The first half of today’s show elaborates further on last week’s show topic: ‘What is ideology in Mainstream Economics’ and how it works. Today the focus is on two examples of ideology and favorite theories of mainstream econ—Laffer curves and Phillips curves. Rasmus explains ideology as manipulation of language to misrepresent reality, facts, and original ideas. Ideology as conscious, purposeful, intentional Mis-representation, using language manipulation techniques like insertion, deletion, conversion, inversion, substitution, reversal of cause-effect, de-temporization, universalization, etc. How these techniques are used with Laffer and Phillips curves to justify tax cutting for businesses and investors (Laffer) and central bank interest rate policy (Phillips) subsidizing bankers at the expense of household savers. Today’s show concludes with quick updates on latest developments in the Turkey currency crisis and its contagion connections to Europe banks and other EMEs; the US-China trade discussions about to renew; Europe’s slowing growth; and the accelerating US budget deficits (now predicted to add $769 billion more to the US deficit in just the last six months of 2018 alone).
Rasmus describes what’s going on in Turkey this week, as its currency collapses threatening to drag down Italian Banks and other emerging market economies. How US Fed and Trump policy are behind the Turkish and emerging markets’ economic crises, now deepening. EME economies that loaded up on dollarized debt globally are the ones collapsing fastest. How global speculators and Trump-US political objectives are involved. Rasmus reviews the equally rapid cooling off of the US housing market and rising rents driving US inflation. A review of the rising bankruptcies for US seniors, age 65-74, and the conditions behind the 200% increase in their bankruptcy filings since 2013. Rasmus concludes with a discussion of his view of Ideology in Mainstream economics and how language is manipulated to produce nonsense conclusions (like business tax cuts create jobs, free trade benefits everyone, income inequality is due to one’s lack of productivity, central banks are independent, markets are always efficient, and other false propositions). (For a verbatim print transcript of this show, and last week’s show on ‘Trump as Neoliberalism 2.0, got to Rasmus’s blog at jackrasmus.com).
Dr. Rasmus provides updates to Trump trade, tax, and Fed monetary interest rate policies, explaining how they are integrated responses designed to resurrect and restore neoliberal policy in a new more virulent, aggressive form after the failure of Obama to do so. How trillions of dollars in Trump’s tax cuts and war spending are producing annual trillion dollar budget deficits and adding $12 trillion more to the US national debt in the next decade. Trump’s recent announcement of more tax cuts coming before November plus another $85 billion to war spending will exacerbate deficits further. How Trump trade policy integrates with fiscal-monetary policies. Rasmus updates latest Trump trade actions illustrate a phony trade war with allies: trade war of words with Europe suspended, a deal with Mexico imminent, but positions hardening with US-China. Risks of China trade war morphing into a global currency war, and its consequences. Contradictions between Trump trade-fiscal-monetary policies emerging. Global central banks’ responses to Trump-Fed policies. (For a print analysis of how trade war with China may morph into a global currency war, see Dr. Rasmus’ blog, jackrasmus.com).
This week’s show addresses the past week’s ‘trade deal’ between Trump and the EU. Trump gets real EU concessions for merely suspending his threats to impose 25% auto tariffs on European parts imports to the US. Europe now will buy US soybeans and natural gas. Trump merely backs off threats in exchange. Rasmus then analyzes why US GDP for 2018 is above historical averages but will soon, in 2019, slow sharply and even retract after midyear 2019. Why rising prices are driving investment and consumer spending, not tax cuts plus how US revisions to household savings rates and corporate profits raise questions about US stats. Trump’s criticism of the Federal Reserve rate hikes. The mainstream economists debate Fed rate hikes. The show concludes with explanation how tariff wars may lead to currency devaluations and currency wars.
Dr. Rasmus reviews the status of ‘Trump Trade Wars’ re. China, Europe, and NAFTA, noting tariffs have been actually implemented on only 2.3% of total US imports and exports. Rasmus predicts: deal with NAFTA within 6 months, possibly with China in early 2019, and with the EU only after its ‘Brexit’ issue is resolved. In the meantime, much Trump threats and bombast to appeal to his domestic political base for November elections. Rasmus next addresses the Federal Reserve chair, Powell’s, testimony to Congress this past week, indicating 2 more rate hikes in 2018 and more after. Rasmus reiterates his prediction that a Fed Funds rate hike above 2.5% (now 2%) will invert the yield curve and precipitate the next recession, likely in 2019. Trump’s critique of Powell, as the Fed raises rates to finance Trump’s annual more than $1 trillion deficits and debt. Trump doesn’t want more hikes but created them with his multi-trillion dollar tax cuts and defense spending. The show concludes with discussion of signs of slowing global trade and economy, and some financial instability indicators emerging in Asian junk bonds and China markets.
Dr Rasmus explains the relationship between trade wars, past and present, and neoliberal tax cutting and war spending policies: Trump 2018, Reagan 1985, Nixon 1971-73. What’s next after $34 billion in US tariffs on China this past week? Relative strengths and weaknesses of US and China in the pending trade war and potential tactics. Rasmus reaffirms his prediction Trump is following a ‘two track’ trade war—one with US allies and another with China, and only China is potentially real. The role of domestic US politics in current trade disputes. A second topic of the show, i.e. accelerating global debt, is now $250 trillion and 3X global GDP, rising at$25-$32 trillion more a year. How global debt and US dollar exchange rates and central bank interest rates are related. The show concludes with review of recent data by the Institute of International Finance, confirming predictions by Rasmus that Trump January $5 trillion tax cuts for business and investors would result in lower US tax receipts, a diversion of tax savings to more stock buybacks, dividend payouts, and mergers & acquisitions—not investment, jobs, and wages. Projections of rapid slowing of US business investment and hoarding of Trump tax cuts.
Dr. Rasmus interviews Alan Benjamin, long time participant in Mexican and US labor politics, on the recent election of Andres Manuel Lopez-Obrador (aka AMLO) this past week. Benjamin provides an analysis of the election, and why AMLO won the election this time after having past elections he likely won in 2012 and 2006 stolen. Benjamin explains AMLO’s program evolution over 2018, the role of AMLO’s key business advisors, Urzua and Romo, selected to head, Mexico’s key cabinet positions of Secretary of Treasury and State, and AMLO’s latest views re. NAFTA and Trump. While the US media focuses on corruption and violence, various real sources of the economic and political crises in Mexico behind the election are discussed—i.e. popular demands by Mexicans for jobs, for an end to privatizations of energy and water, for restoration of Mexico’s declining healthcare services, and for repeal of past neoliberal ‘reforms’ of education and energy. Benjamin then describes the current grass roots organizing and popular committees now being formed by workers, communities, and youth to keep the AMLO election from being co-opted by US and Mexican business interests. How the AMLO election represents an important progressive ‘opening’, but also reflects a potential way of control by capitalist interests, as the old PRI and PAN business parties in Mexico have virtually collapsed. (For more information of original English translation of popular programs and events in Mexico, go to: www.socialistorganizer.com
Dr. Rasmus explains the yield curve as a predictor of the last 17 recessions (and the next in 2019). Why short term Fed rates are rising to finance trillion dollar annual deficits and debt and why investors and businesses aren’t convinced the Trump tax cuts will result in a growing US economy after 2018. Why the Yield Curve predicts recessions. Rasmus then discusses Wisconsin’s $4 billion tax and incentive package to lure Foxconn (the giant Taiwan corporation) to its state. Why Foxconn is not, per Trump’s quote, ‘the eighth wonder of the world’. The meaning of this week’s primary victory by Ms. Ocasio-Cortez in New York, and the Democratic Party leadership’s response. Interpreting the Kennedy Supreme Court retirement announcement. Why Trump is not a fascist, nor yet a dictator. But considers himself ‘above the law’—i.e. the definition of a Tyrant. Rasmus concludes with analysis of what the Supreme Court’s Janus decision this past week means for the intensifying attack on public employee unions now coming. (For more on Janus, listen to our March 2, 2018 Alternative Visions show and interview with SEIU union representatives).
Rasmus reveals plans by Trump-Congress to cut taxes still further on investors and businesses before the November elections. Also ongoing incremental tax cutting involving corporate pension fund contributions and dismantling of funding for Obamacare. The Fed’s latest bank stress tests, how they’re phony and why some US banks are still financial fragile. Rasmus also discusses the pending Teamster-UPS contract and how workers’ wage hikes will be eaten up by reductions of overtime pay and inflation. A new five year agreement will mean real pay cuts. The show concludes with latest updates on Europe, Italy’s debt, Greek debt, 3rd party critiques of the US Labor Dept.’s Alternative Work survey, and Trump’s phony trade war with Europe (and real one with China).
The past week’s momentous decisions by the US (Fed) and European Central Bank on interest rates is discussed. How last week’s Fed rate hike, and announcement of 4-5 more hikes to come in 2018-19, will destabilize Europe’s economy as well as Emerging Market economies. Discussion of new reports released this past week on precariate jobs in the US, US multinational corporations offshore tax havens, Corporate CEOs fivefold increase in insider stock sales as buybacks accelerate due to Trump tax cuts. Also reviewed is study released by financial fraud whistle blower, John Griffin, showing that bitcoin price bubble of 2017 was largely manipulated by Asian cryptocurrency exchange, Bitfinex. Rasmus discusses Trump listing of $50b China tariffs today and internal Italian populist government maneuvering with Euro bankers, as Euro economy (and in particular German) economies show signs of further economic slowing of exports and GDP).
