Alternative Visions

Alternative Visions- Prighozin’s Rebellion, Student Loans & Biden’s Neoliberal Policy Regime

 Dr. Rasmus examines some facts about Russia’s mercenary Wagner group and its leader, Prighozin, recent mutiny. What are some interesting facts behind the origin of the rebellion not reported by the US mainstream media? The show next addresses in depth the US Supreme Court’s decision to scuttle Biden’s proposed $10-$20K student debt forgiveness proposal. Why 43.5m student debtors can’t get any relief, while 25m small businesses had their $900B in loans under the Covid PPP program expunged by the government and SCOTUS said nothing? The scam called the Student Loan program is discussed in detail and what the SCOTUS decision may mean for all businesses. The show concludes with an examination of whether Biden’s economic policies (aka Bidenomics) represent a crisis for US neoliberal policy in general. Why Biden’s policies are classic neoliberal but also reveal a growing crisis in US neoliberal policy in its monetary, fiscal and trade/dollar variants. (For more on the Prighozin Rebellion, check out Dr. Rasmus’s July 1 blog piece: ‘Prighozin’s Rebellion and the Third Offensive’ at his blog, http://jackrasmus.com

Alternative Visions- Fed’s Rate Pause and the Growing Contradictions of US Monetary Policy

What’s behind the Fed’s decision to temporarily halt rate hikes this past week? Then raise rates later again this year? Dr. Rasmus explains the Fed is more concerned in the short run with exacerbating the continuing regional banking crisis than intensifying efforts to slow inflation by raising rates. Fed policy faces a contradiction: raise rates and worsen banking system instability (which the Fed has been offsetting with weekly injections of $95B to stabilize since March), or, not raise interest rates for a while and live with inflation. Rasmus dissects the latest CPI report that shows continuing services sector inflation of 6.3%-6.6%, even as goods inflation has moderated and energy inflation fallen significantly from last year’s highs. Rasmus explains how and why monetary policy faces growing contradictions and is becoming increasingly ‘inefficient’ (i.e. high rates don’t reduce inflation as effectively as in times past, while lowering rates to zero have less effect on stimulating the economy as well. The causes are late neoliberal capitalism’s globalization and financialization. How and why fiscal policy is also facing growing contradictions and why US global economic hegemony is weakening as de-dollarization trends also appear to be gaining momentum.

Alternative Visions China Inflation and Ukraine Offensive

Why is inflation in China virtually zero while it remains chronically high in the US and Europe around 5% and more? Dr. Rasmus describes the forces continuing to keep prices high in the ‘west’ and why China’s economy has little of the same. Supply side issues, corporate price gouging, net exports import prices, currency values, and productivity/unit labor costs—all driving inflation in US—are conspicuously absent in China. The second half of the show addresses the emerging Ukrainian military offensive-the third such during the war. Rasmus explains the dynamics of the first two offensives (Russia in spring 2022 and Ukraine’s in late summer 2022), why both succeeded and failed, and the line up of current forces on both sides in the current third Ukrainian offensive. The importance of concentration of forces (first principal of warfare) in all three offensives and why Ukraine’s latest offensive is likely to fail. Scenarios political and military that could follow. Prediction: negotiations will begin before year end 2023 and it’s likely Zelensky will not be at the table.

Alternative Visions- Final Debt Ceiling Deal, May Jobs Report & Fed’s Next Moves

The May jobs report: why one govt survey shows 339K new jobs and another shows -440k more unemployment. The final version of the Debt Ceiling deal is then reviewed, including last minute Senate additions requiring retroactive student debt interest payments. The Deal as classic Neoliberal capitalist fiscal policy: Pentagon gets $886B (+more in ’24). Discretionary social spending gets cut $2.1T (18%). No tax hikes to pay for projected further $4T deficits & debt (at $35T or more in 2025) Other details of Deal. Rasmus then discusses whether Fed will ‘pause, skip or raise’ interest rates again next meeting. Why US economy ‘goods producing’ sector recession is deepening and will spill over to services by year end 2023.

Alternative Visions- The Biden-McCarthy Debt Ceiling Deal

Dr. Rasmus describes the likely terms of an imminent debt ceiling deal about to be announced this weekend. Reportedly ‘caps’ will be imposed on non-defense social program spending in a two year agreement, while Pentagon spending will rise 11% in the 2024 fiscal budget and an undisclosed further rise in 2025. Some of the possible details are considered: left over Covid funds, student debt cancellation, IRS hiring, work requirements to receive food stamps and Medicaid, fossil fuels licensing and environmental reviews. The NY Times estimates a 18% cut in non-defense spending while Pentagon spending (and higher still total Defense spending) rises. No tax increases to pay for the Pentagon hikes, especially no changes in Trump’s $4.5T 2017 tax cuts. Meanwhile, the CBO estimates failure to reverse the Trump tax cuts will result in a $2.7 trillion boost to the US deficit and debt, now at $31.4 trillion. How real is the US debt default if no deal? And what are some constitutionality issues

Alternative Visions - The Debt Ceiling Negotiations Dance

What’s behind the debt ceiling negotiations?  Is June 1 the real deadline date? Dr. Rasmus describes what’s happened to the national debt since 2000 and the causes for its rise from $4T to $31.4T and why interest on the debt is projected to accelerate rapidly to nearly $1T/yr by end of this decade.

How much have the declining share of tax revenue contributed to the annual US budget deficits and thus the national debt? War and Defense spending? Social program spending? Rasmus reviews the various fiscal policies since Covid—3 Covid relief spending plans in 2020-21 followed by 3 business subsidy and investment plans in 2021-22 by Biden.

Why the debt ceiling negotiations are really a cover about how much social program spending to cut in the next federal budget beginning October 1, 2023. Once the debt ceiling is raised again, what’s the prospect for further budget deficits and still more increases in the US national debt?

Alternative Visions - Inflation USA: Analysis of Latest CPI and PPI Reports

 In this week’s show Dr. Rasmus takes a ‘deep dive’ into last week’s Consumer and Producer Price Index Reports. Conclusions: Fed record rate hikes have shaken out demand driven causes of inflation but further gains will require even higher interest rate hikes. March CPI at 5% has improved only to 4.9% for April. Inflation reduction has ‘stalled out’. The reduction thus far has impacted energy and some food—i.e. what’s called ‘headline inflation’ but has left ‘core’ inflation (all rest) virtually unchanged at 5.5% for most of past year.  Producer prices (that eventually drive consumer prices) are actually rising again. Energy (gasoline) costs and travel costs will again rise in coming months while business unit labor costs will rise due to collapsing US productivity and continuing price gouging by monopolistic corporations (ex: bakery goods) and rents hikes by landlords.

Alternative Visions - US Economic Updates: the Fed, Banking Crisis, and US Productivity & Jobs Reports

The show begins with two questions: Will the Fed’s recent interest rate hike last week be its last? Has the Fed failed in its inflation objective, given the continuing rise of prices in the US services sector? Discussion then turns to the latest developments in the regional banking crisis with last week’s failure of First Republic and new banks new experiencing stock price collapse: PacWest Bancorp, Western Alliance and First Horizon. Rasmus explains why the banking crisis is not over and compares the current bank instability with the prior financial crisis in spring-summer 2008. Why the current bank instability may prove even more serious than 2008. The show concludes with a discussion of 2 key reports issued the past week: the US productivity report showing a decline of -2.7% for Jan-March 2023—the 5th consecutive quarter fall and the longest decline since data began in 1948; And last Friday’s most recent jobs report for April showing 253,000 jobs and the unemployment rate continuing to drop. Rasmus explains why the Fed’s major focus on the JOLT (10m unfilled jobs) statistic of 10m is grossly inaccurate with half of which ‘ghost’ jobs

Alternative Visions - De-Dollarization (continued) + Banking Crisis Updates

 Dr. Rasmus picks up the discussion on the global de-dollarization trend from last week, focusing on the Congressional Budget Office’s April Report “The U.S. Dollar as an International Currency and Its Economic Effects” analysis—i.e. the official US govt view of the trend.  How accurate is the CBO Report’s conclusion that the Euro poses no threat to displace the dollar (and actually will decline) and that the threat from the China ‘Yuan’ currency is currently minimal, will rise only gradually, and even if China economic growth significantly exceeds the USA’s, the use of its currency is held back by China policies. CBO identifies 3 ‘wild cards’ that may accelerate the dollar’s decline (as both reserve and trading currency): world war, severe financial crisis in US, shift to digital currencies. Rasmus critiques the report by ignoring current developments like US sanctions and war in Ukraine driving a shift from the dollar to a expanded BRICS-based currency. The show also addresses the latest events in the US banking & financial system instability, specifically today’s announced failure and coming govt bailout of First Republic bank, and the growing instability in the US commercial real estate market.

Alternative Visions - De-Dollarization Trends + US Economic Update

Dr. Rasmus reports on several latest data releases showing growing slowdown of US economy: latest housing states -2.4%; manufacturing PMIs contracting faster; and US leading economic indicators down -7.8% year on year, the worst seen since 19981 recession. Second half hour of the show begins the analysis of the emerging decline of the US dollar, a key lynchpin in the US global economic empire.  The forces driving up the value of the dollar in the short run recently and the emergence of longer run developments undermining the dollar as global currency are discussed. Distinguishing between the $ as dominant global trading currency and as global reserve currency. Why $ as reserve currency has thus far fallen from 80% to 60%. And as trading currency to 60%.  How US sanctions on Russia is driving China and expanding BRICS toward alternative currency solutions to trade. General view of the negative implications for US economy in longer run. Why the $ will continue to decline as global currency. (Next week: A deeper look at CBO’s just released report in April: “The US Dollar as an International Currency and Its Economic Effects”)