Alternative Visions

Just released US jobs numbers for November are reviewed in first half of the show. Not much change from October, with services sector jobs still growing and goods sector jobs slightly declining. Both reflect the US economy growth/no growth condition with manufacturing & construction continuing to contract while services continue to expand. Inflation statistics reflect the same, with goods prices falling (especially gasoline & energy) while key services prices continue to rise around 5%. US economy is stuck in same place last 3 months. Second half of the show addresses Ukraine war as Congress to vote on aid for Ukraine. Prediction is it will provide some token aid BUT only if Biden agrees to demands by Republicans for border wall and money. Dr. Rasmus predicts as well the war in Ukraine is over, in military terms. Fighting will continue but Ukraine has effectively lost. Other topics include strategic significance of Putin’s Mideast tour and recent US polls showing only 28% of US households now approve of Biden’s handling of the economy. (Next week: Latest inflation stats and how presidents become multi-millionaires).

Today’s shows raises the expose of Zelensky government corruption that US mainstream media has been assiduously avoiding. Actor Danny Trejo just spilled the beans on another Zelensky grift. US celebrities who have been trekking to Kiev apparently get paid $150,000 for their photo op with Zelensky, providing they kick back $50K in cash to Zelensky himself (whose wife just bought a $70m property in Cyprus). Rasmus asks if Z get the original $150k per US celebrity visit from the $1B per month the US gives Ukraine to pay for the wages and pensions of all Ukraine government workers? Dr. Rasmus notes the corruption level appears to be rising as Ukraine’s army retreats from multiple war fronts and talk of a coup of the Zelensky government now grows. Dr. Rasmus reviews the state of the war and political instability in Ukraine amid rumors of Ukraine generals talking a deal with their Russian counterparts and restates his prediction the war will be over by this summer.

Today’s show discusses the growing media spin on the US economy that it’s headed for a ‘soft landing’—i.e. no recession as inflation continues to abate. Dr. Rasmus dissects the 3^rd quarter US GDP numbers of 4.9% annual growth rate that is feeding the soft landing hype. The four major elements of GDP are reviewed, showing 3^rd Quarter was an aberration driven by business over-expansion of inventories in expectation of a surge in consumer spending in 4^th quarter that is now not appearing. What’s really happening with real consumer spending and retail sales, adjusted for inflation; real wage incomes; categories of business investment; and US exports in a global economy slowing noticeably. Rasmus explains how nearly all the slowdown in inflation is in the goods sector, and that manufacturing & construction are in a recession since early 2023. The result: the more likely scenario for winter 2023/24 is therefore US GDP will slow sharply and recession in 2024 beyond the goods sector is likely.

The Fed this past week held off raising interest rates once again. Or did it? Dr. Rasmus explains why the Fed may have paused raising short term rates but it is simultaneously raising long term Fed interest rates (10,30 Treasury bonds). Rasmus explains how the Fed is flooding markets with excess Treasury sales in order to raise funds to cover the US $2T budget deficit, an act driving up long term US Treasury rates. Fed chair Powell faces growing contradictions in monetary policy: higher short term rates destabilize regional banks & real estate markets (commercial & residential), but long term rate hikes undermine Treasury markets. Fed has no alternative, needing to raise more than $1.5T in next 6 months from sale of Treasuries in order to cover the $2T US budget deficit. Contradictions in US fiscal policy (deficits, debt) are thus exacerbating monetary policy & financial markets, Rasmus explains. The ‘spin’ that  Fed policy has produced a ‘soft landing’ of the real economy is next debunked. The show concludes with updates on the Ukraine war, how Russian forces are growing in number while Ukraine’s manpower & weapons fade-as Zelensky quarrels with his generals. In Israel’s war on Hamas, Dr. Rasmus argues 4 US aircraft carriers at and en route to the region represent US planning for potential war with Iran, not simply military support for Israel. A point further suggested by resolutions just passed by the US Congress calling for war with Iran

 The just released preliminary estimates for US third quarter 2023 GDP, showing how the estimated 4.9% annual rate of US growth is actually much lower than reported. Rasmus explains how GDP in 2013 was redefined, boosting its number by more than $500B a year. Also how US low balls the inflation adjustment to GDP to get a higher number. Prospects for GDP in coming 4^th and 1^st Quarter 2024 are forecast at less than 1% a quarter—as  both consumer spending and business investment ‘core’ of GDP slow significantly. (Core GDP in 3^rd quarter only half, 2.5%, of the 4.9% already). The show next discusses the Israel-Hamas war, the strategies of the US and Israel, the massive US military buildup in the region (including 4 aircraft carriers & subs now) and the increasing likelihood of a US-Iran war that the neocons desperately want. Final comments also offered on the status of the US proxy war in Ukraine now that Zelensky has ordered his generals to go on the defensive everywhere, marking the official end of Ukraine’s failed summer offensive.

The title for today’s show is a direct quote this past week from Chase Bank CEO, Jamie Dimon. It reflects the growing concern being expressed widely about the global and US economy and geopolitical conditions. In another quote the giant shadow bank, Blackrock, told its customers “get into cash”. After a brief update on the UAW strike, today’s show reviews the University of Michigan’s consumer survey, showing household sentiment in the USA is plummeting, perhaps signaling the consumer’s propping up of the US economy is about to end as inflation starts rising again—as the latest CPI and PPI price reports showed last week. The show then focuses on the growing contradictions in US (Fed) monetary policy, now converging with similar crisis and contradictions in US fiscal policy-especially deficits and debt management. Today’s show then concludes with an analysis of the Ukraine War and the shifting US & Ukraine strategies as the latter’s offensive collapsed. The conclusion is the ‘war is over’ and the US/Biden administration seeks a way to freeze it in a 2024 US election cycle.

 Latest developments as of 9-30 in the auto workers, writers & actors strikes. Former president Jimmy Carter turns 99 this weekend. No doubt US corporate media has prepared puff piece obituaries, hailing Carter as the most humane and moral president ever. The show today provides the facts and a different picture, however: What were Carter’s real legacies? How Carter paved the way for USA’s disastrous 20 yr middle east wars (2001-21), launched the 4 decades war on unions that inaugurated concession bargaining and union labor’s ‘Great Detour’, and provided the dress rehearsal and economic policy template for Neoliberalism that followed under Reagan.

 As Ukraine’s Failed Offensive becomes increasingly obvious, political repercussions are being felt in the US, Ukraine and Europe. Half of UN delegates refuse to show up for Zelensky’s speech; 32 House Reps and 6 Republican Senators go on record they won’t support more Ukraine war aid; Zelensky feuds with Poland over grain shipments & Poland’s president says Poland won’t send more weapons to Ukraine; Zelensky gives interview to Economist magazine threatening Europe with angry Ukrainian refugees; Biden tells Zelensky US will send only a few ATACMS missiles and not now. US Ukraine war policy is clearly about to shift as Biden admin. seeks a freeze in the conflict during 2024 election year as US faces $1.5T deficit for 2023 and rising debt. Dr. Rasmus summarizes the economic and political legacies of the Ukraine war. The show then discusses the latest events in the UAW strike and negotiations, explains why the Fed paused rate hikes despite rising inflation again, and why a govt shutdown later this year is growing increasingly likely this time around as Republican House ‘Freedom Caucus’ slaps down House Speaker McCarthy’s latest attempt to exempt Defense Dept. and War spending from budget cuts.

most of today’s show is dedicated to understanding the UAW strike that began at midnight last night.  What are the union’s demands and the Big 3 auto corporations offers. Rasmus explains how the companies are flush with cash, with $250B profits, tax cuts, $80B paid out in shareholders buybacks and dividends, tens of billions $ direct subsidies by Biden to build their EV plants, and 40% raises for CEOs. What happened in 2019 UAW negotiations and why autoworkers’ real earnings have fallen by 19.1% since 2019. Dr. Rasmus explains the history of union concession bargaining since 1979 which began with the Chrysler auto strike that year. How concession bargaining expanded last 40 yrs. Recent union negotiations at UPS (Teamsters), west coast dockworkers (ILWU), airline pilots, last year’s railroad negotiations, and current writers-actors strike (SAG-AFTRA) are reviewed in the context of concession bargaining and Neoliberalism ‘Industrial’ policy since 1979. Dr. Rasmus makes some predictions about a possible eventual settlement deal in the current UAW strike, which is possibly planned by negotiations ‘behind the scene’ by Biden, UAW, and Auto corp CEOs that won’t be reported. Show concludes with report on this past week’s CPI inflation report and why prices are creeping back up again.

Dr. Rasmus comments on a Wall St. Journal report of Sept. 8 admitting that revisions to US data and reports are showing bigger swings in corrections and occurring more often. The show addresses his oft-stated view that the Covid recession fundamentally impacted labor, product and financial markets in ways that US data and statistical reports have not caught up to yet, thus the more frequent and greater revisions to the data. Rasmus explains how JOLT stats (job openings to unemployment ratio), employment surveys, and inflation stats are growing more inaccurate in the post-Covid era. The show then describes how housing, energy, and food prices have begun to rise again and the reasons why Fed interest rate hikes don’t have as great an impact on lowering demand and therefore prices. The show ends with a return to the topic of labor exploitation begun a few weeks ago, showing how aggregate data of relative shares, CO to worker pay, productivity, and Prof. Saez data on the income and wealth of richest 1% households in US continues to rise after every recession. (Next week: How Classical Economists from Adam Smith to Marx explained labor exploitation and why exploitation has been intensifying once again under Neoliberalism since 1980 and especially after 2008-09 crash).