The Federal Reserve’s decision this past to raise interest rates immediately by half percent—to be followed by further half percent hikes in June & July and still more increases the rest of the year—means Capitalist economic policy is now to precipitate a recession in order to deal with rising inflation. The question now is not whether, but when, recession comes in the US. Will it be before the end of this year, or early next. And how deep will it go? Dr. Rasmus describes the current Anatomy of Recession in the US: global and domestic supply chain problems that emerged last summer 2021 + monopolistic US corporations price gouging + commodities inflation due to US war sanctions on Russia this year + business productivity collapse leading to pass through of their rising labor costs + emerging inflationary expectations. All together ensure continued inflation in 2022. Rasmus discusses whether the Fed can address these mostly Supply side causes successfully. The US experience of 1981-82 recession is compared to 2022. Can Fed destruction of household-consumer Demand again today achieve inflation control? How deep a recession precipitated by Fed interest rates be required? What’s happening in the stock markets with its wide 1000 point daily swings? Why a ‘soft landing’ of the US economy won’t occur, given the already 1st quarter contraction of the US GDP and concurrent slowdowns in China, Europe and emerging market economies as Fed rate hikes drive up the dollar and ‘export’ recessions abroad.
Dr. Rasmus discusses the recent announcement of US GDP for first quarter 2022 which shows a contraction of the US real economy already underway. The Federal Reserve’s plan to accelerate interest rate hikes starting this month and every Fed meeting this year thereafter, ensures the recession drift will continue and likely accelerate as well. The four components of US GDP—consumer spending, business investment, government spending and net exports (imports-exports) are reviewed as forces behind the GDP contraction. Rasmus discusses the supply side and corporate price gouging behind the current inflation, and how that is depressing consumer spending 70% of US economy + how slowing of economies in rest of world is depressing exports + how US shift to war spending at expense of social programs is further exacerbating the US economic contraction. As Covid impact has ebbed, the war in Ukraine further exacerbates supply drive inflation and in turn consumer demand. How big oil corps and other monopoly corporations in USA are gaming the inflation to generate super profits; what and why Biden administration is doing (and not doing). Rasmus further concludes the war in Ukraine will not be short but protracted, as US adopts a ‘Brezinski 2.0’ doctrine to debilitate Russia economically and militarily in Ukraine; why NATO will expand outside Europe; why the Ukraine war is an event similar to ‘Spain 1937’.
Dr. Rasmus provides an update of US sanctions on Russian gas, commodities, finance and products and assesses their impact. What are some of Russia responses? Will the continuation of sanctions lead to an undermining of US global economic hegemony? Is that imminent or not? Show concludes with Dr. Rasmus observations of the war on the ground and some alternative analyses to US media propaganda. (Check out his latest article on his blog, http://jackrasmus.com ‘US Imperialism’s Proxy War against Russia in Ukraine’ (LA Progressive, March 27, 2022)
Dr. Rasmus discusses the past week historic Fed rate hike announcement and what it portends for both US and global economy, real growth and financial instability. What’s driving the rate hikes, both supply and demand, short and long term. What’s likely impact on the US real economy (housing, autos, small business, etc.). Implications for global currencies’ instability and global economies. Rasmus next discusses she latest of US sanctions on Russia. Are they working? Where and where not? What are Russia’s countermeasures? Are they working? What does it all mean for the major restructuring of the global economy and US imperial hegemony in the months and years immediately ahead.
Dr. Rasmus reviews the many recent financial sanctions and actions taken against Russia and discusses the impacts of each on Russia, as well as on the US and the global economy. The possible ‘blowbacks’ of sanctions to the global financial system are discussed. Various narratives explaining the origins and course of the war are also reviewed and Dr. Rasmus offers an alternative to the mainstream views, arguing all three parties to the conflict are responsible in part and each presents their own preferred view, none of which is totally accurate. Extrapolating from the current experience of financial sanctions on Russia, the show concludes with commentary on how 21st century US imperialism is heavily dependent on financial actions to enforce empire.
What might be the economic impact of the war in Ukraine—On Russia, Europe, and the US as well? Dr. Rasmus discusses the immediate short term economic effects of the past two days of the War. Further consideration and discussion follows on the more intermediate and long term likely impacts in inflation, output, stagflation, financial asset markets, currency exchange rates, and global goods and money flows (exports-imports). An analysis and prediction of the possible minimal effects of US and EU sanctions on Russia, including the suspension of the Russian-German Nordstream 2 natural gas pipeline. Why Biden’s sanctions are full of holes. Why the US has exempted the SWIFT international payments system from the sanctions and why the economic fallout of the war and sanctions will hit Europe harder. What are the implications for global real economic recovery from Covid now underway: will the War thwart and dampen that recovery? The show concludes with comments on some of the fundamental changes in the global economy that the Ukraine war may generate.
As events intensify in the Ukraine and possible conflict looms between the US and Russia—using the proxy of Ukraine—the question rises which is exercising imperialist policies: Russia in Ukraine or US via NATO in Ukraine? Or both? What’s an empire and what’s an imperialist war? Dr. Rasmus defines Imperialism and its key historical examples in the last few centuries. Is capitalist Imperialism different from other pre-capitalist examples? How have different countries managed their empires, especially contrasting British in past compared to USA’s today? Why wars and colonies are only part of the practice of Empire and imperialism. Wars are about obtaining and maintaining empire. But the management of empire in between is different. How imperial countries—especially the USA today—maintain its empire and how is that different from prior empires (British, French, etc.). Rasmus explains how the emerging conflict in Ukraine species of Imperialism fits in the broader historical Geneology of Imperialism.
Dr. Rasmus discusses the widespread narrative in the business media that the Fed will start raising interest rates rapidly next month in March. The argument of mainstream economics is that rate hikes will cool down accelerating inflation (7.5% at latest official report—but really 10% or more). Rasmus explains Fed rate hikes can only impact Demand but current inflation is a combination of Supply problems and monopoly like corporations price gouging. The latest CPI inflation report is discussed, as well as why Fed rate hikes (now predicted at 7 just in 2022) will likely precipitate a major slowdown of the real US economy in 2023 and possibly provoke a financial instability event thereafter as well. The effect of aggressive Fed rate action will also negatively impact global currency markets, Rasmus argues, as the US dollar rises sharply in value in wake of rate hikes. Emerging market economies therefore will experience the negative impacts as well. So why is there consensus that the Fed is the only solution to inflation at this point? And is there another solution? And why is it being ignored?
Dr. Rasmus reviews the historical background to the possible military confrontation in the Ukraine, going back to Gorbachev and the breakup of the USSR in the early 1990s; aggressive moves by the US to move NATO into East Europe after promising not to do so; then US efforts to push pro-Russian politicians out of Ukraine in 2006 and the US backed Georgian invasion of South Ossetia, Russia; followed by the US financed coup of 2014 and Russian responses in Crimea and eastern Ukraine and US unilateral withdrawal from the Intermediate Nuclear Weapons (INF) treaty with Russia in 2019 and moving of NATO missile systems into Poland and Romania. Rasmus chronologically describes events since Putin’s public article last summer indicating NATO in Ukraine was a ‘red line’, up to the current maneuvering going on between Biden and Putin since December 2021 and western European leaders’ shuttle diplomacy now underway. Why a Russian invasion is not ‘imminent’, as Biden claims, but is nonetheless still possible. A preview of Dr. Rasmus’ latest article, ’10 Reasons Why the US May Want Russia to Invade Ukraine’ is presented (see his blog, http://jackrasmus.com for the print version)
The Biden administration this week hypes the 2021 US GDP release of 5.7% growth for 2021 as ‘fastest growth in 38 years’. Yet poll after poll show US households very downbeat and negative about the course and future of the US economy. Who’s right? The politicians or consumers? This show will unpack the just release preliminary figures for US GDP for 2021 and for latest 4th quarter. Why the hyped 5.7% is not all that relevant for the average consumer and household—whether measured in inflation, jobs, wage incomes or even future GDP growth in 2022-23. What’s the real rate of inflation and thus actually lower GDP? Why GDP has been over-inflated since 2013. Why sectors of GDP growth in 2021 are set to slow in 2022. The second major announcement of last week was Fed chair Powell’s declaration that interest rates will rise starting March 2022. Why rate hikes won’t halt inflation, however, and may actually slow the real economy and push financial markets toward more instability.
