For my assessment of the effects of the US central bank’s raising US interest rates last week (and plans for more), the impacts on US and global, and coming US tax cuts and infrastructure spending, listen to my Alternative Visions radio show…
Go to:
http://alternativevisions.podbean.com
SHOW ANNOUNCEMENT:
Dec 16th, 2016 by progressiveradionetwork
Dr. Rasmus reviews the US central bank’s decision this past week to raise rates, with three more hikes coming in 2017 (and more after in 2018-19). What’s really behind the Fed’s rate hikes’ decision? Why US economic elites have decided to shift policy to boost corporate and investor incomes more from fiscal policy in 2017 and after than from monetary policy over the past eight years, 2008-2016. What’s the impact on the US real economy from the shift and why it may not be as great as pundits predict. Why rising rates for the rest of the rest of the US economy may destroy more jobs than infrastructure spending may generate, and the former happen faster than the latter. The outlook for US housing, autos, retail sales. Why real wages may fall. How the euphoria of US stock markets conceals areas of real economic weakness that continue and may grow worse. Jack further reviews the effects of US Fed rate hikes on Europe, China and emerging market economies in Latin America and South Asia. How emerging markets are already now experiencing currency declines, capital outflows, financial instability, and will experience deeper recessions in the year ahead; why Europe will continued slow growth and stagnation and why China’s currency, the Yuan, will devalue beyond its trading band in coming months due to US rate hikes and dollar rise, and may intensify a US-China trade war.
Very good presentation but I hope at some point there is a historical review of what Reagan did. Under Regan, there was an enormous “budget busting” Pentagon budget, which prompted many complaints from what were then known as liberals. There are two issues; one is, why is it that the fiscal spending on the military almost never creates many jobs——– I suspect that say an aircraft carrier is about as capital intensive as any fiscal spending can be and the same critique can be applied to say the Trump fiscal spending on infrastructure, a poor job creator. Second, per David Stockman, part of the purpose of the “budget busting” Pentagon spending of Reagan was to create huge deficits to give political cover to destroy social security and medicare; doesn’t the Trump/Obama/Bush I & II tax cuts have the same purpose?
David Baker