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Dr. Rasmus reviews the final details of the US House of Representatives’ Trump-Ryan tax cut plan just voted out of Committee and on its way to a vote in the House next week. Also, early provisions of the US Senate version of the cuts now being initially debated.  Rasmus shows how the total cuts amount to $4.5 trillion, not the media’s $1.5 trillion that will impact budget deficits and the US debt in the end.  How just three big corporate tax cut measures account for $2.5 trillion tax cuts for corporate and non-corporate businesses. How another $2 trillion in cuts in personal income taxes benefit the wealthiest 1% households. How the middle and working classes taxes will be raised by $3 trillion to pay for the $4.5 trillion—leaving the remaining $1.5 trillion as a budget deficit (to be paid for later by cuts in social program spending, including Medicare, Medicaid, SSI disability, and food stamps, education, etc.).  For Dr. Rasmus’s latest written article on ‘The Trump-Ryan Tax Cuts for the Rich—Who Pays’, go to the blog, jackrasmus.com. (Next week on Alternative Visions show: The debate in the Senate on its version of the tax cuts + Why the Crypto-Currency (Bitcoin etc.) Bubble is about to ‘pop’.)

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Dr. Rasmus dissects the just announced US House of Representatives’ version of the Trump Tax Cuts. The ‘tax cut shell game’ is explained. The main elements of the business tax cuts under the House proposal are described, including corporate rate, virtual ending of US multinational offshore taxation, retention of carried interest, inversions, and other business deduction tax loopholes. Personal income tax cuts targeting high end brackets, the AMT, Estate Tax, personal exemptions, carried interest and standard deductions provisions are reviewed.  How middle class households will pay for the corporate and high income household cuts are explained, including deductions elimination, elimination of credits, and coming cuts in healthcare (medicare-medicaid), food stamps, education, etc. to pay for it. House claims of $1.5 trillion hit to the budget is really at least twice that amount.  Discussion concludes with a critique of the ideological themes used by Trump/House (and ever since Reagan) to justify the cuts and sell them to the country: including the supply side economic nonsense that tax cuts create jobs, that they will be passed on to workers to raise wages, and will lead to greater economic growth and tax revenues, that US business pays the highest taxes in the world and can’t compete, and that the measures proposed amount to a ‘tax code reform’, not another tax cut for the rich and their businesses. (Next week: how Trump’s appointment of Powell means no change of the Fed’s policy of providing virtually free money to bankers and investors, and a continued subsidization of the banking system by the State).

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 Statements by President Xi and China central bank chair, Zhou, indicate China is about to shift economic focus again to attack financial speculators and shadow bankers and allow its real economy growth to slow as it does so. What does this mean for global real economic growth? Dr. Rasmus reviews today’s 3rd Quarter US GDP announcement, and why it reflects conditions in business investment, household consumption, and government spending that are weak. Why US GDP stats overestimate summer quarters and underestimate winter quarter growth. China’s PBOC Zhou warns of a growing ‘Minsky Moment’. What it means for China, and US stock-crypto-junk bond bubbles that continue to grow. Rasmus reviews last week’s decisions by the European Central Bank for a token reduction in QE and free money. Bank of Japan keeps its QE going. Why 21sts century capital is increasingly being subsidized by the State—with free money by central banks and more tax cuts for corporations and investors. (Next week: The US Congress further defines the Trump Tax Cuts).

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As a follow up to last week’s show, Dr. Rasmus takes a deeper look at the forces currently driving bubbles in US stocks (i.e. passive investing, indexing, ETFs, expectations of Fed rates and tax cuts), Bitcoin and other cryptocurrencies, China ‘WMP’ products and corporate junk bonds (aka entrusted loans), Emerging Market dollarized bonds, and Spain and Italy government bonds driven by Catalonia independence and Italy bank debt problems—a short list!  Rasmus explains the parallels between the US 1987 stock market crash and this week’s 30 anniversary thereof, rooted in Fed easy money and speculation in US junk bonds. The super bubble in progress in Bitcoin and cryptos’ rooted in financing of startups and blockchain technology. The big picture of how the capitalist state is increasingly subsidizing investors and corporate profits, primarily by means of Fed free money policies—now shifting to US tax cut policy in the Trump tax giveaways as another major source of State subsidization of money capital. (Next Week: Trump’s next Fed chair and a deeper look at Deutschebank’s important in depth study, ‘The Next Financial Crisis’.)

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 Dr. Rasmus dedicates today’s show to examining the condition of financial bubble and growing instability in global financial markets.  Recent reports and studies warning of bubbles, debt, and financial instability are reviewed, including the IMF, Bank of International Settlements, the just released report by Deutschebank economists, ‘The Next Financial Crisis’, and key financial players like Bill Gross, Wolfgang Schaubel, and others. Rasmus explains how it is not debt levels alone but the causal relationships between debt, income and liquid assets to ‘finance’ the paying of principal and interest on the debt, and changing terms and conditions of debt repayment together explain financial fragility that lead to financial instability crises. (see the 2016 book, ‘Systemic Fragility in the Global Economy’ by Rasmus). The fundamental forces that have created $134 trillion in excess non-financial corporate debt alone in the G 20 economies, and emerging financial instability, are described--as well as the ‘triggers’ or ‘precipitating events’ that may set off the next financial crisis. Rasmus identifies the financial markets most prone at present to bubbles and financial price contractions, including global stock markets, crypto-currencies, leveraged loans, junk bond markets funding zombie companies, ETFs and passive investing which will exacerbate stock and bond crashes, the big banks in Italy and Japan, and the US strategic ‘Repo’ bond market with its problem of insufficient liquidity.

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 Dr. Rasmus in the first half of the show discusses today’s Labor Dept. job numbers, explaining how the total jobless today is not 6.8 million but closer to 15 million, and not counting the 8 million equivalent declilne dur to falling labor force participation. Rasmus debunks academic explanations like ‘It’s the opioid crisis’ (Princeton) or that it is due to workers staying home playing video games (Univ. of Chicago), or even due to the ageing population and early retirements. Other real causes are offered. In the second half of the show, Dr. Rasmus addresses growing financial asset bubbles in the US and worldwide—including US stock markets, US and Europe junk bonds, Leveraged Loans, Exchange Trade Funds, Europe Non Performing Loans, Bitcoin and crypto-currencies, China entrusted loans junk debt, NPLs, Emerging markets dollarized debt and hidden forex exchange derivatives recently warned by the Bank of International Settlements in Geneva. (Next Week: the Deutsche Bank Study just released on growing financial fragility in the global economy).

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Dr. Rasmus dissects the Trump tax proposal of this past week, crafted by Goldman Sachs investment bankers, Steve Mnuchin (Treasury Secretary) and Gary Cohn (head of economic council). Rasmus explains how it is the latest in a long line of neoliberal tax proposals since 1981, which are designed to shift income to businesses, investors and wealthy households at the expense of wage earners. Once again wealthy investors, households, corporations and non-corporate businesses all gain at the expense of wage earners with annual incomes of $38 to $91,000. Rasmus explains how tax cuts are a foundation of neoliberal policy--along with defense-war spending hikes, social program cuts, and the ‘twin deficits’ solution to financing government debt. Tax cutting from Reagan to Obama to Trump are summarized. The major elements of corporate and non-corporate business income that will benefit from the Trump plan are summarized, including benefits that will accrue to the wealthiest households and businesses as a result of the elimination of estate and AMT taxes, retention of carried interest and preferential capital gains, new cuts in top end corporate and personal nominal tax rates, Trump’s proposal to end the territorial taxation, to allow multinational corps to repatriation $2.6 trillion at special rates, big cuts in business income pass through, etc .  (Next week: Financial Asset Bubbles Again Growing—What Could Happen).

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 Dr. Rasmus analyzes and critiques US Federal Reserve chair, Janet Yellen, announcement the central bank will begin selling off its $4.5 trillion balance sheet of free money given to banks since the 2008 crash. Rasmus explains why the Fed can’t raise interest rates above 2% without precipitating another financial crash and a global currency crisis and provoke the next global recession. Rasmus also debunks the Fed’s explanation why it hasn’t achieved its 2% inflation goal but has to continue subsidizing private banks in the 21st century with ‘free money’. (see excerpts of Dr. Rasmus’s just published book, ‘Central Bankers at the End of Their Rope: Monetary Policy and the Coming Depression’, at his blog, jackrasmus.com, and on Amazon.com, for the analysis of the Yellen Fed to date).  The final two-thirds of the show is a discussion with Mark Dudzic, a coordinator for the Medicare for All movement now growing at local levels throughout the US. Mark and Jack discuss Republicans’ last ditch effort to repeal the ACA and the new Bernie Sanders’ legislation and its growing grass roots movements across the country for Medicare for All, and how Single Payer/Medicare could save $1.5 trillion in the US GDP, as well as business and households’ medical costs if it replaces private for profit health insurance.  

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Dr. Jack Rasmus explains the notion of ideology in mainstream economics and how it works to create false arguments like ‘business tax cuts create jobs’, ‘free trade lifts all boats’, ‘markets are efficient’, ‘inflation is always caused by too much money chasing too few goods’, recessions are caused by external shocks to a stable (equilibrium) economic system, interest rates determine investment, a global savings glut caused the housing bust and crisis of 2008, ‘central banks are independent of the banks’, and one’s ‘income is determined by one’s productivity’.  Rasmus defines ideology as ‘purposeful falsification of original ideas’ on behalf of the interests of those who benefit from the falsification, and describes language manipulation techniques of how this is done, like inversion of propositions, reversal of cause-effect, converting correlations to causation, inserting contradictory elements, deleting original elements of the idea, etc.  The latest version of tax cuts create jobs, by economist Douglas Holtz-Eakin is explain, as is the US Dept. of Commerce’s recent report on incomes and poverty results and its interpretation by NY Times columnist, David Brooks. (Check out Dr. Rasmus’s blog, jackrasmus.com, or his website, www.kyklosproductions.com, later today for re-posting of his prior essay, ‘Applications of Ideology in Economic Policy’, for further explanation).

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Jack Rasmus interviews Gayle McLaughlin, founding organizer of the successful grass roots independent political action movement in Richmond, California, former mayor of Richmond and current city council member. McLaughlin explains how the Richmond Political Alliance, RPA, has been able to take over city government despite intense opposition from oil giant, Chevron Corp., that previously ran the city. How the RPA’s strategy and tactics enabled real political action, outside the two wings of the corporate party of America (aka Democrats and Republicans), to become successful. Gayle describes the progressive improvements the RPA has achieved, how it started, its organizational innovations and direct community ties and how electoral action and direct action tactics were melded successfully.   McLaughlin and the RPA are now undertaking efforts to extend progressive politics to the state level with her candidacy for Lt. Governor of California.  For more information about her Lt. Governor campaign, go to her website http://www.GayleforCalifornia.org . For how the RPA became a successful grass roots movement, its strategy, organization structure and tactics, see http://www.RichmondProgressiveAlliance.net.  And for local San Francisco bay area residents, check out her campaign’s next meeting at 747 Lobos St., Richmond, Calif., this Sunday, September 10 at 2-5pm. (For a full  history of the RPA from origin to present, Dr. Rasmus also recommends reading RPA member, Steve Early’s book, Refinery Town: Big Oil, Big Money, and the Remaking of An American City, Beacon Press, 2017. )

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