Did you hear? President Trump is going to be running for a third term in office. And he’s not joking. Who knows how serious he is, but as we’re going to see, the constitutionality of third presidential term may not be as set in stone as many suspect. Along with the rest of the US Constitution. A constitutional convention could be just around the corner. Just a lawsuit away. And we can thank the DC austerity lobby and their fellow travelers at the Council for National Policy (CNP) and the American Legislative Exchange Committee (ALEC) for this looming threat. The same austerity lobby that has spent years trying to roll back Obamacare, eviscerate Medicare and Medicaid through block-grants, and generally erode what’s left of the US’s social safety-nets as more and more Americans are forced to take any work available just to qualify for increasingly meager government assistance. That austerity lobby. It’s back with a big sneaky plan: a lawsuit purporting to prove that the 34 state threshold for an Article V constitutional convention has already been met. David M. Walker — the former US Comptroller for both Bill Clinton and George W. Bush — is leading the legal effort, with legal support from NRA lawyer (and CNP member) Charles “Chuck” Cooper. If the lawsuit succeeds, get ready for a new constitution written by and for the oligarchy.
But this story isn’t just about this new lawsuit. It’s also about how the DC austerity lobby has been working with CNP to push these constitutional convention ambitions since at least 2013, which is right around the same time it become clear that the last major round of DC austerity lobbying had failed in achieving a “grand bargain” of slashed entitlements. A round of lobbying that began in earnest as the 2008 financial crisis was still playing out with David Walker — then President and CEO of the newly formed austerity-centric Pete Peterson Foundation — taking on a lead role as public austerity advocate. The Great Recession was a great opportunity for a “grand bargain”. And it almost worked. But didn’t work, at least not entirely, and it wasn’t long after that failure became clear that we saw the austerity lobby and the CNP begin hatching far more ambitious plans. Plans that just might be about come to fruition. Because as we’re also going to see, if a constitutional convention does happen, the forces behind this plan are the ones who will be running it. The DC austerity lobby really is just a lawsuit away from winning everything.
There’s blood in the water. With regional banks potentially looking at years of trouble ahead and interest rates well above the historic lows, distress is permeating the US commercial real estate (CRE) markets. That’s been the CRE news, with the private equity now palpably excited about all the distressed real estate that’s bound to come on the market. A supply and demand dislocation that can turn blood in water into a gold laced silver lining for the entities with cash on the sidelines. As we’ve seen, being the ‘cash on the sidelines’ opportunistically waiting for things to fall apart or blow is a big part of the ‘Heads we win, tails you lose’ private equity business model. A business model also rooted in the fact that the fund managers charge high fees whether they’re investments pan out or not. So we shouldn’t be surprised to learn that one of the big investment opportunities private equity has been steering billions of dollars of public pension money into in recent years is...*drumroll*...commercial real estate! With plans on shoveling billions more into the sector going forward. JP Morgan is now predicting these pension funds are going to create a ‘floor’ in the CRE markets. Yes, private equity-led pension funds are going to save the CRE market from complete collapse. At least that’s the plan. A plan that’s going to pay its private equity managers handsomely no matter how it pans out. It’s all part of how American’s growing retirement crisis is translating into private equity’s growing opportunity. The kind of crisis-driven opportunity that pays handsomely whether the underlying crisis grows or not.
It’s been the same headline for months now:
* April of 2020: American billionaires have gotten $280 billion richer since the start of the COVID-19 pandemic
* May of 2020: American billionaires got $434 richer during the pandemic
* August of 2020: American billionaires got $637 richer during the pandemic
* September of 2020: U.S. billionaires got $845 billion richer since the start of the pandemic/Wealth of US billionaires rises by nearly a third during pandemic
* October of 2020: US billionaires saw their net worth rise by almost $1 trillion between March and October — Jeff Bezos remains the richest, a study says.
From nearly the start of the COVID-19 pandemic it’s been clear that the public health disaster wasn’t a disaster for everyone, with the wealthiest individuals being not only largely insulated from the economic lockdown but in many cases well positioned to profit from it. The pandemic was turning into a giant upward transfer of wealth. And as we’re going to see, giant upward transfers of wealth are essentially what the private equity industry is all about. The rise of ‘supply-side’ economics in the 1980s coincided with the rise of private equity and that’s no coincidence. The philosophy behind the private equity movement is the philosophy of supply-side economics. An anti-New Deal philosophy, where ruthlessness is a virtue, that fueled a 40 year giant fascist leveraged buyout of society.
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