Alternative Visions

Alternative Visions - US Economic Slowdown Ahead 2018 As US Debt Hits $70 Trillion and Trump Targets China Trade - 03.16.18

Dr. Rasmus identifies weakening retail sales and business inventories as sources of US GDP sharply slowing later this year. Trump’s tariffs as only opening skirmish in US trade war---with China not the rest of the world. Half of US $810 billion trade deficit in goods is with China. Watch next week Trump actions targeting China trade. Why China will not respond cooperatively.  Rasmus puts Trump’s ‘Déjà vu’ trade war in historical perspective, showing how US corporations and politicians have always periodically attacked their foreign capitalist competitors to improve US share of world trade profits, by manipulating US currency and forcing trade treaties. Nixon in 1971-73 (Smithsonian Agreement) and Reagan in 1985-86 (Plaza and Louvre Accords), targeting Europe and Japan, respectively. Trump will target China. The show also addresses the escalating US total debt, from $50 trillion in i2007 to $70 trillion today and what it means, the 10 year anniversary of the Bear-Stearns Investment bank crash of March 2008, the accelerating banking deregulation by Congress underway, and the appointment of economic lightweight Larry Kudlow to Trump’s Economic Council and his support for absurd ‘supply side’ economic ideology.

Alternative Visions - Is There a Trump Trade War Brewing? - 03.09.18

Dr. Rasmus takes up the key economic news of the past week that Trump is launching a trade war by raising tariffs on steel and aluminum imports. Contrary to press and media, it’s not a general ‘trade war’ but another example of US capitalists—the national ‘America First’ wing allied with Trump in the current case—signaling they intend to renegotiate trade agreements with US trading partners. After announcing, Trump immediately exempted NAFTA partners, Canada and Mexico, the US main steel importers. Trump further announced more exemptions coming for Europe and elsewhere. SO the main target is…China, even though China is responsible for less than 1% of steel imports to US.  Rasmus explains how historically the US has always turned aggressive on trade when the global trade pie, or its share of it, was threatened: Reagan did it in 1985, Nixon in 1971, and Hoover in 1930. Further explained is how the Fed rate hike policy underway will raise the US dollar and make US exports less competitive, so the trade renegotiations are anticipating this by making US trade partners pay for the rate-dollar hikes coming. How US trade policy is a response to US monetary policy which, in turn, is a response to Trump tax cuts, defense spending, and $trillion annual deficits and $10 trillion US debt. It’s all US Capital on the offensive in a new Trump aggressive ‘Neoliberalism 2.0’ taking form.

Alternative Visions - The Attack on Unions Intensifies: the JANUS Supreme Court Decision - 03.02.18

 Today’s show focuses on the pending US Supreme Court decision, Janus vs. AFSCME, which represents an escalation of the billionaire-corporate-right wing attack on unions. Dr. Rasmus welcomes guest, Joe Bryan, Vice President of Service Employees International Union (SEIU) local 1021 in California. The billionaires behind the case—from the State Policy Network to ALEC to the Koch Brothers, Bradley Foundation, Donors Trust Fund and others are noted. How the Janus case seeks to gut union representation by bankrupting the union.  Rasmus provides an overview of anti-union tactics and strategies of the past 40 years, that have already devastated union membership in the private sector, now down to only 6.5% organized. Now the attack moves to destroy them in the public sector as well, in the Janus and other pending cases.  VP Bryan explains responses being planned by his union when the Janus decision comes down, likely against the unions. Rasmus and Bryan discuss possible further direct action responses by public unions, perhaps in unity with other social movements now arising—like #MeToo, Black Lives Matter, Fight for $15, DACA and immigrant rights, and Florida students against the NRA.  Why the public unions’ response must be more than just legal or even electoral. What might be done. (For more information on Janus and union response, go to SEIU 1021’s website at SEIU1021.org)

Alternative Visions - Debt & Recession Warnings Growing - 02.23.18

While the mainstream economists and business sources trumpet US and global growth underway, warnings about accelerating debt and recession from capitalist and more independent research sources are emerging as well. Dr. Rasmus reviews statements by Ray Dalio, CEO of the world’s biggest hedge fund, warning a 70% chance of recession, and by the OEDC researchers that government debt alone has risen $20 trillion more since 2008 just for OECD advanced economies (Another $20 for China and other emerging market economies). Rasmus adds rising net totals for household debt and even more for business debt mean debt levels today are worse than in 2008.  What matters, however, is the ratio of income(and therefore prices for assets, goods, and labor wages) to debt, Rasmus explains—as detailed in his 2016 book, ‘Systemic Fragility in the Global Economy’.  The show follows up on prior show topics of Trump tax cuts, war spending, the coming $1 trillion a year in US deficits (and debt), growing assets controlled by shadow banks (private equity, hedge funds, etc.), the now escalating interest rates by the Federal Reserve US central bank, and the intensifying attacks on public employee unions in pending US Supreme Court decisions next week. Rasmus forewarns his prediction in recent articles (see his blog, jackrasmus.com) that Fed rate hikes this year will precipitate a recession in early 2019.

Alternative Visions - The Rising Wages Myth + Trump’s Recession 2019? - 02.16.18

 Dr. Rasmus debunks the media hype about wages now rising, showing how in fact real weekly earnings for non-management workers (both full and part time) over the past year amounts to only 6 cents to 8 cents per hour, based even on government Dept. of Labor data. And the trend is downward, as wage(hourly wage x hours worked) earnings change have been zero or negative for five of the last six months. Wages are flat or declining, not rising.  In the second half of the hour, Rasmus predicts a Trump Recession will occur in 2019, as the Federal Reserve raises interest rates four times in 2018.  The rate hikes are not due to rising wages and inflation, but are necessary to finance the more than $1 trillion a year deficits annually that are now coming.  The deficits and debt in turn are due to Trump’s $5 trillion tax cuts for corporations, businesses, and investors, the acceleration war spending, continued price gouging by health insurance companies and drug companies for Medicare, Medicaid, CHIP, program costs, and now the rising interest on the debt the Fed will be paying. The deficits and debt servicing are causing the Fed to raise rates. Rasmus reiterates his prediction that Fed rates cannot rise another full percentage, and US 10 yr. Treasury bond rates cannot exceed 3.5%--without precipitating another general credit crunch (as in 2007) that will set off the next recession. (for a print article explanation of the analysis, go to the blog, jackrasmus.com, or the article posted here on PRN website as well).

Alternative Visions - US Stocks Biggest Fall Since October 2008. Causes & Predictions - 02.09.18

 Dr. Rasmus delves deeper into this past week’s US and global stock crash. Is it another 2008? Or more like the dotcom tech bust of 2000? Rasmus argues the current decline has characteristics of both 2000 and 2008 and may be therefore even more significant. How tech stock speculation drove 2000 and how property based financial speculation-engineering in derivatives drove 2008. Rasmus explains the role of the new derivatives: ETFs/ETNs/ETPs (the new subprime mortgages-CDO-CDS), and how new developments in recent years of passive index stock buying, momentum trading, and ‘Quant’ hedge fund automated algorithm selling is the new dangerous combination.  Rasmus then discusses the three level of causation behind the stock bubble and now bust: precipitating causes during last week; medium term enabling causes of Trump tax cuts, stock buyback and dividend payouts, return of massive stock margin buying, and more fundamental causes of central bank policies, corporate debt financing, and the longer term relative shift to financial asset investing globally.  Rasmus warns to beware of continued derivatives volatile trading tied to stocks (ETFs, Risk Parity, Vix options), Emerging Markets’ currency and capital flight, China currency devaluation, and highly leveraged US junk bond dependent ‘zombie’ companies, now 37% of all US corps. (Next week: Is there really a recovery of wages in the US? And maybe more on finance markets).

Alternative Visions - The Condition of the Working Class in America in Trump Year One - 02/02/2018

In the first half of the show, Dr. Rasmus reviews key economic developments of the past week: the emerging major correction of bubbles in stock and bond markets; the reversal of forces that drove up Bitcoin and crypto currency prices to bubble levels in 2017 (that are now driving down Bitcoin et.al. prices); the end of the Janet Yellen regime at the Federal Reserve central bank; and a review of Trump’s ‘high theater’ first State of the Union speech.  Rasmus then focuses on the main theme of the show: the condition of the American Working Class today, in ‘year one’ of the Trump regime’s ‘Neoliberalism 2.0’ offensive. Rasmus debunks the official view that real wages have been rising for the core working class of more than 100 million non-supervisory workers in the US, and follows with a clarification of the jobs picture presented in select, official government data. Why the Trump tax cuts will reduce jobs, not grow them, as multinational corporations have strong incentives to shift more production offshore and why rising central bank interest rates will exacerbate already slowing auto and home sales. Rasmus concludes with a discussion with ominous tech trends now coming that will devastate jobs even more in the coming near and medium term: the ‘Uber Effect’ (transport & hospitality), the ‘Amazon Effect’ (retail, groceries, healthcare), and the ‘Artificial Intelligence Effect’ (self-driving cars and 1 million trucking jobs). Next Week: Why Unions in America are Collapsing and What Could be Done (plus updates on the stock and bond markets).

Alternative Visions - Trump in Davos: Is Global Inter-Capitalist Competition About to Intensify? -01.26.18

While ‘Davos Men’ at the World Economic Forum gathering celebrate a short term resurgence in global economic growth, more serious longer-run problems in the global economy remain and appear to be growing. Dr. Rasmus discusses how global trade growth in relation to GDP has been slowing dramatically, how global income and wealth inequality is accelerating (fueling populism and economic nationalism), debt levels are rising even faster everywhere (for households, business, and governments), productivity and wage incomes are stagnating (except for a small 5% top layer), and currency and trade wars are on the verge of erupting, as the US economic elite wing behind Trump continue to signal their intent to rearrange the global profits pie distribution once again more favorably to the US.  Trump’s ‘America First’, and recent salvos of tariffs and treaty renegotiations, and US Treasury Secretary, Steve Mnuchin’s, declaration this past week of a US ‘low dollar’ policy have riled the global capitalist community at Davos. Rasmus argues the recent Trump tax act—which delivers more than $2 trillion in subsidization to US multinational corporations (and more than $4 trillion tax subsidy to US businesses and investors in general) should be understood as part of this global offensive by US business to garner more of the US and global economic pie for itself—at the expense of global competitors and the US middle class.

Alternative Visions - Behind the Bitcoin Bubble Bust + Apple’s $105 billion Trump Tax Cut - 1/19/2018

 Dr. Rasmus explains the forces behind the 2017 escalating Bitcoin bubble and their reversal in 2018 in recent weeks, leading to the collapse of Bitcoin prices. Both demand and supply forces driving, then collapsing, bitcoin are explained, and projections for 2018 offered where Bitcoin and other Altcoins may be headed. Crypto currencies as classic financial asset speculative plays are explained, in context of 21^st century Capitalism’s continuing securing shift to financial asset investing. Rasmus then estimates the true tax cuts for US businesses from the Trump tax act ($4 trillion not $1.5 trillion), and estimates that US multinational corporations will reap at least half of that $4T. The case example of Apple Corp’s tax cuts are estimated—from the repatriation one time tax savings in 2018 and thereafter for the next five years, after Apple’s announcement of bringing back $38 billion (over the next five years) of its $270 billion offshore untaxed thus far profits hoard. Rasmus explains only part of the $38 billion will result in wage and real investment, with most going to stock buybacks, dividends, and mergers and acquisitions. (Next week: ‘What’s Happening in China?’)

Alternative Visions - Trump’s Tax Cuts: More than $5 Trillion (Not $1.5T) - 01.12.18

 Dr. Rasmus starts the show with comments on last week’s announcement by WalMart raising its minimum wage and the Bloomberg News story about China considering cutting back buying US Treasury bonds. The rest of the show addresses the Trump Tax Cuts true extent of tax reduction on corporations, businesses, investors and the wealthiest 1% households. Jack debunks the notion that the US budget deficit hit from the tax cuts will equal only $1.46 trillion, the official government estimate, showing it is based on the absurd assumption of a 10 year annual average GDP growth rate of 3% and no recession occurring for another decade (or 19 years from the last). The deficit hit will be at least twice, or $3 trillion. Tax hikes on the middle class are about $2 trillion. So the tax cuts for corporate America et. al. therefore exceed $5 trillion. Rasmus then estimates the $5 trillion from the major provisions of the Act: $1.5t from corporate rate reduction, $1t from accelerated depreciation write-offs, $.5t from elimination of corporate AMT, and between $2-$2.5t for US multinational corporations from repatriation of $2.8t to $4.0t profits in offshore subsidiaries and tax havens and a future offshore tax rate reduction from 35% formerly, to 8%. Rasmus explains the cornerstones of the US global economic empire: the twin deficits (trade-budget), free trade (benefits share with local capitalist elites offshore), the dominance of the US dollar as global trading currency, and US domestic tax policy that ensure trillions of profits keep flowing to investors via dividends, stock buybacks, and capital gains.