The US stock markets are recognized by a growing number of analysts as approaching, or already in, bubble territory. Yet stocks have ratcheted up another 15%-20% since Trump won the election. The run-up is sometimes called the ‘Trump Trade’. Investors have been ploughing in even more anticipating another stage of corporate profits subsidization by Trump and Republican fiscal policies—Trump proposed $6.2 trillion in tax cuts, deregulation (Obamacare, Dodd-Frank, EPA, Mergers & Acquisitions encouragement, etc.), shifting hundreds of billions $ from social programs to defense spending, and $1 trillion in Trump proposed infrastructure spending. Jack explains how expectations of the policy shift to fiscal from central bank, monetary policies from 2008-2016, is now the new strategy for subsidizing corporate profits and investor further wealth gains. Central bank monetary policy had run its course and began to develop contradictions. Fiscal policy—tax cuts, deregulation, infrastructure and defense spending—is the new strategy. US stocks surged in anticipation of the new profit opportunities. But signs Trump may not deliver have stopped investors in their tracks this past week. Failure to deliver policy may result in a major stock pullback in 2017. Jack cites various sources that the current stock market bubble has peaked.
The Fed raised interest rates again this past week. Jack explains it has little to do with it having reached its inflation or employment targets, but represents the major policy shift underway by US economic elites. From Fed low interest policy for eight years subsidizing stock, bond and financial assets—and thereby corporate and investor profits and incomes of the wealthiest 1%--the shift now underway is to subsidize profits and incomes of the 1% by cutting taxes, deregulation, and moderate infrastructure spending. Sustained low Fed rates were beginning to cause more instability in financial markets after 8 years. They played their part in boosting profits and incomes; now another policy ‘mix’ is emerging. Jack shows how Fed 2% inflation and job targets are phony justifications for Fed low rate policy continuation; how and why long term rates which the Fed doesn’t control will continue to rise, and what the global responses and effects in Europe, Japan and China will be to the new Fed direction. Will the Fed be used by the US economic elite to check Trump? Possibly.
Jack Rasmus dissects the Republican/Ryan proposal of this past week to repeal and replace the Obamacare Act. The proposal is first and foremost a $500 billion a year tax cut for corporations and the wealthiest 1%, as they no longer have to contribute anything to the plan. Other provisions of the proposals are described, including the freeze and dismantling of the Medicaid elements, the end of all mandates, the sliding scale of in come for credits, etc. This is a tax cut bill and a further privatization bill, and should be viewed as the first of a sequence of medical related bills that will make everyone ‘pay more for less’. Next target: Medicare. Rasmus reviews the plusses and minuses of the Obama ACA, and why it was doomed from the start due to inability to control health cost increases. The show concludes with an analysis of the origins of escalating health costs since the 1990s, which have their roots in health insurance companies’ and drug companies’ drive to buy out competitors and Wall St.’s penetration of these companies to require more profitability in exchange for loans to buy up their competitors. The trend for a quarter century has been increasing privatization and rationing of health care costs and services. And it’s about to become worse. (Next week: The Federal Reserve’s next interest rate hike next week and its impact)
In today’s show, Jack puts Trump strategy and policies in historical perspective, showing how his proposed programs are rooted in policies initially proposed by Nixon and Reagan. Trump represents the latest in a series of corporate-radical right initiatives to restructure economic and political relationships periodically with US foreign competitors and to contain domestic challenges. Nixon’s NEP program of 1971, and the Powell Memorandum announced at the same time, represent a policy shift to restore US hegemony globally and check and rollback domestic popular challenges by unions and protestors demanding social programs. Nixon’s foreign policy shift was to split China-Russia by courting the former to pressure the latter. Reagan’s ‘neoliberal’ policies shifted the emphasis, to court Russia and isolate China. Trump in foreign policy is returning to a more Nixonian focus on deals with Russia to pressure China. Trump’s economic nationalism also has parallels with Nixon and Reagan. Reagan attacked Japan and Europe forcing new trade accords with both. Trump’s new targets are Mexico,China and Germany. Listen to a program by program comparison of Nixon, Reagan, and Trump for the deep consistency between Trump and his predecessors. Trump has reorganized the corporate-radical right movement. Breitbart is new and a more extreme variant of a theme that has been growing since the 1970s.
Dr. Rasmus discusses how the intensifying attacks on Trump administration represent an historic internecine conflict between old and new wings of the US ruling elites and not ‘democracy vs. fascism’. Rasmus offers an analysis of the first month of the Trump regime and its growing conflicts with the Media, the ‘deep state’ 17 intelligence communities, federal state bureaucracies, and political parties of Democrats and moderate Republicans. Revisiting his November article ‘Tameing Trump’, Rasmus explains the meaning of last week’s firing of NSA Flynn, Trump’s backtracking on China, his reassuring Canada and Japan prime ministers on trade, and his revisiting of his muslim country travel bans. How the Flynn affair was a warning ‘shot across the bow’ for Trump to back off his proposed foreign policy changes with Russia and NATO. How the US spends $700billion a year subsidizing NATO and Europe and how US control of NATO is key to control of Europe politically and economically. The policy areas of conflicts between Trump and the old elites. Rasmus explains how old neoliberal elites (media, parties, spy agencies, state bureaucracies) continue to build a case on Trump and either ‘tame’ him or dump him—but only after he delivers on massive corporate-investor tax cuts, deregulation of healthcare and banks, and checking his trade initiatives. The grass roots base of Trump vs. old elites is discussed.
Jack Rasmus invites guest, Alan Benjamin, to discuss the pending April-May elections in France. How goes France goes Europe, the saying goes. Will Le Pen’s right wing National Front Party pull off a ‘Trump Surprise’ and win the elections, pulling France out of the European Union as she promised? Will the independent Macron united the remnants of capitalist parties and right wing social democracy in the Socialist Party and win? What is the ‘united left’ in formation in France? What does it mean by ‘left frexit’. Benjamin provides a ‘on site’ analysis from his work in Europe and France today not available in mainstream media. Rasmus and Benjamin discuss the collapse of traditional social democracy in Europe as it has aligned with European Neoliberalism and the rise of both right wing populist parties and emerging left wing alternatives. The positions of all the major parties in the French election are explained. Comparisons to the UK Labor Party, Germany’s SPD and AfD, Spain’s Podemos, and with US ‘Sanders-Warren’ efforts to ‘reform’ the US Democrat party are discussed.
Jack Rasmus describes Trump’s grand strategy that is now beginning to take shape--economic, social and foreign elements, noting how the Trump strategy reveals great similarities with Nixon in the 1970s and Reagan in 1980s. Trump is Nixon-Reagan on steroids. Rasmus reviews similarities with Nixon and Reagan in Trump’s current attack on US trading partners in Europe, Mexico, Japan, Australia, Germany, Australia and soon China—comparing them with Nixon’s New Economic Program in 1971-72 and Reagan’s 1985-86 attacks on Japan and Europe with the Plaza and Louvre accords. Trump is not against Free Trade, but for bilateral free trade instead of Clinton-Obama multilateral free trade. Trump’s protectionism is tactical. The goal is to advance US corporate interests vis a vis foreign competitors, just as Nixon and Reagan did. Rasmus describes Trump Grand Strategy to date as: Congress drives deregulation of ACA and Dodd-Frank and then focuses on corporate-investor tax cuts. Trump meantime paves the way with Executive Orders, while using EOs to attack immigrants, domestic and foreign; Trump goes slow on major foreign policy changes involving Russia, middle east and Asia, while aggressively attacking immigrants, law and order, proposing election reform and advancing religious groups’ interests. Strong similarities between Nixon, Reagan, and Trump on policies involving defense spending, social program cuts, deficits, strong dollar, attacking the liberal media, undermining unions, massive deregulation, cutting pensions and social security, promoting police and law and order attacks on protestors, and domestic spying and surveillance. (Next week: France and the Future of Europe)
Dr. Rasmus reviews the major events in the first week of the Trump administration, both domestic and global, as Trump ‘governs’ by Executive Order. Rasmus explains government by executive order has no basis in the US constitution, but Trump is using EOs as the Republican Congress takes the next 6 months to formulate and pass big corporation favored legislation on tax cuts, business deregulation, and replacing Obamacare and Dodd-Frank bank regulations. Trump EOs on immigration and the ‘wall’, the collapse of meeting and negotiations with Mexican president, Pena Nieto, are discussed as is whether a ‘trade war’ with Mexico brewing. Teresa May’s visit to Trump as Britain begs the US to help it bail out of the EU and Eurozone; the exodus of career officials at the Dept. of State? Rasmus describes similarities between Trump and Nixon, and discusses the growing discussion whether Trump represents a new fascism? What really are the elements of fascism. The show concludes with a review of some global economic events this past week, including infighting in the Eurozone over QE, Germany’s newest conflict with Greece over debt, electoral events in Germany and French elections, Mexico’s economic crisis, Emerging Markets economies loading up on dollar debt, China’s fight with speculators, and the non-significance of US stock market, the DOW, reaching 20,000.
Jack Rasmus reviews the key economic events, US and global, in the run-up to the Trump inauguration: China President Xi warning of trade war with US, the European Central Bank’s continuation of its QE policy, the United Kingdom’s Prime Minister, May, signals a ‘hard Brexit’, Trump cabinet nominees tell Congress what they want to hear (and not what they intend to do), Indonesia slaps down Chase Bank and UUS bond rating agencies, US Banks announce accelerating profits and stock prices with much more to come, Janet Yellen, chair of the US Federal Reserve, warns Trump not to spend on infrastructure because US economy is ‘too hot’, the real heat globally rises with hottest climate on record in 2016, and various US elites ‘warn’ Trump about foreign policy shifts without their consent. Jack explains that Trump enters office with elites willing to tolerate him so long as he delivers quickly on massive tax cuts, business deregulation, and eliminating the costs to them in Obamacare and Dodd-Frank, but don’t dismantle NAFTA and China trade or mess with NATO. Rasmus predicts Trump will eventually be ‘brought to heel’ by the US economic elites, and a new Neoliberalism 2.0 will be launched. (next week: Trump’s inaugural address and what it means for US policy)
Jack reviews Barack Obama’s parting farewell address delivered this past week in Chicago. Contrasting the speech event with his 2008 victory speech, this time the mood was not a celebration of unity but a warning of growing disunity and threats to American democracy in the talk. Rasmus quotes from amazingly false passages like “America is a better and stronger place today”, “the wealthy are now paying their fair share of taxes”, “if disappointed with your elected representatives, run for office yourself”, the US remains “the wealthiest, most powerful, most respected nation in the world”—to which Rasmus offers alternative interpretations. Obama’s litany of accomplishments he announced are debunked, including references to ending the great recession, creating jobs, providing health insurance for millions, ending dependency on foreign oil, and saving the auto industry, among other topics. The media’s oft-noted main accomplishments of his administration—Obamacare and Dodd-Frank banking regulation acts are critiqued in detail. (For more detail on Rasmus on Obama’s farewell address, go to Rasmus’ blog, jackrasmus.com, for the latest published article: ‘Obama’s Farewell Address’). Listeners should also note the internet connection went down for about 5 minutes in the middle of the show, but came back up and the show continues. Next week: ‘Trump in Historical Perspective—Trump’s Origins in Nixon, Reagan, Bill Clinton, and the Teaparty’.