Feed on

Dr. Rasmus continues the critique of Neoliberalism, explaining how it entered a crisis under Obama and how Trump is attempting to restore it in a new aggressive form. How material forces give rise to capitalist restructurings of which Neoliberalism is just the latest. And how material forces now developing beneath the surface are undermining the Neoliberal policy regime, with growing contradictions, that will give rise to a new restructuring in the 2020s.  Why Neoliberalism is not ‘Liberal’ at all but in many ways its opposite. What critics of Neoliberalism miss in their analyses. Neoliberalism as just the latest policy response to capitalist restructuring which has occurred before WW1 and after WW2. Why Neoliberalism will not survive the next crisis. (Check out Dr. Rasmus’s latest book ‘The Scourge of Neoliberalism’, from his blog and website, jackrasmus.com and http://kyklosproductions.com)

 Dr. Rasmus discusses the main themes and predictions of his just released latest book, ‘The Scourge of Neoliberalism: US Policy From Reagan to Trump’: Neoliberalism as just the latest US capitalist restructuring to ensure US continued hegemony over domestic opposition (unions, social movements, etc.) and global capitalist competitors (China today; Japan-Europe before). Prior capitalist restructurings before WW1 and after WW2 are compared to the Neoliberal. Why Neoliberalism is not ‘Liberal’. Neoliberalism as historical practice vs. Neoliberalism as Idea is differentiated. What’s missing in prior critiques of Neoliberalism. The 4 basic policies of the Neoliberal policy regime are explained: Fiscal (tax, war-defense, social program spending), Monetary (low interest rates), Industrial (deregulation, privatization, anti-union, pension, jobs, wage compression), and External (trade, free trade, $US exchange rate, global money flows, twin deficit solution). Rasmus describes the major contradictions developing within Neoliberalism in recent years, why Neoliberalism hit a crisis under Obama, and why Trump policies represent a new virulent Neoliberalism 2.0. Why Trump’s restoration of Neoliberalism is doomed due to new technological changes, money forms, and rising political opposition (domestic and global) to it. The coming crisis of 2020s. Why Neoliberalism must remove Democracy as an obstacle if it is to further expand.  Trump as example of decline of Democracy in late Neoliberalism.  (For more on the book, check out Dr. Rasmus’s blog, jackrasmus.com, or website, http://kyklosproductions.com, where book copies may be ordered starting tomorrow, October 26, at discount).

A review of latest data on US economy, now showing retail sales and consumer joining the contractions in manufacturing, industrial production, business investment and construction. Why the Repo Market instability and problem is not going away, as bankers refuse to sell Treasuries back to the Fed (who’s trying to buy them in order to pump more cash needed into the market)—i.e. the Fed’s strategy to pump $400b more into Repos (QE Lite?) may not work. Then what? A third show topic is an assessment of the just announced ‘deal’ between the UAW and GM and why it may not be approved by the autoworkers themselves in their now scheduled contract ratification vote. How management ‘moves the money around’ in last minute negotiations. How it can manipulate the temp workers offer. How it will reduce its contract offer by not reopening plants in the US and increasing jobs in Mexico. Why lump sum payments actually reduce costs for the company and take home pay for the workers. The politics behind union contract ratification voting. The show concludes with Dr. Rasmus outlining his forthcoming book (next week), ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, October 2019. Why ‘neoliberalism’ is not really liberalism at all, and not really about free markets but an idea created by conservative economists to obfuscate policies designed to restore hegemony for US capitalists at home and abroad.

Business and mainstream media today talking up a likely ‘mini’ deal on US-China trade. What’s behind it and what’s likely to be covered. China’s call for a ‘fair’ deal means a mini deal, minus any agreement on the nextgen tech issue. Trump’s ‘big deal’ will mean no tech issue resolution. So why is Trump now willing to take what’s on the table (same as last May 2019) and forego his ‘big deal’? Rasmus discusses the various economic reasons Trump may settle for less today, and continue attacking tech issue by other means. Is the ‘mini’ deal pending with China another ‘softball’ deal per So. Korea, Japan, USMCA, EU trade agts? Trump’s trade war a dismal failure, as US trade deficit hits record $55b in August. The second half of show revisits the Repo Market instability topic once again, provides updates on Fed’s $400 billion money injection, discusses whether it’s ‘QE’ again, and reviews just released BIS and FSB studies showing role of shadow banks in the Repo market may be part of the problem. The show closes with comments on 7m US auto loan defaults, and the chronic problem of a rising US dollar. (Next week: Neoliberalism as ‘Idea’ of academics and intellectuals vs. Neoliberalism in ‘Practice’)

This past week California proposed the creation of a public bank. What are the pros and cons of a public bank? Why a public bank would benefit Californians. Why public banks aren’t panacea solutions to a US chronic slow growth economy approaching recession once again. The limits of monetary policy, whether QE, MMT, or public banking. Why advocates of monetary solutions always over-estimate the role of money supply, interest rates, and bank lending. What really drives capitalist investment and economy. Why money is necessary but not sufficient. Public banking (and MMT) as QE turned on its head.  Rasmus introduces show with discussion of latest US purchasing managers index for services and manufacturing now slowing and contracting, and why job numbers are becoming weaker and will soon follow by year end or sooner, as US economy slowly joins the global economic slowdown. Why Trump may strike a deal with China—i.e. take the money and run and leave the tech issue for another day.  (Next week: Ukrainegate, Trump, and the Decline of American Democracy)

Dr. Rasmus dissects this past week’s spike in Repo (Repurchase Agreement) bank to bank lending market and what it means for growing financial instability in the US and globally. Candidate for financial market instability in US and worldwide are reviewed (junk bonds, BBB, leveraged loans, CDOs, etc., as well as India-Europe banks, China markets, Argentina, etc.). further slowdown of world real economy and trade underlying and interacting with growing financial market instability. Competitive devaluations via central bank interest rate and currency wars.  Trump’s narrow view of tariffs and Fed rate cuts. Why the Fed was divided on last rate cut this week. In the midst of all this, the US Repo market rates spike to 10%. Official short term explanations not acceptable. Longer term more fundamental causes: Fed pulling money out of bank reserves via bond operations and balance sheet sell off in order to finance US $1 trillion plus budget deficits. Banks now addicted to more excess reserves after QE, financial structure changes since 2008, etc. Fed will now restart ‘QE Lite’ via Repo market injections (4 times this week). More Negative Rates worldwide and balance sheet ballooning again inevitable now. Fed and central banks policies no longer as economic stabilization tools but as main conduit of capital market incomes subsidization tools. Fed and central banks now secretely planning even more radical innovations next year.

Today’s show focuses on the recent decision by the European Central Bank to re-introduce QE and drive Europe’s more than $7 trillion in interest rates further into negative territory. Another $22b per month in QE and rate reduction to -0.5% when, over the past 5 yrs QE and negative rates have not stimulated the European economy. Reasons why QE and neg rates have little effect. How $17 trillion in negative rates worldwide is a growing problem and won’t stimulate the Euro economy. Lower rates as exchange rate currency/ trade move. Why Trump is now calling for US negative rates. Why central banks (including Fed) now secretly discussing new tools and tactics for the next recession, including ‘bail ins’ and calls are growing by high level capitalists for the Fed and central  banks to expand their authority into fiscal policy areas (as predicted in my 2017 book, ‘Central Bankers at the End of Their Ropes’). Consequences of such for US Constitution and fiction of ‘central bank independence’.  Rasmus discusses US deficit now officially projected to exceed $1 trillion a yr. The Democrat Party latest debate and opposition to Medicare for All. And what’s behind the recent ‘softening’ of US & China trade war (and why a deal may now be closer with ‘decoupling’ of technology issue). Rasmus introduces the show with brief outline of his forthcoming book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, October 2019, and shares its main themes. (Review of chapters coming in following weeks of this show).

 Dr. Rasmus explains why US stocks gyrate on every public announcement concerning US-China trade. Why US financial institutions and markets no longer focus on economic fundamentals. What’s behind the Trump plan to privatize the quasi-government mortgage companies, Fannie Mae and Freddie Mac. Why hedge funds and speculations will reap big windfalls and how the home buyer rates on 30 yr. mortgages will rise and pay the price. Rasmus observes the class politics behind the ‘hard Brexit’ vs. no Brexit factions in the UK. The show concludes with analysis of the latest US labor dept. jobs numbers and why the jobs ‘lagging indicator’ is now beginning to show the US drift to recession, following down the indicators for US manufacturing, housing & construction, and business equipment investment. (For more analysis in print version, check out the just posted articles on unemployment, jobs and wages on his blog, at www.jackrasmus.com).

What’s the condition of Labor this Labor Day 2019? The official Trump estimate of 3.1% increase in wages this past year is really between -0.8% and 1.1% according to independent bank and other research companies. 3.1% is unadjusted for inflation, is an ‘average’ skewed by big gains for professionals and managers, and refers to only full time workers—leaving out the 60m plus ‘contingent’ part time/temp/gig workers. Independent surveys by Bankrate, Payscale, McKinsey Research, and EPI paint a different picture: 60% of labor force say they got no pay increase at all last year. 45% say they are working 2nd and 3rd jobs to make ends meet. Rasmus debunks with data the Neoliberal lie that business-investor tax cuts create jobs. Trump’s tax cut correlated with big investment collapse. 1.1 million jobs not due to tax cuts last year. US Labor Dept. just announces adjustment of 500,000 fewer jobs last year than previously reported. Monthly job creation no different 2018 than 2017 after tax cuts.  Rasmus describes the continuing attack on unions, especially public sector. (Check out Dr. Rasmus’ blog for article on ‘Myths of Wages and Jobs Under Trump’ at jackrasmus.com)

Trump brags about the ‘Wall of Money’ coming into the US from abroad. But what it represents is a global economy deteriorating fast and offshore investors sending their money to US safe haven of Treasuries. How the ‘wall’ is driving up the $US, negating Trump’s tariffs, and negating any trade deal with China. Trump turns up the ‘blame game’ for economy weakening: tantrums against China’s new tariffs, the Fed’s Powell foot dragging on lowering interest rates, and Dems refusing to give more tax cuts to investors. Why Fed rate cuts won’t stimulate the economy. Why Trump’s new proposed tax cuts won’t either. Trump’s next desperate moves to manipulate currencies (US and China’s) that will intensify the emerging currency war. Other topics of the show: debunking Trump’s payroll tax cut idea, why US steel companies are laying off workers in Michigan, and what’s behind the Japan-So. Korea ‘pissing match’ (yup, it’s trade).

« Newer Posts - Older Posts »