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 - 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.

Alternative Visions - 2nd Covid Wave & the US Economy

Evidence grows that a 2^nd covid-19 wave is now emerging in the US, focused in the south and southwest ‘red’ states. Pandemics always have 2^nd waves (even 3rds). Second waves tend to be worse than first. Will this 2^nd wave exceed the impact of the first on the coastal ‘blue’ states, now that widespread reopening of the US economy is underway, especially in the ‘red’ states? Dr. Rasmus discusses the transmission mechanisms and channels by which Covid-19 has been impacting the US economic contraction. Also, how causal forces independent of the virus have begun to take effect in the US economy now exacerbating the general economic crisis. How Covid-19 causes interact with independent economic dynamics to worsen the economic instability. Why the June ‘recovery’ is especially weak and tentative and why a further economic relapse is inevitable, sometime in the fall or right after the November US elections. What’s happening with the four major areas of the US economy: household consumption, business investment, exports, and government spending and why recent fiscal stimulus by Congress and monetary stimulus by the Federal Reserve are not working well. (check out Dr. Rasmus’s latest blog post, ‘The 2^nd Wave & the US Recession’, at jackrasmus.com. Follow his daily updates on his twitter feed at @drjackrasmus).

Alternative Visions - Latest Jobs Numbers, the Economy, & the Protests

Dr. Rasmus explains why the official U-3 unemployment figure of 13.3% is a gross misrepresentation of the unemployment rate. What’s wrong with the U-3. Plus the Labor Dept’s own admission that the 13.3% is distorted by the questions it has asked the jobless. Why the Labor Force participation Rate and Employment to Population ration show little improvement in the jobless situation. Why there is a brief phase of 2-3 months when the economy will not keep falling but level off and maybe recover 20% of the loss of the past few months, but why a W-Shape recovery longer term is on the agenda. Why most jobs won’t come back or return only slowly over the next 10 yrs.  Dr. Rasmus concludes with some commentary on his latest blog publication, ‘Confronting Institutional Racism’, and why (and how) the demonstrations and protests need to expand and grow organizationally, in terms of alliances, and in its demands—or it will go the way of the ‘Occupy’ movement of 2011 and ‘yellow vests’ in France in recent years. (Check out the article ‘Confronting Institutional Racism’ on Dr. Rasmus’s blog, jackrasmus.com or on Counterpunch, Znet, or Global Research public blogs today)

Alternative Visions - Heroes Act Negotiations + US Financial Imperialism & China

Today’s show continues in more depth the discussion last week on the pending Heroes Act in Congress. Is it another mitigation bill, stimulus bill, or a growing subsidy for business bill. What are Republicans proposing to change the original House proposals in the bill? Senate Democrat responses in progress? What’s the true unemployment rate in the US today. Why has the $1.7T in corporate loans under the March ‘Cares Act’ not being taken up by big business? And why is only $95B of the Fed’s $1.7T liquidity provisions to banks being used so far? Is the bailout of households being converted to more subsidies for business? The show concludes with a discussion of how US financial imperialism works, and why Trump is now preparing to leverage it against China marking a new stage in the China-US economic war. Some commentary on Trump’s emerging 2020 election strategy: election fraud.