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In the first half hour of the show Dr. Rasmus describes the legislative maneuverings underway in the attempt to pass the $3.5 trillion ‘American Families Plan’ (aka human infrastructure bill) in Congress. Why it’s a negotiation within the Democratic party and not with the Republicans. Why it’s more fundamentally about the corporate wing of the Democratic party opposed to reversing the Trump 2017 $4.5 trillion tax cuts, than it is about spending on ‘human infrastructure’. Why the final bill will approximate $1 to $1.5T and not $3.5T and how the Democrats will ‘sell it’.  Rasmus then spends the second half hour returning to last week’s theme, ‘What’s a Socialist America, Part 2, which addresses the changes to the US political system that might (have to) occur in order to establish a Socialist America.

 

Dr. Rasmus starts the show with a short commentary on Biden’s just announced mandate yesterday requiring businesses to vaccinate their workers. What’s the economics behind the announcement, reasons and economic consequences of the announcement. Thereafter, the rest of the show addresses the topic: ‘What Would a Socialist America’ look like? Many listeners and readers of Dr. Rasmus’s blog have asked him to comment on that topic. So today’s show begins that discussion, focusing on what a Socialist Economy would have to look like in order to establish the foundation for a Socialist America. The emphasis today is on what fundamental changes to economic institutions, class relationships, and economic policies are required to establish a Socialist Economy. Subsequent shows on ‘What’s A Socialist America’ will address basic changes required in the country’s political system, social structure, and even culture.

 Dr. Rasmus addresses the state of working class America this labor day 2021. Creeping austerity is the defining term, as unemployment benefits are being cut, rent assistance not distributed & rent moratorium ending, job creation rapidly falling off by late summer in today’s Labor Dept. jobs report, child care payments due to expire in December, student loan forbearance in January, and no new stimulus on the horizon. Rasmus cites the 11.2m losing unemployment benefits and debunks the Republican argument with data that workers aren’t returning to work because of too generous unemployment benefits. The real reasons why many aren’t returning to work are noted. Why landlords are scuttling $46B rent assistance while the Federal Reserve continues $120/B every month in free money to bankers and investors. Dr. Rasmus then dissects today’s Labor Dept. jobs report for August and explains why only 235,000 jobs were ‘created’ last month after 750,000 a month on average in the previous 3 months.  Why the unemployment rate is at least double the official 5.2%. Why the actual employed numbers (not manipulated via seasonal adjustment) in August showed a decline in actual total employment by -364,000. Why the media and politicians always ‘cherry pick’ the most optimistic statistic from the monthly job reports and ignore other contrary data in the same reports.

: Dr. Rasmus reviews Fed chairman Powell’s decision today, as the Jackson Hole, WY meeting of central bankers kicks off. Powell signals in his opening statement a possible earlier ‘taper’ of the Fed’s $120 billion/mo. injection of free money into the banks and investors ($4T since Covid recession began). Why the Fed continues to ‘pre bail out’ investors when they don’t need it (and never have). Rasmus examines Powell’s statement and claims regarding employment gains, inflation, and Covid effects. What’s the real picture re. inflation, employment, and the state of the US and global economies. Early warning signs of slowing US recovery as Asia economies, including China, slip into another recession or stagnate. Why the Fed may not be able to really ‘taper’ without setting off a major global currency crisis. Why are more foreign govts adopting Bitcoin and crypto currencies as a defense against the dollar and why will this destabilize their economies even further in the end.

Dr. Rasmus discusses his latest published article, ‘Afghanistan & the American Imperial Project’ (see his blog, http://jackrasmus.com, for free copy), explaining the US retreat in Afghanistan has to do with the inability of the US to maintain the costs of empire in the middle east (not just Afghanistan) and simultaneously pay for the cost of the new ‘wars’ looming on the horizon. The wars in the middle east since 2001 have officially cost $6.4T according to the US oversight office, SIGAR. However, that’s only for Afghanistan ($1-$2T) and Iraq. If Syria/Isis, Libya, naval blockade of Iran, US financing Saudi Arabia’s war in Yemen, annual handouts in aid to Egypt & Israel, Somalia, and other ‘operations’ in the region are concerned, the total cost the past 20 years is easily $10 trillion. Rasmus explains the US empire cannot continue funding $500B/yr. on average, while it faces new costs of empire in the new wars: the nextgeneration tech war with China, the cybersecurity war with Russia & others, and the ‘war’ against Nature itself as the US scrambles to deal with climate change. Rasmus further notes the middle east wars have been financed as the US cut taxes by $15 trillion over the 20 yrs. The result of $10T cost as $15T taxes cut is annual budget deficits > $1T and cumulated deficits approaching $28T. Imperial financing of new wars will have to change, as the US shifts focus from the ‘old wars’ of middle east to protect oil (the US no longer needs) to the ‘new wars’ with China, Russia & Nature. The US empire is not imploding. It is restructuring, Rasmus concludes.

 

Topic of today’s show is who has gained in income terms over the first full year of the Covid induced US recession. Dr. Rasmus looks at the period, 2nd quarter (April-June) 2020, when the US economy crashed and compares it to most recent quarterly data in 2021 for April-June this year. Those receiving capital incomes and corporations registered record gains: billionaires in US increased their wealth by more than $1 trillion, stock investors enjoyed record levels of price gains, and Fortune 500 corporations recorded record revenue gains of 24.7% over the past year. On the negative side, workers’ wages in net terms fell as more than 35 million were jobless at some point during 2020 and hours of work were cut drastically for many still with jobs. Meanwhile, CEO pay rose 18.9%. Small businesses also did poorly, even as more than $1 trillion in loans and grants were distributed. Nearly 1 million small businesses failed nonetheless and millions more suffered significant income losses despite receiving partial loans. Dr. Rasmus addresses losses experienced by renters as $70 billion or more of forbearance (suspended) is yet to be paid, while landlords continue to block distribution of $47 billion in rental assistance payments. The role of the US Supreme Court in preventing the evictions moratorium is discussed. Student loan forbearance is added to wages, jobs, and renters as those who have not gained over the past year. In short, wage incomes, small businesses, and transfer payment recipients have lost, while investors, big corporations and bankers have gained most.

Dr. Rasmus dives into the details of the latest US jobs report, showing how the 943,000 new jobs for July is grossly distorted by seasonality adjustment bias by hundreds of thousands over-estimated. Why there are still 17m jobless (not 8.7m) and the unemployment rate is really 10.5%, not 5.4%. In the second half of the show, the current state of Infrastructure spending negotiations is reviewed. Why the Senate version, to be voted on this weekend, is actually the proposals of McConnell and the Republicans from the beginning, with only $500B new money spending on mostly traditional projects of roads, bridges, etc. The show continues with a brief assessment of the Congressional Budget Office’s released estimate of a $3T budget deficit for the current fiscal year, due by far to tax and revenue causes rather than government social program spending. Why we are beginning to witness ‘creeping austerity’ as social program spending funds in the Covid Relief Act of March 2021 are being cut or diverted to other areas. Rasmus concludes the show with a comment why 2021 may be a déjà vu repeat of the policy and economic recovery trajectory of 2020.

Dr. Rasmus discusses 4 key events of the past week and how they’re related: (1) What does the preliminary report on 2nd Quarter 2021 US GDP really indicate? Is it a ‘V’ or just the first half of a ‘W’ given economic indicators showing a slowing of US recovery in the second half 2021. (2) the Federal Reserve meeting showed chair Powell is intent on continuing pumping in $120B of free money to the banks and investors every month for at least another year. Plus keep a second $1T spigot is now permanently open in the Repo Market for stock speculators as well. Why then are banks and investors continuing to get all the free money, while politicians keep cutting the promised fiscal stimulus for working and middle class households and the poor? Why Sanders’ $3.5T Family Bill Dead on Arrival! (3) Rasmus next addresses the phony Infrastructure deal and the Dems latest concessions to McConnell & Republicans in the name of ‘bipartisanship’. (4) How is Biden’s & Dem’s retreat on infrastructure spending—from original $2.3T to $500B now—tied to the launch, six months after, of US House hearings on the January 6 Capitol insurrection?  Why no budget reconciliation & filibuster will mean no electoral reform which will seal the Dems defeat again in 2022. Why the crisis of the decline of US Democracy continues to intensify.

In this final 3rd show discussion the differences between what Marx said and what economists today erroneously say he said, Dr. Rasmus addresses two historic issues in Marx’s analysis of capitalism. First is the idea, held by many contemporary economists who consider themselves Marxists, that under capitalism the rate of profit tends to decline over time, leading to ‘crises’ in the form of severe business cycle contractions (recessions, depressions, etc.). Rasmus shows this is incorrect, that Marx’s ‘Falling Rate of Profit’ tendency is a ‘in the long run’ argument and about breakdown of capitalism and not an explanation of short run business cycle ‘crises’ like economic depressions. Rasmus debunks the assumptions in the Falling Rate of Profit tendency argument and explains how 21st century capitalism cannot be expressed in such terms. The second issue addressed is by critics of Marx, contemporary mainstream economists, who hold that Marx failed to explain how values get transformed into prices in the real world. Thus Marx’s explanation of how exploitation of labor drives capitalist profits is never proven by Marx. Rasmus concludes with commentary why both contemporary Marxists and Mainstreamers fail to understand the financialization of capitalism today as a key source of crises, short run and long.

In this final 3rd show discussion the differences between what Marx said and what economists today erroneously say he said, Dr. Rasmus addresses two historic issues in Marx’s analysis of capitalism. First is the idea, held by many contemporary economists who consider themselves Marxists, that under capitalism the rate of profit tends to decline over time, leading to ‘crises’ in the form of severe business cycle contractions (recessions, depressions, etc.). Rasmus shows this is incorrect, that Marx’s ‘Falling Rate of Profit’ tendency is a ‘in the long run’ argument and about breakdown of capitalism and not an explanation of short run business cycle ‘crises’ like economic depressions. Rasmus debunks the assumptions in the Falling Rate of Profit tendency argument and explains how 21st century capitalism cannot be expressed in such terms. The second issue addressed is by critics of Marx, contemporary mainstream economists, who hold that Marx failed to explain how values get transformed into prices in the real world. Thus Marx’s explanation of how exploitation of labor drives capitalist profits is never proven by Marx. Rasmus concludes with commentary why both contemporary Marxists and Mainstreamers fail to understand the financialization of capitalism today as a key source of crises, short run and long.

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