Alternative Visions

Alternative Visions - More Economists Predicting Great Depression

Dr. Rasmus reviews the growing number of mainstream economists now beginning to predict the current economic crisis, either is now or soon may become, another Great Depression. World Bank and Mellon Bank chief economists, Carmen and Vincent Reinhart’s forthcoming essay in the prestigious Foreign Affairs Journal is reviewed. Rasmus notes how their analysis is similar to points he’s been making since March 2020.  Other views similar by liberal dean of economics, Paul Krugman, who calls today’s crisis ‘The Greater Recession’ and others are noted. Few mainstream economists now call it a V-shape recovery, unlike this past spring. Rasmus then reviews actual GDP contractions world wide in 2020 and why they suggest a ‘great recession’ that is weakening at best in the 3^rd quarter. Why the current economy will weaken: more Covid 19 problems, basic restructuring of the economy, coming political instability, and financial crisis potentially in 2021. (check out my articles at jackrasmus.com blog for updates).

Alternative Visions - Trump’s Election Plan ‘B’?

 As Congress goes home it now appears negotiations on a stimulus plan have collapsed, not just broken off. There may be no stimulus package before the November 3 elections. Severing negotiations means Trump’s plan not to negotiate with Democrats and Congress is no longer tactical but strategic. What’s the bigger strategy behind the growing triple crisis in America: Health, Economic and Political? Dr. Rasmus speculates on the elements of Trump’s strategy for November now taking form. How it assumes a continuation of the Covid, Economic, and Constitutional confrontation with Congress. What’s the possible role of a foreign policy crisis in October in a ‘Plan B’? With a deepening Constitutional challenge with the US House of Representatives. What are some scenarios possible after November 3? (Check out Dr. Rasmus’s blog, jackrasmus.com, and his twitter posts for day to day developments, at @drjackrasmus

Alternative Visions - Slowing Jobs Recovery; Fading 3Q Rebound?

In today’s show, Dr. Rasmus comments on the growing economic cold war between US and China, on the status of the Economic Stimulus negotiations in Congress, and the latest US jobs and wage numbers released today by the US Labor Dept.  On the China-US economic war, the latest developments involving Microsoft and the forced purchase of China’s ‘TIk Tok’ by Trump. What’s behind it? The latest status on terms of the negotiations in Congress involving unemployment, income checks, rent, local government aid, payroll and other tax measures. What the latest US job numbers for July indicate. (For more on the stalling US economic rebound see Dr. Rasmus’ blog, jackrasmus.com, for latest articles or his twitter posts on daily developments at @drjackrasmus).

2nd Quarter US GDP Collapses & June Rebound Fading

Dr. Rasmus dissects the just released data for US economy’s 2^nd quarter GDP stats, confirming his March prediction of W-shape recovery, no V-shape and no 2^nd half recovery. The 4 myths are discussed: Fast recovery in 2020; US economy strong in 2019; consumer households were doing great in 2019 and will do again in 3Q20; Congress’s March 2020 Cares Act is enough stimulus. No need to rush to another massive stimulus bill. Review of McConnell Republicans’ HEALsAct vs. Democrats Heroes Act. Two great ‘wild cards’ that could throw the US economy into depression in 2021: Trump generated political-constitutional crisis around Nov. elections + financial instability in 2021 as business and household defaults deepen.

Alternative Visions - 2nd Quarter US GDP Collapses & June Rebound Fading

Dr. Rasmus dissects the just released data for US economy’s 2^nd quarter GDP stats, confirming his March prediction of W-shape recovery, no V-shape and no 2^nd half recovery. The 4 myths are discussed: Fast recovery in 2020; US economy strong in 2019; consumer households were doing great in 2019 and will do again in 3Q20; Congress’s March 2020 Cares Act is enough stimulus. No need to rush to another massive stimulus bill. Review of McConnell Republicans’ HEALsAct vs. Democrats Heroes Act. Two great ‘wild cards’ that could throw the US economy into depression in 2021: Trump generated political-constitutional crisis around Nov. elections + financial instability in 2021 as business and household defaults deepen.

Alternative Visions - US Economy: Relapsing from Rebound

Dr. Rasmus discusses the latest data showing a rise once again in unemployment and benefit claims. Why it’s a harbinger of a relapse and W-shape recovery now emerging more clearly. The dual causes behind the rising job losses: covid resurgence and permanent layoffs by big corporations. A detailed review of what’s known of the status of current negotiations in Congress over the Heroes Act follows. The major elements of the Republican-McConnell proposals are reviewed. (Check out more details in Dr. Rasmus’s recently published article, ‘What Lies Ahead’, available on his blog at jackrasmus.com). Next Week: more detail on the Heroes Act negotiations.

Alternative Visions - : What Lies Ahead

Dr. Rasmus discusses his latest blog piece, ‘What Lies Ahead’ (see jackrasmus.com). The 8 factors that intermediate to long term may mean the current Great Recession experiences a major economic relapse, and W Shape trajectory in the next 6 to 18 months. More permanent 2^nd jobless wave, weak Heroes Act fiscal stimulus next week, wave of unemployment benefits loss and rent evictions, child care and education system crisis, state & local government defaults, (and muni market crash), permanent transformation of industries, return to austerity in 2021 by politicians, business and government defaults, bankruptcies and financial instability, and US political instability are candidates for pushing the US (and global) economy. Also discussed are this past week’s Banks putting away tens of billions more of emergency cash as hedge against defaults coming. Today’s show and article are a sequel to last week’s short term look (3 mos) why the current June economic rebound will falter. See both articles on jackrasmus.com.

Alternative Visions - Rebound, Relapse vs. Recovery

Dr. Rasmus explains 8 reasons why the US economic ‘rebound’ will not be a recovery. Why jobs are not recovering at rate announced by government, while mass layoffs of permanent jobs are beginning to occur amidst recalls due to economic reopening. Other reasons for W shape rebound and relapse and not robust recovery is that the 2^nd surge in Covid will depress economic activity again, the lack of a sufficient fiscal stimulus in Congress as the first CARES ACT dissipates, growing business and consumer negative expectations, global trade collapse with 90% of world economies in recession, business cost cutting, wage cutting and layoffs of the recent shutdown becoming permanent, intensifying US political instability in coming months, prospects growing of rising business defaults, bankruptcies, and another financial crisis in 2021. (for further detail analysis see jackrasmus.com blog and latest posted article on why the rebound will not be a recovery).

Alternative Visions - 2nd Wave Virus, 2nd Wave Economic Contraction Coming?

 Dr. Rasmus reviews the facts re. surging 2^nd wave of virus infections and hospitalizations in the USA and discusses whether it will precipitate a further weakening of the US economy in the second half of 2020 as well. As World Bank chief economist, Carnmen Reinhart, has recently warned: it is important to distinguish between a ‘Rebound’ and a ‘Recovery’. Rasmus explains the reopening of the US economy the past 6 weeks has produced what looks like a ‘rebound’ for historic depths of contraction during the 1^st wave of the virus, February-April, but that it is not a recovery. 39m still unemployed by moderate estimates, work hours down 15%, personal incomes up but being significantly unspent, the CARES Act stimulus either already spent by households or loans being hoarded by big corps. amount to no added real stimulus. Fed forecasts for US GDP for 2^nd quarter at -30.5% to -41.9% mean a very deep hole for the US economy to try to crawl out of. Rasmus reviews the current late June state of the US economy: consumption, business investment, trade, and government spending that shows a slowing of the deep contraction but a continued contraction nonetheless. Conclusion: despite reopening the economy and a 5.5% GDP stimulus in March the US is not poised for an accelerating ‘recovery’ but a modest ‘rebound’ at best. And a 2^nd wave increases probability of another economic relapse in late 2020 or early 2021 if no real fiscal stimulus comes soon.

Alternative Visions - Gaming the Economic Bailout & The Economic ‘Stimulus’ that Isn’t

Dr. Rasmus reviews the various ways the Cares Act and $2.7T Congress bailout since March has been ‘gamed’ by big business and investors. How big corps have taken the funds and not invested, or refused to take up the loans altogether. The same applies to the Federal Reserve’s $3.3T in loans to banks and investors via its QE and 11 ‘facilities’ to provide free money capital to banks and others. A second theme of the show is Dr. Rasmus explanation that the nearly $5T in Congress and Fed stimulus is not really a stimulus. And the near future appears a further lack of stimulus, amidst a further subsidization of  businesses that aren’t really investing or growing the economy. Economic news of the past week is also reviewed re. retail sales, housing, manufacturing, etc.