Alternative Visions

Today’s show main theme discusses how the Biden administration and mainstream media are spinning the latest jobs and inflation reports. The official ‘messaging’ by politicians and media alike is that both jobs and inflation are steadily-if slowly-improving. The messaging: the August jobs ‘cooled’ to 187,000; inflation moderated to 3% down from last year’s 9% peak, and wages are rising.  Speaking around the country, Biden claims that jobs, inflation, and rising wages show ‘Bidenomics’ is working. But a closer look at the data since April 2023 shows little progress the past four months: since April 2023 job creation is stuck at around 180,000/mo; services inflation likewise stuck at around 6%; and wages rising mostly for the highest paid 10% of the labor force (and for some at the bottom as minimum wages laws take effect) leaving the ‘great middle’ behind. Dr. Rasmus argues the truth is in the details, not aggregate averages, and shows most of the jobs created last 3 months were 520,000 part time, low paid, service work, of which 321,000 were 2^nd and 3^rd jobs, low paid, with few benefits. At the same time, 311,000 full time jobs have disappeared since April. Similarly since April, services inflation (80% of economy) remains ‘stuck’ at around 6% while wage gains continue to be ‘skewed’ to the top 10% and bottom extremes of the labor force. Bidenomics is thus bypassing the middle class! Rasmus further predicts the Fed will continue to raise interest rates, the US economy slow, US$ rise and exports fall, bank lending continue to decline, housing and manufacturing continue to contract, and consumer spending will slow sharply in 4^th quarter and beyond.

The show begins with an analysis of the past week of the death of Wagner mercenary forces leader, Prigozhin. The show then moves to the main topic: the forces driving the Fed to continue to raise interest rates; for certain this September but possibly even after. At minimum, US rates will remain high for some time. Chronic high services inflation plus emerging new forces globally that keep pressure on chronic inflation and Fed need to raise rates. Rasmus adds that record Fed Treasury sales will add to that pressure and rate hikes, as the Fed needs to sell ever more Treasuries in order to cover US budget deficits. And add still further the rise of the BRICS and declining demand for US dollars

Dr. Rasmus debunks Biden’s and other Dem party notables’ ( HRC, Reich, Krugman)celebration of the Inflation Reduction Act (IRA) on its one year anniversary. Why the IRA has had no impact on inflation but is best understood as part of the 2022 trifecta of Biden bills (including Chips Act & Infrastructure Act) that together provided $1.65T in direct subsidies and tax cuts to US corporations. Rasmus next explains the current structure of inflation, now rising again with services inflation (80% of economy) stuck at 6%+ for the past three months. The chronic inflation reflects the growing contradictions of Fed monetary and interest rate policy and why US deficits funding requirements by means of US Treasury securities will continue to drive interest rates higher in coming months. The show next discusses the growing int’l crisis in the Sahel area of Africa, in particular the country, Niger, and what it means for French neo-colonialism and US future intervention. The show concludes with an initial discussion of ‘exploitation’ and why exploitation of American workers has been intensifying ever since 1980. Various statistical measures of exploitation are provided, including forms of ‘secondary’ exploitation of labor as well as primary.

Dr. Rasmus discusses in depth the causes and consequences the Fitch Credit Rating Company’s decision this past week to downgrade the US government’s credit worthiness. What’s behind the decision? What are some of the consequences? Rasmus reviews the past 22 yrs of rising US deficits and debt and why deficits continue to rise more than $1 trillion a year, the national debt surpasses $34T now (going to $43T) and the economic implications of annual interest payments on the debt now exceeding $600B/yr (going to $900B). The contradictions are intensifying for US Neoliberal Fiscal Policy as well as Neoliberal Monetary Policy. What Fed rate hikes have had minimal effect on services inflation and now threaten to exacerbate US regional banking and commercial real estate sectors of the economy. How the imminent shift by the BRICS economies toward trading in their own currencies (instead of $) will exacerbate monetary policy contradictions, US inflation and GDP. Dr. Rasmus reviews today’s Jobs Numbers, which show little change in services jobs (and inflation) over the past year. (Next Week: What Is Labor Exploitation and How Has It Intensified Since 1980)

With Teamsters-UPS contract negotiations deadline of end of July approaching, the Writers-Sag-Aftra unions’ strike continuing, and Auto workers about to begin bargaining to reverse past concessions, is union Labor about to rise again? Dr. Rasmus describes the various forces behind US labor’s ‘Great Detour’ that began in the late 1970s and continuing now for more than four decades: offshoring of jobs, free trade deals, deregulation of transport and communications, shift to services, substitution of precariate jobs (part time, temp, gig), ‘WalMart Effect’, pro-company NRLB & court shift, atrophy of minimum wage and wage guarantees, top union leadership dependency on the Democrat party, expanding of open shop and anti-labor legal offensives, etc. What happened with last year’s Railroad Union negotiations. Will new leadership of Teamsters and Auto workers unions and new worker militancy mean the beginning of the end of the ‘Great Detour’ of union labor in America? The show then describes why Biden’s current tour promoting his economic policies are not what they seem. Rasmus describes the truth about jobs, wages, inflation, and GDP today.

The mainstream media is now spinning last week’s inflation reports to message that inflation is now under control, therefore the Fed won’t need to raise rates further, and that in turn means a ‘soft landing’ with no recession. Dr. Rasmus dissects both the consumer price index and producer price index reports issued last week. Reports show that ‘goods’ (manufactured things and construction) prices have abated in price, but Services prices (80% of US economy) remain stuck in the 5-6% annual range. In fact, June CPI shows services prices rising more (6.2%) compared to May (5.3%). While some sectors of services are declining (airline,hotels prices) rents remain high. Simultaneously, after falling sharply, energy (gasoline, etc.) prices are rising again as are commodities, housing and utilities. Rasmus explains some of the questionable methods the US Labor Dept uses to dampen actual price hikes—like ‘owners equivalent rent’, ‘hedonic pricing’, outmoded ‘weights’ given certain goods, and by selectively using 14 different ‘base periods’ for different key items in the index. Rasmus concludes, services inflation and price gouging remain the defining conditions of current chronic inflation. And that the Fed can’t raise interest rates higher without further exacerbating the regional banking instability

This past week the Biden administration launched a new PR offensive, touting its package of economic policies as a reversal of ‘trickle down’ economics the past 40 years. Bidenomics is supposed to be a break from the past 4 decades of Neoliberal economic policies. In today’s show Dr. Rasmus debunks the current ‘Bidenomics’ PR offensive, describing how it is a continuation of classical Neoliberal policy (fiscal, monetary, industrial and external) since Reagan. Rasmus defines the essential features of Neoliberal fiscal, monetary, industrial and trade/external policies and then fills in the details of Biden policies showing they are classic Neoliberal. Rasmus argues the ‘Bidenomics’ PR offensive is also classic neoliberal ideology (ideology defined as conscious misrepresentation of fact and reality in the service of special interests by manipulation of language). Summarized, Bidenomics is the continuation of neoliberal ‘trickle down’. Rasmus concludes with an assessment of the 4 dimensions of neoliberal economic policy future and the growing theme on the left that Neoliberalism is in growing crisis. Rasmus agrees 3 of the 4 areas of Neoliberal policy are facing growing contradictions and crisis, with the exception of neoliberal industrial policy (anti-union, anti-strike, wage-benefit compression, privatization, deregulation) remaining strong under the Biden administration. (For an analysis of evolution of Neoliberal policy from late 1970s until 2020, check out Dr. Rasmus’s book “The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump”, Clarity Press, 2020)

 Dr. Rasmus examines some facts about Russia’s mercenary Wagner group and its leader, Prighozin, recent mutiny. What are some interesting facts behind the origin of the rebellion not reported by the US mainstream media? The show next addresses in depth the US Supreme Court’s decision to scuttle Biden’s proposed $10-$20K student debt forgiveness proposal. Why 43.5m student debtors can’t get any relief, while 25m small businesses had their $900B in loans under the Covid PPP program expunged by the government and SCOTUS said nothing? The scam called the Student Loan program is discussed in detail and what the SCOTUS decision may mean for all businesses. The show concludes with an examination of whether Biden’s economic policies (aka Bidenomics) represent a crisis for US neoliberal policy in general. Why Biden’s policies are classic neoliberal but also reveal a growing crisis in US neoliberal policy in its monetary, fiscal and trade/dollar variants. (For more on the Prighozin Rebellion, check out Dr. Rasmus’s July 1 blog piece: ‘Prighozin’s Rebellion and the Third Offensive’ at his blog, http://jackrasmus.com

What’s behind the Fed’s decision to temporarily halt rate hikes this past week? Then raise rates later again this year? Dr. Rasmus explains the Fed is more concerned in the short run with exacerbating the continuing regional banking crisis than intensifying efforts to slow inflation by raising rates. Fed policy faces a contradiction: raise rates and worsen banking system instability (which the Fed has been offsetting with weekly injections of $95B to stabilize since March), or, not raise interest rates for a while and live with inflation. Rasmus dissects the latest CPI report that shows continuing services sector inflation of 6.3%-6.6%, even as goods inflation has moderated and energy inflation fallen significantly from last year’s highs. Rasmus explains how and why monetary policy faces growing contradictions and is becoming increasingly ‘inefficient’ (i.e. high rates don’t reduce inflation as effectively as in times past, while lowering rates to zero have less effect on stimulating the economy as well. The causes are late neoliberal capitalism’s globalization and financialization. How and why fiscal policy is also facing growing contradictions and why US global economic hegemony is weakening as de-dollarization trends also appear to be gaining momentum.

Why is inflation in China virtually zero while it remains chronically high in the US and Europe around 5% and more? Dr. Rasmus describes the forces continuing to keep prices high in the ‘west’ and why China’s economy has little of the same. Supply side issues, corporate price gouging, net exports import prices, currency values, and productivity/unit labor costs—all driving inflation in US—are conspicuously absent in China. The second half of the show addresses the emerging Ukrainian military offensive-the third such during the war. Rasmus explains the dynamics of the first two offensives (Russia in spring 2022 and Ukraine’s in late summer 2022), why both succeeded and failed, and the line up of current forces on both sides in the current third Ukrainian offensive. The importance of concentration of forces (first principal of warfare) in all three offensives and why Ukraine’s latest offensive is likely to fail. Scenarios political and military that could follow. Prediction: negotiations will begin before year end 2023 and it’s likely Zelensky will not be at the table.