Investors should Get Ready for Market Correction

Investors need to prepare for a 10% market correction over the coming month, as they make sense of the Federal Reserve’s position on interest rates.

The U.S. central bank is due to announce it will start to reduce its $120 billion monthly bond purchases on Wednesday, and the real story for the markets is how the Fed will talk about inflation.

Inflation is becoming a much larger issue than the majority of analysts had forecast, so investors will be focusing on fighting the trend of rising prices by starting to raise interest rates.

It’s highly improbable that the Federal Reserve will use their previous ‘transitory’ phrase to describe the current price surges. Inflation appears to be far stickier than expected.

Therefore, they will likely have to hike interest rates quicker and/or more aggressively, so markets are pricing in two or three rate hikes next year, which could result in a 5 to 10% market adjustment over the next month.

Naturally, all markets are subject to bouts of volatility, and the best way to manage this is with a well-diversified portfolio. A good fund manager will help investors to take advantage of the opportunities that come from volatility and mitigate potential risks as and when they arise.

Global central banks that introduced massive emergency support to fight the pandemic are now planning a move in the other direction.

A potential market correction will be viewed by savvy investors as the first major step towards a return to normal monetary policy and they will be looking out for the inherent opportunities that will come about.

Nigel Green is CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organisations.

Biden’s ‘Global Tax’ & the 40-Year US Corporate Tax ‘Shell Game’

The corporate media in recent days has been busy resurrecting and re-reporting the deal negotiated weeks ago by Janet Yellen, US Treasury Secretary, to get 100+ other nations to sign on to and introduce a 15% global corporate alternative tax in their countries.

But why is the mainstream media bringing it up again now? Is it to soften the blow of Biden’s repeal of his proposal to hike corporate taxes in the US from Trump’s 21% to 26%? (It was 35% pre-Trump)? Or is there something else as well that explains why the media is running the global tax story that’s already weeks old?

The global sign on to Biden’s 15% global minimum tax, announced weeks ago, is purportedly designed to prevent big multinational corporations’ manipulating governments by seeking out, and getting, special tax deals in certain countries at the expense of others.

A notorious example is Ireland, where US and other multinational corps locate their headquarters and book their global tax payments at Ireland’s lower corporate tax rate which is, on average, only 2%-3%, for most corporations.

Ireland is also the favorite locale for what’s called the ‘Inversion’ tax loophole. Per the loophole, US multinationals sell products or services in large quantities in other countries, but book their profits in Ireland simply because they locate their company headquarters there. They make nothing in Ireland, in many cases, but get to pay the Ireland much lower corporate tax rate instead of much higher tax rates in countries where the corporation actually does make and sell goods and services.

The biggest US corporate beneficiaries of this Inversion loophole have been US pharmaceuticals, tech companies, finance companies, corporate consulting companies, and many others. Under Clinton US corporations got to activate the loophole by simply ‘checking a box’ on the US corporate tax forms.

But Ireland is not the only back door out of domestic corporate taxes. There’s a host of others. Luxembourg and Netherlands in Europe also come to mind. There are others outside Europe as well.

The inversion tax loophole has enabled US corporations in particular to play one country against another and choose the lowest in which to relocate headquarters and book global profits at lowest rates.

The inversion loophole isn’t the only tactic US multinational corporations use to move their profits around to pay lower rates outside the US’s.

Another favorite tactic of US multinational corporations is to engage in what’s called manipulation of ‘internal’ pricing. That’s where a company manipulates its prices between its global subsidiaries: for example, it makes its US operations pay artificially higher prices for parts and materials it purchases from its subsidiaries offshore. That way the US operation records higher costs, and thus lower profits; from the higher prices it charges its US operations, its subsidiary gets higher sales revenue and higher profits. But it pays a lower profit rate in the offshore operations. In short, by clever internal pricing the US multinational corp reduces its profits and tax in the US, while increasing profits and tax offshore. Its net global tax payment is reduced.

The Biden administration has hyped the benefits of a global 15% minimum corporate tax as a way to make the biggest US corporate tax avoiders what more operations offshore, employ inversion loopholes, or just engage in ‘internal pricing’ to pay their fare share. Some have been paying nothing despite billions in sales revenues. But Biden’s 15% proposal does nothing for corporations manipulating internal pricing and nothing as well for ending inversions.

The global corporate tax ‘race to the bottom’ that Biden’s 15% minimum tax is supposed to correct is similar to the ‘race to the bottom’ tax game US corporations have been playing between the 50 US states for decades. For years, US corporations have been moving their headquarters operations from one state to another to lower their taxes; or else threaten to do so in order to get states and cities give them special tax breaks just to remain. They just don’t call it ‘inversions’ when carried on within the US. In recent years US multinational corporations have exported and adapted this tax strategy to the global stage as well. Biden’s global tax is designed to try to do something about it on the global stage, while doing nothing within the US.

The 15% minimum is supposed to stop corporations manipulating countries’ tax systems. At least that’s what Biden and US Treasury tells us. But don’t trust the much hyped global 15% corporate minimum to accomplish what they say it will. Here’s just three reasons why not:

First, Biden’s 15% tax may never see the light of day. It will take all the 100+ countries–including the USA–to also pass actual tax legislation after the recent, much hyped 15% deal. The 15% treaty only says the 100+ are committed to try. It will take years just to get half of them to pass enabling legislation.

Second, the recently announced 15% global minimum tax is a negotiated treaty. That means, per the US Constitution, it must be ratified by the US Senate first (even before any US enabling legislation is introduced in Congress). Does anyone really think the current US Senate will approve that treaty? After it’s just done everything to prevent any stimulus legislation from being funded by reversing the Trump tax cuts?

Third, even if the 15% passes legislatures in the US and the 100+ countries who signed on to the treaty, what will prevent each country also passing more tax loopholes to the 15%, with accompanying exemptions, exceptions, off-setting tax credits, and so on?

The Corporate Tax 40 Year ‘Shell Game’

The ‘shell game’–i.e. trading off corporate tax rates for loopholes and then loopholes for rates–has been going on for years, especially in the USA.

The four decade shell game occurs when the public learns of the massive loopholes that have been created and demands they be closed, Congress passes partial laws to close a few of the loopholes and exemptions, but then lowers the corporate tax rate.

Just look at the US tax system since 1980: whenever corporate tax rates got too low and it raised the public ire, Congress partially raised back the nominal corporate tax rate but in the same legislation increased the loopholes, exemptions, etc. That trend is evident in the 1981 Reagan tax cuts, followed by the 1986, thereafter by Clinton in 1997, then a series of Bush Jr. tax cuts in 2001-04, then Obama in 2012-13.

The pretense of the ‘shall game’ was ended altogether by Trump in 2017, however, when he massively cut corporate tax rates but didn’t even bother to close any loopholes. He also ended all semblance of a corporate Alternative Minimum Tax. Corporate America got a triple whammy windfall. With Trump the ‘shell game’ itself disappeared. The ‘pea in the shell’ was evident for all to see. Instead of ‘now you see it, now you don’t’ we got ‘now you see it, and now you see it even better’!

This ‘shell game’ of trading rates for loopholes over time results in corporations paying less and less in total net taxes. The US corporate tax rate used to provide more than 20% of US government tax revenues in the 1960s; it now provides barely 5%.

The shell game goes on with the Biden 15% minimum corporate tax. It will be easily negated by US multinational corporations continuing to manipulate their internal pricing between their US operations and offshore subsidiaries; it will continue so long as the inversions loophole remains. The 15% looks good on paper but for various reasons stated above, is almost certain not to take effect for many years–if even then. If it’s a treaty and doesn’t pass the Senate, for certain other countries will not implement it if the US fails to do so.

The Corporation As Capitalist Conduit

What the mainstream media refuses to say when hyping the global minimum tax (or any of the chronic corporate tax cutting that’s been going on for decades) is the role it plays in the ever accelerating income and wealth inequality in the US today.

The corporation is the conduit for distributing massive amounts of income and wealth to capitalist shareholders. In the past decade more than $12 trillion has been distributed by corporations in the US to their shareholders in the form of stock buybacks and dividend payouts. During the Obama years these combined distributions rose from $700 billion a year to nearly $1 trillion a year. Under Trump, 2017-2019 the amount averaged $1.2 trillion a year. This year, 2021, under Biden it is projected to rise to $1.5 trillion. The massive distribution of income enriches individual capitalists, who then mostly reinvest it into stocks, bonds and other financial securities–i.e. forms of wealth–thus driving wealth inequality as well as income inequality. The assets of wealth (i.e. stocks, bonds, etc.) then throw off even more income as the buybacks and dividends keep rising further.

If the corporation is the institutional conduit for funneling more and more income and wealth to the capitalist class, then the corporate tax shell game is the liquid that flows through that conduit.

As capitalist investors accumulate more income and wealth due to corporate distributions rising made possible by the tax ‘shell game’, the individual wealthy capitalist-investors get to keep more and more of what the corporation distributes to them as well. Individual tax rates and loopholes are also expanded so that the individual capitalists get to keep more of what their corporations distribute to them in buybacks and dividends.

Corporate Tax Hikes as Political Marketing

This shell game will not end with the global 15% tax. Nor will it end with the recent proposals for an individual billionaires tax or a tax on billion dollar profit companies that the Democrats are now proposing as ‘smoke and mirrors’ funding for Biden’s Build Back Better plan (see my article of last week, ‘The Smoke & Mirrors Billionaires Tax and 15% US Corporate Minimum Tax’). The Global tax is of the same species, just a different genus. All are about creating a facade for politicians to make the public think something is being done about the tax system that ever enriches the wealthy and their corporations.

The recent proposals by Biden to raise the corporate tax in the US back a little, from Trump’s 21% to 28%, would have contributed to reversing the trend. So too would the proposal by Biden to raise the personal income tax on the wealthiest back to 39%. Before Trump the corporate tax rate was 35%. He reduced it to 21%. Biden originally proposed to raise it back in part to 28%. Then he lowered that to 26%. Now he’s dropped it altogether in his latest ‘framework’ for his Build Back Better bill.

But proposals for actual tax rate hikes on corporations and wealthy capitalists have been abandoned this past week by Biden and the Democrats as they capitulated to corporate lobbyists–and their shills in the Senate (Manchin, Sinema) and House (Cuellar).
Now in lieu of actual tax hikes on corporate America we get the smoke & mirrors of taxing billionaires and the ‘looks good on paper only’ global 15% corporate tax. Watch for still more abandonment of proposals to make the rich and their corporations pay and in their replace tax increases that look good on paper but which the politicos know can never result in any real revenue.

What’s needed instead is a total radical overhaul of the US tax system. That system has, according to this writer’s calculations, provided US corporations and their shareholders and wealthy financial speculators no less than $15 trillion in total tax cuts since 2001! Reforms are no longer possible. The income and wealth shift through the current tax system has reached such proportions that tinkering with it will not be enough. Something more fundamental is required. But that’s another story.

Permanent Output Losses from the Pandemic

In the World Economic Outlook, published October 12, the International Monetary Fund (IMF) slightly lowered its forecast for global economic growth this year to 5.9%, while maintaining a forecast of 4.9% for 2022. It also emphasized the “divergence” in the pace and extent of economic recovery in different countries.

Two factors are highlighted in explaining the divergence. First, there are the different paces and extent of vaccination in different countries, that is, the ‘Great Vaccination Divide’. The WEO report shows a positive correlation between vaccination rates and upward revisions in country growth projections since April. The second factor corresponds with national differences in the fiscal space available for recovery support via public policies.

The IMF referred to “lasting imprints” left during divergent recoveries, with emerging and developing economies suffering deeper medium-term damage than advanced countries, on average. Most countries are now forecast to have lower GDP in 2024 than projected in January 2020 before the pandemic. The exceptions are the United States and emerging countries in Eastern Europe, for which higher GDP than before is forecast (Figure 1).

permanent output losses from the pandemic Figure 1

The divergence in economic recoveries is also manifested in labor markets and in the levels of utilization of productive capacity. The IMF projects higher job losses relative to pre-pandemic trends through 2024 in emerging and developing economies.

It is necessary to distinguish, on the one hand, the permanent output loss resulting from the pandemic and, on the other, any possible consequences of the pandemic for future GDP trajectories. Comparing previously predicted and actual trajectories with what happened during the pandemic shows a definite loss. Even if one hypothetically supposes an exact return of the economy to the point where it would be according to the original trajectory, with a return to the growth rate prior to the pandemic, all the GDP not generated during the crisis would be permanently lost.

This is different from crises associated with industrial or financial cycles common in history because, in those cases, in general, some period of above normal or trend growth will have occurred previously. In the pandemic there has been only the loss side.

There is also a high probability that ‘scarring’ prevents a complete return to levels of GDP that were projected before the pandemic. In the case of a recovery in the form of an ‘inverted square root’ (Figure 2 – see Canuto (2020)), the permanent loss of GDP would include the differences between GDP levels projected before and after, even assuming a return to the potential growth rate prior to the pandemic.

permanent output losses from the pandemic Figure 2

As discussed previously, the pandemic is causing scarring in labor markets. Long-term unemployment leads to skills erosion. The quality and quantity of hours in human capital formation is also being negatively impacted.

The pandemic will leave other scars, as discussed by Diggle and Bartholomew (2021). Financial support from the public sector has made it possible for ‘zombie’ companies to survive—firms incapable of generating returns and meeting debt services in the ‘new normal’ conditions. Public support prevented the death of otherwise viable companies, but the side effect of maintaining zombies is, in turn, an impediment to the improved reallocation of resources.

Experiences with strong negative shocks also have persistent impacts on the beliefs and moods of companies and businesses, leading them to greater levels of risk aversion in financial and budgetary decisions. It is not by chance that, historically, savings go up during pandemics.

On the other hand, the pandemic has had a positive productivity shock in sectors where there was some business reluctance to accelerate digitization and automation, as revealed in some recent surveys of corporate managers. Certainly, the challenges in terms of the need to retrain the workforce have also increased.

The IMF WEO report included an upgrade to the medium-term scenario for the U.S. economy, which may be taken as including a favorable assessment of the effects of the Biden administration’s fiscal program, for which the feasibility of political approval was certainly facilitated by the pandemic crisis. This arguably can be included among the ‘positive shocks’ from the pandemic.

The scars, with different depths in different countries, will limit the extent to which the recovery will bring economies closer to their pre-pandemic trajectories. The shorter the recovery, the greater the permanent loss of GDP arising from differences between projected GDP before and after. This is bad news in particular for emerging and developing economies that, according to the IMF report, are on the downside of the “divergence of recoveries”.

What about the growth trends after the pandemic, with scarring effects taken into account? Is there any reason to expect growth to change up or down as a lasting consequence of the pandemic?

Here, there is a danger that national economic policies will focus more on risk prevention and lead to a retreat from the productive integration across borders that marked globalization in the decades prior to the global financial crisis. This integration was already subject to pressure in the opposite direction before the pandemic. The primacy of efficiency and cost minimization could give way to security against the risk of shocks and supply chain resilience. The supply disruptions that have marked the current moment of recovery from the crisis could be used as a justification for this.

It remains to be seen how far the demarcation lines of what will be considered ‘strategic’ by different countries will be extended. But moving towards closing of markets tends to negatively affect the future evolution of productivity. And one cannot lose sight of the exuberant result that accompanied globalization in terms of global poverty reduction and less inequality between national per-capita incomes.

One must also consider as a possible positive consequence of the pandemic the strengthening—apparently the case in many countries—of domestic political support for the pursuit of sustainable and inclusive growth. For now, however, there are permanent losses of GDP.

The Great Strike of 2021

The best definition of a strike is when ‘workers withhold their labor’ for better wages and working conditions. The conventional wisdom is that unions go on strike. But that is incorrect. Workers go on strike and they don’t necessarily need to be members of unions. That fact is evident today as millions of US workers are refusing to return to their jobs. They are ‘withholding their labor’ searching for better pay and a future.

We are witnessing the ‘Great Strike of 2021’ and it’s composed mostly of millions low paid non-unionized workers!

Workers returned to jobs at a rate of 889,000 a month during the 2nd quarter 2021 (April-June) as the economy reopened. That average fell to only 280,000 per month in the just completed 3rd quarter 2021 (July-Sept), according to the Economic Policy Institute.

The most recent September month figure was only 194,000 jobs were refilled, according to the US Labor Department’s monthly ‘Employment Situation Report. That missed mainstream economists’ prediction of 500,000.

According to various Tables in the US Labor Department’s monthly ‘Employment Situation Reports’ (A-1, A-13, B-1), only half of the workers who were jobless at the start of 2021 have returned to work. Officially, per the Labor Dept. more than 5 million still have not. But that 5 million is a gross under-estimation. It doesn’t count the 3 millions more who have dropped out of the labor force altogether and are no less jobless than those officially recorded as unemployed. Nor does the 5 million include a several million or so workers who were mis-classified by the Labor Dept. as employed in March 2020 when the pandemic began simply because they indicated when surveyed by the government that they expected to return to work even though they weren’t working at the time of survey. The Labor Dept. soon thereafter acknowledged it was an error to count them as employed, but to date it has still refused to correct the numbers. That number of mis-classified as employed today remains around 1 million or so.

So there are somewhere around 8 to 10 million workers in the US still without any work at all, (which doesn’t account for the millions more who are underemployed working part time or a few hours a week here and there).

Many of the 9 million or so are not returning to work out of choice—i.e. they are ‘withholding their labor’. They are in effect on strike for something better.

While most are low paid, their ranks aren’t limited to just those industries that first come to mind—like hospitality or retail work. The ranks of the low paid are common across nearly all industries in the US today, not just hospitality or retail.

Comparing the US Labor Dept.’s level of employment as of September 2021 to the pre-pandemic months of January-February 2020, number show workers withholding their labor is widespread across industries and occupations: Leisure & Hospitality shows 1.6 million fewer working today, in September 2021, compared with pre-pandemic months of January-February 2020. But the Health Care industry, with hundreds of thousands low paid workers in home health care and clinics, shows 524,000 fewer employed today compared to January 2020. Professional & Personal business services shortfall is 385,000; Education services—with its hundreds of thousands of adjuncts in higher education and millions of K-12 teachers paid low wages in small non-union school districts—is down by no fewer than 676,000. One would think manufacturing was a case to the contrary. But no. Millions of manufacturing workers are employed as ‘temps’ with low pay and no benefits—even in union contracts. Manufacturing has 353,000 fewer jobs today than it had in early January 2020. Ditto for Construction, with 201,000 fewer. And so on.

That’s more than 5 million fewer—not counting those having dropped out of the labor force altogether or those still mis-classified as working.

It’s safe to assume that at least half of the 9 million with no work whatsoever are refusing to return to work out of choice. That’s 4 to 5 million who are de facto ‘on strike’. The USA is in the midst of the ‘Great Strike of 2021’, involving millions of the low paid and super-exploited US workers across virtually all US industries!

Signs are beginning to appear that their example may now be spreading to the unionized workforce as well. Union contract renewals are being rejected—and strikes imminent or in progress—in industries from food processing (Kellog workers) to agricultural equipment (John Deere) to hospitals and healthcare on the west coast. These are large union bargaining units involving thousands, and tens of thousands of union workers.

Capitalist Ideology: Reversing Cause & Effect

Employers, business media, politicians and most mainstream economists won’t acknowledge they’re in a strike wave of both the unorganized and organized. They are united, however, in trying to blame the workers for what is a de facto walk out by millions. They are all lamenting, and scratching their heads, with no answers as to why so many workers are not returning to their jobs or willing to leave them—especially now that vaccines are available and employers are advertising job openings.

Their explanation earlier this past summer was unemployment benefits were too generous and were thus responsible for keeping millions of workers not returning to work. This theme was especially popular among politicians in the Red states. Starting last June 2021 many Red state governors and legislatures unilaterally and pre-emptively cut unemployment benefits, even though the benefits were to continue until September. The then went silent as data over the summer showed that the few ‘blue’ states that did not cut benefits early—like California, New Jersey, etc.—actually showed a greater rate of return of workers to their jobs over the summer than did Red states that cut unemployment benefits early. So much for that argument.

Now the drumbeat by employers, politicians, and Red states is that child care benefits and improvement in food stamps are keeping workers from returning. It’s the old employer strike strategy: starve them out and they’ll come back to work.

In other words, workers’ refusing to return to work has nothing to do with unlivable low wages, with lack of alternative health care for themselves and their families since returning to work means loss of government COBRA payments or Medicaid, with unavailable or unaffordable child care. It has nothing to do with employers offering many workers to return to work but at fewer hours and no guarantee of hours needed to ensure sufficient weekly earnings to cover their bills. It has nothing to do with employers insisting on unstable family-destroying work schedules, no civilized paid leave, and in general no hope for the future ever getting out of what is in effect a system of modern work indenture afflicting tens of millions of US workers today.

According to many employers, their media, and their politicians, it’s the fault of the workers themselves. They’ve been given too much during the pandemic and now they don’t want to work! That’s the Capitalist mantra and explanation for the millions refusing to return.

With that explanation, employers, media, politicians and mainstream economists turn reality on its head! As is typical of the language games played by capitalist ideology, they have reversed cause and effect. The victims—the workers—are the cause of the problem and not the result or effect. Workers are the cause of the rate of job returns falling by two-thirds the past three months compared to the previous April-June period. Left unmentioned is the decades-long practices of paying unlivable low wages, few or no benefits, and working conditions so inadequate that virtually all other advanced capitalist economy have abandoned them years ago (i.e. no paid leave, child care, national health care, etc.).

The more accurate way to look at what’s going on is that perhaps as many as half of the 9 to 10 million still without any work today are withholding their labor and looking for better wages, benefits, conditions, and new jobs that provide some hope for the future. 4 to 5 million US workers are in effect ‘On Strike’.

The Great Strike Wave of 1970-71

The last great strike wave in America was 50 years ago, in 1970-71. At that time it was union workers who walked out en masse in construction, trucking, auto, on the docks and in dozens of other big manufacturing, construction and transport companies.

This working class history has largely been ignored by academics and the capitalist media. Probably because the strikes were so successful, in nearly all instances the striking workers and their unions winning big victories! On average, that strike wave resulted in 25% immediate increases in wages and benefits in no more than three year term agreements. The workers and unions could not be stopped by employers. They were so successful the companies had to turn to the US government to halt the successful strikes and contract settlements. They turned to Nixon, president at the time, in the summer of 1971 who quickly issued emergency executive orders to freeze wages won by the strikes and then roll back the 25% wage and benefit gains to no more than 5.5%.

The wage freeze and rollbacks were central elements to Nixon’s so-called New Economic Program (NEP) issued that same August 1971 along with the wage freeze. In the NEP Nixon also attacked US Capitalist competitors in Europe and elsewhere with various trade measures and by ended the guarantee of exchanging the US dollar, 32 dollars per one ounce of gold. That blew up what was called the ‘Bretton Woods’ international capitalist system that the US itself had set up in 1944.

In the former great strike wave of 1970-71 there were 10,800 strikes during the two years, with more than 6.6 million workers participating and 114 million work days lost due to the strikes. The 1970-71 strike wave was in some ways as great as the preceding big wave of 1945-46. In that period there were approximately 9,750 strikes involving 8.1 million workers resulting in an even larger 154 million work days lost due to the strikes. (Source: Analysis of Work Stoppages, US Department of Labor, Bulletin 1777, 1973)

Fast forward another half century, to the present day. There are almost as many workers ‘withholding their labor’ at around 4 to 5 million—with the number possibly rising as union workers join their ranks as their contracts expire. Number of work days lost is still to be estimated. But there is no doubt that there’s a new militancy rising, as workers take their fate into their own hands—or should one say ‘with their feet’ as they walk away from their jobs and withhold their labor!

What’s different today is today’s Great Strike of 2021 is not led by the unions. Private sector unions in the US have been decimated and almost destroyed since 1980 as a consequence of Neoliberal policies of decades of offshoring of jobs, free trade agreements, and massive government tax subsidies to corporations to replace workers with automation, machinery, and new capital equipment.

Replacing this job destruction the past four decades were tens of millions of low paid minimum wage and substandard service, temp, part-time, gig and similar indentured ‘precariate’ jobs as they are called. The recent Covid crisis exacerbated and deepened the economic contraction of 2020-21. And now the low paid, precarious, and de facto indentured work force are in revolt.

Many industries and companies are now having to raise their wages and pay recall or hiring bonuses to try to get workers to return, as they continue to withhold their labor and create a labor supply shortage. Shortages of labor supply usually mean wages must rise. But the practice is uneven across industries and still largely anecdotal.

Historical Significance of the Great Strike of 2021

The US is in the midst of an historical event. Sections of the US working class may be awakening—on their own—and not led by unions that have either been destroyed or are being led by senior union leaders who don’t want to strike out of concern it might ‘embarrass’ their Democrat Party senior friends.

The great strike of 2021 is composed, in contrast, of mostly the non-unionized workforce—lower paid service workers, independent long haul truckers, delivery drivers in the cities, hospitality workers in hotel and restaurant service, workers in retail, on local construction projects, teachers and school bus drivers, nurses ‘burned out’ by chronic overtime, warehouse and food processing workers pushed to the limit for the past 18 months, home care aide workers exploited by US middleman ‘coyotes’, and so on. The list is long.

Mainstream economists and politicians have very little understanding of the fundamental, structural changes to production processes and to product-service markets that the Covid period and deep contraction has wrought. Those changes are still be revealed. And many will prove profound. The restructuring of US labor markets now appearing is just the beginning The Great Strike of 2021 is but the symptom. Product markets and global distribution of goods and services are under similar great stress and change as well. Not least, the full effect of financial asset markets—i.e. stocks, bonds, derivatives, forex, digital currency, etc.—is yet to be felt as well. That one is yet to come and when it does may prove the most de-stabilizing of all.