Feeds:
Posts
Comments

Brazil is transitioning to a greater political crisis based on events of the past week, May 2017. The origins of the political crisis, however, are economic. Business and right wing forces precipitated the legal coup of 2016 to put their political representatives in direct control to enrich themselves again. The coup, however, was made possible only by the Brazilian economy’s deep recession of recent years, which was precipitated by its central bank raising interest rates to 14.25%, in order to prop up the value of its currency and prevent the collapse of assets of the wealthy.

How the Brazilian economy collapsed into recession was addressed in chapter 3, ‘Emerging Markets Perfect Storm’, in my 2016 book, “Systemic Fragility in the Global Economy”, Clarity press, 2016. (see the book icon on the front webpage of this website for reviews and more detail).

To read the chapter’s excerpt on Brazil’s economy, go to the following url to the ‘articles’ subpage on my website.

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

While pundits, press and politicians hype a US economic recovery underway today, listen to my contrarian view focusing on some of the weakspots in the US economy that may result in a continuation of the sub-par trend that has been the hallmark of the US economy since 2010.

To listen go to:

http://www.alternativevisions.podbean.com

or go to:

http://prn.fm/?s=Alternative+Visions

SHOW ANNOUNCEMENT

Last week the US stock market experienced a major hiccup as it now appears the US economy is softening in areas and the ‘Trump Trade’ may not materialize. Dr. Rasmus explores the soft spots in the US economy in US policy, business spending, household consumption, trade and government spending. Consumer and Corporate debt data released by the NY Federal Reserve raises a red flag. Rasmus explains the relationship between debt, income to service debt, and terms and conditions affecting debt payments and the importance of these relationships to the US economy. Why jobs and real wages are not going to improve much more, why household debt is now greater than in 2008 and business debt twice the levels it was in 2008. Rasmus predicts the US economy will grow less than 2% for the entire year, far less than the Trump administration’s prediction of 3-3.5%, and explains why this will be so. (Next week: review of the Trump final budget proposal of spending cuts, defense spending increases, and tax cuts).

Greek people are again protesting against yet another annual tightening of austerity by the Troika. The Syriza government agrees again, as in 2016, 2015, 2012, and 2012 to demands by the Troika to impose even harsher austerity terms.

Watch my 10 minute video interview summarizing the emerging protests and strikes. (Check out my 2016 book, Looting Greece, on this blog)

To watch the interview, go to:

http://newsvideo.su/video/6799384

Today France elected Emmanuel Macron, the former banker, as its next president. The voting result was 65% for Macron, a newcomer in the election cycle who didn’t even have a political party, but who did have the massive business backing and traditional political elites united behind him, providing unlimited media and financial assistance to his campaign.

Approximately 25% of all voters in France, the most in nearly fifty years (since 1969), abstained from voting, however. It is also estimated that 25% of Macron’s 65% vote margin were voters who voted ‘against Le Pen’ and the far right national front party, and did not vote ‘for’ Macron. How solid is Macron’s support, and whether the French people support what will be his continuation of European neoliberalism, remains to be seen.

Macron’s victory as an ‘independent’, with no party, just a ‘movement’ called En Marche, was made possible by several unique developments during the recent election cycle.

First was the convenient scandals that early on knocked out of the election cycle his other business-backed challengers, Juppe and Fillon. It appears the political elite may have encouraged the publicizing of the scandals in order to unite business, bureaucracy, traditional elites, and professional classes behind one candidate, the newcomer Macron. Business interests were thus united, while the left and right alternative parties were divided.

Another convenient development enabling Macron’s election victory was the failure of the French left to unite early behind a challenger. The Socialist party’s candidate, Benoit, was burdened with the massive failure of the Socialist Party that ruled France under Francois Holland, the outgoing president, who leaves office with barely 5% popularity. Benoit’s candidacy in part split the left alternative. The strongest ‘left challenge’ was led by a new face, Melenchon, who started late in the campaign and could not shift the election media-driven message from ‘vote for Macron to stop Le Pen and the far right’. Other left parties failed to unite behind Melenchon as well.

A tactical failure in the campaign appears to have been the ‘leaks’ posted on the internet about Macron’s campaign and backers. Whoever was behind them is unknown, but the leaks appeared just a hour before the ‘black out’ on the election last friday, not enough time for voters to digest the results. As in the US, the media and Macron are now claiming Russian hackers were behind the leaks.

Other similarities with the US 2016 election are also interesting. US voters last November rejected the US Democrat party’s neoliberal policies advocated and defended by Hillary Clinton, thinking they would get something else in Trump. Trump won by creating the appearance he was against these policies. However, in just 100 days it is now clear Trump represents a continuation of the same US neoliberalism–with a nasty social twist of anti-immigrant, anti-environment, anti-social program overlaid on traditional pro-business tax cuts, deregulation, and bilateral free trade proposals.

Macron further represents a strategy to save European neoliberalism similar to that which Britain and the US economic elites put forward in the 1990s when they put Tony Blair and Bill Clinton in office.–i.e. so-called ‘new democrats’ at the time. Emmanuel Macron is France’s ‘new democrat’, and a reflection of elites in France putting a ‘shiny new young face’ on its prime politician just as UK elites did with Tony Blair and US with Bill Clinton. Macron is thus the ‘Tony Clinton’ (or ‘Bill Blair’ if you prefer) of France. However sustaining a ‘Tony Blair’ or ‘Bill Clinton’ strategy and solution in France may not be possible at this juncture, nor in the case of France in general. Time will tell if the ‘shiny young new face’ solution works in France, given its current discrediting in UK and US.

Macron is also a former banker, and therefore also represents the trend of a deepening influence and control of bankers and finance capitalists in the governments of the advanced economies like the US, UK, Japan and Europe in general.

In the US, big bankers like Goldman Sachs now run nearly all the key cabinet positions and agencies in the US administration under Trump. Under Obama in 2008, all the recommendations for cabinet-agency positions put forward by the megabank, Citigroup, were eventually adopted by Obama. France 2016 appears a continuation of this trend, as banker-finance capitalists maneuver in new ways to retain their dominance of the political system in the advanced economies in an age of growing economic disruptions.

Macron has promised to pick up the baton of ‘labor reform’ in France introduced by Socialist Party Holland. That means laws that will weaken unions, collective bargaining, allow firing of workers, eliminate strikes, cut social benefits, privatize the healthcare and education systems in France. So now the conflict in France moves from the electoral arena to the workplace. During the recent election cycle shopfloor resistance in France continued to grow rapidly. Many unreported short strikes were called to protest the plans to implement the new anti-worker labor laws. It is not unlike what began to occur in 1967 as DeGaulle and the capitalist parties laid out plans to strip workers of rights and benefits. That plan resulted in nationwide strikes and a shutdown of the economy and widespread protests called ‘May 1968’, which in turn led to the resignation of then president, DeGaulle. Will Macron’s presidency be a repeat? Is France now embarking on the same trajectory with Macron, who like deGaulle, has vowed to aggressively implement the anti labor reform laws? The largest union in France, the CGT, has already called for more intense opposition at the company level and preparation for a general strike. Whether Macron, a champion of the anti-labor laws is willing to stake his presidency on the direct conflict with labor at the economic level will be interesting to watch.

As US workers today cross their fingers and hope that Trump isn’t lying about bringing jobs back to the US (which he is), France’s workers may be preparing for a confrontation in coming months of a more united and militant kind. It will be interesting to see how far the Macron-Business-Banker elites in France are willing to go to face off the growing militancy ‘from below’ in the coming months.

In any event, with the election they have bought themselves some additional time. Watch the stock markets boom in Europe on Monday, as investors intensify their financial bets on the rise in stock markets in France, Europe and elsewhere and cash in on yet more capital gains and financial profits.

These are strange times in American politics. And stranger still is the emerging character of the Trump presidency. Events are appearing with growing frequency, raising the question who is really running the White House and the US government? Is Trump really the President?

Trump sits there on the second floor, spending late evenings into early mornings tweeting to the world. In itself, that’s politically weird. But even more strange is what he’s tweeting and the next day fallout.

We hear about the aircraft carrier task force in Asia that was reportedly steaming at full speed to the North Korean coast a few weeks ago, only to learn soon after it was actually headed in the opposite direction to Australia. Did Donald imagine that? Was the US Navy informed or requested by its titular commander in chief to turn around and go north…and then didn’t? Was Trump’s command to go north perhaps countermanded by some head of Naval operations, or maybe someone else in the White House or government? Or did he just imagine it all and never even informed the Navy to head to Korea? All the possibilities are strange. Very strange.

And then there was the tweet by Trump that his big budget was going to be announced in a few days. It wasn’t even prepared. Government bureaucrats had to quickly slap something together in a couple of pages to provide to the press.

Trump did it again, tweeted announcing his big tax cuts. Again the bureaucrats were caught off guard and had to throw some general outline together and issue it to the press. All this happened after it was generally known that the tax cut proposals were not going to be developed until late summer, and that the Obamacare Repeal bill had to go forward first. The Obamacare repeal was a necessary prerequisite for the general tax cut. Its $592 billion in tax cuts for business and investors had to come first. Until it was resolved, it made no sense to publicize elements of the yet bigger tax cuts of trillions of dollars more scheduled to follow. But Trump tweeted it anyway, and the bureaucracy jumped, putting something down on paper. Who’s communicating what to whom? Is Donald just lobbing electronic policy missiles out of the second floor of the White House, hoping some bureaucrat will catch them before morning?

Or perhaps Trump is being allowed to sit up there on the second floor of the White House and do his tweet thing, while others actually run the government. By others, perhaps it is vice-president Pence in charge, working with some inside committee of key cabinet officers and the intelligence spooks in the NSA-CIA-FBI?

Is Trump being allowed to ‘play at President’ for public consumption, while the generals, spooks, and Goldman Sachs financial pirates run the show?

It’s hard to believe that the members of his administration and the government State bureaucracy knew in advance of Trump’s recent tweets welcoming Philippines President, Duterte, to the White House. Or that Trump would tweet recently that he’s willing to meet with North Korea’s president, for whom he, Trump, had great respect. You can imagine the political constipation that comment caused the spooks and the generals in charge of State, Defense, and National Security.

Last November 30, 2016 this writer wrote a piece predicting that Trump the right wing populist would be successfully ‘tamed’ by the political elites of this country that really run the show. I laid out some ideas how that would be accomplished. (see my blog, jackrasmus.com). But I didn’t think it would happen so fast and so easily.

The past month has witnessed Trump doing a total ‘about face’ on virtually all his right wing populist proposals during the election. He’s backtracking so fast it’s a wonder he hasn’t tripped over himself. (Check that, he has). What explains his 180 degree turnabout?

Was his talk of right wing populism during the campaign all political election hype? Tell the people whatever they want to hear to get elected, and then go do whatever the moneybags really running the show want from you—which is big tax cuts, massive across-the-board deregulation, end the taxation on Obamacare and we don’t care what happens to the rest of it, give us some infrastructure spending deals that resurrect wheeling-dealing commercial property investments with big tax loopholes, and just tweak and rearrange existing free trade treaties.

So what we actually got so far from Trump during his first 100 days is government by ‘executive orders’—i.e. repealing environmental protections, gutting immigrants’ rights, going after sanctuary cities, opening up national monuments and parks to mining and cattle exploitation, subsidizing killer coal companies, attacking consumer protection, smoke and mirror changes to H1-B skilled worker import quotas that haven’t changed, gutting K-12 education and shifting funds to private schools from public, opening up offshore drilling, and so on. But elsewhere it’s been a wholesale retreat from his election positions, proposals and promises. Here’s a short list:

Trump does a reversal on China, from declaring it a currency manipulator to offering it major concessions at the Mar-a-Lago meeting, in exchange for help with North Korea. One wonders if China’s offshore islands expansion is also part of the deal.

From NATO is a waste of money and unnecessary, Trump shifts to NATO is the great bulwark against Russia. From Putin the great leader to Putin is responsible for Syria using poison gas–of which still no proof thereof by the way. (Is it true, or is it all in that great American tradition of ‘yellow cake’ (2003), ‘babies thrown from incubators’ (1990), ‘tonkin gulf’(1965), ‘the war on drugs’ (Panama invasion), ‘Soviets are in Grenada’, and ‘remember the Maine’ (Spanish-American War) incidents that always precede and justify US going to war).

From Mexico is going to pay for the wall, to there’ll be no wall (latest per Homeland Security Secretary). From dumping NAFTA, to ‘I’m not going to terminate NAFTA’ (Trump quote).

And then there’s Trump’s staged press conferences with companies like Carrier Corp., indicating they’re not going to export some jobs to Mexico for now (as they continue to plan to export still others at the same time). And the list of companies announcing jobs they intend to hire in the US without saying when, or that they already had planned to hire them anyway prior to the press conference.

From cancelling the TTP free trade deal (already killed in Congress), to declaring a reopening of the TTIP free trade deal with Europe. And what about the silent deal Trump struck with Japan’s prime minister, Shinzo Abe, when he was here? It’s been leaked that Japan will pick up the lead on the TPP renegotiations and the US will join it later. Or Mexico’s recent offer to the US to just apply the TPP terms to a new ‘reform’ of NAFTA by Mexico and the US? Watch both these back door free trade resurrections, they’re coming too.

And what about Trump’s organizational about face, with right wing ideologue Steve Bannon banished from the National Security Council and pro-Russia general Flynn banished from the government?

What I also find interesting is the intense media attack on Trump— focusing on his Russia connection, his tax returns, nepotism in the White House, his companies’ benefiting (a violation of the emoluments clause of the US constitution) and calls for impeachment in Congress—all of sudden all the above have disappeared from view in the media front page. They’ve been put on the back burner in Congress and the press. And there’s no more damaging leaks coming weekly from the intelligence spooks either. Instead, what we hear is talk about ‘now he’s coming around’, beginning to appear presidential! Is all that just coincidental? Hmmm.

Is this a presidency where the Donald gets to sit on the second floor of the White House and do his late night tweets, and the bureaucrats scurry the next day to clean up? Where Donald is brought downstairs to the oval office for Executive Order signings or occasional reporter interviews and then trotted back upstairs? Is it a presidency where he makes his late night calls to his moneybag friends, like the billionaire Mercers and others, to find out ‘how am I doing guys’? While the rest of the representatives of the economic and political elite run the show?

Is this a Trump presidency, or a government by Generals-Goldman Sachs-Pence, with son in law Kushner functioning as intermediary between them and the Donald? A government of second floor tweets and first floor executive order signing events?

The quality of the American presidency has been in steady decline for decades. From the crook Nixon to the inept peanut farmer, Carter; from the movie-actor, camera friendly Reagan to the morally sleezy opportunist Bill Clinton; from know-nothing George Bush to the super-cautious false progressive Obama; and now to the fake right populist, blowhard, tweety-bird called Donald Trump.

We’re going to need a lot of luck to get through the next three and a half years folks!

What does last week’s elections in France portend–for that country’s growing social and political polarization, for Europe, and parallels to the US? Listen to my Alternative Visions radio show of April 28 as guest and eyewitness to the election, Alan Benjamin, and I discuss this important event.

TO listen to the show go to:

http://alternativevisions.podbean.com

or to:

http://prn.fm/?s=Alternative+Visions

SHOW ANNOUNCEMENT:

The show welcomes back guest, Alan Benjamin, an eyewitness to the recent elections in France last week, to discuss what’s going on in France. Will the right wing, Le Pen party, win in the runoff election coming up in a couple of weeks, or will the candidate backed by the French business and political elite, Macron, win? What are progressives and the left doing in response? Who is the progressive candidate, Melenchon, and how he almost made it to the runoff election. Behind the elections are the deteriorating economic conditions in France, as throughout Europe, and a growing attacks on jobs, wages, healthcare services, pensions and other benefits by French business elites. Benjamin explains the anti-worker law and privatizations of healthcare and education behind the election, driving resistance now taking place ‘from below’ that will aggressively reassert itself after the election. Is France headed for another ‘May 1968’ general strike? What are the parallels to conditions and developments in the US today? Jack Rasmus briefly introduces the show with comments on today’s just released US first quarter 2017 GDP figures, showing only a 0.7% growth rate in the US—a forecast predicted by Jack in the January 2, 2017 Alternative Visions show. (Next week show: Trump’s 100 Days record and what it means plus a deep analysis of Trump’s budget and tax cut proposals)

Today, April 26, 2017, Trump announced the outlines of his proposal for the latest trillion dollar business tax cuts that have been a hallmark of US neoliberal policies since 1978. Trump’s tax cuts are the policy centerpiece of his regime. They are what he and the entire US capitalist class have agreed on, unlike some of Trump’s ‘right wing populism’ proposals on which he ran during the 2016 elections. Those right wing populist proposals are now being swept off the table by Trump himself, as he retreats quickly during his first 100 days from those popular appeals. (Another article and analysis coming on that shortly).

The real essence of Trump policy is massive tax cuts, across the board deregulation, and renegotiating of free trade deals so US business gets a bigger cut from its global capitalist competitors as the global trade pie continues to grow more slowly and shrink in the period ahead. All the rest populist appeals–the wall, create jobs in the US, NATO, Russia, Syria, China, immigration, Obamacare repeal, etc. are secondary and will be removed as policy obstacles to enable the tax cuts, deregulation, and free trade deal renegotiations.

In terms of tax cutting, the Trump proposals are the initial down payment of his proposed $6 trillion more in tax reduction, almost all of which accrue to business, corporations and investors.

These proposals represent Trump as part of the Neoliberal tradition in the US going back to 1978-80.

Reagan proposed a $792 billion tax cut in 1982. More tax cuts followed in 1986. Clinton cut taxes in 1997-98. George W. Bush cut taxes by $3.4 trillion in his first term, 80% of which accrued to businesses and the wealthiest households. He added another $350 billion in tax cuts for multinational corporations and another $100 billion for energy companies in 2005-06, and another $180 billion in 2008.

Obama was an even bigger tax cutter than Bush. His 2009 fiscal stimulus bill provided $300 billion in tax cuts, which he increased by $800 billion in late 2010 as recovery faltered. He then extended Bush’s tax cuts by two more years, worth another $450 billion. Obama cut a deal with Republicans in late 2012 called the ‘fiscal cliff’ compromise, which extended the Bush tax cuts another 10 years at a cost of $5 trillion.

So Bush’s tax cuts amounted to more than $4 trillion and Obama’s more than $6 trillion. More than $10 trillion in tax cuts, in other words, under Bush and Obama alone, before Trump begins his latest round of tax giveaways to business, investors and corporations.

A good deal of the income inequality in America is due to the massive tax shifting for more than three decades. So is the rise of the US government debt from $4 trillion in 2000 to more than $19 trillion today. Studies show that collapsing tax revenue is responsible for 60% of the deficits and debt in the US. (For another detailed look at that, see my piece ‘The Eight Real Causes of Deficits and the Debt’, on this blog).

The Trump tax proposals are a repeat and acceleration of the Bush tax cuts, which Obama extended, but even more aggressive in handouts to the rich and their corporations than provided by Bush-Obama.

For my analysis of the Tax Shift before 2000 and Bush-Obama-Trump, see my website, where I’ve uploaded chapter 2 from my 2005 book,’The War at Home: The Corporate Offensive from Reagan to Bush’. It is available on the website at:

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

The ‘War At Home’ book documents the various policies, including tax policies, by which $1 trillion a year, every year, up to 2005, was being shifted from working and middle class incomes to capital incomes–a centerpiece of Neoliberal policies since 1978. The book is available from this blog or the website for discount at $10, or on Amazon.