Jack Rasmus

(3rd in a series on Trump trade policy)

In recent weeks Trump threatened $500 billion in tariffs on China imports, escalating his prior threat to impose $200 billion on China. He then threatened hundreds of billion in tariffs on world auto parts imports, targeting Europe. But Trump’s threats and announcements do not constitute a trade war. Threats and even announcements of tariffs are one thing; the actual implementation of tariffs another. But even the current scope of tariff implementations do not yet represent a trade war. Bona fide trade wars occur when tariff fights spill over to currency devaluations and generate currency wars.

To date, only $34 billion in tariffs on China industrial imports to the US has been actually implemented, plus another $2-$3 billion in intermediate steel and aluminum products. In response, China has so far imposed an equivalent $36 billion in tariffs on imported US agricultural goods, targeting US soybeans, port, cotton and other grains produced in Trump’s political base of the US Midwest agricultural belt.

Elsewhere around the globe, earlier in July Trump threatened to escalate a trade conflict with the European Union, threatening to impose $200 billion on Europe and global auto part imports to the US. But to date there’s only been US tariffs implemented on Europe steel and aluminum imports. And the response from Europe has been a mere $3 billion in counter tariffs on US imports. Ditto for trade with Mexico-Canada. US steel-aluminum tariffs on imports from Mexico-Canada have elicited a token response of $15.8 billion in Mexican and Canadian tariffs on US imports.

Total actually implemented US import tariffs to date—mostly levied against China—amount to only $72 billion, or 2.3% of a total of $3.06 trillion imports into the US annually. US trading partners have responded tokenly in kind, with their own 2.3% in tariffs on US exports on the total $2.58 trillion US exports worldwide. Tariffs of 2.3% hardly represent a tariff war, let alone a trade war. Bona fide trade wars are never limited to tariffs. Trade wars involve not only tariffs but also non-tariff barriers to trade. Even more important, bona fide trade wars occur when tariff spats escalate and precipitate currency devaluations.

Should Trump follow through with threats of $200-$500 billion more tariffs on China imports, the US and China will likely slip into a currency war as China allows its currency, the Yuan, to devalue further. And that devaluation will almost certainly quickly go global— given the current significant decline in currency exchange rates already taking place throughout various throughout key emerging market economies (Argentina, Turkey, India, etc.). Other emerging market economies will have no choice but to follow China’s devaluation lead. Nor will advanced economies like Japan and Europe be immune from having to devalue, as they try to offset Trump tariffs in order to maintain their share of global trade that Trump policies are clearly attacking.

Trump’s Dual Track Trade War

Trump apparently believes he can control the response of US trading partners to his threats and intimidations, and that he can conclude token trade deals, if necessary, to avoid falling over the trade cliff of currency devaluations. While he might be able to backtrack and quickly close trade deals with NAFTA partners and Europe—just as he settled a quick, token deal with South Korea early this year—the settling of a quick trade deal with China may not prove so easy. And the longer the tariff conflict with China continues, and escalates, as appears likely, the greater the likelihood or the current US-China tariff spat descending into a currency war.

A Trump two track trade policy has been underway since early 2018. One track is with US trading allies. Here Trump will prove flexible and eventually settle for minor adjustments in trade terms, just as he did with the South Korea trade pact earlier this year. Trump will then exaggerate and misrepresent the dimensions of the deals with allies, selling it all as great achievements benefitting his domestic US political base and confirming his US ‘economic nationalism’ policy that proved so politically valuable to him in the 2016 elections. Much of the trade war with allies is really about US domestic politics and the upcoming US November midterm elections.

US-Mexico Deal Imminent

Unlike China, where trade negotiations are currently frozen and no discussions are underway, both Europe and Mexico in recent weeks have been signaling they are amenable to a quick deal with Trump if he will settle for relatively minor concessions. Mexico president elect, Lopez Obrador, sent his trade negotiator to Washington DC this past week to explore concessions with Trump. A deal was negotiated last spring by US and Mexican trade representatives but was subsequently scuttled by Trump. Trump introduced a new demand in US-Mexico negotiations that any trade deal would have to ‘sunset’ and be renegotiated every five years. Trump did not want a deal too early. Trump wants a deal closer to the US November elections so that he can tout it to his domestic political base as proof his ‘economic nationalism’ policy works. The current differences between the US and Mexican positions in negotiations currently are otherwise not significant; should Trump drop his sunset demand, which he will do when the timing for his domestic politics is appropriate—that is, just before or soon after the US midterm elections—a deal with Mexico (and thereafter similarly with Canada) will be concluded quickly. And according to US Commerce Secretary, Wilbur Ross, just last week, an agreement between the US and Mexico will soon be announced.

Hiatus in Trump ‘War of Words’ with Europe

The same Trump flexible approach was evident in the just announced ‘deal’ with European Commission president, Jean-Claude Juncker, who also came to Washington this past week. Juncker’s goal was to get Trump to back off his threats to impose tariffs on Europe auto part imports. Not actual tariffs, in other words, but to get Trump to retract his threat to perhaps introduce them. Trump and Juncker then announced a ‘deal’. The so-called deal is merely verbal and indicate objectives the parties, US and Europe, hope to maybe achieve, at some point undefined in the future. It was not actually a trade agreement. Just a mutual statement they would negotiate toward a deal. Trump backtracked from his threat to impose tariffs on autos. In exchange, Juncker offered to buy more US soybeans and US natural gas at some point in the future. In terms of actual tariffs, or any other ‘trade’ measure, the Trump-Juncker announcement was mostly a public relations stunt for both parties designed to placate their domestic critics.

The US trade war with Europe is just a war of words, as it has been thus far with NAFTA. What exists in fact is just a couple billion dollars of actual tariffs on steel and aluminum imposed by the US on Europe and a similar amount of token tariffs implemented by Europe on select US imports to Europe. The so-called trade war with NAFTA and Europe is still phony. Not so the case, however, with China. And while negotiations continue with NAFTA and Europe, no further discussions are underway with China and will likely not occur soon.

What the US Wants from China—And Won’t Get

Unlike NAFTA and Europe, a quick settlement with China is not in the works. The US wants concessions from China that it is not demanding from NAFTA, Europe and other allies. The US wants concessions in three areas from China: more access to China markets by US banks and multinational corporations, including 51% and then 100% US corporate ownership of their operations there. Second, the US wants China to purchase at least $100 billion more in US goods, mostly from Midwest US agribusiness and manufacturing. Third, it is demanding stringent limits and reductions in China’s current policy requiring US nextgen technology transfer from US businesses operating in China. What has the US defense and intelligence establishment especially worried is China plans to leapfrog the US in nextgen technologies like 5G wireless, Artificial Intelligence, and Cybersecurity. These represent not only the source of industries of the future, but threaten a quantum leap in China military capabilities. The US refers to the nextgen technologies as ‘intellectual property’ since they are fundamentally software based. But what the US really means is nextgen military-capable software intellectual property.

When negotiations opened with China this past spring, China cleverly offered major concessions to the US. It announced it would grant 51% ownership rights for US multinational corporations doing business in China, and signaled it could agree to 100% as well. That delighted US bankers and multinational corporations. Their representative on the US trade negotiating team, US Treasury Secretary, Steve Mnuchin, publicly declared a deal with China was therefore imminent. China also signaled it could purchase $100 billion more a year in US agricultural products. But it would not budge on the tech transfer issue. A deal was close but was then upended by US defense-intelligence-war industries US negotiating faction. Through their friends in Congress, they aborted any prospective trade deal with China. Trump then followed up by threatening to impose an additional $200 billion of tariffs on China in response to China matching US tariffs on China imports by implementing an equivalent $34 billion on US exports to China, especially targeting US soybeans, pork and other grains. And when China declared it would match the US further threat of another $200 billion in tariffs, Trump doubled down by threatening a further $500 billion on China imports. While Trump’s threats of more tariffs and intimidation tactics have proven successful eliciting the response he wants from Europe and NAFTA partners, it has not to date proved similarly effective with China. Nor will it likely.

While China will allow significant US corporate access to its markets, and will agree to purchase hundreds of billions more of US exports, especially agricultural, China shows no signs of bending on its technology development objectives. And while US bankers, multinational corporations, and agribusiness-farmers appear willing to cut a trade deal on market access and US exports purchases, it appears that the US defense establishment (Pentagon, Intelligence agencies, defense contractors), together with its friends in Congress, will not allow a deal with China without major concessions by China on technology.

From Tariff Spats to Currency Wars

Trump believes his intimidation tactics—thus far proving successful with NAFTA and Europe—will work as well with China. He believes he can close token deals quickly when he chooses with the former two, which is true. But he can’t do so similarly with China. And the longer the tariff spat with China drags on, and deteriorates, the more likely a US-China tariff war will escalate into a bona fide trade war involving currencies and US dollar-Yuan exchange rates. And that is the prospect US and global business interests are particularly worried about.

A currency war between the US and China will reverberate across the global economy that already shows signs of slowing and, in some key sectors, is already descending into recession. Tariff spats involve two trading partners and may affect their mutual economies, but currency wars quickly spread across all economies in a chain-like contagion of devaluations.

This potential scenario is approaching, as Europe’s economy is slowing rapidly and tending toward stagnation once again. Japan is already in another recession. A growing number of emerging market economies are contracting—the worst case scenarios being Argentina, now in a 5.8% economic contraction, but Brazil, South Africa, and others are continuing to slip further deeper into recession. Turkey’s currency is now collapsing rapidly, a harbinger of real economic contraction on the near horizon. Meanwhile, India and other south Asian currencies and economies are also growing more unstable. In short, the global economy is growing more fragile in terms of both trade and production. A trade war involving currency instability between China and US will almost certainly tip the balance.

But Trump clearly believes China’s economy can be destabilized by the US trade offensive. That China has more to lose than the US, since it has benefitted from US trade more than the US has from China trade. But this is a naïve and simplistic analysis, typical of Trump and his advisors. Typical of a financial speculator mentality, Trump believes that so long as the US stock markets are doing well, the real economy is strong and can weather an intensification of a tariff war. For Trump, ‘tariffs are great’. Just raise them further to intimidate trading partners and force concessions from them to the benefit of US corporate interests and the economies of his domestic political US base.

China has already begun to ‘dig in’, however, in anticipation of a longer, protracted contest with the US over tariffs and their economics effects, and US demands to restrict China technology development. It has just announced another major fiscal-monetary stimulus to its economy this past week, in anticipation of slower growth from exports and trade with the US. A massive money injection to spur bank lending, tax cuts, and more government investment are planned to offset any export slowdown. It is also aggressively pursuing other trade deals with Europe and other economies to offset any decline in US trade. China also has various measures it can employ in a Trump trade war escalation. It can slow its purchase of US Treasury bonds. It can impose more non-tariff administrative barriers on US companies in China and those exporting to China. It can launch a boycott of US made goods among China consumers. These are likely measures of last resort, however. More likely is China may allow its currency, the Yuan, to devalue against the dollar—thus even offsetting any Trump tariff effects. And ironically somewhat, the devaluation of China’s currency will be allowed to occur due to market forces, not any China official declaration of devaluation, since the US policy is already causing a devaluation of the Yuan.

Trump’s trillion dollar annual US budget deficits have resulted in the US Federal Reserve central bank raising interest rates. The Fed must raise rates to finance Trump’s now estimated annual trillion dollar deficits for the next decade (caused by Trump’s $3 trillion in tax cuts and trillion dollar hikes in defense spending; with trillions more tax cuts and defense spending in the Congressional pipeline before year end 2018).

To pay for the multi-trillion dollar deficits, the US central bank, the Fed, is rapidly raising interest rates. Rising interest rates are driving up the value of the US dollar. That dollar appreciation in turn is causing an inverse decline in the value of emerging market economy currencies—and that includes China’s Yuan currency. The Yuan has devalued by 10% since the US tax cuts, deficits, and interest rate hikes in 2018. A seven percent Yuan devaluation in just the last three months. The Yuan is now at the edge of its trading band at 6.8 to the dollar. Should it slip further, which is inevitable as US interest rates and the dollar continue to rise, a devaluing Yuan will set off a chain reaction of devaluations throughout the global economy—i.e. a currency war will have arrived. And as currencies devalue, Trump’s tariffs will have been offset, neutralized, negated.

Trump has declared ‘tariffs are great’. But Trump’s tariffs will have been negated in turn by a currency war set in motion by Trump’s own domestic fiscal and monetary policies that are causing the US dollar to rapidly appreciate worldwide. Trump is betting his intimidation approach can produce quick results before his tariff war precipitates a currency war and a severe global economic contraction. He is rolling the economic dice. He and his advisors clearly believe if it gets too serious, he can call off the tariff disputes with NAFTA, Europe and other trading allies quickly. He probably can, by backing off and getting token agreements which he’ll misrepresent and exaggerate. But the scenario for a quick resolution is quite different with China. It will not back off so easily. The US-China dispute is far different than the US-trading allies (NAFTA, Europe) trade war of words.

Some Conclusions

Thus far, Trump’s trade wars with allies are phony. A NAFTA deal is imminent. A hiatus even in the trade war of words with Europe has been declared. And a further escalation with China has not yet occurred. Trump will announce token and fake deals with Mexico and Canada before the US November elections for purposes of touting the success of his ‘economic nationalism’ to his US domestic political base. He will likely make more outrageous threats to China while perhaps trying to lure them back to negotiations with sweet-talk about China President, Xi, and possibilities of a deal . But China knows his game by now, and most likely will not negotiate until it sees what happens with the US November elections and the Mueller investigation of Trump.

At some point China and the US will negotiate. When they do, the key to whether a real trade war emerges thereafter—and that will only be with China—will depend whether Trump follows through with his threats to impose another $200 billion in tariffs on China imports to the US and whether the Pentagon and US defense industry lobby agrees to soften its demands on US technology transfer. US-China negotiations have already reached tacit agreement on China purchases of US exports and more US banker-corporate access to China markets in the future. How China will respond to more US tariffs and technology transfer is the crux of any US-China trade agreement—or trade war.

Trump and his advisors believe China cannot match tit-for-tat an equal $200 billion since it doesn’t import that magnitude of goods from the US. They think therefore they have the advantage in a dispute with China. The US has a bigger ‘tariff stick’ than China has is the thinking. But that view is naïve. China has other measures, which it has signaled it is prepared to employ (without yet revealing the details). A devaluation of its currency would be high on its agenda of possible responses should Trump implement $200 billion more in tariffs. China’s currency is already pushing the edge of its band, at 6.8 to 6.9 to the dollar. China thus far has been intervening in money markets to keep it there. All it needs to do, however, is stop intervening and let the Yuan devalue beyond the band, driven by market forces. It doesn’t even need to declare a devaluation. As the dollar rise, as it will continue to do so as the Fed raises interest rates further, the Yuan will devalue without China intervening to prevent it. (In other words, US policy is ultimately driving the Yuan devaluation). A Yuan devaluation will allow China to offset Trump tariff costs by an equivalent amount, thus negating Trump’s tariff actions. Contrary to Trump’s bombast, of ‘Tariffs Are Great’, he will find that tariff wars typically fail.

At that point the skirmish on tariffs between the US and China will morph into a currency war and signal that a true trade war will have begun. It will be a China-US trade war—with significant repercussions for other global currencies as a contagion effect of currency devaluations follow. Global currency exchange rates will adjust downward even lower than they have to date already throughout emerging markets, as well as in Europe and Japan. The general competitive devaluations will sharply slow global trade and, in turn, global economic growth.

Jack Rasmus, July 31, 2018

Dr. Rasmus is author of the book, ‘Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression’, Clarity Press, August 2017, and the forthcoming, ‘The Scourge of Neoliberalism: US Policy from Reagan to Trump’, also by Clarity Press. He blogs at jackrasmus.com and tweets @drjackrasmus.

Listen to my 12 min. interview with Loud & Clear radio yesterday, July 25, on Trump’s tariff threats on Europe, his proposed $12 billion in aid to US agribusiness to offset farm losses from China tariffs, and how the present tariffs tit for tat could lead to a full blown currency war Trump cannot control.

GO TO:

https://www.spreaker.com/user/radiosputnik/new-trade-war-developments-eu-tariffs-ai?utm_medium=widget&utm_source=user%3A8544886&utm_term=episode_title

Listen to my analysis on ‘Loud & Clear’ Radio, Washington DC, on Trump’s latest announcement to impose tariffs on Europe auto imports. Why Trump rhetoric and threats amount to only actually 2.3% US tariffs on $3.06 trillion of imports to the US. Why Trump’s trade offensive is about playing to his domestic US political base. My predictions re. Trump trade war: a deal will be reached with NAFTA within 6 months; with China (maybe) in 2019; and with Europe only after the UK ‘Brexit’ is resolved. But lots of Trump bombast, threats, and insults in the interim.

TO LISTEN TO MY INTERVIEW, GO TO:

https://www.spreaker.com/user/radiosputnik/auto-tariffs-latest-front-in-trump-admin

The European Central Bank, ECB, is at the heart of the failure to stabilize Europe’s economy since the 2008 global crisis. It is a central element as well in the institutional arrangement since the creation of the Euro that has allowed northern Europe economies and banks, especially Germany, to skew economic growth for itself at the expense of the rest of most of the European periphery, especially its southern tier. In 2018 the ECB has announced it will discontinue its 30 trillion euro monthly subsidization of the financial system by QE bond buying, followed by an attempt to recover the more than 2.5 trillion excess liquidity injections (’free money’) it has prodced as a consequence of its QE program since March 2015. But with interest rates rising in the US, and the Euro economy growth slowing once again, it is unlikely the ECB will discontinue its QE for very long, if at all, and certainly will fail to recover the 2.5 trillion free money it has injected since 2015. Europe’s financial system will thus remain on ‘free money’ life support for the foreseeable future. What follows is a major 9K word excerpt from my 2017 book, ‘Central Bankers at the End of Their Rope’, chapter 11 entitled ‘European Central Bank Under German Hegemony’. The ECB’s current chair, Mario Draghi–a member of the notorious ‘Group of 30’ biggest Europe capitalists, bankers and their politicians that determine Europe policy behind closed doors–is scheduled to leave in 2018. What will his successor do as Europe stagnates once again and the global economy slows and heads for another recession or worse?

To read the complimentary chapter on the European Central Bank from my book, ‘Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression’, Clarity Press, August 2017, go to my website from the link below

GO TO:

http://www.kyklosproductions.com/posts/index.php?p=362

For the latest developments and data re. these three key global trends today–and how they are inter-related–listen to my July 13, 2018 Alternative Visions Radio show.

TO LISTEN GO TO:

http://prn.fm/alternative-visions-3-strategic-trends-trump-china-trade-war-escalates-global-debt-accelerates-trump-tax-cuts-dissipate-07-13-8/

Or GO TO:

http://www.alternativevisions.podbean.com

SHOW ANNOUNCEMENT

Dr Rasmus explains the relationship between trade wars, past and present, and neoliberal tax cutting and war spending policies: Trump 2018, Reagan 1985, Nixon 1971-73. What’s next after $34 billion in US tariffs on China this past week? Relative strengths and weaknesses of US and China in the pending trade war and potential tactics. Rasmus reaffirms his prediction Trump is following a ‘two track’ trade war—one with US allies and another with China, and only China is potentially real. The role of domestic US politics in current trade disputes. A second topic of the show, i.e. accelerating global debt, is now $250 trillion and 3X global GDP, rising at$25-$32 trillion more a year. How global debt and US dollar exchange rates and central bank interest rates are related. The show concludes with review of recent data by the Institute of International Finance, confirming predictions by Rasmus that Trump January $5 trillion tax cuts for business and investors would result in lower US tax receipts, a diversion of tax savings to more stock buybacks, dividend payouts, and mergers & acquisitions—not investment, jobs, and wages. Projections of rapid slowing of US business investment and hoarding of Trump tax cuts.

What’s happening in Mexico? New President, Lopez Obrador has been elected. Why did he win? What is his program for change? What’s the role of big business, and leftovers from the prior ruling parties, PRI and PAN, in his government? What does it men for NAFTA and immigration? And what’s happening ‘on the ground’ with grass roots mobilizing, unions, progressives, etc. To Listen to my discussion with guest, Alan Benjamin, who lived in Mexico for years and visits frequently, on the latest developments. TO LISTEN to the hour long podcast,

GO TO:

http://prn.fm/alternative-visions-way-mexico-lopez-obrador-election-07-06-18/

OR GO TO:

http://www.alternativevisions.podbean.com

SHOW ANNOUNCEMENT

Dr. Rasmus interviews Alan Benjamin, long time participant in Mexican and US labor politics, on the recent election of Andres Manuel Lopez-Obrador (aka AMLO) this past week. Benjamin provides an analysis of the election, and why AMLO won the election this time after having past elections he likely won in 2012 and 2006 stolen. Benjamin explains AMLO’s program evolution over 2018, the role of AMLO’s key business advisors, Urzua and Romo, selected to head, Mexico’s key cabinet positions of Secretary of Treasury and State, and AMLO’s latest views re. NAFTA and Trump. While the US media focuses on corruption and violence, various real sources of the economic and political crises in Mexico behind the election are discussed—i.e. popular demands by Mexicans for jobs, for an end to privatizations of energy and water, for restoration of Mexico’s declining healthcare services, and for repeal of past neoliberal ‘reforms’ of education and energy. Benjamin then describes the current grass roots organizing and popular committees now being formed by workers, communities, and youth to keep the AMLO election from being co-opted by US and Mexican business interests. How the AMLO election represents an important progressive ‘opening’, but also reflects a potential way of control by capitalist interests, as the old PRI and PAN business parties in Mexico have virtually collapsed. (For more information of original English translation of popular programs and events in Mexico, go to: http://www.socialistorganizer.com

by Dr. Jack Rasmus
June 30, 2018

KEYWORDS: Trump, Justice Kennedy, Tyranny, Deutsche Bank

Some very interesting news has just appeared in recent days in the mainstream press–i.e. NY Times and Wall St. Journal–raising questions about Justice Kennedy’s recent resignation at the last minute before the Supreme Court’s session ended. As is obvious, Kennedy announcing his retirement will enable Trump to appoint a more radical right winger to the Supreme Court before the November 2018 elections. Should Trump lose control of the Senate in November, he might not be able to get another radical right winger through a Senate confirmation process, to give him a 6-3 super majority on the Court. Kennedy’s resignation all but ensures now he will get his second right winger (after Gorsuch last year) and get it approved by the Senate before the November 2018 elections.

But what’s behind Kennedy’s early retirement now, before the November elections, that enables all this to happen?

Justice Kennedy privately went to the White House before his announcement. Why was that necessary? What did he and Trump perhaps discuss? Here’s a possible scenario:

The Mueller Report on Trump will soon be released. My bet is that it will show very close financial connections between Trump and various Russian Oligarchs. The oligarchs loaned Trump large sums of money when US banks would not. It kept Trump’s real estate empire from collapsing. And who knows what else the Oligarchs have on him during Trump’s trips to Moscow before the 2016 elections.
So what does that Trump-Oligarch connection have to do with the Trump-Justice Kennedy connection and Kennedy’s recent surprise resignation?

Deutsche Bank Connection

It happens that the shady global investment bank, Deutsche Bank, known to broker deals under the table and launder money worldwide for elites like Trump, served as the money launderer for Trump and the Russian Oligarchs. And guess who, as senior manager at Deutsche bank, was in charge of the Oligarch-Trump deals? None other than the son of Justice Kennedy. (source: OZY Daily Presidential Brief, ‘Deutsche Bank Fails Federal Reserve Stress Tests’, June 29, 2018).

This raises some interesting questions. Was Kennedy ‘encouraged’ by Trump to resign now so he, Trump, could push through his latest radical candidate for the Supreme Court, to ensure his 6-3 majority? Trump knows Mueller’s report will show his Russian Oligarch connections. Trump will definitely fire Mueller. That’s a done deal already. And he’ll probably fire Rosenstein and others at the Justice Dept. to clean house of his adversaries there (including possibly even Jeff Sessions). It will create a firestorm response. And if he, Trump, loses control of the Senate or the House in November, it will almost certainly result in impeachment proceedings being raised or debated.

But Trump has already publicly declared he has the right to pardon himself under the Constitution. A 6-3 majority Supreme Court will then support his interpretation and likely rule that the president can pardon himself under the US Constitution.

A Trump self-pardon will dispel the fiction that in America no one is ‘above the law’. Trump believes he is, has said so publicly in recent weeks, and he is now setting up a scenario where he will be able to pardon himself. Kennedy’s resignation is one element on the road to that end.

Trump: Neither Fascist Nor Dictator but Tyrant

Progressives and even liberals increasingly today are warning of a kind of ‘creeping fascism’ in the US today, driven by Trump. Or they say that Trump is a dictator. But fascism is a movement resorted to by ruling elites to destroy opposition to them in a crisis by unions, opposition parties, and the press. Trump doesn’t need to resort to physical destruction of his opponents. The Unions are on the run, or all but destroyed already. The Democratic Party has moved so far to the right since Bill Clinton that it has lost its mass base and has become merely a legislative party. It has retreated to enclaves in a few big cities or on the coasts. Its leadership since Clinton has been in the pocket of big moneybags, who are doing all they can to prevent an internal resurrection by Sanders and other grass roots elements. So there are no alternative progressive or liberal forces on the left that are organized to stop Trump that Trump needs to take on ‘in the streets’ to destroy. Trump doesn’t need a fascist movement. He (and the ultra right wing capitalists behind him–i.e. the Mercers, Olins, Adelsons, Kochs, etc.) don’t need it, at least not yet. Trump is winning without it. The traditional capitalist elite who thought they could populate his cabinet and ‘tame’ him, have all been driven out of his administration (Priebus, McMaster, Cohn, Tillerson, and soon to leave Kelly as well). Trump is mobilizing and agitating his domestic political base with his anti-foreigner ‘America First’ ideology–both immigrants and other capitalist globalists in Europe, Canada, Mexico, etc. (America First echoes other ‘foreigners are the problem’ appeals when ‘jews, communists, and gypsies’ were identified as the enemy). The ideology in development may be there with Trump, but the organized fascist movement is not yet.

Nor, contrary to liberal and progressive claims, is Trump yet a ‘dictator’, although he is well on his way to taming the Republican party and reconstructing it as his own. Trump doesn’t need to directly ‘dictate’ laws in lieu of a representative legislature determining the law. His Freedom Caucus friends in the House now do his bidding, his buddy Mitch McConnell in the Senate is in his pocket, and now Trump’s packing of Federal Courts (with the help of McConnell) means Trump is able indirectly to dictate and thereby negate the laws established democratically before him. But he’s not yet a ‘dictator’ in the direct sense. That too is not yet necessary. The form of democracy still remains, even as its content is being significantly destroyed. No, he’s not a fascist nor a dictator yet. He doesn’t have to be to get what he wants
.
But what Trump is much nearer to becoming is a Tyrant. He already believes he is ‘above the law’. He even says it publicly. And a politician ‘above the law’ is the classical definition of Tyranny!! Of a Tyrant. Trump is a tyrant in the making. Tyranny is being installed before our very eyes. So what has this to do with the Trump-Justice Kennedy connection?

Trump’s Next Step: Firing Mueller & Self-Pardon

The resignation of Kennedy will enable Trump to take one step closer (now very close) to his avowed desire to be ‘above the law’, a Tyrant. Trump will pardon himself after November if the Mueller report leads to an impeachment–which itself is a long shot. But Trump is taking no chances. Packing the Supreme Court with a solid 6-3 majority in his favor is his way to protect himself against Mueller and a possible impeachment down the road. If charged, Trump will pardon himself. And the Supreme Court 6-3 will rule the US Constitution allows him to self-pardon–that is, to declare himself ‘above the law’, to permit a Trump Tyrannus.

It will be interesting to see if the forthcoming Mueller report says anything about the Kennedy-Deutsche Bank-Russian Oligarchs Trump connections. It should. But don’t count on it. Congress, the Presidency, the media are all held in the lowest esteem by the American people. One of the few democratic fictions left in America is that the US Supreme Court is impartial and not political. That it is not part of the destruction of democracy in the USA that has been developing now for two decades since the Supreme Court in 2000 manipulated the national election to give George W. Bush the presidency that year. Americans forget the role of the Supreme Court in that subversion of Democracy that gave George W. Bush the presidency (and the rest of us the Iraq war, the banking crash of 2008, and the Great Recession that followed).

If anyone thinks that Justice Kennedy’s recent surprise announcement of resignation from the Court is just an individual act and has nothing to do with broader political developments in the US, they are naively deluding themselves. And all the liberal media spin recently that Justice Kennedy was a sometime liberal ‘swing vote’ on the Supreme Court is such bull. He’s the guy that gave us Citizens United and enabled billionaires like Trump and his buddies to buy American democracy and elections, with his 5-4 ‘swing vote’. And his replacement by Trump will be even worse! More brazenly anti-democracy, anti-worker, anti-immigrant, and pro-Trump.

One can only wonder what Justice Kennedy and his son at Deutsche Bank will get out of a deal with Trump? We know what Trump gets.

Dr. Jack Rasmus
copyright 2018

Dr. Jack Rasmus is author of ‘Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression’, Clarity Press, August 2017, and the forthcoming ‘The Scourge of Neoliberalism’, Clarity Press, 2018.

Listen to my explanation of the Yield Curve and why it’s flashing red for the next recession in 2019. Also my explanation why Trump is a wannabe Tyrant. What’s behind the retirement of Supreme Court Justice Kennedy now ( and see the latest NY times and Wall St. Journal discoveries announced today that Justice Kennedy’s son headed up Deutsche Bank’s laundering of Russian Oligarch money to Trump before the US 2016 election). Meuller will soon release his findings and Trump will fire him (and maybe others in the Justice Dept.) Why Trump is not a fascist, not yet a dictator, but is about to become a ‘Tyrant’. My take on the election of Ms. Ocasio-Cortez and the Democratic party.

To listen to the Show of June 29 GO TO:

http://prn.fm/alternative-visions-yield-curve-recession-2019-trump-tyrannus-06-29-18/

Or to:

http://alternativevisions.podbean.com

SHOW ANNOUNCEMENT

Dr. Rasmus explains the yield curve as a predictor of the last 17 recessions (and the next in 2019). Why short term Fed rates are rising to finance trillion dollar annual deficits and debt and why investors and businesses aren’t convinced the Trump tax cuts will result in a growing US economy after 2018. Why the Yield Curve predicts recessions. Rasmus then discusses Wisconsin’s $4 billion tax and incentive package to lure Foxconn (the giant Taiwan corporation) to its state. Why Foxconn is not, per Trump’s quote, ‘the eighth wonder of the world’. The meaning of this week’s primary victory by Ms. Ocasio-Cortez in New York, and the Democratic Party leadership’s response. Interpreting the Kennedy Supreme Court retirement announcement. Why Trump is not a fascist, nor yet a dictator. But considers himself ‘above the law’—i.e. the definition of a Tyrant. Rasmus concludes with analysis of what the Supreme Court’s Janus decision this past week means for the intensifying attack on public employee unions now coming. (For more on Janus, listen to our March 2, 2018 Alternative Visions show and interview with SEIU union representatives).

With the ink barely dried on Trump’s $5 trillion tax cut for investors, businesses, and the wealthiest 1% households this past January, he and his stacked-deck Republican Congress are now preparing another big investor tax cut before the November 2018 midterm elections. In the last tax cut, signed into law in January 2018, the total tax cuts for business was $5 trillion. Two trillion $ was raised on middle class tax deductions. Another $1.5 trillion was ‘disappeared’ with absurd assumptions about US economic growth averaging more than 3.5% for every year for the next decade (and of course no recession). That left the ‘official line’ of a tax cut of only $1.5 trillion, which the mainstream media promoted as well as Trump’s mouthpieces at Fox and elsewhere. In the January tax cut, capital gains taxes were left at levels where George W. Bush left them–at 15% and 20%. Now they are coming back for a second ‘bite at the apple’, to cut capital gains taxes still further, at a cost of another $1.5 to $2.0 trillion. During the election in 2016 Trump had promised to cut taxes if elected by $10 trillion more over Bush. (See my early 2016 post,’$10 Trillion Tax Cuts; Another 410 Trillion Coming’). Another tax cut and he’ll be more than half way there.

Listen to my Alternative Vision radio show of June 22 during which the coming further tax cuts under Trump is discussed. Also discussed are the US Federal Reserve’s bank stress tests, with an explanation why they are ‘phony’. Other updates on past shows are also discussed.

(Tune in to my show on the Progressive Radio Network on June 29, 11am pacific time, for my explanation of what’s called the ‘YIELD CURVE’ and why it is now predicting US recession in 2019–as it has 17 times before accurately in the past.

To Listen to Trump Tax. Cuts 2.0, GO TO:

https://alternativevisions.podbean.com

SHOW ANNOUNCEMENT

Rasmus reveals plans by Trump-Congress to cut taxes still further on investors and businesses before the November elections. Also ongoing incremental tax cutting involving corporate pension fund contributions and dismantling of funding for Obamacare. The Fed’s latest bank stress tests, how they’re phony and why some US banks are still financial fragile. Rasmus also discusses the pending Teamster-UPS contract and how workers’ wage hikes will be eaten up by reductions of overtime pay and inflation. A new five year agreement will mean real pay cuts. The show concludes with latest updates on Europe, Italy’s debt, Greek debt, 3rd party critiques of the US Labor Dept.’s Alternative Work survey, and Trump’s phony trade war with Europe (and real one with China).

Are world crude oil prices rising now due to lack of supply? Excess demand? Or is it something to do with professional financial speculators? Oil is not just a commodity; it’s a financial security. Its price tends to follow the rise of another financial asset–the US dollar. (Which rises in response to US interest rates and central bank policy). And the last time global oil prices began to escalate was 2008–on the eve of the last banking crash. Is history about to repeat itself–in whole or part? Listen to my short interview with Loud and Clear radio on global oil price movements and the broader significance of the shift to financial asset investing as a key characteristic of 21st century global capitalism

GO TO: https://www.spreaker.com/user/radiosputnik/opec-to-hold-summit-as-debate-over-globa