Feeds:
Posts
Comments

Today the US Senate slammed the lid permanently closed on the Voting Rights Acts, voting 48-52. After giving the ‘deep six’ to Biden’s Build Back Better bill last month, Democrat Senators Manchin & Sinema followed up with a coup d’ grace for Voting Rights too. Both desperately needed bills are now DOA!

In his press conference tonight president Biden took a swipe at Bernie Sanders instead of Manchin-Sinema, revealing the Democrat party’s spin to cover up the two historic defeats has already begun; That spin and new messaging is to blame Sanders, progressives, and the so-called Democrat party ‘left’ for Biden’s debacle instead of laying blame where it accurately belongs: with those corporate interests and lobbyists who, behind the scenes for months, have been backing Manchin and Sinema.

Biden’s remarks about Sanders (“I am not Bernie Sanders, I’m not a Socialist’) will now open the door to a crescendo of ‘me too’ commentary from Democrat politicians, operatives, talking head pundits in the media, and other opportunists who’ll echo the claim the party moved ‘too far left’ in proposing Build Back Better and Voting Rights. That will be the mantra of the corporate wing in the party who’ll now take further control of legislative proposals and other initiatives. The Democrats will now move even further to the right. Their single proposal will be ‘vote for more of us in November and then we’ll get the job done’.

This historic failure of the Democrats to confront the economic and political crisis facing the country was predictable way back in the primaries in 2020. Recall the claim of Biden at that time that only he could ‘get the job done’ by forging alliances with Republicans to pass legislation. History now shows what a farce that was. It was the old Obama bipartisanship strategy that failed totally under Obama, resurrected during Biden’s election, and failed once again during Biden’s first year in office.

Biden has shown he can’t even slap together 50 votes of his own party. This fact is already not lost on the American electorate. The farce of the campaign pledge that he can get the job done (whereas Bernie couldn’t) has not been lost on the American people one year later. Biden’s approval rating has plummeted to 33% and will fall further as inflation continues to roll back wages, Covid continues to run its course, and Fed now quickly raises interest rates that will both slow the real economy in 2022 and provoke financial markets instability.

That is not the only consequence of Biden’s total failure to deliver as promised during the primaries.

The risk is high that Biden and Democrats will now push to confront Russia over Ukraine. The real issue is Russia’s obvious resolve not to let NATO gain a foothold in its back yard. Russia wants assurances that won’t happen. The Democrats and US foreign policy elite won’t give it to him. But Russia is not about to let Ukraine go NATO without a shot–after it lost 20 million people defending Ukraine from the Nazis–and after the US encouraged Georgia to invade it back in the Bush years. US political advisers–mostly civilian academics and intellectuals–don’t seem to understand where Ukraine fits in the Russian historical psyche. The odds are better than even that Biden, the Democrats, and US elite will push too far into brinkmanship and provoke an invasion.  With Biden and Democrats two great legislative defeats now in the Republican-Corporate bag, and social and political conditions worsening, an historic foreign policy miscalculation is increasingly real.

It’s even possible that US capitalists and elites may want a Russian invasion. It may be the one way to bring the European Union fully back into the US-NATO fold, from which parts of it have been drifting in recent years, not to mention getting Germany to abandon the Russian gas pipeline and instead buy imported US producers natural gas. The Ukraine situation is scary, since both parties may have independent motivations to see an invasion occur.

History may yet show a Biden policy of brinksmanship in foreign affairs may prove the analog to Biden’s failed domestic policy of bipartisanship.

Meanwhile, domestically the crisis of US Democracy is escalating rapidly.

A year ago we saw how Trump and is wing of capitalists were going to eliminate it in all but name–and almost succeeded. The Achilles heel of the electoral college was evident for all to see: Trump’s plan was simply to bypass electors that didn’t vote for him. That was to be accomplished by getting pro-Trump governors to simply appoint and send to Washington pro-Trump alternative electors of their choice; or else not to endorse the results in their states and send any elector delegation. Vice President Pence was then to acknowledge, when the count took place on January 6, 2021, that there were disputes in key states over which elector delegation was official, and therefore neither delegation should be counted. Remaining states’ electors would then be counted and the outcome would calculate in favor of Trump. That was evidently the plan to bypass even that un-democratic institution of the electoral college itself. Pence did not play ball, however. But can anyone doubt that, with a Republican majority in both the House and Senate, that Pence would not have balked? And next time, 2024, the Republicans will have a majority in both Houses of Congress.

There’s a further alternative scenario that might play out in 2024. If some elector delegations are in question and red state governors refuse to send them to Washington on January 6, 2025, then the decision on president could be made by the US House itself. Per the Constitution, each state would have one vote. And if a majority are red states, which they almost certainly will be, then a simply majority of red states could vote not to seat the popularly elected president.

Some combination of these scenarios are quite possible come 2024.

Since a year ago, the prosecution of the rioters of the Capitol has proceeded at snails pace. It won’t reach conclusion by the midterm elections this coming November, after which it is 99% certain Republicans will win the US House and shelve it in a bottom drawer somewhere in the basement of the Capitol. They’ll be able to win and do this not just because of Biden and the Democrats have been too timid and have failed to develop a strategy to push legislation; not only because of raging inflation devastating workers’ incomes; but because that second front of the attack on Democracy has been succeeding as well.

That second front is the corresponding assault underway on US democracy at the state level, concentrated in the roughly two dozen Republican dominated and controlled state legislatures.

Together the two assaults represent a political ‘double pincer’ political movement: In the Republican/Trump run ‘red states’ at least 20 anti-voting laws have been passed and hundreds more are pending. That goes forward, while Voting Rights laws are stopped in their tracks at the national level.

Biden attempts to put a spin on the defeat of Voting Rights, saying he’ll continue to fight. But fight ‘how’? He never says what’s his next strategy now to achieve what he couldn’t achieve to date by pleading with the Manchins, Sinemas, and McConnells. It’s because he has no strategy. His failed strategy of bipartisanship has been replaced by no strategy except to talk about how he’s not giving up.

Not only will Democracy fail to go forward, now the Voting Rights Acts are DOA, but Democracy in America will slide still further backward as voting repression at the state level accelerates. The even longer run trend accompanying voter suppression, of course is gerrymandering. The latter endorsed by the Supreme Court in various decisions over the last decade.

Gerrymandering plus Voter Suppression at the state level is the ‘second front’ to the US Senate’s killing of voting rights at the national level. Add procrastination in the investigations of January 6, 2021, and a Supreme Court that will continue to endorse all the above, and you have poisonous political brew that bodes ill for American Democracy in both near term and mid.

Throw in the mix a growing potential for confrontation in Ukraine and the risk grows of the anti-Democracy forces accelerate their efforts while the American public is distracted by yet another foreign policy military adventure.

Jack Rasmus
copyright 2022

Recently David Baker, a frequent commentator to this blog, raised the point that don’t current US inflation, the pending Fed rate hikes in response to inflation, have negative as well as positive consequences for the future short term 2022 trajectory of the US economy? He asked what are the ‘connections’.

As David noted: “

My take away is that inflation is a savage form of class warfare which is why Biden et al will do nothing about it. Where I am confused is how this inflationary spike will play out because Neoliberal policies require cheap money as well as the substantive issues raised in ‘Central Bankers on the Ropes’ obviously there are connections I just can’t process them.

My reply is the following to this important question:

Dr. Rasmus Reply to Baker:

The ‘connections’ you identify are in fact also contradictions. One the one hand owners of bonds and other fixed capital incomes want inflation controlled since it eats into their wealth and income; so they favor Fed rate hikes. On the other hand, corporations don’t like too much rate hike since it raises the cost of borrowing and thus investment (although banks like higher rates that add to their net interest income). Also, US multinational corps don’t like higher rates since it results in an appreciation of the US dollar, which means when they repatriate their offshore profits earned in foreign currency in the countries they do business, they must convert profits from foreign currency to dollars. And if dollar appreciates (due to higher Fed rates), it means they repatriate few profits in dollar form. Also, rising Fed rates and dollar causes big declines in foreign currency exchange rates, that slow foreign economies (and offshore profits in those countries). It also raises fragility of foreign debt, both sovereign foreign government debt and dollarized private corporate bond debt–all of which can result in financial crashes in emerging market economies. So it’s a mixed picture for US capitalists. Some benefit from higher Fed rates; some not. Capitalist governments continually try to balance the contradictions, not letting either get too far out of control. But when crises deepen, the balancing act becomes more difficult. Sometimes they lose control. Then sovereign bond defaults occur and the IMF has to bail them out (e.g. Argentina, Turkey, etc.); or a sector of the global financial economy experiences a crash and crisis; or re-recessions of the real economy emerge. And in a globalized financialized capitalist economy today, the risk of accelerating contagion–real and/or financial–becomes more likely. Capitalism works by enriching the capitalists while feeding more crises and instability within itself. Capitalist policy makers are always trying to maintain an uneasy balance between enriching capitalists more and provoking more instability and crisis within their own system. That’s what’s behind its ‘boom and bust’ characteristic. Problem is the rich and their corporations benefit most from the ‘boom’, and then are the first to be bailed out when there’s a bust. The rest of the population has to fend for itself to different degrees depending on how important this or that segment is to the system itself. The last four decades illustrate the balancing act is getting increasingly difficult–more is going to the capitalists and their corporations during both pre-bust and post-boom, and less and less relatively to the rest. That’s my ‘short’ explanation.

The US govt’s most recent inflation report shows consumer prices rising past 12 months at 7% rate, up from prior report that showed 6.8%. (Really both over 10% for reasons I’ve stated before). The worst since 1981. Biden admin. spokespersons say it’s ‘slowing’. Yet prices rising first week of January twice as fast as last week of December; and 7% is more than 6.8%. Inflation will cut into 1st Quarter 2022 real US GDP, dampening consumer spending. Also, the end of child care benefit will have same effect on real consumption. Then there’s the general fall of disposable income for millions of US households due to failed Build Back Better plan, which is now not only dead but buried. Continuing problems of production and exports from China/Asia will further add to US real economic slowdown this quarter. Ditto as Omicron slows business investment and adds to workers shortages; and as Fed raises interest rates as well. Focus will be on Fed raising rates as means to slow inflation. However, Fed rate hikes depress demand which is not the problem behind inflation. That problem is in part supply side issues (US and global trade) and even more so problems of US monopoly corps price gouging. Fed rate hikes can’t effect either supply or monopoly causes. It can make households pay for inflation by rate hikes that result in layoffs in housing, autos, other big ticket purchases–just as the Fed did in 1981-82 when it raised rates to 18%. It provoked recession as solution to dampen inflation–when the real cause was OPEC and Saudi supply side cause.  Will the Fed repeat 1981 in 2022? If it tries it will fail. US economy is far more fragile today. Should Fed raise rates beyond 3% (10 yr. US bond rate now at 1.5%), it will provoke major real economic contraction–i.e. double dip recession in 2022. So it won’t and will back off, I predict.

In summary, more chronic inflation coming 2022.  More slowing US real economy this quarter.  And growing fragility in global/US financial markets as China property developers default pressures spread, contagion potential rises, US dollar rises and emerging market economies’ currencies deflate (and their economies slow).  The fiscal stimulus phase of Great Recession 2.0 is now over.  There’ll be no further fiscal stimulus for households, as Fed monetary policy turns contractionary as well with rate hikes.

Longer run conclusion: whereas Great Recession 1.0 (2007-10) was precipitated by financial markets crash that pulled down the real economy in its wake, today’s Great Recession 2.0 (2020-22) may experience a similar cause-effect but in reverse: real contraction 2020-22 followed by financial markets’ contraction (late 2022-2023).

Read my commentary of the past week below on twitter noting the key developments for prices in wake of government’s latest inflation report:

#Fed rate hike in March all but certain, as all Fed governors now lined up for it. Before rates drift up. Auto prices (new & used), houses, etc. to rise more next 2 months. Ditto as exports from China slow & US monopoly corps continue price gouging. Result: inflation continuing

#Inflation Republicans say its excess Demand from too generous stimulus. But stimulus ended in Aug-Sept. Inflation surged after. Dems say its supply. But oil, meat, grain, etc. corps have no supply problem. So what is it? It’s monopoly corps price gouging to recover 2020 profits

#Inflation there’s no shortage of domestic US oil supply. Yet US oil corps raised prices 29.6%! So not even supply supply driving oil, gas, energy inflation. So what is? Price gouging by oil corps (and other monopolies like meat producers, cereal-bread corps, etc. etc.)

#Inflation report today = 7% Dec CPI rise, so it’s accelerating from Nov 6.8%. Big driver is oil/gas up 29.6% over year. So oil corps = biggest cause of supply side inflation today, just as in 1981 when OPEC oil supply shock caused inflation. Monopolies price gouging = main cause

#Fed raising Fed interest rates will actually exacerbate & worsen supply side driven inflation. It will mean less business investment, more worker layoffs and lost wage income to spend & more labor supply shortages–all of which will add to supply side inflation in coming months

#Fed using interest rate hikes to slow inflation is like using a sledgehammer to swat flies. Powell knows rate hikes won’t check supply driven inflation. It won’t take 18% Fed rate to provoke another recession in 2022. US economy more fragile. A 3% 10 Yr. Treasury rate will do it

#Inflation Biden & media saying inflation is abating. Another lie. Govt own data show inflation rising first week of January twice as fast as during last week of December. There’s so much lying going on, from both wings of capitalist party–radical right/Republicans & Biden/media

#Inflation In 1981 inflation 10% due to supply side issues with global oil imports, caused by OPEC & Saudis. US response: get Fed to raise rates to 18%. Autos, housing, crashed. Investment & wages fell. Recession. Demand was used to address Supply cause. Fed planning same 2022.

#Inflation CPI up 7% again December-most since 1981. Inflation not slowing. So what’s Biden proposing? More competition for monopolies like meat producers. When asked by nat’l media today what’s being done about supply driven inflation, Biden’s Director of CEA ducks the question

#Fed As inflation accelerated in 2021 Fed refused to raise rates. Now as wages try to catch up to prices, Fed says will soon raise rates =Fed trying to protect profit margins of corps & businesses, not really to stop inflation which is supply driven & rate hikes can’t slow

#Wages Govt & Media hyping 4.7% wage gains past 12 mos. Say compares to 3% pre-covid. But inflation pre-covid 2%-2.5%. Inflation now almost 7%. So now Real Wages less than pre-pandemic.(Also 4.7% is ‘average’, so higher paid managers, tech, professionals getting > & others <4.7%)

#Fed signals will raise rates maybe as early as March, not next fall. Rate hikes to address supply side inflation work instead by depressing demand, jobs, wages, consumer spending–i.e. make workers pay for what is corp. driven supply inflation. Fed made same error in 1980-81

#Inflation Biden’s says today: “We must get to the bottom of why farmers and ranchers continue to receive low payments while families across America endure rising meat prices”. ‘Get to the bottom’? Really? Biden means let’s study & bury it. It’s obvious food corps price gouging.

#Inflation Biden’s answer to monopoly price gouging by food industry: govt give more $ to smaller capitalists to create more competition. Translated: Inflation is just an excuse for govt to provide more subsidies to corporations. Real solution: price controls + tax big food corps

#Inflation meat & food prices up 20% so far. Biden says due to lack of competition: “Capitalism without competition isn’t capitalism. It’s exploitation” (wall st. journal 1-4-22). Since all food industry is near-monopoly, it’s all capitalist exploitation.

Listen to my January 7, 2022 Alternative Visions radio show in which I comment on the major developments and events in 2021 in the US/Global Economy (including the likely further slowing again of the economy in early 2022, continuing inflation, Fed rate hikes) and US/Global Politics (including the accelerating attack on US Democracy, the failure of Biden/Democrats to check it, and flash points in Ukraine and Taiwan). My predictions on what’s most likely to occur in US economy/politics in 2022 follow.

TO LISTEN GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-2021-year-in-review-economy-politics/

Reflections on Jan. 6

As talking heads in media comment on this anniversary of the January 6, 2021 insurrection of the US Capitol–an event that brought home the deep and growing attack on US Democracy to the general populace–allow me to share some of my reflections as well of the past few days on the subject. Here are some of my twitter feeds and commentary on the topic. (Check out my forthcoming extended post as well, ‘The Neoliberal Origins of January 6 and Crisis of US Democracy’)

#Jan6

How to explain McCarthy(McConnell, Graham, etc.)blamed Trump for riot on Jan. 7, then joined Trump cult after McCarthy visited Mar-a-Lago? Per the ‘fly on the wall’, I’ve been told Trump likely threatened to break up the Republican party & start new one. McCarthy & friends would have been jobless in 2023

#Jan6

Was the insurrection a culmination of months-long efforts to subvert the election process? Yes. Was it also the start of a more serious undermining of Democracy by a wing of US capitalist elites and their paid for politicians? Yes. Is the other wing failing to stop it? Yes

#Jan6

Looking for historical parallels, can we call Jan 6 the US radical right and Trump’s ‘Beer Hall Putsch’? (that was the Nazis’ initial failed insurrection in 1923 Germany, after which Nazi party became Hitler’s cult and it purged any internal voices of challenge to Hitler)

#Jan6thCommittee

Here’s a Prediction: Cong. hearings will never touch the big politicians & financiers behind Jan 6 riot + after Repubs take House in Nov. 22, prosecutions will be halted, pardons granted, and if voting rights bill pass this yr (big ‘if’ per Joe Manchin) it’ll be reversed

#Jan6

On this anniversary of the insurrection & riot in DC we’ll hear a lot of talking heads lamenting the attack & crisis of democracy today. Listen close. You’ll not hear much in the way of actions to address that crisis besides Cong. hearings (to be forgotten after Nov. ’22)

#USA

Progressives & leftists think 1930s New Deal was ‘normal’ America. No, that era was historical aberration. America today has all but shed New Deal + WW2 programs & policies. Its now reverting to true USA culture, economy & society of pre-1930s period. 2020s more like 1920s

#January6

Does Jan. 6 reveals the Republican party is now at the stage of Germany in 1926. Only then did Hitler become infallible ‘leader’ of Nazi party, purging all other challengers to him internally + uniting under the Nazi party all the scum on the right. German depression began 1927-28. Liberals allowed him under the tent which he then burned down with the infamous ‘Reichstag Fire’.

#Democracy

Another ‘marker’ of its USA decline: collapse of mainstream political parties. Republican party is now a ‘cult’ with Trump in complete charge & Democrats are led by octogenarians at loss of what to do to save it, dragging their feet, debating ad nauseum, afraid to confront Trump. Wanna bet they never indict him?

#Manchin

Is playing his ‘move the goalpost’ game again, this time re. voting rights bills & filibuster. Says he doesn’t like lifting it, even temporarily, but voted to do so a month ago to pass the Dec. $768B defense bill. Says he’ll maybe support it later, but only if Republicans agree as well. (That means never, of course, as he knows well)

#January6

Democracy dies when its elites begin to abandon it. Jan 6 insurrection = tip of iceberg. In 2020, 440 anti voting bills were introduced; 88 still pending. 34 passed in 19 states. More than 130 nonpartisan state elections county directors now taken over & replaced by red state legislatures. From Supreme Ct to Senate to State legislatures, attacks on voting & democracy accelerating.

#Manchin

Dem leaders now formally give up on passing Build Back Better. Instead turn to passing Voting Rights Act. Manchin now opposed to that as well. And says he’s against changing filibuster too. Deja Vu further collapse of Dem Party. What kind of party would keep a Manchin?

#January6

Just released polls show only 10% of Republicans think January 6 riot was an insurrection. And 61% believe none of it was violent. Meanwhile, AG Garland remains AWOL & US House plods along as midterms approach, after which it will all be dropped. Dems have no strategy to check the local level ground attacks on Democracy, besides House hearings which won’t stop it

Watch/listen to my December 14, 2021 hour long interview and discussion with the west Oakland, California ‘This Is Revolution’ group. The show’s topic: “Understanding the Biden Economy’

Biden fiscal policy outcomes, the state of the US economy, the continuing US political crisis of Democracy, and related topics summarizing Biden’s first year in office.

To watch on YouTube GO TO:

https://www.youtube.com/watch?v=81iOiBM7VfQ

To listen only (audio) on YouTube GO TO:

(Note: the first 01:30 minutes of the video podcast is an ‘avant garde’ musical intro that may be skipped to get to the interview; the intro to the audio podcast is commentary by the host)

Here’s a 15 min. follow up radio interview on the theme of my most recent print article, ‘Build Back Better Bill Is Now DOA’.

TO LISTEN GO TO:

https://drive.google.com/file/d/1_g1r6yDQKEumkrsCLXUXcXsHxq0fesss/view

Months ago this writer predicted that Senator Manchin would never support Biden’s ‘Build Back Better’ Bill and was simply engaging in ‘bad faith bargaining’ to string the Democrats along. Manchin’s goal was to get the Democrat leadership–Biden, Pelosi, Durbin, Shumer et. al.–to reduce their proposals, which they conveniently did, on repeated occasions.

But Manchin’s real objective has always been to shit can the bill, in order to prevent the necessity of raising taxes on corporations and investors in order to pay for it. To borrow a phrase: “It’s the Tax Cuts, Stupid!”.

The taxes involved in the Build Back Better bill were just a small part of Trump’s $4.5 trillion 2018 tax cuts. The Build Back Better bill’s funding involved partially raising Trump’s corporate taxes. But even that was too much for the thousands of corporate lobbyists who descended on Washington in recent months; their single objective has been to ensure corporate interests in the Senate–within the Democrat party as well as the Republican–don’t pass the Build Back Better bill in any form, since paying for it involved to a significant extent clawing back some of Trump’s $4.5T tax cuts for corporations and investors. Their lobbying effort has proved quite successful.

From the start, Manchin (and Sinema as back up) have been the point of the corporate spear of interests determined to block the Build Back Better bill. To try to lure Manchin into some deal, the original Build Back Better $3.5 trillion bill was reduced to $1.75 trillion by Democrat leaders this past July. Manchin then played Biden, Sanders and the rest, constantly suggesting he might agree to something amounting to that total–but putting no proposal of his own on the bargaining table at any time. That tactic, of implying he might agree, then not, is classic bad faith bargaining: that is, refuse to agree to anything your opponent proposes, suggest you might agree to something less if they put it forth in writing, but then rejecting it and refusing to make even an alternative offer. That’s classic ‘bad faith bargaining’. If that were the practice in union-labor negotiations, the union would have declared an ‘unfair labor practice’ based on bad faith bargaining, and gone out on strike.

But Biden and naive Congressional Democrats kept falling for Manchin’s bad faith bargaining trick. Democrat Senate colleagues of Manchin kept saying ‘don’t piss off Joe Manchin’ or he’ll never agree to anything’. But Joe never had any intention of agreeing to even something. That was made totally clear this past weekend when he said “NO”, he couldn’t agree to the bill in any form, as well as the way he delivered his coup de grace tot he bill: His answer to shit can the bill was given on Fox News without even notifying Biden and the White House he intended to appear on Fox and do so. When the White House desperately tried to contact him right after his announcement, he refused to take calls from them.

Historically, Manchin’s response was analogous to the Japanese not providing a declaration of war to the US before bombing Pearl Harbor. It was not only bad faith; it was treachery.

In other words, Joe Biden (the other president Joe) has been ‘Pearl Harbored’ by de facto prez Joe Manchin.

The response of Democrat leaders to Manchin’s announcement killing the bill has been typically timid. Senator Sanders replied they should put the bill to a vote in the Senate to show West Virginians where Manchin stands. As if it was not already clear to everyone! Dick Durbin’s reply was ‘let’s all go home for Xmas’ and we’ll all feel better when we return and maybe can get something done’. Such timidity reveals traditional Democrat political pusillanimity and a desperate ‘too clever’ spin that the bill isn’t quite dead. Somehow the Zombie legislation can be resurrected. But Build Back Better is not only DOA, but buried.

The charade of negotiations within the Democrat Party over the Build Back Better bill since this past July have thus come to an end, as this writer has been predicting they eventually would for months.

So what’s next? Some Democrats will try to keep the charade going. They’ll recommend the various provisions of the now DOA Build Back Better be broken out and voted on separately. All this will mean is that Manchin and the corporate interests behind him–the lobbyists and corporate supporters in the ranks of the Democrat party in the Senate–will simply have more chances to vote NO on separate provisions. The farce of trying to pass a real social spending stimulus bill will continue–with similar results.

It should be clear that Manchin represents the wing of the party–the corporate wing–that wants to prevent any further spending on social programs for the tens of millions of Americans now desperate increasingly to make ends meet. A growing faction within the Democrats in Congress see the collapse of Build Back Better as an opportunity to turn the Democrat party toward the right. They argue that by embracing Sanders’ and other proposals of the progressive wing in Congress in 2021 the leaders of the party have driven it off course. A turn to the right is thus required.

The failure to pass the Build Back Better bill represents a milestone both economically and politically and the beginning of a new phase in legislation–and in the growing economic and political crisis in America as well.

Politically, it means the Democrats are ‘toast’ in the 2022 midterm elections. It will be nearly impossible to turn around public voter sentiment by next November, which shows in many recent polls and surveys  growing disappointment, even disgust, with the Democrats failure to get needed programs passed. Biden ran on a promise he could ‘get things done’ by uniting Democrats and Republicans to pass necessary legislation to ensure economic recovery. In fact, he now has proven he can’t even unite his own party to do so.

There is also a historical deja vu moment here. In 2009 the Democrats, in control of both houses of Congress and the presidency under Obama, passed insufficient legislation of $787 billion. Obama listened to his corporate advisors and low balled that recovery spending. The result was it failed to generate sufficient jobs and economic recovery. The economy lagged and stumbled for working class America for years thereafter. That failure to pass sufficient legislation to ensure recovery for all resulted in Democrats being trashed in the 2010 midterm elections. A decade of McConnell and Republican dominance followed, fueling the Trump rebellion from the right, his election in 2016, and the passage of the $4.5 trillion corporate-investor tax cuts. Democrats are all but doomed to experience a similar political debacle in 2022 midterms.

The historical analogy can be extended. FDR faced a similar choice in 1934. His initial legislation in 1933 focused on rescuing the banks and enabling businesses to raise prices as a way to grow business profits to jump start investment and job recovery. It failed. Business interests in summer 1934 demanded more business directed subsidies, tax cuts, and support.  FDR instead turned to programs known as the New Deal. The 1934 midterm elections resulted in more gains for Democrats in Congress, which ensured the passage of New Deal legislation starting 1935.  Obama chose the opposite of FDR: Obama turned to the right and corporate policies, instead of social programs benefiting households and consumption. The outcome was, unlike in 1934, Democrats were slaughtered in 2010 midterms.

Biden’s trajectory is now similar to Obama’s in 2010 than FDR’s in 1934. The conclusions should be clear: Democrat Party 2021 is not the party of your grandfathers’ in 1934. It’s not even the party of your fathers’ in 1966. It’s now a political animal firmly in control of corporate interests.

The phase of economic stimulus measures is now over, after not even a year effort. There will now be a hiatus of spending until the Republicans take over in January 2023. Then a typical Austerity Phase will begin.  In 2009 Obama engineered his $787 billion insufficient stimulus package; only to agree in August 2011 with McConnell and Republicans to ‘take back’ $1.5 trillion in social program spending. If Biden follows Obama’s trajectory, he’ll agree to some degree of austerity after 2022 with Republicans, justifying it with ‘it could be worse’.

The US has already entered the ante-room to austerity. Early Biden stimulus from the American Rescue Plan’s $1.9 trillion package (of which only $900B was projected to be spent in 2021-22) has dissipated. The extended unemployment benefits, the rental assistance, the emergency checks are all gone. Soon to expire are the child care credits, forbearance for student loans and mortgages, and other programs. All will have a severe negative impact on consumer spending. All this occurs at a moment when it appears the new Covid Omicron variant will have some degree of negative impact on economic activity again, and as rising, chronic inflation promises to whack household real spending in 2022 big time as well.

In short, economic consequences to the defeat of the Build Back Better bill will be the main economic story in 2022. Democrats are failing once again to provide sufficient economic stimulus to ensure a sustained economic recovery. Longer term, through 2024, the economy will experience brief, weak recoveries followed by short, shallow relapses of economic recovery–as it did post 2010 under Obama.

Bidenomics is now become just retread Obamanomics.

Politically, the consequences in 2022 will be similar to 2010 as well : Democrats will almost certainly be trashed in 2022 midterms–especially since Manchin, Sinema and others are also prepared to shit can any voting rights bills.

Democrats are showing once again they are incapable of resolving the crisis–economic and political–now confronting the country.

Sanders’ and their progressive wing’s so-called ‘Inside Strategy’ of reforming the party and returning it to its ‘new deal’ roots is now clearly a failed strategy as well. The progressive wing capitulated in the House in November and is now in total disarray. All Sanders can say is ‘let’s embarrass Manchin’ by putting the Zombie Build Back Better bill to a vote.

So which way the Democrats 2022-24? The way now points to a new debacle in 2022, concessions to McConnell the next two years, and a likely resurgence of the right 2022-24. In 2024 it’s like there will be a return of a more clever Trump-like candidate in a DeSantis or something–if not Trump himself as Democrats bungle their January 6 investigation and their Attorney General Garland continues to go slow on Trump.

In short, the political crisis of Democracy in America will continue to deepen, the US economy will stumble along at best, and concerned Americans will have to decide whether to throw their support again, a third time, to Democrats who have proven twice now incapable of resolving the twin crises of democracy decline and faltering economic recovery. The old saying of ‘Fool me once, shame on you; fool me twice, shame on me’, applies here.

Democrats have been given a majority control of the Presidency and Congress twice–in 2009 and 2020–and have failed twice to deliver anything but tepid, and ultimately insufficient, policies. The first in 2009 as tragedy; the second in 2020 as farce, as the saying goes. History now shows both parties–Republican and Democrat–are ultimately controlled by corporate interests. Perhaps a more accurate description today should be in America today we have now a single party, a Corporate Party of America, with two wings, Democrat and Republican.

Should voters choose to get fooled a third time is the question? Or should they perhaps seek a different, independent organizational alternative? If the latter, there’s no time to lose since Time is clearly running out.

Dr. Jack Rasmus
December 20, 2021

Watch my Youtube interview of this past week on Neoliberalism and its future (or not) in USA, with Pat Cummings & Greg Godels of ‘Coming From Left Field’ show.

We discuss origins and future of Neoliberalism and related subjects at length over the course of 75 minute show. Topics included: US economic restructurings since 1910, Neoliberalism as 3rd restructuring in wake of 1970s decade crisis, Neoliberalism’s material basis as policy and economic restructuring, the ideology of Neoliberalism, 4 core economic policies of Neoliberalism, Trump’s effort to create a more virulent form of it, why Biden’s a neoliberal, the current crises of political democracy and parties in the US, and prospects for what comes next this decade.

To watch on Youtube Go To:

https://www.youtube.com/watch?v=-iQxgGse0ZY

To watch on Apple Podcast Go To:

https://podcasts.apple.com/us/podcast/coming-from-left-field-video/id1553630022

To listen to audio only on Spotify Go To:

December 3:  (Jobs Report, Inflation, & Artificial Intelligence vs. Future Jobs)

https://drive.google.com/file/d/1VXjuDp8ukUiBE4GKTr0bl7Sy_EXVK1Pn/view

November 26: (Consumer Spending, Supply Chains)

https://drive.google.com/file/d/1iJOZIom_G2cud0PIROSTDIscBQGs5WG7/view

November 24: (Fed Powell Appointment, Inflation & Interest Rates)

https://drive.google.com/file/d/1PLjoemK6h5nVeF9IvVK5ZgoMpx9NOJH8/view