Alternative Visions

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’)

Alternative Visions - The Anatomy of Inflation

Dr. Rasmus dissects the various causes of inflation in the US over the past year, explaining it is mostly Supply side driven and not consumer Demand. Following last spring 2021 reopening of the US economy, some price increases followed due to more wage in come as workers went back to work. That was a moderately rise, however. The big escalation of inflation began last September due to global and US domestic Supply chain problems which was followed by price gouging by monopolistic US corporations many of which had no supply issues (ex: bakery-cereal and meat packing companies, oil companies, etc.). In 2021 Supply was responsible for at least 3/4s of the inflation. Overlaid on these forces in 2022 were three additional causes: first, commodity inflation due to Ukraine war and Biden sanctions depressing supply of oil, gas, industrial metals, certain agricultural goods; second, rising unit labor costs by US businesses due mostly to collapsing US productivity (worst since 1947) passed through to prices; third, emerging inflationary expectations (the latter a Demand factor). To address this anatomy of inflation, the Fed is raising interest rates at a record pace, addressing Demand but unable to address Supply causes. Recession will follow (as in 19981-82). Rasmus further explains how the US exports both its inflation and recession to emerging market economies via a currency crisis now underway. The show ends with a brief warning of potential financial asset price deflation emerging, with cryptocurrencies’ collapsing and raising potential for contagion across other asset classes.

Alternative Visions - Fed Decides Recession: How Deep? How Soon?

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 1^st 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.

Alternative Visions - US Recession Is Here: US GDP Contracts January-March

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’.

Alternative Visions - Russian Sanctions Update & Analysis of Global Fallout

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)