Listen to my recent 45 min. interview with WKPN Radio on the origins and conditions on the eve of the current Coronavirus precipitated economic crisis. How Neoliberal policies prior to February 2020 created a fragile US economy, heavy susceptible to the virus effect when it occurred. How the virus precipitated, exacerbated, and accelerated the economic crisis once the virus hit the economy. Will the central bank, the Federal Reserve, be able to prevent the deep contraction in the real economy from setting off a financial crisis in its wake? Will the Fed’s $9T (and rising) free money being injected into both banks and non-banks of all sizes prevent a wave of defaults and deflation that might in turn ‘freeze up’ the banking system? Why the current crisis in the economy won’t result in a rapid V-shape recovery soon and why any ‘recovery’ will be very slow under the best of conditions with no banking crisis in particular.
TO LISTEN TO THE INTERVIEW GO TO:
https://soundcloud.com/wpkn895/why-our-economy-fumbled-covid-19
Pre-Coronavirus Origins of the Current US Economic Crisis–audio
April 27, 2020 by jackrasmus
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While the capitalist system has undergone numerous restructurings throughout its history, capitalist elites purpose in restructuring has remained the same: to restore and/or extend their hegemony. The current restructuring, operative since 1978, is called Neoliberalism. The book examines Neoliberalism as both an Idea and an historical practice composed of a particular mix of fiscal-monetary-trade-industrial policies that began with the latest US capitalist restructuring in the late 1970s, continuing to evolve to this day. The book further explains the deeper material forces giving rise to - as well as now undermining - the Neoliberal policy regime, with special focus given to the crisis of Neoliberalism in the wake of the 2008-09 global crash, Obama's failure to resurrect it, and Trump's current doomed effort to restore it in a new, more aggressive form. Evidence why Neoliberalism is destroying US Democracy concludes the book's analysis.
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(Click on image): This book offers a new approach to explaining why mainstream economic analyses have repeatedly failed and why fiscal and monetary policies have been incapable of producing a sustained recovery. It explains why the global economy is slowing long term and becoming more unstable, why policies to date have largely failed the trend, and why the next crisis may therefore prove even worse than that of 2008-09.
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Dr. Jack Rasmus @drjackrasmus
Jack Rasmus 
With respect, I did not understand your response to the question as to whether or not the Fed with its injections of trillions of dollars to the banks and other corporate entities is in effect, close to default. In other words, is this real money? How can the Fed run deficits forever? Are these injections ever paid back?
Yes, it’s money as ‘real’ as any other created when the private banking system makes loans into the economy, backed up by Fed providing the banks the money in their electronic accounts they have at the Fed. The $9T and rising Fed injections into the banks is to ensure when defaults in the general economy rise that the banks will not have to absorb those losses. If they did, it would mean the banks would stop lending because the debt from the defaults would then become their own debt. Can the Fed run deficits forever? It spent $4.5T bailing out the banks last time; it’s spending $9T+ this time before the banks even have a crisis. It’s a pre-emptive bank bailout! Never happened historically this way before. The Fed ‘got back’ only $.5T of the money it injected into the banks 2009-16. Not any more likely it will ‘get back’ the $9T+ this time either. So never paid back. How much a deficit of its own (Fed) can it accumulate? No one knows when how much will be too much. It’s new territory.