Alternative Visions

Alternative Visions 08/26/22 - Biden’s Bifurcated Student Debt Cancellation Proposal + Comments on Powell’s Jackson Hole Speech

 Dr. Rasmus analyses the positives and negatives of Biden’s announcement canceling some student debt. The five main elements of the proposal are described. But more than 25 million students and former students will now have to resume payments and will pay even more starting 2023. Why the $10k debt forgiveness proposal will be offset in more debt in just a couple of years again. And why the second $10k won’t cover all eligible Pell grant recipients.  Rasmus explains how the new rule of paying 5% of discretionary income will result in more unpaid debt interest, rising debt principal and total debt levels. The basic problems of the student loan system is not addressed by Biden: government interest rate charges higher than market rates; no inflation adjustment; no controls on college administration costs and fees, and a narrow definition of who qualifies for residual debt forgiveness after 10 years. Rasmus proposes his own solutions to the crisis.  (for further analysis see Dr. Rasmus just published article, ‘Biden’s Bifurcated Student Debt Cancellation Plan’ at his blog, http://jackrasmus.com. The show concludes with a discussion of Fed chair Powell’s speech today at Jackson Hole, WY, and why it means further rate hikes for some time, more protracted recession, and stagflation in 2023. (Listen to next week’s Labor Day show on the state of the US working class and unions today)

Alternative Visions 08/19/22 - Biden’s ‘Inflation Reduction Act’ and How We Got It

 Dr. Rasmus explains the tax and spending details contained in the just passed Inflation Reduction Act, the culmination of two and half years of fiscal spending & tax acts under Trump and Biden during Covid and after.

The composition of the Cares Act (March 2020), efforts to pass a follow on bill in summer 2020, the emergency Cash Act passed in December 2020, Biden’s March 2021 ‘Covid Relief Act, and the collapse of the Build Back Better Act in November 2021 are all explained and compared. Rasmus describes how Biden’s initial ‘Covid Relief’ and ‘Build Back Better’ proposals in 2021 were stripped out of their corporate measures, which subsequently were passed as the Infrastructure Act (November 2021), the ‘Semiconductor & Manufacturing Act’ (July 2022) and now the ‘Inflation Reduction Act’.  The three pro-corporate Acts of 2022 replaced the Sanders-House Build Back Better bill.  Rasmus describes in detail the just passed Inflation Reduction Act, argues its tax measures won’t produce the $740B revenue, why it won’t reduce inflation, and why most of the $370B spending on climate will go to corporations and businesses as well. Positive, albeit token, social spending measures mostly benefit Medicare households or keep the Obamacare subsidies going a few more years.

Alternative Visions - Dissecting the July 2022 US Jobs Report

Dr. Rasmus discusses today’s Jobs report in detail, dedicating the entire show to an analysis of the report. Is the 528,000 reported ‘new’ jobs and only 3.5% unemployment rate accurate? Rasmus explains the various statistical operations on the actual raw jobs data that results by the Labor Dept. surveys in order to arrive at these numbers. How seasonality, new business formation, and other statistical manipulation on the ‘raw actual jobs data’ results in artificially robust monthly numbers and why there are important contradictions between the two jobs surveys employed by the government in the report. Also discussed is why the reported 4.5% gain in workers’ earnings are really a -4.6% decline in inflation adjusted earnings; why other government report stats like labor force participation rate and employment to population survey show no strong job growth trend; and why the reported 3.5% unemployment rate is really 7.2% even according to the report’s other tables. Also discussed is the significance of an increase of 800,000 in part time employment in just the past month and data in Table A-8 of the report showing a decline in total employment since May 2022—from 156,180,000 to 156,000,000—contradicting the reported 528,000 new jobs last month and the 372,000 in June before.  

Alternative visions -US 2nd Quarter GDP: Is Recession Here? (What’s a Recession?)

 Dr. Rasmus discusses the US economy’s current critical juncture: Is recession already here after this past week’s 2^nd Quarter US GDP report showing two consecutive quarters now of US GDP contraction? Why is there a debate going on that it’s not yet a recession (Biden, Yellen, Powell) despite two quarters of contraction? The two definitions of recession are described. Why those who say it’s not yet a recession are wrong. It is. Dr. Rasmus next discusses the Fed’s decision last Wednesday to raise interest rates another 75 pts. Why the US stock markets & investors welcomed it and surged. What did Fed chairman, Powell, say in announcing the rate hikes that signaled the Fed has lost control of the economy? How many more rate hikes will follow? Why Powell says ‘no recession’ yet and believes a ‘soft landing’ is possible? Why it is not. What’s response of other global central banks in Europe & Japan and why rate hikes to date won’t happen effect on reducing inflation much.

Alternative Visions_072222_ US Recession: Latest Indicators Show ‘Technical’ Recession Already Here

 Dr. Rasmus reviews the latest data and economic indicators this past week which show a ‘technical’ recession is likely already here. ‘Technical’ refers to two consecutive quarter declines in US GDP. First quarter 2022 already declined at -1.6%. 2^nd Quarter predictions by Fed show another -1.5% fall. Rasmus reviews other indicators: recent retail sales adjusted for inflation, consumer sentiment, business activity contraction in the important benchmark region of the mid-Atlantic states, and today the latest release of Purchasing Managers’ Indices for manufacturing and services, both of which now contracting, with forecasts in some regions worse to come.  Rasmus notes the recent McKinsey Consultants report on ‘The Great Attrition’, contrasted to his own ‘Great Strike’ prediction of last fall. Important union negotiations and possible strikes in railroads, west coast ports, and Teamsters next year are discussed, in relation to the anti-union 1947 Taft-Hartley Act designed to enable US government to intervene and stop strikes. Global slowdown in China and Europe and Japan now sliding into recession as well. Rasmus predicts Fed ‘demand destruction’ rapid rate hikes will ensure even non-technical definition of recession before year end 2022. But destroying demand forces contributing to inflation won’t abate supply forces also contributing. Thus recession will take down half of current inflation rate but inflation will continue into the recession period.

Alternative visions

Here’s the announcement for today’s Alternative Visions show:

 

Title: US Dollar & Empire in Rising Global Inflation & Recession

Copy: Dr. Rasmus takes up the theme of US global economic empire is in decline and examines that in relation to the role of the US dollar and other US dominated economic institutions like the IMF, SWIFT international payments system, and other institutions of empire. Both short run and long run trends for the dollar and empire are discussed, and likely moves toward more independence from the US empire by economies like the BRICS (and others now joining it) and what that means for the $ and the empire. The show then reviews recent US CPI and PPI inflation numbers of the past week and Fed rate hikes accelerating. US GDP and its components are considered, as well as GDP, inflation, Currency instability, and interest rate developments underway in China, Europe, Japan, and emerging markets. Show concludes with brief discussion of potential financial liquidity crises erupting as inflation and recessions deepen globally, and what markets this might appear

Alternative Visions - Biden’s Phony Inflation Initiatives + June Jobs Report

In the first half hour today’s show dissects the latest US jobs report for June. Why even govt stats reveal unemployment rates are nearly twice the official, low ball 3.8%. Dr. Rasmus other govt stats as a clearer picture of the job market in the US, explains why the past year jobs numbers are not ‘new jobs created’ but restoration of jobs lost during Covid, and why jobs are a ‘lagging indicator ‘ of the economy and will follow the economic slowdown in 6-9 months hence, as hiring freezes and early layoffs in some sectors are already appearing. The show’s second half debunks President Biden’s various public announcements about how he’s acting to reduce inflation: Biden’s PR  includes lowering tariffs on China exports to the US; suspending the US federal gas tax; selling oil from the US strategic petroleum reserve; jawboning gas stations to lower price at the pump more; pleading with Saudi Arabia to produce more crude oil; getting the G7 economies to fix a price of $50/barrel at which they’ll buy Russian oil as a measure to drive down to that level the global price of crude in general, from its current $100 range.  Rasmus reviews what Biden could do to bring down US gas prices but won’t. Behind the PR spin, Rasmus explains, is the real Biden solution to dampen inflation: have the Federal Reserve precipitate a recession and thereby collapse Demand (via layoffs and wage incomes) for what is a global Supply and domestic oil corps manipulation of price actual problem.

Alternative Visions - G7 Declares War & Global Economy Slides Into Recession

Today’s show reviews G7 meeting and its decisions on new sanctions and de facto declaration of future war on Russia. US/NATO military buildup, provocations, and war costs for US. Larry Summers’ admits recession in US nearer than 2023, confirming Dr. Rasmus’s predictions of 2022 recession for past seven months. Review of sectors of weakening US real economy, as stock and bond markets plunge 1^st half 2022. Show concludes with analysis of Biden’s failing inflation control initiatives to date and why stagflation USA has arrived.

Alternative Visions - Russian Sanctions: Are They Working & Why Not

Dr. Rasmus reviews the content and consequences of US/NATO imposed sanctions on Russia since the Ukraine war was launched in February. A brief history of US use of sanctions is followed by description of sanctions since February. The categories of sanctions: goods, financial, individuals. Why oil and gas sanctions have failed. The cost of sanctions to US/ Europe, and Russia. Countries involved. Relation between sanctions and accelerating inflation globally. Impacts on US economy, Europe’s, and emerging market economies worldwide. Biden’s tepid solutions to inflation and why they’re failing. What alternatives aren’t being discussed. Consequences of sanctions for restructuring of global capitalist economy and risks for US global economic empire.

Alternative Visions - Anatomy of Inflation (Part 2), Jobs Report, and Economic War with Russia

 Dr. Rasmus picks up where last week’s show, continuing the discussion of the Anatomy of Inflation in the US and why inflation will continue chronically for months more. Why falling productivity, rising unit labor costs, inflationary expectations, further intensification of sanctions and war in Ukraine will all add to inflationary pressures. Biden’s various failed initiatives to dampen inflation, and rejected alternatives that could address inflation, are discussed. The show next considers today’s just released jobs report, and looks behind the numbers to show the jobs trend is slowing and hiring freezes appearing that will change the direction of this lagging indicator in coming months. Meanwhile wage gains are falling further behind prices and for most workers are much less than the official reported ‘average’ of 5.2% which is skewed by 18% gains for professionals and managers at the top end of the wage structure and for minimum wage hikes needed to attract workers to service jobs again at the low end. The show concludes with a preliminary discussion of the nature of War in general, and economic war in particular, today. (Next week’s show: ‘Russian Sanctions and their consequences’ for EU, US, and global economy’)