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As a follow up to last week’s show, Dr. Rasmus takes a deeper look at the forces currently driving bubbles in US stocks (i.e. passive investing, indexing, ETFs, expectations of Fed rates and tax cuts), Bitcoin and other cryptocurrencies, China ‘WMP’ products and corporate junk bonds (aka entrusted loans), Emerging Market dollarized bonds, and Spain and Italy government bonds driven by Catalonia independence and Italy bank debt problems—a short list!  Rasmus explains the parallels between the US 1987 stock market crash and this week’s 30 anniversary thereof, rooted in Fed easy money and speculation in US junk bonds. The super bubble in progress in Bitcoin and cryptos’ rooted in financing of startups and blockchain technology. The big picture of how the capitalist state is increasingly subsidizing investors and corporate profits, primarily by means of Fed free money policies—now shifting to US tax cut policy in the Trump tax giveaways as another major source of State subsidization of money capital. (Next Week: Trump’s next Fed chair and a deeper look at Deutschebank’s important in depth study, ‘The Next Financial Crisis’.)

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 Dr. Rasmus dedicates today’s show to examining the condition of financial bubble and growing instability in global financial markets.  Recent reports and studies warning of bubbles, debt, and financial instability are reviewed, including the IMF, Bank of International Settlements, the just released report by Deutschebank economists, ‘The Next Financial Crisis’, and key financial players like Bill Gross, Wolfgang Schaubel, and others. Rasmus explains how it is not debt levels alone but the causal relationships between debt, income and liquid assets to ‘finance’ the paying of principal and interest on the debt, and changing terms and conditions of debt repayment together explain financial fragility that lead to financial instability crises. (see the 2016 book, ‘Systemic Fragility in the Global Economy’ by Rasmus). The fundamental forces that have created $134 trillion in excess non-financial corporate debt alone in the G 20 economies, and emerging financial instability, are described--as well as the ‘triggers’ or ‘precipitating events’ that may set off the next financial crisis. Rasmus identifies the financial markets most prone at present to bubbles and financial price contractions, including global stock markets, crypto-currencies, leveraged loans, junk bond markets funding zombie companies, ETFs and passive investing which will exacerbate stock and bond crashes, the big banks in Italy and Japan, and the US strategic ‘Repo’ bond market with its problem of insufficient liquidity.

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 Dr. Rasmus in the first half of the show discusses today’s Labor Dept. job numbers, explaining how the total jobless today is not 6.8 million but closer to 15 million, and not counting the 8 million equivalent declilne dur to falling labor force participation. Rasmus debunks academic explanations like ‘It’s the opioid crisis’ (Princeton) or that it is due to workers staying home playing video games (Univ. of Chicago), or even due to the ageing population and early retirements. Other real causes are offered. In the second half of the show, Dr. Rasmus addresses growing financial asset bubbles in the US and worldwide—including US stock markets, US and Europe junk bonds, Leveraged Loans, Exchange Trade Funds, Europe Non Performing Loans, Bitcoin and crypto-currencies, China entrusted loans junk debt, NPLs, Emerging markets dollarized debt and hidden forex exchange derivatives recently warned by the Bank of International Settlements in Geneva. (Next Week: the Deutsche Bank Study just released on growing financial fragility in the global economy).

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Dr. Rasmus dissects the Trump tax proposal of this past week, crafted by Goldman Sachs investment bankers, Steve Mnuchin (Treasury Secretary) and Gary Cohn (head of economic council). Rasmus explains how it is the latest in a long line of neoliberal tax proposals since 1981, which are designed to shift income to businesses, investors and wealthy households at the expense of wage earners. Once again wealthy investors, households, corporations and non-corporate businesses all gain at the expense of wage earners with annual incomes of $38 to $91,000. Rasmus explains how tax cuts are a foundation of neoliberal policy--along with defense-war spending hikes, social program cuts, and the ‘twin deficits’ solution to financing government debt. Tax cutting from Reagan to Obama to Trump are summarized. The major elements of corporate and non-corporate business income that will benefit from the Trump plan are summarized, including benefits that will accrue to the wealthiest households and businesses as a result of the elimination of estate and AMT taxes, retention of carried interest and preferential capital gains, new cuts in top end corporate and personal nominal tax rates, Trump’s proposal to end the territorial taxation, to allow multinational corps to repatriation $2.6 trillion at special rates, big cuts in business income pass through, etc .  (Next week: Financial Asset Bubbles Again Growing—What Could Happen).

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 Dr. Rasmus analyzes and critiques US Federal Reserve chair, Janet Yellen, announcement the central bank will begin selling off its $4.5 trillion balance sheet of free money given to banks since the 2008 crash. Rasmus explains why the Fed can’t raise interest rates above 2% without precipitating another financial crash and a global currency crisis and provoke the next global recession. Rasmus also debunks the Fed’s explanation why it hasn’t achieved its 2% inflation goal but has to continue subsidizing private banks in the 21st century with ‘free money’. (see excerpts of Dr. Rasmus’s just published book, ‘Central Bankers at the End of Their Rope: Monetary Policy and the Coming Depression’, at his blog, jackrasmus.com, and on Amazon.com, for the analysis of the Yellen Fed to date).  The final two-thirds of the show is a discussion with Mark Dudzic, a coordinator for the Medicare for All movement now growing at local levels throughout the US. Mark and Jack discuss Republicans’ last ditch effort to repeal the ACA and the new Bernie Sanders’ legislation and its growing grass roots movements across the country for Medicare for All, and how Single Payer/Medicare could save $1.5 trillion in the US GDP, as well as business and households’ medical costs if it replaces private for profit health insurance.  

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Dr. Jack Rasmus explains the notion of ideology in mainstream economics and how it works to create false arguments like ‘business tax cuts create jobs’, ‘free trade lifts all boats’, ‘markets are efficient’, ‘inflation is always caused by too much money chasing too few goods’, recessions are caused by external shocks to a stable (equilibrium) economic system, interest rates determine investment, a global savings glut caused the housing bust and crisis of 2008, ‘central banks are independent of the banks’, and one’s ‘income is determined by one’s productivity’.  Rasmus defines ideology as ‘purposeful falsification of original ideas’ on behalf of the interests of those who benefit from the falsification, and describes language manipulation techniques of how this is done, like inversion of propositions, reversal of cause-effect, converting correlations to causation, inserting contradictory elements, deleting original elements of the idea, etc.  The latest version of tax cuts create jobs, by economist Douglas Holtz-Eakin is explain, as is the US Dept. of Commerce’s recent report on incomes and poverty results and its interpretation by NY Times columnist, David Brooks. (Check out Dr. Rasmus’s blog, jackrasmus.com, or his website, www.kyklosproductions.com, later today for re-posting of his prior essay, ‘Applications of Ideology in Economic Policy’, for further explanation).

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Jack Rasmus interviews Gayle McLaughlin, founding organizer of the successful grass roots independent political action movement in Richmond, California, former mayor of Richmond and current city council member. McLaughlin explains how the Richmond Political Alliance, RPA, has been able to take over city government despite intense opposition from oil giant, Chevron Corp., that previously ran the city. How the RPA’s strategy and tactics enabled real political action, outside the two wings of the corporate party of America (aka Democrats and Republicans), to become successful. Gayle describes the progressive improvements the RPA has achieved, how it started, its organizational innovations and direct community ties and how electoral action and direct action tactics were melded successfully.   McLaughlin and the RPA are now undertaking efforts to extend progressive politics to the state level with her candidacy for Lt. Governor of California.  For more information about her Lt. Governor campaign, go to her website http://www.GayleforCalifornia.org . For how the RPA became a successful grass roots movement, its strategy, organization structure and tactics, see http://www.RichmondProgressiveAlliance.net.  And for local San Francisco bay area residents, check out her campaign’s next meeting at 747 Lobos St., Richmond, Calif., this Sunday, September 10 at 2-5pm. (For a full  history of the RPA from origin to present, Dr. Rasmus also recommends reading RPA member, Steve Early’s book, Refinery Town: Big Oil, Big Money, and the Remaking of An American City, Beacon Press, 2017. )

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 Dr. Rasmus takes stock of the condition of the US working class today. Discussed are the true condition of jobs and employment and how official government statistics underestimate contingent jobs, discouraged and missing labor force jobs, how labor force participation fails to account for millions, how government surveys of jobs underestimates, and how ‘hidden unemployment’ means jobless today is still 15-20 million. Working class wage stagnation the past decade, 2007 to 2017, is estimated with effects of contingent labor, gig labor, free trade, capital substitution, de-unionization, and privatization of healthcare and pension benefits; how workers real wages are less than reported due to housing-medical-education cost inflation, shifting tax burdens, and rising debt interest payments. The show concludes with discussion of new employer offensives against unions, focusing on open shop (right to work) Koch brothers offensives and new initiatives to outlaw agency shop and dues check off provisions in union contracts. Acknowledging the dismal scenario, Rasmus concludes that instead of stepping up defense of unions and workers’ interests, the Democratic party continues to retreat further into the morass of identity politics.

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The Fed and other central bank leaders gathering at Jackson Hole Wyoming today express concern for financial instability. Fed chair, Janet Yellen, warns of the Trump administration’s current fast tracking of financial deregulation, driven by the Goldman Sachs-driven US Treasury Secretary, Steve Mnuchin. Dr. Rasmus explains how shadow bankers, like Goldman Sachs, now have almost complete dominance over Trump economic policy, with former Goldman Sachers Mnuchin at the Treasury, Bill Dudley in charge of the NY Fed, and Gary Cohn aschair of Trump’s Economic Council (and soon to replace Janet Yellen next February as head of the Fed). Rasmus explains how the Fed and other major central banks have provided bankers and investors $25 trillion in free money since 2008, but have still not bailed out the banking system leaving a residue of financial problems.  More than $15 trillion in non-performing bank loans still exist, not counting trillions more added to corporate bond debt, 3 trillion more in US consumer loans, and $12 trillion more in US government debt just since 2008. Globally, the capitalist system has added more than $50 trillion in debt above its 2008 levels. Where did the $25 trillion go is explained. Why the Fed and other central banks can’t (and won’t) raise interest rates without precipitating another financial crisis. How a new global finance capital elite now control the central banks and economic policies of the governments of the advanced capitalist countries.

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 Alternative Visions radio welcomes guest, Pablo Vivanco, of Telesur Media in Latin America to explain what’s really going on in Venezuela as the Trump administration raises the spectre of possible military intervention in the democratic revolution in that country.  Dr. Rasmus describes the measures by which US elites and its deep state since the 1950s typically engineer an overthrow of governments, by wrecking first the economy of the country (precipitating recessions, inflation, food-medical shortages,etc.), funding political opposition parties and groups, then taking over government institutions, generating domestic unrest and conflict, and ultimately counterrevolution regime change.  Rasmus argues the US since 2015 has been ‘pivoting’ from the middle east to Latin America, as well as to Asia. Venezuela is now at the point of the US regime change spear in the western hemisphere. Journalist Pablo Vivanco is interviewed at length and explains what’s going on today with the recent election of a new Constituent Assembly in Venezuela and what it aims to accomplish as it blunts counter-revolution and regime change efforts by US and domestic business interests in Venezuela. The popular support for the Constituent Assembly, structured on grass roots organizations, is described by Vivanco and where event may be next leading.

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