Feeds:
Posts
Comments

It is now clear that Trump is adopting a strategy similar to Richard Nixon in 1968, focusing on ‘law and order’ first, with the message that the causes of current US economic discontent are a consequence of breakdown of law and order. Trump, like Nixon before, by linking the two issues of ‘law and order’ and ‘economic discontent’ (and in turn linking the breakdown of law and order with immigration as its cause) is telling disaffected American voters that law and order is a solution to their economic fears and concerns. ‘Law and Order’ and ‘Anti-Immigration’ are themes designed to deflect voter attention from the real causes of the continuing collapse of US living standards for tens of millions–for which Trump in his speech has made no real proposals.

For more on Trump’s ‘Law and Order’ and ‘Bash the Immigrants’ in lieu of policies and proposals to do something about US economic conditions, listen to my July 22 Alternative Visions radio show commentary, and why Trump has a better chance of winning the November election than mainstream pundits and press think.

Trump is unlike all the other candidates, Republican and Democrat alike, in the current election cycle. Nor is he like Reagan. Like Nixon, he is another high risk taker and ‘roll the dice’ wheeler-dealer who will risk all the get elected. And if elected, will engage in high risk adventures that will destabilize a global capitalist system already growing increasingly weak and unstable.

For more on this analysis….

Go To:

http://prn.fm/category/archives/alternative-visions/

Or to:

http://www.alternativevisions.podbean.com

SHOW ANNOUNCEMENT:

Jack examines in detail Trump’s acceptance speech and its non-traditional Republican themes criticizing Free Trade, US national debt, NAFTA, China, offshoring, taxes, military spending-NATO, and related topics. Trade issues are paramount but represent pandering to working class discontent over the loss of jobs, wage income decline, and chronic US economic insecurity since 2000. Trump’s specific proposals for trade are dissected, including his claims to ‘tear up’ NAFTA, impose 35%-45% tariffs on Mexico and China, stop China currency manipulation, offshoring, anti-immigration wall, etc.—all of which represent pandering to working class discontent. Trumponomics = ‘Law and Order First’ economic recovery plan. How Trump is cleverly targeting disaffected working class voters in key swing states of Pennsylvania, Ohio, Michigan, Wisconsin, Virginia, North Carolina, and Florida as key to an electoral victory in November. Jack predicts the election outcome will depend on who, Trump or Clinton, is able to turn in those states the white working class, un- and under-employed 20-something youth, Hispanic, and independents voting blocs in those key states. Who has the bigger base, and who (Trump or Hillary) can turn out more of that base in these key states will determine the outcome. Trump has the advantage currently in turnout, Jack concludes as Hispanics and disaffected youth may sit home during the election. Trump could win. Much will depend on the TV debates.

With the Republican and Democrat party conventions in progress or upcoming, it has now become clear that the 2016 USA presidential election is unlike preceding elections in recent decades. Large percentages of those who consider themselves members of either party do not approve of their presidential candidates, for one thing. That includes more than a third of both Republican and Democrat voters. For another, both candidates have assumed positions on issues that in previous elections would have been considered anathema to the dominant ruling economic and political elites. For example, both candidates have been highly critical of US trade and free trade policies—especially Trump.

Trump’s more vehement criticism of US trade policies in particular has US elites concerned, to put it lightly. Almost hysterical might more accurately express their emotional state when the subject of Trump and trade is raised.

US Elites Nervous About Trump & Trade

For example, the president of the biggest and most influential US business lobbying group, the Business Roundtable’s John Engler, a former governor of Michigan, in a recent interview stated “There’s a great sense of frustration here”. Trump’s views on trade are ”diametrically opposite” and a “cause for great concern” to the Roundtable, whose corporate members collectively represent more than $7 trillion in annual revenues and employ 16 million workers. “Everything has been upended”, according to Engler.

Chicago billionaire, Penny Pritzker, current US Commerce Secretary, has voiced similar concerns, as has Obama—i.e. Pritzker’s protégé since his early days in the Illinois state legislature. While Obama the candidate in 2008 promised to rewrite the NAFTA free trade treaty if elected, as soon as he was elected he morphed into the biggest presidential advocate of free trade in US history—thus coming around to the view of Pritzker’s Chicago corporate clan of free traders. Most politically well-connected economists, and media mouthpieces in and out of academia—like Paul Krugman, Thomas Friedman, and a host of others—all defend free trade and therefore have joined the growing army of pundits attacking Trump’s positions on the subject. Christine Lagarde, director of the Washington-based and US dominated International Monetary Fund, IMF, has chimed in recently as well, labeling Trump’s trade proposals “disastrous” for the world economy. The presidents of the NAFTA economies—the USA, Canada, and Mexico—recently met in their ‘three amigos’ NAFTA summit in Ottawa, Canada recently and jointly reaffirmed their elites’ view of the benefits of free trade, and the dangers of ‘Trump-like’ trade protectionism.

According to the academic theory of free trade all countries involved benefit from trade. But do they? Free trade theory says nothing of how the benefits get distributed and to whom—i.e. to corporations, investors, and shareholders or to wage earners. If corporations and investors benefit on both ends of the trade exchange, the same is not necessarily so their respective working classes. Free trade theory conveniently ignores income distribution effects. However, that doesn’t deter mainstream economists treating it like a ‘holy grail’ of neoliberal economics nonetheless.

Trade and Working Class Incomes

The record of US free trade policies for working and middle class America reveals devastation, not benefit. For example, total US employment since NAFTA and China trade the past two decades has witnessed a loss of more than 6 million US manufacturing jobs. Perhaps as many as two thirds of which have been due to free trade alone, according to studies. Additional millions of jobs have been lost in communications, professional services, and other non-manufacturing industries. For the jobs that remain, moreover, wages in US companies that export more have risen less than wages have fallen in companies harmed by the rise in imports. The net result is that both jobs and wages—and therefore median working class incomes—are both negative. And that’s due to direct export-import effects. There’s more.

Free trade is also about money and investment flows, as well as goods and services net export-import flows. Read the provisions of NAFTA. It’s as much about terms and conditions for US corporations ease of US money investing into Mexico as about goods and services. With free trade enabled money and investment outflows from the US have come US investment offshoring and consequent US job offshoring. Job offshoring is thus an indirect, and no less significant, consequence of free trade. In the past 15 years, US households’ median wages and incomes have declined by more than 10%–much of that due to the above free trade direct and indirect job and wage effects.

In the past two decades, and especially since 2009, US workers have become more informed and conscious of the negative impact of trade on their jobs, incomes, and living standards. They see the wealthiest 1% of household take 95% of all the net income gains since 2010, while their wages and incomes decline. They see high paying manufacturing jobs disappear to other countries, while more than half of the jobs that have been created in the US since 2010 have been low paying, part time, temp jobs averaging less than $36k a year. And they sense even less opportunity for their children. Recent reports project that more than 90% of new jobs created in the next decade will earn about the same $36k a year. Due to all this, they are, legitimately, pissed off.

Trump has identified and played to this discontent. That Trump is popular and leading in polls in states with a high concentration of white, middle age and up, male, non-college educated working class voters is not surprising, given his aggressive criticism of US trade policies and their devastating effects. Trump has embraced the trade issue in no uncertain terms, and his attack on US trade policies have resonated deeply with this working class segment—i.e. a voting bloc in key swing states and a group that cares little what Trump says on other non-economic issues, however outrageous, whether on race, ethnic, gender, foreign policy, or other subjects. Trump speaks to their ‘rage’ at being ignored by US political and economic elites now for decades, and especially since the 2008-09 recession, the recovery from which has mostly passed them by, as well as to their fears for future prospects for their children. The more that US economic elites, in whichever party, attack Trump the more this working class bloc is convinced he, Trump, must be for real because they’re attacking him.

Donald Trump: Populist or Panderer

The important question, however, is whether Trump is honestly serious about changing US free trade policies, or whether he is just cleverly pandering to the discontent of this bloc of working class voters. He has called for ‘tearing up’ the NAFTA treaty; imposing tariffs on imports from China and Mexico of 45% and 35% respectively; stopping China from manipulating its currency; and building a fence to stop immigration flows from central and Latin America.

But he won’t say what he means by ‘tearing up’, which therefore appears more a rhetorical appeal than a proposal. If he means it literally, treaties cannot be ‘torn up’ by Presidents in the US system. That’s potentially grounds for impeachment. Nor has any president legal authority to unilaterally raise tariffs, except temporarily for 150 days and no more than 15%, after which Congressional legislation is required, according to the 1974 trade act. Nor is Trump correct that China is a currency manipulator, since for more than a decade now China has pegged its currency, the Yuan to the dollar in a narrow trading band. Its Yuan has risen and fallen in synch with the US dollar. If any countries are currency manipulators, they are Japan and the Eurozone—both having made their currencies more competitive by 20%-30% to the dollar by monetary means in recent years in order to gain exports at US expense. But one hears nothing from Trump (or US elites) complaining about Japan or Europe currency manipulation. And Trump has said nothing about changing US tax policies that subsidize US multinational corporations offshore investing and therefore promote job offshoring. And he conveniently ignores the impact of hundreds thousands of high paying tech jobs being given every year to tech workers imported to the US on H1-B and L-1 visas, most of whom come from Asia and not Latin America. Asian tech workers take high paying jobs Americans want; Latin American immigrants mostly assume ultra-low pay service jobs that US workers generally don’t want. Does Trump maybe want to build a wall along California beaches and pacific coastline as well?

Certainly Trump and his advisers know all this. One can only conclude, therefore, that Trump is not really serious about attacking free trade. He is pandering to those with a legitimate and serious real concern who have been deeply harmed by US trade policies. Trump is in that great US presidential candidate tradition, promising voters what they want to hear and then, if elected, doing whatever the economic elites want them to do. US presidential candidates, of either wing—Republican and Democrat—of the Corporate Party of America, are habitual liars and cannot be trusted. We had our pseudo-populist from the ‘left’, Barack Obama, elected eight years ago promising to reform free trade treaties. And he became the biggest free trade advocate in US economic history. In Trump, we have our Obama analog, a pseudo-populist this time from the ‘right’, promising the same. And who then will do the same. To paraphrase an ancient saying, US voters now considering voting for Trump based on his anti-trade views would do well to ‘Beware of Billionaires Bearing Gifts’.

To listen to my Alternative Visions July 15 radio show on the above topic,

go to:

http://prn.fm/category/archives/alternative-visions/

or go to:

http://www.alternativevisions.podbean.com

SHOW ANNOUNCEMENT:

A centerpiece of Trump’s campaign, that is gaining support for him among white working class voters in key swing states like Pennsylvania and Ohio, is his attack on free trade treaties from NAFTA to TPP. Today’s show examines the conditions behind the current stagnation of global trade the past 18 months, growing wage stagnation and income inequality in the US, and increasing US voters’ associating of their loss of quality jobs and declining wages with free trade. Dr. Rasmus briefly reviews policies in China, Japan, Europe, and the slowing of world trade. How US economic elites—from the Business Roundtable and others— are becoming terrified of Trump’s successful manipulation of voter discontent with free trade. The elements of Trump’s position on trade are discussed, including ‘tearing up’ treaties, imposing tariffs on Mexico and China, charges of China as currency manipulator, tax policy incentives encouraging job offshoring, and US visa policies. Jack critiques Trump’s positions and concludes that Trump—like Obama before and Hillary now—is simply pandering to the discontent and will reverse his promises on trade if elected. Pandering to the trade issue, however, may just provide Trump enough votes to win key states’ electoral majorities.

In conjunction with the Peninsula Peace and Justice group’s community TV project, Dr. Jack Rasmus is now presenting 10 minute Youtube interviews on topics of contemporary global economic and political importance. Below are the first three interviews in the series–on Greece’s debt crises, France workers protests against labor market reforms, and the economic origins of the recent UK ‘Brexit’ vote.

To access the Youtube presentation on Greece, go to the following:

To access the Youtube presentation on France Labor Protests against labor reforms, go to the following:

To access the Youtube presentation on the UK ‘Brexit’ referendum vote, go to the following:

To read this 5700 word feature article, pubished June-July 2016 in the European Financial Review of London, go to Dr. Rasmus’s website, kyklosproductions, at the following url:

http://www.kyklosproductions.com/articles.html

ARTICLE ABSTRACT

Dr. Jack Rasmus explains why mainstream economists typically fail to understand financial forces and variables and how they impact the real business cycle and long term growth. Their failure results in repeated mis-forecasting of major shifts in the global economy. The reasons lie in their training biases, insufficient general economic models, academic institutional biases, and other factors, it is argued. The failure to integrated financial variables properly leads to an over-emphasis on interest rates, central bank monetary policies, and traditional views of money and credit of declining relevance in 21st century global economy.

Listen to my latest analysis of the global contagion effects of Brexit, now beginning to emerge in the UK, EU, and beyond, from my Alternative Visions radio show, July 8, 2016, at the following:

http://prn.fm/category/archives/alternative-visions/

or:

http://www.alternativevisions.podbean.com

SHOW ANNOUNCEMENT:

Jack Rasmus takes an in-depth look at crashing financial assets in UK property funds and growing insolvent Italian banking system. Are these early signs of post-Brexit emerging financial instability? UK property funds are refusing investors their cash, Italian government is planning more ‘bail ins’ of depositors money to bail out its banks, now $400 billion in the red, UK and Euro currencies are falling, and financial asset prices are under growing pressure everywhere in Europe. Will (and how) might it spill over to the US economy? How political instability in Europe from ‘Brexit’ and spreading ‘Euroscepticism’ are being accelerated by growing financial and economic instability in the UK and Europe. Jack concludes with another take and critique of just released US jobs reports, showing how the two US jobs reports show dramatic different picture, how private job creation is being offset by public job losses, and why it’s impossible that involuntary part time jobs declined last month by 587,000. US jobs stats are increasingly unreliable, he concludes.

Listen to my June 1 Radio Show for my analysis of the economic and political consequences of the Brexit vote one week after. How the global new finance capital elite are, and may, react in response to the eventual breakup of the European Union, set in motion by the UK exit vote. To listen go to:

http://prn.fm/category/archives/alternative-visions/

or go to:

http://alternativevisions.podbean.com

SHOW ANNOUNCEMENT:

“As predicted last week, June 24, the initial scenario for the Brexit vote is not an immediately global financial crash. The threat is more intermediate than short term. The analogy is not Brexit as a ‘Lehman Brothers’ event, the US bank collapse that ushered in the financial crash of 2008-09, but more similar to a ‘Bear Sterns’ event, the US bank that collapsed in the US early in 2008. Brexit is a warning shot fired across the bow of the global capitalist economy, not the precipitating event for another crash. Jack explains how global investors are waiting to see what happens next before dropping the other shoe. Jack reviews the likely intermediate effects of Brexit on global markets—currencies, bond rates, stocks, real investment, deflation, productivity, bank lending, consumption, and GDP. The relative effects of Brexit on economic regions are also covered: the UK, EU, US, China, EMEs. Recession in the UK will occur first, Jack explains. Europe will stagnate further. Japan’s recession will deepen, the US will enter recession in 2017 soon after the elections. China eventually will have to devaluate its currency with severe global consequences—i.e. the effects of Brexit on financial markets and real economies is just beginning. Political instability in the UK, in both conservative and labor parties is reviewed, with splits deepening in both. What Brexit also means for growing political instability for France, Spain, Netherlands, and Italy; how Brexit is penetrating the US election campaigns, as US elites and corporate push back on both candidates. Jack warns the weak spots of global capital today are Italy’s banks and Japan, where the most likely next ‘Bear Stearns’ event will emerge. Longer term, the UK currency and London as global financial center are finished as global players.

Follow

Get every new post delivered to your Inbox.

Join 233 other followers