison camps? Or his pledge “to root out the communist, Marxist, fascist, and the radical left thugs that live like vermin within the confines of our country, that lie and steal and cheat on elections and will do anything possible—they’ll do anything, whether legally or illegally—to destroy America and to destroy the American dream.” Trump’s belligerent rhetoric merges a vocabulary of dehumanization with a language of racial cleansing and repeated threats of violence. He claims that immigrants are “poisoning the blood of our country,” states that “the former chairman of the Joint Chiefs of Staff deserves to be executed, and to discourage shoplifters urges police officers to shoot them. Running an openly authoritarian political campaign, Trump unapologetically states, with a smirk on his face, that he wants to be a dictator.[6] For the far-right and MAGA politicians, fascist politics is now displayed and enacted as a badge of honor. There is more at work here than an echo of former authoritarian regimes. The ensuing threats from Trump and his warrior-soldier types lead directly to the Gulags and camps in a former age of authoritarianism.

The spirit of the Confederacy along with an upgraded and Americanized version of fascism is back. The corpse-like orthodoxies of militarism, racial cleansing, and neoliberal fascism point to both the bankruptcy of conscience and an instance in which language fails and morality collapses into barbarism, and any vestige of democracy is both mocked and attacked.

What is clear is that there is a massive rebellion against democracy taking place in the United States and across the globe. And it is not simply being imposed from above through military dictatorships. People now vote for fascist politics. Disimagination machines such as the mainstream media and far-right online platforms have become powerful ideological fictions– pedagogical machineries of political illiteracy inflicting upon the American people an astonishing vacancy that amounts to a moral and political coma. The underlying causes of poverty, dispossession, exploitation, misery, and massive suffering disappear in a spectacularized culture of silence, commodification, and cult-like mystifications. As civic culture collapses, the distinction between truth and falsehoods dissolves, and with it a public consciousness able to discern the difference between good and evil. Too many Americans have internalized what Paulo Freire once called the tools of the oppressor. They not only accept the shift in American politics towards authoritarianism, they also support the idea.[7] The latter is evident in the large public support Trump garners in spit of his overt embrace of fascist politics, his claim to revoke the Constitution, and call to use his office if he returns to the White House to lock up his political enemies.[8]

On the side of resistance, Les Leopold is right in arguing that the fight against neoliberal fascism will never succeed until both “our sense of the possible expands” and we take seriously “that real education about big picture issues can make a difference in how people see the world.”[9] At the same time, any commanding vision of the future must embrace as part of a viable  pedagogical struggle, anti-capitalist values capable of mobilizing a broad-based movement in which the call for political and personal rights is matched by the demand for economic rights. Vaclav Havel, the world-renowned playwright, statesman, and human activist, astutely noted the need for a massive resistance against the leveling of meaning, language, subjectivity, and social responsibility. His call for a revolution in human consciousness echoes that of Martin Luther King Jr.’s similar appeal for a revolution of values. For Havel, morality had to be put ahead of politics, economic, and science and for that to happen he states that “the main task in the coming era is … a radical renewal of our sense of responsibility. Our conscience must catch up to our reason-otherwise we are lost.” [10]  For Havel, matters of consciousness, subjectivity, and agency are a crucial part of a politics of resistance. But they  are only the beginning of the long struggle towards a radical restructuring of society. Ideas have to be articulated to action in order to address the political pathologies of our time.  There can be no viable resistance without a massive campaign against both gangster capitalism–with its destructive emphasis on economic inequality, the plundering of the environment, widespread attacks on social justice– and a movement to restructure rather than reform society based on democratic socialist values. Militant critique must be matched by a militant sense of possibility.  Howard Zinn got it right when he argued that “To be hopeful in bad times is not just foolishly romantic….If we see only the worst, it destroys our capacity to do something. If we remember those times and places—and there are so many—where people have behaved magnificently, this gives us the energy to act, and at least the possibility of sending this spinning top of a world in a different direction. …The future is an infinite succession of presents, and to live now as we think human beings should live, in defiance of all that is bad around us, is itself a marvelous victory.”[11]

We live in an era of dire emergencies. The urgency of the times demands a politics that recognizes that the looming threat of fascism presents us with a moment in which it is crucial not to give up on the imagination, to imagine the impossible as possible, and to embrace a vision of the future and sense of collective struggle in which there is life beyond gangster capitalism. This is not a choice; it is a necessity.

Notes.

[1] Henry A. Giroux, “Killing Children, the Burdens of Conscience, and the Israel-Hamas War,” Counterpunch (December 9, 2023). Online: https://www.counterpunch.org/2023/12/08/killing-children-the-burdens-of-conscience-and-the-israel-hamas-war/

[2] Chris Hedges, “Fascism Comes to America” Substack [October 8, 2023]. Online: https://chrishedges.substack.com/p/fascism-comes-to-america

[3] Thom Hartmann, “Is Cowardly Journalism Bringing Trump’s Fascism Back?”  LA Progressive [December 4, 2023]. Online: https://www.laprogressive.com/the-media-in-the-united-states/cowardly-journalism..Will Bunch, “Where’s the ‘Trump Resistance’ as autocracy looms?” The Philadelphia Inquirer [December 5, 2023]. Online: https://www.inquirer.com/columnists/attytood/trump-resistance-womens-march-felicity-huffman-college-admissions-20231205.html

[4]Jessica Corbett, “Warnings Grow That US Media Again Failing to Accurately Cover Trump’s Fascist Threat.” Common Dreams [November 13, 2023]. Online: https://www.commondreams.org/news/donald-trump-and-the-media

[5] Henry A. Giroux and Anthony DiMaggio, Fascism On Trial (London: Bloomsbury, 2024).

[6] See, Robert Kagan, “A Trump dictatorship is increasingly inevitable. We should stop pretending,” The Washington Post (November 30, 2023). Online: https://www.washingtonpost.com/opinions/2023/11/30/trump-dictator-2024-election-robert-kagan/

[7] Philip Bump, “A lot of Americans embrace Trump’s authoritarianism.” The Washington Post [November 10, 2023]. Online: https://www.washingtonpost.com/politics/2023/11/10/lot-americans-embrace-trumps-authoritarianism/

[8] Martin Pengelly, “Donald Trump vows to lock up political enemies if he returns to White House,” The Guardian (August 30, 2023). Online: https://www.theguardian.com/us-news/2023/aug/30/trump-interview-jail-political-opponents-glenn-beck

[9] Les Leopold, “6 Reasons Why Resisting Trump Is Not Enough: Here’s How We Might Be Able to Save Our Democracy,” Alter Net, [January 1, 2017]. Online:http://www.alternet.org/election-2016/challenge-our-hands-save-democracy-lot-bigger-trump

[10] Vaclav Havel, “Havard University (Cambridge June 8, 1994), The Art of the Impossible (New York: Knopf 1997), p. 222.

[11]. Howard Zinn, “The Optimism of Uncertainty,” The Nation (September 2004). Online: https://www.thenation.com/article/politics/optimism-uncertainty/

 

Henry A. Giroux currently holds the McMaster University Chair for Scholarship in the Public Interest in the English and Cultural Studies Department and is the Paulo Freire Distinguished Scholar in Critical Pedagogy. His most recent books are America’s Education Deficit and the War on Youth (Monthly Review Press, 2013), Neoliberalism’s War on Higher Education (Haymarket Press, 2014), The Public in Peril: Trump and the Menace of American Authoritarianism (Routledge, 2018), and the American Nightmare: Facing the Challenge of Fascism (City Lights, 2018), On Critical Pedagogy, 2nd edition (Bloomsbury), and Race, Politics, and Pandemic Pedagogy: Education in a Time of Crisis (Bloomsbury 2021). His website is www. henryagiroux.com