Jack Rasmus

By Dr. Jack Rasmus
Copyright 2024

Nearly all public polls in the USA today, and since the beginning of 2024, show that the number #1 issue for American voters is the condition of the economy. But listening to the debate this evening one would have heard little discussion about it—and even less about solutions—from either candidate.

The ABC moderators started off the discussion with what one hoped would have set a positive tone for the debate in that regard. They actually said the number 1 issue was the economy and cost of living and challenged both candidates with the appropriate phrase: “Is the economy better off today than four years ago!”

In her initial response of the debate, Harris jumped onto the issue by citing several of her proposals: a $6k/year child care tax credit for newborns, a tax credit of $50k for new start up small businesses, and a $25k credit for first time homebuyers. She then charged that Trump’s tax cut proposals provided $5 trillion for billionaires and businesses.

But that was the highlight of the evening in so far as actual economic issues were concerned. It went downhill from there.

Harris ended her first responses by saying Trump’s proposals for an increase in tariffs was a de facto sales tax on consumers amounting to $4k/yr. Trump replied it wasn’t sales tax and if tariffs were so bad why did the Biden administration continue his (Trump’s) first term tariffs that brought in hundreds of billions of dollars to the US Treasury. Those tariffs didn’t result in inflation in 2018-20, so why would his new tariffs do so now, he retorted?

Trump then dropped the economic ball altogether. Instead of informing the audience of his own economic proposals—like ending taxes on tips, ending taxing of seniors’ social security income (which was the practice before Reagan), or pointing out that he and JD Vance had already proposed a $5k child care credit—for all kids not just newborns—Trump just let it slide. He could have said Harris’s child care credit was a ‘me too’, announced after JD Vance had first raised the $5k credit. Even more surprising, Trump never mentioned throughout the debate his proposal to exempt social security benefits from income taxation, which would certainly have been popular to voters in swing states like Arizona and Pennsylvania with high populations of retirees.

Trump also failed to follow up on his own point that inflation the last three years ranged from 21% to 80%, depending on the item, and that grocery prices remains stuck at 35% higher compared to 2020 and gasoline 38%, according to the Wall St. Journal. He did mention egg prices in passing but didn’t say they were up 114%.

In other words, the phrase ‘are you better off today than four years ago’ disappeared at that point for the rest of the evening. Harris obviously not wanting to ‘go there’ and Trump strangely accommodating her.

Trump seemed to be fixated on the immigration issue, to which he returned again and again. But he spoke mostly in generalities and anecdotes and never cited the fact that more than 4 million illegal immigrants entered the country in 2022-23. Moreover, after declaring most of the illegals were criminals coming from all around the world, he turned ridiculous by saying in Minnesota the illegals were ‘eating cats’. Uh Oh!

At that point the moderators even jumped him citing the city manager of Minneapolis publicly said that was not true. No one ate cats in Minneapolis. One wonders how the moderators were so well prepared with that response, almost as if they were waiting for it to arise. Besides, that was not their job to add content via commentary.

At another point Trump correctly declared the Biden record on job creation was mostly ‘bounce back’ jobs as he put it that returned as the economy reopened in 2020-21. They therefore were not new jobs created under Biden. But if Trump had cited the net jobs created in 2017-2019 compared to Biden’s 2022-24 he may have been able to make a more convincing point.

Trump repeatedly declared Harris ‘had no plan’ for the economy. In a sense that was correct. Harris’s plan in the debate came down to three proposals: $6k child care credit, $50k start up business credit, and a one time reference she made to $25k assistance to 1st time homebuyers. These three hardly constitute a ‘plan’ but Trump said nothing to critique the points. For example, he could have pointed out that Harris’ proposals were applicable to only a partial segment of households in all three cases and that even together they would have a minimal impact on the economy. But he didn’t. Nor did he contrast his own measures to Harris—i.e. tariffs to bring jobs back to the US, no tax on tips, $5k child care credit, and no taxing of seniors’ social security checks. Nor did he elaborate on his tax proposals for business. Like Harris, not much of a plan either.

Neither candidate even remotely referred to the country’s current $2 trillion deficit this year, or the $35 trillion national debt, or the current interest payments to bondholders now more than $900 billion a year! Perhaps neither ‘wanted to go there’ since the cumulative deficits and debt under Biden so far is $7.2 trillion and under Trump was $7.8 trillion. Both know that would open a can of worms and perhaps lead to the likely logical consequence of the need in 2025 to engage in massive austerity cuts to social spending which is almost certainly coming after the election.

It might also have led to a more detailed discussion of tax proposals which, given their generosity to investors and businesses, neither candidate likely didn’t want to discuss in any detail.

At another point Harris declared that Trump’s first term trade deficit was a consequence of his selling out the US to China. Trump could have—but didn’t at that point—have cited Biden’s current trade deficit running at more than $100 billion/month and more than $1 trillion this year, the highest in US history.
Harris then went further re. China and said its president Xi was responsible for Covid, which also went unanswered by Trump.

Perhaps that would have sounded too much like he agreed with her since Trump has alleged that previously as well. That would be as far as either candidate discussed China for the evening.
The centerpiece of Trump’s plan and solutions for the economy—the #1 issue—has been for months now more tax cuts, without spelling out who would actually benefit from the cuts, since it would benefit mostly rich investors and businesses. The Congressional Budget Office, by the way, estimated Trump’s tax proposals would cost the US budget $5 trillion more over the next decade by 2034—which was in addition to his $4.5 trillion cuts introduced in 2017. It’s not surprising so many big CEOs have been recently rallying to his campaign—as they did in response to the same tax cut promises in 2016. Déjà vu.

At this point of the debate it was becoming clear Trump was passing up a lot of opportunities to score on the Biden-Harris economic performance of the past four years or to present a convincing alternative vision of his own. It was a big lost opportunity by Trump. Trump never pressed the question: ‘Are you better off today than four years ago?” Then came the discussion about abortion.

It has to be said Harris scored points on this topic although she spoke mostly in terms of generalities that women have the right to choose what to do with their bodies. She was very much ‘Trump like’ in citing horrifying anecdotal examples of women denied abortion medical assistance. One almost thought it was a state of the union pitch, with the victims sitting in the Congressional rafters. Everything but the lemming like applause from the Congressional floor.

She also probably scored points by saying Trump supported a national abortion ban, which he denied. However, she supported her allegation by citing actions by some of the states now deciding on the issue that have come close to just that, an outright ban. Trump defended his position of giving the decision on abortion to the states, codified with the US Supreme Court’s recent decision turning over abortion policy to the states.

At this point the ABC moderators came down on Harris’s side, threw a hardball at Trump and asked if he would veto a Congressional bill banning abortion. He prevaricated unconvincingly and without saying yes or no, said it would never come to a Congressional bill because now the Court had turned the decision over to the states.

Harris scored another point on this issue by alleging Trump was even against IVF for families, which he outright denied. Then Trump pulled another ‘eating cats’ faux pas by saying doctors in Virginia were deciding on whether to kill newborns. The ABC moderator jumped in on Harris’ side at that point again and said that wasn’t so. So much for neutrality. Moderators walked a fine line at times throughout the evening, and at times injecting commentary contra Trump and often to Harris’ advantage.

In the key swing state of Pennsylvania energy jobs from fracking are a big issue in the election. Harris was asked why she apparently changed her position recently on the issue and now did not oppose fracking. Her response was to deny she had ever changed. There was a lot Trump could have said to pin her down at that point but didn’t. Nor did he say anything about her about face recently on issues like lowering the corporate income tax even below Biden’s 37% proposal to her own now 28% (Trump proposed lowering from current 20% to 15%). Both candidates obviously have been courting big business campaign contributions as they race to see who gives more tax cuts to big donors.

With rising deficits and debt, and likely social program austerity cuts coming in 2025, clarifying their positions on the tax issue was important for voters. Who will pay to lower the runaway annual budget deficits? Will taxes be raised on business and wealthy? Spending programs cut? For the average voter how that is answered means a lot for their take home pay and perhaps even for many if they even have a job next year—since the US economy of late is showing clear signs of slowing as manufacturing, construction, industrial activity and trade have all been contracting and the jobs market is softening rapidly in recent months. But nothing was addressed by either candidate about these emerging worrisome trends.

Throughout the debate Harris kept referring to the need not to look at the past but to the future. However, she more than agreed with moderators resurrecting a number of topics ‘out of the past’. Most were directed specifically at Trump, in what were clearly ‘hard ball’, as they say.

January 6 events came up, with the moderators posing the question to Trump whether he regretted what he did on January 6 and would he accept a peaceful transition of power again. Zing! The cameras turned to Harris on that one, as she smiled widely. Trump fumbled for a while, settling on blaming Pelosi for not accepting his offer on January 6 to provide 10,000 national guardsmen for the Capitol’s defense.

Trump then tried to explain how January 6 and the felony convictions were all about ‘lawfare’ waged by the Democrats after him as a candidate, a first in US political history and a low point in US democracy. He could have taken it further, however, and challenged Harris to explain why the Democrats were also spending millions to prevent third parties like the Greens or RFKjr getting on the ballot or receiving public campaign funds. But again he didn’t and lost the opportunity to show how the Democrats were trampling democracy in the election no less than they were charging him.

Harris pressed the charge of Trump’s threat to Democracy, raising Trump’s alleged recent public statements if the election was stolen again there would be a political ‘bloodbath’ in the country. Trump once again—as throughout the evening—was put on the defensive responding to Harris. He neither explicitly denied or explained the accusation.

Toward the end of the debate foreign policy finally came up and was revealing. Both competed to show who was more pro-Israel. Harris more or less repeated the Biden position: Israel was horribly attacked. Women were raped by Hamas. It has the right to defend itself. There should be a ceasefire and in the end a two state solution—which appears about as likely as Boeing rescuing US astronauts in the Space Station. And Iran is the big bogeyman. The US should continue to give Netanyahu all he asks for.

Trump’s position was October 7 would not have happened on his watch. Trump scored a point in the ‘I’m more holy than thou’ Israel support debate by saying Harris refused to meet with Netanyahu when he came to the US recently. She went to a sorority meeting instead. Trump added Iran was broke when he was president but now has $300 billion due to Democrat policies lifting sanctions and Iran is running amuck in the middle east funding Israel’s enemies. Not a mention by either candidate of the 40,000 civilians or 17,000 children dead. Trump missed another opportunity at this point. He could have pressed Harris on why her position of a ceasefire and two state solution sounds good but has failed miserably thus far with no success in sight. What would she do differently if president to make it succeed? Again, no follow up.

The Ukraine war was more interesting. As in the middle east, Harris again parroted the Biden position: Russia was the invader, Ukraine was the epitome of democracy, the US will continue to give them more money and weapons, and if we don’t Putin will invade Europe. She even mentioned Poland, obviously pandering to the large Polish vote in Pennsylvania.

Trump came out hard in reply saying more than a million have needlessly died in the war and it was not in the US’s interest. The war should not have happened and would not have on his watch. US policy of Biden and Harris has cost the US taxpayer $250 billion so far and only $100 billion by the Europeans. They should pay their share. In other words, the USA continues to subsidize NATO and Europe, one of Trump’s long term issues.

Trump then dropped what should have been a bombshell accusation followed up by the moderators who ignored it and went on to ask unrelated questions: Trump accused Biden and his son Hunter of taking money from Ukraine and even receiving $3.5 million from the wife of the mayor of Moscow! The moderators moved on as if nothing was said.

In another hardball tossed his way by the moderators Trump was asked specifically “Do you want Ukraine to win?” At first he stepped around the query but the moderators tossed it his way a second time. Trump’s answer was he would end the Ukraine war even before being sworn in as president next January. The moderators didn’t ask Harris in turn what she would do to end the war. Perhaps they knew it would be answered with the current Biden policy of let’s continue sending money and weapons until Putin concedes?

Trump did score on this exchange by challenging Harris to explain why Biden in 2021 refused to even talk to Putin and said that Harris visited Kiev just three days before the war in Ukraine broke out—i.e. evidence according to Trump she was a weak negotiator and not respected by either Zelensky or Putin. The moderators got Harris off the hook by asking her if she ever met Putin, which was obviously not part of the debate script but made it appear Trump’s accusation was not relevant.

Trump warned that Biden-Harris policy in general has been a mess for four years, from the very beginning with Biden’s disastrous Afghanistan retreat that ended with US servicemen killed; but also today in Yemen, Ukraine, Israel, Iran. Trump added it was all leading the US toward a possible World War 3 with Russia.

Now nearing the end of the debate, the moderators asked both candidates how they would deal with Putin? (But apparently not how they would deal with Zelensky who has resisted all efforts to negotiate). It was at this point that Harris sounded like an honorary US neocon saying Putin’s agenda is not just to take Ukraine but to continue beyond into Europe. Tony Blinken, Jake Sullivan and Victoria Nuland would have been proud. The absurd ‘Dominoes Theory’ lives!

What is especially noteworthy in the entire foreign policy discussion was that neither candidate said a word about what is perhaps the greatest threat to US global hegemony and economy: the current rapid rise and expansion of the BRICS and their accelerating development of alternative global financial institutions that will almost certainly undermine US global dominance, and consequence its domestic economic stability next four years. But perhaps that was expecting too much from the moderators; and certainly would have been flubbed by the candidates neither of whom have any idea what’s going on in that regard and how tenuous a hold the USA has on its increasingly unstable global empire now.

At the close, the ABC moderators confronted Trump with their last hardball on his public statements that he doubted Harris was ‘black’. Now things got very personal. But it was a perfect opening for Harris who quickly attacked Trump as racist and accused him of always trying to divide the country. To prove her point she dredged up incidents that occurred decades ago accusing him of refusing to rent to blacks in New York, calling for the execution of the ‘Central Park 5’ murders in NY at that time, and denying Obama’s US birth.

This was truly a deep dumpster dive into the past to resurrect issues which contradicted her central debate message of ‘let’s look to the future not the past’. If one of the ground rules of the debate was not to attack one’s opponent personally, Trump surprisingly adhered to the rule throughout the debate. It was not the old Trump of 2016. The ABC moderators set up Harris with cover to do a personal trip on Trump. The Democrat strategy has always been to portray Trump as an unstable and unsavory character. The structure of questions and timing of the discussions enabled Harris to deliver that message. In terms of personalities, Harris thus came off the ‘winner’ in the debate as a result.

Summarizing the Second 1st Presidential Debate one might conclude:

• Both candidates hardly addressed the voters’ central issue of the economy
• Trump was repeatedly on the defensive and lost numerous opportunities to score points
• The ABC moderators threw softball questions at Harris and several hardballs at Trump
• Both candidates differed little on policy on the middle east
• Neither candidate said anything about the current economic war with China or Taiwan
• Trump and Harris did differ sharply on policy toward the Ukraine war
• Trump over-emphasized the immigration issue turning to it perhaps too often
• Harris policy on NATO, Ukraine & Israel remains Biden’s
• No one offered solutions how to lower prices, how to prevent the emerging US economic slowdown or how the US might respond to global challenges by the BRICS

In general one would have to conclude that Harris probably ‘won’ the debate, especially given the low bar set in initial expectations of her performance. She remained calm and didn’t get flustered. Trump on occasion appeared to come close to being thrown off balance, by the moderators questions in particular.

The American voters are of course the big losers. I doubt anyone can come away from the debate with a clear understanding what either candidate’s comprehensive plan is for the US economy—or the various pressing issues of millions of American households’ declining real income, affordability of basics like food and shelter, their ever-growing burden of consumer debt, intensifying global wars, chronically rising global warming, the growing likelihood of recession in 2025, or the spectre of renewed US political instability also on the horizon.

It’s doubtful the US mainstream media will say anything about all that but will focus on the personalities, how they appeared, and their media performance.

However, in the end the debate will likely matter little to the election outcome. Only seven or so states matter in the election outcome, given the US archaic electoral college system. As this writer has already said, four of the seven swing states are likely locked up by Trump (AZ, NV, GA, NC) and he only needs to win one of the remaining three (PA, MI, WI). Harris needs to win all three of the latter if she loses the former four which is likelier than not. So has the ‘Second 1st Presidential Debate’ moved the needle, as they say? Probably not. But hell! It ain’t over until the fat lady sings and she’s still waiting in the wings!

Jack Rasmus
September 10, 2024

On Labor Day this writer has summed up the condition of the American working class over the past year. This national election year it is perhaps useful to review not only the past year but what has happened since the last election in 2020. How has the American worker fared the past four years—in terms of wages, benefits, inflation and jobs? How have their unions, now a mere 10% of the labor force, also fared during the period of recovery since the deep Covid era recession of 2020, the uneven recovery of 2020-21 that followed, and the past thirty months of what has been a modest economic growth.

A salient feature of the past thirty months after the US economy finally fully reopened after Covid in 2022 is that the growth in US GDP has not been all that impressive given the massive fiscal and monetary stimulus of 2020-22. That stimulus in fiscal terms included about $4 trillion in government spending programs and tax cuts from the April 2020 ‘Cares Act’ through the early 2021 ‘American Relief Act’. In addition to that $4 Trillion fiscal stimulus, the US central bank, the Federal Reserve, provided an additional $4 Trillion of monetary stimulus to banks, investors, and businesses small and large from March 2020 until March 2022.

Theoretically, this monetary stimulus in the form of Fed direct purchase of bonds from investors and virtually zero interest rates during that two year period should have provided a massive boost to real investment, production and employment. Another almost $1 trillion was provided by the Fed (and FDIC) to prevent a crash in the regional banking system from March 2023 to the present. That’s a total of around $9 to $10 trillion in fiscal-monetary stimulus.

On top of that amount the Biden administration pushed through Congress in 2022 another approximately $1.7 trillion in mostly subsidies and tax cuts to corporations in the form of the Infrastructure Act, the Chip & Modernization Act, and the (misnamed) Inflation Reduction Act.

In total that’s all more than $10 trillion in economic stimulus during and immediately after the Covid recession in 2020. The economy began recovering slowly in late 2020 as it reopened in stages, sometimes with false starts and stops. It wasn’t until 2022 that the US economy had fully reopened. Only then can the $10 trillion plus fiscal-monetary stimulus be considered for its effects on growing (not reopening) the US economy. But the 2022-24 economic recovery record, even when measured in GDP terms, has not been all that impressive given the magnitude of the $10 trillion stimulus of 2020-22.

Throughout all of 2022, that is the first full year of recovery (i.e. not counting reopening from the shutdown period that ended in 4th quarter 2021), US GDP adjusted for inflation rose year on year in 2022 by an annual average of only 1.9%. In 2023 it rose by another 2.5%. And so far in the first half of 2024 by an annual average of 2.2%. (These stats source: Bureau of National Affairs ‘National Income and Product Accounts’, Table 1.1.1, https://apps.bea.gov revised 8-29-24)

That’s hardly an impressive performance of US economic growth given the more than $10 trillion in fiscal and monetary stimulus injected into the economy by Congress and the Federal Reserve bank since 2020!

So how did American workers fare during this roughly four year period in the wake of what has been the most massive fiscal and monetary stimulus effort in US economic history? And how have American unions done during the recovery from recession period, during which historically union membership, union jobs and union wages have tended to recover as well?

Wages

The US government defines wages in a number of ways. So it’s important to be clear on the definition. There’s Hourly Wages that are actually wages and salaries of all the roughly 167 million employed in the US labor force. Then there’s Weekly Earnings, which are hourly wages or salaries times the hours worked in a week. A subset of both hourly wages and weekly earnings is estimated for the roughly 110 million or so private sector Production and Non-Supervisory Workers (add about another 20m employed as teachers, state & local and federal government).

It is further important that their hourly wages or weekly earnings are adjusted for inflation, i.e. are real hourly and weekly, keeping in mind that the inflation adjustment using the Consumer Price Index (or Fed’s Personal Consumption Price Index) does not account for price rises associated with interest rates at all (which is just the price of money). Nor does it adjust for taxes and government fees. Or increases in their contributions to their benefit and pension plans. In addition, the two main US inflation indexes contain a host of assumptions and methodologies that can be shown to result in an under-statement of actual inflation. But that’s another story for another article. We’ll assume ‘real’ wages or earnings is adjusted using the government’s CPI or PCE inflation indexes. But the point is these points mean the wage gains noted below are actually less than reported in government stats.

Nevertheless, the wage data show American workers have not fared very well since 2020 and even over the past year. Which means that $10 trillion plus stimulus went into the bank accounts of others, not American workers as a whole.

So what have been their real wage gains since 2020? As well as during the past year, July 2023 thru July 2024?

The best indicator is Real Median Weekly Earnings. That is adjusted for inflation using government inflation indexes and uses the midpoint of those employed, not the average. Averages skew the number to the to—i.e. those with high earnings get higher wage increases compared to those at the middle or below.

Real Median Weekly Earnings in the 4th quarter of 2020 were $376 per week. As of end of 2nd quarter 2024 last month, they were $368. (Table 1, Median Weekly Earnings of Full Time Workers, Usual Weekly Earnings of Wage & Salary Workers, Bureau of Labor Statistics, July 2024). Remember, that’s for Full Time Workers only, which is about 120 million private sector workers in the US civilian labor force of 168 million. So it doesn’t count the 38 million who are part time or independent unincorporated contractors. Also, that $368 is, as noted, under-adjusted for inflation per the government’s indexes. It’s also not take home pay which means it’s before workers pay for a higher share of benefits costs, higher taxes, and government fees (auto registrations, etc.).

What about the past year, not just the past four years?
Before adjusting for inflation (called nominal wages), Average Weekly Earnings for Full Time Workers rose July 2023 thru July 2024 from $1,160/week to $1,199/week for a gain of only $39 which is about 3.3%. (Source: US Weekly Earnings for Wage & Salary Workers 2nd Quarter 2024, Bureau of Labor Statistics, July 2024).

But that’s not adjusted yet for inflation. Plus it’s also an average for all 168 million in the labor force so those with higher pay got more than the Median. Adjust for inflation and Median and it wipes out any gain in weekly earnings over the past year as Table 1 noted in the paragraph above shows: inflation adjusted Median Weekly Earnings for Full Time Workers was $365/week in July 2023 and in July 2024 was still $365/week. Make a further adjustment to include the 38 million part time and contract workers and you get numbers for Weekly Earnings still less.

What about Weekly Earnings for the subset of the 168 million US labor force—i.e. the approximately 119 million US private sector Production and Non-Supervisory Workers. No higher paid managers and higher salaried tech, finance and other professionals in this group. Their real average weekly earnings rose from $972 in July 2023 to only $980 in July 2024. Again, however that’s an ‘average’ and for full time employed not part time or contract. At the Median and below, including part time, it’s less than $8/week gain over the past 12 months.

In summary with regard to wages, the American worker has not benefited at all from the $10 million plus fiscal-monetary stimulus. Real Weekly Earnings are flat to contracting. And take home pay’s even less.

One can’t say the same for shareholders of corporations. Since 2020, the Fortune 500 corporations alone distributed more than $5 trillion in stock buybacks and dividends to their shareholders, according to annual reports in the Wall St. Journal. This year 2024 should be a record of more than $1.5 trillion.

JOBS

What about the jobs picture? The Biden administration likes to brag it created 15 million jobs. That fiction is perpetrated by most of the mainstream media as well as mainstream economists who should know better (and likely do).

During 2020 about 35 million Americans were unemployed at some point during that year. The economy reopened haltingly in late 2020 and again in 2021. As it did the 12 million who were still jobless at the end of 2021 steadily returned to their jobs in 2022 and beyond. These 12 million jobs were not ‘created’. They existed in February 2020 and most were still there by end 2021. Workers simply returned to jobs that were there, not to net new jobs that were ‘created’.

According to the St. Louis Fed’s FRED database, there were 106.5 million Production & Non-Supervisory Workers in the labor force in February 2020. That 106.5 was not reached again until July 2022.

If one looks at the July 2022 Employment Situation Report of the Bureau of Labor Statistics there were 158.2 million workers employed in July 2022, compared to 161.2 employed in the US economy in July 2024. So roughly only 3 million have been actually ‘created’.

It is important to also note that the vast majority of the net new jobs created have been part time, temp, gig and contractor jobs. In the past 12 months full time jobs in the labor force has fallen by 458,000 while part time jobs have risen by 514,000. (Source: Table A-9 Employment Situation Reports, Bureau of Labor Statistics, July 2023 and July 2024)

Ever since the end of the Covid recession the US economy has been churning out full time jobs and replacing them with part time, temp, gig and independent contractor jobs.

The jobs reports over the past year are revealing as well. They continually reported monthly job gains of around 240,000. But the Labor Department just did its annual revisions and found that for the period March 2023 thru March 2024 it over-estimated no fewer than 818,000 jobs! The Wall St. Journal further reported that up to a million workers have left the labor force due to disability from Covid and long Covid related illnesses. Neither of those statistics are factored into the government’s unemployment rate figures.

Which brings us to another convenient mis-reporting of jobs data. The government has two jobs surveys. One is for large establishments (and not really a survey but a partial census of sorts). Another is a true survey. The first is called the Current Establishment Survey (CES). The second The Current Population Survey (CPS).

The media typically picks up the total monthly employment gain figures from the CES; the second CPS is the source of the monthly unemployment rate statistic. The first is an estimate of total employment gains; the second the unemployment rate.

The problem is there are more than just one unemployment rate in the monthly CPS. There’s the rate for full time workers only. Last month that rate called the U-3 was 4.3%. But the unemployment rate that includes involuntary part time workers and workers discouraged from working and haven’t looked in four weeks or a year, called the U-6 rate was 7.8%. Moreover, neither reflect the recently adjusted 818,000 jobs over-reported. Or the millions who were so discouraged they left the labor force altogether. They’re still presumably without a job, at least most.

But for purposes of calculating either unemployment rate by the government they don’t exist and their numbers are excluded from the calculation of unemployment. Those numbers are about 5 million since Covid. If they were included, the unemployment rate would be easily more than 10% today.

Last month the government estimated the CES employment number was 114,000. That compares with an average of 240,000 each month over the past year. It shocked even the myopic mainstream economists and the media. It was their favorite cherry picked jobs number and it came in well below healthy levels. There are at least 100,000 new entrants to the labor force every month looking for work, due to population growth, immigration, and elderly returnees to work. The fastest growing age segment of the labor force is those over 65 years old who can’t make it on social security or meager pensions any more.

It will therefore be interesting to see if on September 5 the monthly jobs report for August continues to reflect a weakness in the favored CES employment report. But if one were considering the other CPS jobs report which better catches small business employment trends, it would be clear for some months now that the labor market is quite weak. It’s just that that weakness is now spilling over from small businesses in the CPS to the larger caught by the CES.

Working Class Debt in America

Another indicator of the state of the working class in America is the level of debt load it is now carrying. The last quarter century of poor wage increases has been offset to a degree by the availability of cheap credit with which to make consumer purchases in lieu of wage gains and decently paying jobs. Actually, that trend goes back even further to the early 1980s at least.

Household US debt is at a record level. Mortgage debt is about $13 trillion. Total household debt is more than $18 trillion, of which credit card debt is now about $1 trillion, auto debt $1.5 trillion, student debt $1.7 trillion (or more if private loans are counted), medical debt about $.2 trillion, and the rest installment type debt of various kind.

American households carry probably the highest load of any advanced economy, estimated at 54% of median family household disposable income. And that’s rising. (Source: https;//tradingeconomics.com)

Debt and interest payments have implications for workers’ actual disposable income and purchasing power. For one thing, interest is not considered in the CPI or PCE inflation indexes and thus their adjustment to real wages. As just one example: median family mortgage costs since 2020 have risen 114%. However, again, that’s not included in the price indexes. Home prices have risen 47% and rents have followed. But workers pay a mortgage to the bank, not an amortized monthly payment to the house builder.

One should perhaps think of workers’ household debt as business claims on future wages not yet paid. Debt payments continue into the future for purchases made in the present, and thus subtract from future wages paid.

The State of Unions in America

In periods of recovery from recessions, as jobs are restored or created, union membership typically rises some. But not in the 21st century and not since the end of the Covid recession.
Since 2020 union membership has declined. There were 10.8% of the labor force in unions in 2020. There are 10.0% at end of 2023 which is about half of what it was in the early 1980s. Unions have not participated in the recovery since Covid, in other words, at least in terms of membership. Still only 6% or 7.4 million workers of the private sector labor force is unionized, even when polls and surveys in the past four years show a rise from 48% to 70% today in the non-organized who want a union.

In the past year in absolute numbers union membership has risen by just under 200,000 in private industry which has allowed union membership to remain at 6% of total employment in that sector. In the public sector union membership over the past year has declined by about 50,000.

Some private sector unions have reversed in recent years the decades long dark years of concession bargaining. Recently the Teamsters union under new leadership made significant gains in restoring union contract language, especially in terms of limits on temp work and two tier wage and benefit structures. The Auto workers made some gains as well. But most of the private sector unionization has languished. And over the past year it has not changed much.

About half of all Union members today are in public sector unions. There is has been difficult for Capital and corporations to offshore jobs, displace workers with technology, destroy traditional defined benefit pension plans, or otherwise weaken or get rid of workers’ unions. The same might be said for Transport workers whose employment is also not easily offshored, but is subject to displacement by technology nonetheless. But overall union membership has clearly continued to stagnate over the past year as it has since 2020.

The Artificial Intelligence Threat to Workers & Unions

Union membership as a percent of the total labor force will likely start to decline once again, at least in the private sector, as the Artificial Intelligence technology revolution takes hold. Recently Goldman Sachs bank research has estimated 300 million jobs world wide will be lost due to AI. These are mostly simple decision making jobs, in service as well as manufacturing. AI will displace these jobs and probably soon. So available jobs as well as union membership will be severely impacted.

The early trend is already observable for union membership and jobs in the recent Writers and TV-Movie sector union contract negotiations. The unions did not fare well. Workers job in general will be severely impacted by this latest tech trend. Several hundred billion dollars a year is being invested in AI, which is mostly about raising productivity by getting rid of workers. That investment is estimated to rise to nearly $1 trillion before the end of the decade.

Summary

The foregoing accumulation of data and statistics on wages, jobs, debt and unionization in America this Labor Day 2024 contradicts much of the hype, happy talk, and selective cherry picking of data by mainstream media and economists. That hype is picked up and peddled by politicians and pollsters alike.
But the fact is those selectively chosen statistics are often contradicted by other government stats that are left unmentioned. US statistics are like the bible in a sense. One can find whatever data in it one wants.

But selective referencing—while ignoring other data—is a form of lying. And there’s a lot of it going around this Labor Day 2024 by politicians of both parties, with their media complicit, and their crew of mainstream economists in tow.

Dr. Jack Rasmus, Sept. 1, 2024

The German economy had been long hailed as the economic ‘engine’ of Europe. If so, it clearly needs a major ‘valve job’ and is running on only 5, or maybe 4, cylinders.

It is in recession that will no doubt deteriorate further. Politically, it is also becoming more unstable as the right wing Afd party, and the newly formed left party led by Susan Wagenacht, are about to register major gains within days in German regional elections now underway.

The ruling SPD Sholtz coalition with Greens–both strong proponents of support of Ukraine with weapons and funding until recently–last week announced it would provide no further funds or weapons for Ukraine. The unpopularity for the SPD support for that war is widespread now, as is public opinion about Sholtz’s handling of what can only be called the de-industrialization of Germany.

Recent German public revelations that German police investigations revealed Ukraine special forces, with NATO assistance, were responsible for blowing up Germany’s Nordstream pipeline in September 2022, and the fact Sholtz’s government has remained silent about the matter–except to complain to Poland as one of the saboteurs of the pipeline’s destruction, a Ukrainian businessmen, successfully fled to Poland which allowed him to make his way back to Ukraine.

German public opinion is also complaining the Sholtz government has also meekly addressed policies of the USA since 2022 responsible for Germany’s continuing economic decline as well. Not just the US direction of the sabotage of the Nordstream pipeline but subsequent economic policies of the USA that have been undermining Germany’s economy as well: in particular the USA’s oil companies’ charging natural gas imports to Germany costing 3X and 4X that formerly charged by Russia; the Biden administration announced tax and trade policies that have been now luring German business investments to the USA that otherwise might have been invested in Germany itself; and US convincing EU supra-elites in the EU Commission to join the US in sanctioning and raising tariffs on China imports to the EU.

The declining condition of Germany’s economy as the ‘economic engine’ of Europe reveals that perhaps the ‘Plan B’ purpose of Biden/US Russia sanctions on Russia has been to make Germany/EU more economically dependent on the USA. Even if those same sanctions haven’t proven successful with regard to ‘Plan A’ which was has been precipitating the economic instability of Russia!

The USA sanctions policy has thus succeeded re. making Europe more dependent on the USA–even if that policy has failed with regard to destabilizing Russia’s economy and the Putin regime.

A recent post by UK economist and political commentator, Michael Roberts, has gathered extensive data with charts revealing the depth and extent of the growing crisis in Germany’s economy and electoral alignments as of today. It is worth referencing and can be found at:

https://mail.google.com/mail/u/0/#inbox/FMfcgzQVzPDQzQgKSStzdXXrxBRKKWpr

My only ‘critique’, if it can even be called that, of Roberts’ data and data that show conclusively the serious condition of Germany as the engine of Europe is he perhaps might have discussed more how US economic policies have seriously contributed to the decline in Germany and the growing economic (and political) dependence of it, and Europe itself, on the USA as a result of those US policies.

My contributing comment to Roberts’ otherwise excellent piece is as noted below:

Excellent summary, Mr. Roberts, but I would have liked to have read more analysis how US policies re. Europe, especially sanctions, takeover of energy, tax incentives to invest in USA instead of Germany, etc. are contributing to German recession. Also, the West (G7/8) is in a goods recession everywhere. US manufacturing PMI has been contracting for 8 months, now lowest level, while construction activity is down 1/3 and contracting further this summer. US GDP numbers are misleading. How can it be 3% in 2nd quarter when corresponding Gross Domestic Income, GDI, is only 1.3%? Unemployment is not 4.3% when part time & discouraged workers leaving labor force is counted; it’s 7.8%. Inflation is not 2.6% (PCE) but at least 5% when the questionable assumptions for calculating prices are removed from both PCE and CPI. Even official US stats show a seriously slowing economy: manufacturing PMI, new housing starts, home sales, commercial construction, industrial activity, CPS (small bus. sector) job statistics (not CES), even real retail sales flat, and so on. US and global recession will deepen in 2025, given economic trends that will be exacerbated by USA & EU intensifying political crises and decline of the $US as BRICS challenge accelerates.

The Ukraine War is at a crossroads. It is entering a new phase. Military and political strategies on both sides are in flux. Both Ukraine and Russia have opened new fronts and offensives—Ukraine in the northern Kursk border region and Russia in the Kharkov and central Donbass area of Donetsk. Further new fronts are likely.

It is estimated that Russia’s total forces in Ukraine ranges today, late summer 2024, are between 600,000 (per Ukraine) and 700,000 (per Russia Ministry of Defense). Ukraine’s total available forces are around 350,000. Behind these numbers, however, both sides are mobilizing further additional forces not yet committed to the line of combat. Ukraine is hurriedly recruiting and training another 150,000 while Russia reportedly has another 400,000 in its total armed forces located elsewhere in Russia. Russia additionally plans to have an army of 1.4 million by year end which suggests additional combat reserves of perhaps 300,000 in addition to its 700,000 combat brigades now in Ukraine.

So Russia today has a roughly 2 to 1 numerical superiority in both combat troops in Ukraine as well as potential reserves. What a Russian force of 700,000 in Ukraine today—and even 1 million by year end—means is that Russia’s Special Military Operation (SMO) is simply not a sufficient force to conquer all of Ukraine. Nor was it ever intended to be when Russia in February 2022 entered Ukraine with an SMO combat force of less than 100,000.

With combat forces even at 1m by year end, short of an unlikely total collapse of Ukraine’s army, the SMO is not sufficient to take Kiev or Odessa; and it’s certainly not sufficient to invade NATO as some war hawks in the west like to argue in order to justify more direct NATO involvement in the war.

By way of historical comparison, it took the Soviet Union a 13 million man army to push the Nazis out of its territory; at least a third or 4 million of which were engaged in its southern Ukrainian front alone.

While Russia has a clear, albeit not overwhelming edge, in combat forces in Ukraine today, military success is not just a function of absolute numbers but of how well forces can be concentrated at a given front to enable a numerical advantage for a time over one’s adversary. Other factors play a tactical role as well—like the element of surprise, the quantity and quality of reserves that can be marshalled at critical points and times in the conflict, the mobility of one’s forces to be quickly deployed, and the ability to deceive one’s opponent as to where, when and how much force will be concentrated.

While important, and even at times decisive, these latter factors (reserves, surprise, mobility, etc.) are nonetheless secondary; concentration of force is always the primary military tactic. And so far we have seen both Ukraine and Russia concentrate their respective forces, albeit in different fronts separated by hundreds of kilometers. The question is which front is strategically the more important.

The Key Strategic Event of 2024

The key event of the war this summer 2024 is Russia’s concentration of numerically and qualitatively superior forces in the central Donbass area. Russia has enjoyed a numerical advantage in combat forces in the Donbass as well as in air superiority and missile-artillery forces for at least the past year since the collapse of Ukraine’s summer 2023 offensive. This Russian advantage and superiority in Donbass has been further increased this summer 2024 as result of Ukraine’s withdrawal from Donbass this summer of some of its own best brigades. Ukraine sent these best brigades from the Donbass to the north Kursk border region to participate on August 6 in Ukraine’s invasion of Russia’s Kursk territory. That shift of Ukraine forces left its Donbass front weakly defended. In contrast, Russia has not shifted any of its forces from Donbass to the Kursk front but has increased its forces in Donbass. This event is perhaps the single most important strategic shift in the war this summer 2024.

Which front and offensive—Ukraine’s Kursk or Russia’s Donbass—is more important for the eventual outcome of the war will likely be decided in the coming months, and definitely before year end 2024.

In the battles now underway in these two fronts—Kursk and Donbass— we may in effect be witnessing the beginning of the endgame of the war in Ukraine.

As result of Ukraine’s withdrawals of some of its best brigades from the Donbass, Russian forces are now having increasing success on that front taking village after village and driving west toward the key Ukraine strongholds of Pokrovsk in central Donbass, as well as toward Slavyansk in northern Donbass. Should Russia take Pokrovsk and Slavyansk, the war in eastern Ukraine will be effectively over—at least in those former provinces Lughansk, Donetsk, Zaporozhie and Kherson in eastern Ukraine. The line of combat will almost certainly then move quickly far to the west to the Dnipr river.

In contrast, it’s difficult to see what strategically Ukraine hopes to achieve by its penetration into Russia’s Kursk province. Will it turn the tide of the war in favor of Ukraine? That is highly unlikely given Russia’s continuing advantage in combat forces, weapons and air superiority. Which raises the question: what were Ukraine’s motives and objectives for its Kursk offensive and can it attain them?

Ukraine’s Kursk Summer Offensive

Launched on August 6, 2024 Ukraine’s Kursk offensive has had some initial success. Ukraine initially concentrated numerically superior forces at the Kursk border (as it had earlier in the summer at the Kharkov border southeast of Kursk).

In the run up to its August Kursk offensive, Ukraine publicly announced its troop concentrations opposite Kursk and north of Kharkov city were strictly defensive moves to prepare for expected Russia invasions from the north which were being rumored to be imminent throughout the spring 2024. In hindsight, however, Ukraine’s announcement that its forces at the Kharkov and Kursk borders were strictly defensive appears to have been a military deception. Ukraine’s military recently revealed that Ukraine had been preparing back in June for an offensive into Russia at Kursk.

The question then arises: what were Ukraine’s motives and objectives moving troops from the Donbass and other areas of Ukraine (also from the Belarus-Ukraine border) and concentrating them on its northern Kharkov and Kursk border? If it was not for defense against a new Russian offensive in the north but to launch an offensive of its own, what were (and are) Ukraine’s objectives?

In preparation for it Kursk offensive this August, Ukraine transferred combat brigades from all over Ukraine and concentrated them at the Kursk border in July—including many of its best brigades in Donbass as well as some of its 95,000 in defensive positions at the Kharkov border. Ukraine reportedly even moved troops from its Belarus border to Kursk, enabled apparently by an agreement with Belarus to reduce their respective forces from the Belarus-Ukraine border (an agreement that reportedly has been recently rescinded). Finally, Ukraine also rushed some of its new drafted recruits with minimal training to its Kursk region in preparation for the Kursk offensive as well.

In short, Ukraine moved up to a third of its total brigades to the Kursk region. That is probably around 150,000, perhaps half of which are actual combat brigades. A reduced force was left at Vovchansk and a seriously depleted force in the Donbass. In addition, some Ukraine brigades reportedly have returned to the Belarus border since the August offensive.

With an amassed combat force of around 70,000 Ukraine easily overwhelmed Russia’s thinly guarded Kursk border which was manned with border guards and other untested units—even though Ukraine invaded Kursk initially with 12,000 or so. Since August 6 it has brought up and concentrated at least another 60,000 or so.

This perhaps suggests Ukraine is not finished with crossing the border into Russia elsewhere along the northern border. Some analysts suggest Ukraine plans to open another offensive further northwest of Kursk in what’s called the Bryansk border region. Or alternatively just southwest of Kursk in the Belgorod border.

There is even some rumor of another offensive in the far southwest of Zaporozhie province by Ukraine, targeting the taking of the Zaporozhie nuclear power plant currently under Russian control. Where Ukraine might marshall such additional combat forces is debatable, however.

In response, Russia initially brought in special forces and marines to check Ukraine’s advance which has slowed significantly. And reportedly mechanized forces are en route to the Kursk front from other locations in Russia. The Kursk pocket has now become perhaps the most intense killing field of the war to date.
What the Kursk and other possible Ukraine offensives and fronts suggests is that Ukraine is desperate to get Russia to shift its superior and increasingly effective forces from the Donbass in order to slow Russia’s accelerating advances there. But so far it appears Russia has not done so.

Russia’s Kharkov-Vovchansk Offensive

There’s another parallel story here: Before Ukraine’s August offensive into Kursk, Russian forces in early May had entered Ukraine’s Kharkov province near the Ukrainian border city of Vovchansk located just 25miles north of Ukraine’s second largest city of Kharkov. That Russian offensive was launched with a small force of only 15-20,000 even though Russia knew Ukraine had concentrated 95,000 troops in a defensive line just south of the border. The result was predictable: the Russian offensive into Kharkov became quickly bogged down and a stalemate resulted there around the city of Vovchansk, at least until very recently.
A second parallel question therefore arises: why did Russia cross the border near Kharkov-Vovchansk with such an insufficient concentration of forces, facing off against what it knew were reportedly 95,000 Ukrainian troops dug in defensive positions? Clearly the objective could not have been to take Kharkov city. So then what was it?

Russia’s Donbass Offensive

The most important strategic military development this summer 2024 in the war is not Ukraine’s invasion at Kursk. It is that to enable its Kursk offensive Ukraine has left its Donbass front seriously weakened. So weak in fact that Russia’s offensive in the Donbass is intensifying almost daily with growing success.

There are three directions in which Russia is driving west in the Donbass. The most important is the central Donbass where Russia is virtually at the gates of the strategic hub Ukrainian city of Pokrovsk. Pokrovsk is a railway and road intersection that feeds Ukraine forces most of its weapons and supplies to central and southern Donbass. If it falls to Russia, supplies to most of its forces in central Donbass are at great risk. Equally important, west of Pokrovsk there are few lines and fortifications for Ukraine defense operations. The road is open to the Dnipr river to the far west, the next natural line of defense by Ukraine. But the Dnipr represents the loss of all of Donetsk province and its complete liberation by Russia.

Just further north of Pokrovsk lies a similarly strategic city of Slavyansk and its neighboring largest city of Kramatorsk. Slavyansk is the analog in terms of Ukraine logistical support for the northern Donbass. If it too falls so too does all of the remainder of northern Donetsk and Lughansk province. Russian advances have also begun in this region, through Siversk and Izyum.

In short, if Pokrovsk and Slavyansk fall to Russia it’s game over in the Donbass front to Ukraine. Russia advances suggest this is likely before the US November elections or soon after. The point is Ukraine’s withdrawal of some of its best forces from Donbass, to its Kursk front, as no doubt accelerated Russia’s gains now underway in the Donbass. And if Donbass falls, Ukraine has no choice but to exit its positions further south at the Zaporozhie border as well, or else be encircled there.

The events in recent months in Donbass thus raises yet a third strategic question: Has Ukraine effectively decided to sacrifice the Donbass in order to launch its Kursk offensive?

Military analysts on both sides seem uncertain as to why Ukraine and Russia have made the decisions they have at this critical juncture of the war in summer 2024—Russia last May in Kharkov, Ukraine this summer in Donbass and today Kursk, and Russia’s decision to hold firm to its offensive in Donbass.

So what are some of the possible explanations being bandied about by analysts trying to explain these objectives of these two offensives—Ukraine in Kursk and Russia in Kharkov-Donbass?

Some Unanswered Strategic Questions:

Let’s summarize these strategic questions and offer some possible answers.

Question 1. Why Did Ukraine Invade Kursk, what are its possible objectives, and can it attain those objectives:

Military analysts are all over the map with speculation as to why Ukraine invaded Kursk. Some say the objective was seize the Russian nuclear power plant located just south of the city of Kursk and less than 100 miles from the border. By seizing the plant Ukraine would then use it as a blackmail piece in negotiations with Russia.

Another objective raised is that Ukraine intends to use the territory captured as a bargaining chip in negotiations with Russia, which it appears several third party countries have been trying to arrange—albeit thus far without success.

In terms of military tactics, still another speculation goes, the Ukrainian invasion was intended to force Russia to transfer brigades from its Donbass front to Kursk, and thereby slow down Russia’s advances in the Donbass that appear to be accelerating.

Yet another speculation is Ukraine intended to create a buffer zone along the border before Russia launched its own offensive into Ukraine in the region. That suggests the Ukrainian invasion was to pre-empt Russia opening an offensive front of its own along the northern border.

Another view is that the true objective of Ukraine’s offensive has been to make Putin appear weak to Russian elites and public who are now demanding a more aggressive Russian response to the invasion. The Kursk offensive, according to this view, is to provoke Russia to a more extreme aggressive response that would enable Zelensky to receive more lethal military aid from NATO—like UK Storm Shadow and US ATACMS missiles and missile carrying F-16s—and NATO permission to use them to attack deep inside Russia.

It is possible that a little of all the above are motivations for Ukraine’s offensive: So far as seizing the Kursk nuclear plant is concerned, if that were the objective it has been neutralized and Ukraine has virtually no chance of reaching the Kursk plant any longer now that massive Russian defenses now block its path.

The explanation that the Kursk offensive’s objective is to force Russia to move military units from Donbass to Kursk has also apparently failed to date. Russia has sufficient reserves elsewhere in Russia proper and is moving those to the Kursk front.

The speculation that Zelensky authorized the Kursk offensive as a ‘land for land’ bargaining chip in future negotiations is also negated by recent events since August 6: Putin has publicly stated there will be no negotiations with Ukraine so long as its forces remain on Russian territory, whether in Kursk or Donbass.

The idea of Ukraine obtaining a buffer has never been convincing. Why would Ukraine deplete its military resources elsewhere and risk losing more territory (Donbass) in order to protect territory (North Border) it hadn’t even lost yet?

It seems therefore that the most likely objective of the Ukraine Kursk offensive was, and remains, political: to provoke Russia into an extreme response in order for Ukraine to restore fading western support for Ukraine to continue the war. Zelensky needs Russia to escalate to remain in power in Ukraine. Throughout NATO, support is waning for providing military arms and ammunition. The west further believes that funding Ukraine’s war and economy is settled, provided by the seized $300 billion of Russian assets. However, Western Media almost daily has become increasingly critical of the war, recognizing it cannot be won. Zelensky thus needs to show Ukraine still has the ability to fight and NATO needs to provide even more weaponry because Russia is escalating the war!

Zelensky realizes he needs more direct NATO troop involvement—not just weaponry. Currently NATO is participating in ground operations with technicians operating advanced NATO weapons, mercenaries, as well as senior NATO officers and war planners on the ground. It will need even more. It can’t impress NATO to provide more by losses in the Donbass. But it might convince NATO war hawks to do so by offensives into Russia like Kursk.

2. Has Ukraine effectively decided to sacrifice Donbass?

Evidence on the ground strongly suggests Ukraine may have decided to sacrifice territory in the Donbass and perhaps the entire region altogether. Its Donbass defense was beginning to crack well before the Kursk offensive, ever since loss of the strategic Donbass city of Avdeyevka earlier this year. Now losses there are accelerating after Ukraine pulled some of its best brigades from Donbass and moved them to Kursk.

For Ukraine, the northern Kursk front is strategically more important than Donbass. Its bargaining position in eventual future negotiations with Russia and western support in general was weakening so long as it was losing Donbass. Seizing Russian territory in the north might shore up that loss of support and strengthen its position. In short, protecting Kharkov city and Ukraine territory outside Russia’s four provinces in the east is strategically more important to Ukraine than holding on to the Donbass. Ukraine can’t hold onto the Donbass in the end and NATO and Ukraine both know it. Opinion in the west increasingly suggests Ukraine should agree to give up Donbass and the four provinces. But Ukraine cannot simply retreat in the Donbass and give it up without appearing weak or is about to lose the war. That would accelerate NATO withdrawal of support. Zelensky therefore needed another success elsewhere if Ukraine was inevitably about to lose Donbass. Thus the Kursk offensive.

3. Why did Russia invade Kharkov region with an insufficient force?

Russia crossed over the border early last May in the Kharkov region but not to capture the large Ukraine city of Kharkov. That would take perhaps a Russian offensive force of at least half a million. Russia obviously knew, moreover, that a large Ukrainian force of up to 95,000 per reports was concentrated between the border and Kharkov city itself barely 50 miles away to the south.

So why then did Russian open that front with only 15-20,000 troops? The only possible explanation is Russia entered Kharkov with an insufficient force to get Ukraine to withdraw forces from the Donbass to protect Kharkov, which it did. Otherwise the explanation for throwing a force of 15,000 at 90,000 was military folly. And there’s no evidence throughout the war Russia has been militarily foolish in its offensive force deployments.

4. Did Russia get caught by surprise by the Kursk invasion?

It has to be admitted Russia was clearly caught off guard by Ukraine’s Kursk offensive. It might have been misled by Ukraine’s deception that its amassing of forces on the Ukraine side of the Kursk border in the summer was strictly defensive, designed to confront Russia should it have itself invaded at that location. It is also possible Russia may have viewed US/NATO limitations to date on Ukraine’s use of ATACMS and cruise missiles to attack deep inside Russia as evidence Ukraine was not allowed by NATO/US to escalate attacks directly into Russia. Before August 6 Ukraine’s attacking inside Russia was limited to Ukrainian drones.

Russia may have interpreted these NATO limits meant Ukraine would not be given the ‘green light’ to cross the Russian border with large ground forces. This—combined with Russia misreading Ukraine’s concentration of forces on its side of the border as only defensive—may have led Russia to erroneously assume Ukraine would not mount an offensive into Kursk.

5. Are we witnessing the growing importance of reserves in the war?

As the war now has passed its two and a half year mark, it is clearly beginning to wear on both sides in terms of men and materiel. The availability of sufficient reserves is therefore beginning to play a relatively more important role as the war has continued. Not just reserves in the sense of the number of available combat troops but their combat experience, training, and availability of weapons and ammunition are becoming an increasingly critical factor in the conduct of the war. This is often the case in war as the conflict becomes protracted, except when one side has an overwhelming force advantage of the other. That may have been the case in US wars in Iraq, Libya, Yugoslavia, Panama, and elsewhere. But it wasn’t in Viet Nam and it isn’t in Ukraine. Here Russia’s longer term advantage in reserves has begun to show.

It is true Russia in refusing to move reserves from Donbass has had to commit reserves from elsewhere in Russia but it has such reserves. Ukraine does not. The Kursk offensive shows Ukraine has probably committed most of its remaining reserves to that front. And it had to move brigades from Belarus, Kharkov and Donbass for the Kursk offensive—and to cut short training of new drafted recruits. Ukraine is approaching the end of its human reserves and cannot get an increase in weapons and ammunition from NATO that it requires if the war intensifies, as it is now, in both Kursk and Donbass. NATO has arrange continued funding for Ukraine throughout 2025 by seizing Russia’s $300B assets in G7 banks that were frozen at the outset of the war.

NATO’s provision of weapons is slowing, moreover, as NATO inventories are drying up; it can no longer accelerate the delivery of weapons to Ukraine as it did in 2022-23. Nor politically does NATO have the will to provide soldiers on the ground directly into Ukraine, although it is building the largest military and air base in NATO now in eastern Romania within tens of miles from Odessa where it already has stationed thousands of French and US airborne troops. If NATO does intervene ever on the ground it will mostly like be to prevent Russia seizure of the critical Ukraine seaport of Odessa, without which even a rump state of Ukraine in the west cannot be sustained.

6. What are Russia’s strategic options with regard to the Kursk invasion? Its Donbass Offensive?

Russian strategy will not change much in the Donbass. It will continue to advance, likely even more rapidly. Ukraine’s forces in Donbass may even collapse there before year end, with Ukraine retreating west to the Dnipr river and thus abandoning any hold on territory that comprises Russia’s four provinces. As for the Kursk front, Russia will most likely seal off the currently occupying Ukrainian force, bring up new Russian armored division, artillery and air forces and continue to batter those Ukrainian forces in the pocket until they weaken and retreat of their own accord. That will likely happen soon after the US November elections. Ukraine will try to hold on to Kursk to try to ensure further US support before Biden leaves office next January. The odds are significant, however, it will not be able to succeed in that.

Political Consequences of the Kursk-Donbass Offensives

Public opinion in Russia has strengthened Putin’s hand in the war as a consequence of the two offensives. His problem now is not ensuring Russian public opinion continues to support his government and the SMO but that growing segments of Russian opinion and Russian media are now demanding he take even more aggressive military action in response to the Kursk invasion.

Putin’s challenge now is to not fall for Ukraine’s Kursk provocation, abandon the SMO and escalate the conflict to an even more intensive and wider war that would require a much larger military force than the SMO and falling into the NATO war hawks trap to use a Russian escalation as an excuse to get NATO even more directly involved on the ground in the war than it already is.

Zelensky clearly wants to maneuver events into that direction—i.e. a more direct Russia-NATO conflict. That’s perhaps the major rationale behind the Kursk offensive. But Putin ultimately wants some kind of negotiated settlement, albeit on Russia’s two terms announced earlier this summer. He will therefore likely wait until the outcome of US elections to determine whether abandoning the SMO for a larger conflict is necessary. Zelensky and Ukraine leadership is desperate and reckless; Putin is calculating and typically factors in the bigger political picture.

For the moment, however, Putin’s conditions for beginning negotiations announced a couple months ago—i.e. Ukraine leave the four provinces and agree to neutrality—is off the table.

Scuttling the possibility of negotiations (that China was trying to arrange last July) may have also been part of the objective of Ukraine’s Kursk offensive. Ukraine and Zelensky have a long track record of feigning interest in negotiations as a cover for an escalation planned. Ukraine diplomatic maneuvers in Beijing in July and in Qatar in August are evidence Ukraine has no intention of seriously negotiating anything. Quite the contrary. Although nothing is imminent, US and Russia may continue exploring the possibility of negotiations through back channels, as they have in recent months, but it’s clear there will be no negotiations of any kind until after the US elections at earliest and more likely not until the Biden administration ends next January 20, 2025.

Throughout the summer opinion has been growing among NATO elites and western media that Ukraine cannot hold onto the Donbass or even the four provinces annexed in 2022 by Russia. Russia’s continuing successes in the Donbass offensive further confirm that view, and solidify it should Russia take Pokrovsk next month. Conversely, NATO elite opinion may shift further toward allowing Ukraine to attack inside Russia using ATACMS, cruise missiles, and even F-16s to enable Ukraine to hold onto the Kursk territory as Ukraine losses the Donbass. The test of this NATO elites’ shift will be evident should US allow in coming weeks further shipments of UK storm shadow cruise missiles to Ukraine. Losing the Donbass logically means rolling the military dice even further in Kursk and the northern border.

US neocons and war hawks will attempt to create further escalation in the Ukraine war between now and January 2025 in order to make it extremely difficult for any new US president elected in November to reduce US/NATO commitments to Ukraine, let alone withdraw.

Should Harris win in November, the Biden administration policies toward the war will almost certainly continue. Harris will be malleable to the foreign policy/neocon establishment who have been running US foreign policy and wars since at least 2001 and perhaps even earlier since the late 1990s. Should Trump win—and the Deep State allow him to actually take office in January without a major US constitutional crisis (which is more likely than not)—it is unlikely that Trump will be able to end the Ukraine war in the short run after taking office January 20. Even with Trump in office, the war will therefore continue well into 2025. The only factor that may expedite an earlier end to the war is if Russia debilitates Ukraine military resources to such an extent that those forces effectively collapse in both the Donbass and Kursk fronts.

Russia has never intended to ‘conquer’ all of Ukraine, including Kiev. Putin’s SMO has always been to drive Ukrainian forces out of the Russian speaking provinces and then ensure some kind of neutrality by what’s left of a Ukrainian state.

But before that can happen Russia will need to conclusively drive Ukraine back across the border from Kursk and take the strategic Donbass cities of Pokrovsk and Slavyansk. Only then is Endgame apparent. Only then will Ukraine forces retreat back to whatever remains of Ukraine. Only then will US/NATO decide to cut losses and abandon the ‘Ukraine Project’ altogether.

Dr. Jack Rasmus is author of The Scourge of Neoliberalism: US Economic Policy From Reagan to Trump, Clarity Press, 2020 and the forthcoming Twilight of American Imperialism, 2024, also Clarity Press. He blogs at http://jackrasmus.com, hosts the weekly radio show, Alternative Visions, and posts daily on ‘X’ at @drjackrasmus.

Watch my most recent YouTube presentation to the northern California Green Party on the actual state of the US economy on eve of the US elections. Topics addressed include is there a ‘soft landing’ underway? Dissecting the US GDP, inflation and jobs reports for more detail suggests actually higher inflation and recession already underway in the US goods sector (manufacturing, industrial output, exports, construction, jobs market and even real retail sales). Why the US price indexes under-estimate prices and jobs reports over-estimate jobs growth. The presentation also comments on recent tech bubble, Japan carry trade instability, and accelerating expansion of the BRICS and what it means for US dollar and influence in 2025 and after.

To Watch GO TO: https://www.youtube.com/watch?v=MaJ8HVw3UTg

Listen to my last friday’s, August 16, 2024, Alternative Visions radio show for my latest comments on the Ukraine war (Kursk, Kharhov, Donbass fronts), including a review of the recent Wall St. Journal article on how rogue Ukraine officers and businessmen were behind the Sept. 2022 bombing of the Norstream pipeline. Plus why Iran has not yet retaliated against Israel (and may not). Concluding with a breakdown of the US CPI and PPI inflation reports last week and why the inflation rate is actually, or about to be, higher in both.

TO LISTEN GO TO:

https://alternativevisions.podbean.com/e/alternative-visions-ukraine-war-update-cpi-ppi-inflation-reports/

Listen to my initial take on the dynamics behind last week’s Yen carry trade & Asian stock markets and the deflating Tech bubble in the USA, as billionaire Warren Buffet sells off $80B of his Apple stock. This short radio interview only 15 minutes. (Tune in to my Alternative Visions show of Friday, August 9, 2pm eastern on the Progressive Radio Network for a more in depth analysis of the same.)

For initial radio interview here with Critical Hour radio GO TO:

https://drive.google.com/file/d/1SPqEj4FrjSYuHg4vCkRSg-1E7vSIHCec/view

Listen to my Friday, August 2, Alternative Visions radio show where the topics are preparations for wide war in middle east continue + US real economy now indicating not just chronic inflation but multiple signs of real slowdown (manufacturing PMIs, Construction, real (goods) retail sales contraction and jobs market) as well. Why the Aug 2 jobs numbers are even worse than reported, when Labor Dept., 2nd jobs survey, the CPS, that covers more small businesses is considered. Why the tech sector bubble is now bursting (including early AI boom) and why Services sector will later follow. Goods sector recession now underway and Services sector next. Meanwhile, US political candidates are totally ignorant of the major crisis in $ and US empire coming in 2025 along with US recession.

To Listen Go To: https://alternativevisions.podbean.com/e/alternative-visions-war-in-middle-east-us-economy-flips-over/

Listen to my recent hour long interview on the ‘Great Distraction’ in the US 2024 election. Why both parties mostly ignore the economy and immigration, which polls show as top voter concern. Why national opinion polls are irrelevant and why what happens in seven swing states determines the election. Why Trump has advantage in the swing states still even after Biden’s withdrawal. Review of data on immigration since 2020 and how Trump is leveraging the issue and is particularly targeting issues in swing states while Dems are not. Why election will probably come down to who wins northern tier of WI, MI, PA. Harris needs to win all 3 but Trump needs only one to get 270 electoral votes. Why inflation is higher than reported by media in govt official CPI and PCE index reports and some examples why is higher than reported. Other topics on US and global economy are discussed including why US real economy is now slowing fast and why both presidential candidates are ignoring the big global economic news of expansion of the BRICS and decline of US dollar coming 2025.

TO LISTEN GO TO: 

Two recent short (15min) radio interviews in 3rd week of July 2024 on Decadence of US political parties and US sanctions impact on US and EU economies.

(Election 2024 Bombshells & Deep Money Control of Parties & Elections)

https://drive.google.com/file/d/1c9Va5uv5mikpmJJ8ol_LK-fytTcC6uVc/view

(US Sanctions and $300 Russia Assets Seizure Economic Impact on Europe)

https://drive.google.com/file/d/1lMdOQQZuIC4H0sXjknRtRPqwbqtoBeMh/view