Today’s show examines and discusses the past week’s major decisions by the Federal Reserve and the Bank of Japan, and how they represent growing failure and desperation of central bank monetary policy globally. Bank of Japan promises to keep bond rates at zero for another ten years and to continue to inject money until inflation exceeds 2%. The Federal Reserve …
Jack takes on recent reports from private and government sources this past week that US incomes and the economy are finally recovering. Taking issue with Paul Krugman’s column today, ‘Trickle Up Economics’, hyping the reports, Jack cites and explains contrary data that show the reports and Krugman punditry are questionable. Alternative sources, like the Gallup Poll, show 87% of US population surveyed consider the economy poor or getting worse. Other sources show the doubling of death rates from drugs, suicide, and alcohol for the 25-64 age group—Trump’s target voters in key swing states. Jack discusses data showing Trump now leads in key swing states, Ohio and Florida, where incomes remain down as much as 10%, as well as in other swing states. Why Clinton’s campaign is trying to reorient to the 25-64 group and millennials—too little too late. The show concludes with Jack repeating his prediction of US recession in 2017-18, and predicting post-election policies of more business tax cuts, infrastructure spending, TPP, and Fed interest rate hikes are coming.
Media, press, pundits and politicians in the US today keep hyping the US economy as doing well. We hear the US economy is growing nicely, better than other economies at least. Wages are finally rising, and full employment is here. Jack bunks these and other myths about the US economy on the eve of the US election, and explains why …
Dr. Jack Rasmus summarizes his just published book this month, ‘Looting Greece: A New Financial Imperialism Emerges’, Clarity Press, Sept. 2016, explaining how debt and credit are becoming new and even more efficient and generalized means by which the more powerful capitalist countries are beginning to extract and transfer wealth from the smaller and more vulnerable. Jack describes the various techniques and means by which financial measures are used to extract surplus. Greece is a case example of the new imperialism taking shape increasingly globally. ‘Looting Greece’ is a sequel to Dr. Rasmus’s January 2016 publication, ‘Systemic Fragility in the Global Economy’, which described how the shift to financial investing is slowing down the global economy, and how a new global finance capital elite is increasingly dominating national economies and slowing growth. In the last half of the show, Rasmus reviews the major economic events of the past week, including today’s US job numbers, recent US manufacturing data, the US central bank meeting—and why the Fed will raise interest rates for certain before year end and the impact that will have on a shift to fiscal spending in 2017 andthe US economy’s coming recession in 2017-18 as well as on emerging markets, China and US corporate profits. The show concludes with a commentary on recent IMF and BIS reports on the global economy.
Jack takes a detailed look at the strategic and tactical errors of the Syriza party and Greek government in 2015 that led to its eventual capitulation to the Troika, resulting in continued austerity and economic depression in Greece. Among the errors noted are Syriza’s naïve reliance on the support from social democratic allies in Europe that did not exist or abandoned it, Syriza’s repeated unilateral concessions to the Troika without any concessions in turn, its allowing the ECB to slowly shut down Greece’s banking system and its refusal to nationalize its banks to remove them from ECB control, Syriza’s agreement to extend the prior debt terms and continue making debt payments to the Troika while the Troika denied Greece loans and payments it was due, amateur bargaining tactics by Syriza negotiators, Syriza’s refusal to leverage potential support from Russia, China, threaten to leave NATO, or to demand concessions from the Troika in exchange for Greece assistance controlling refugee flows into Europe, Syriza continued signals it would not Grexit or form an alternate parallel currency, Syriza’s poorly worded referendum vote in July, and its leaders’ rejection of the results of the vote. (For more detailed analysis of the Greek debt events from 1999 through May 2016, see Jack Rasmus, ‘Looting Greece: An Emerging New Financial Imperialism’, Clarity Press, September 2016.) See also the article by Rasmus on Greece posted on the PRN website and at Jack’s blog, jackrasmus.com.
Dr. Rasmus discusses the first of a two part series on the nature of Greek debt crises, and how they are the consequence of Euro neoliberalism, dominance of the Eurozone’s ‘Troika’ (European Commission, European Central Bank, IMF) by German bankers, allies and politicians, and the continuing insolvency of European private banks. Citing recent studies that show 95% of Greece’s debt payment to the Troika since 2010 have gone to European bankers, Rasmus argues the recycling of debt and interest payments represents an emerging new form of financial imperialism that is built into the Eurozone’s very structure since 1999. The deeper analysis is available in Dr. Rasmus’s new book, to be released in September, ‘Looting Greece: An Emerging New Financial Imperialism’, by Clarity Press. Rasmus discusses the origins of the 2010, 2012, 2015 (and April 2016 mini) debt crises in Greece, and concludes with the Greek Syriza party’s main strategic error. Next week, Part 2: ‘Why Syriza’s strategy (and tactics) failed and why the Troika’s prevailed’—plus more on the new financial imperialism taking form in the Eurozone periphery and its prospects globally elsewhere.
Jack reviews the current condition of Japan’s economy, after 8 years of virtual perpetual recession despite record QE central bank injections, negative interest rates, and talk of helicopter money. The Central Bank of Japan as harbinger of global capitalist central banks policy direction and innovation. How central banks-bank of japan free money policies are not only no longer working, but are now having contrary negative effects on the global economy. Japan’s history of monetary policy first, plus austerity, since 1991 has doomed it to perpetual recessions—8 since 1991 and 5 since 2008. Japan as innovator of QE and negative rate policies. The results in creating trillions of non-performing bank loans (NPLs) and more than $13 trillion in negative bond rates since 2014 are reviewed. Growing NPLs and negative rates as indicators of failing capitalist monetary policies as investment slows, productivity declines, wages stagnate and real consumption falters worldwide. Why global economies are about to shift in 2017 to more fiscal infrastructure spending—but will do so ‘too little and too late’ to prevent recessions in 2017.
Jack Rasmus explains why all economic indicators for the US economy are ‘flashing red’ except for consumer spending, driven mostly by surging household debt again in credit cards, mortgages, auto loans and student loans. Meanwhile, 7 years of continued low interest rates created by the Federal Reserve (and other central banks) are creating a crisis in pensions, insurance, and sectors …
Jack examines in detail Trump’s acceptance speech and its non-traditional Republican themes criticizing Free Trade, US national debt, NAFTA, China, offshoring, taxes, military spending-NATO, and related topics. Trade issues are paramount but represent pandering to working class discontent over the loss of jobs, wage income decline, and chronic US economic insecurity since 2000. Trump’s specific proposals for trade are dissected, including his claims to ‘tear up’ NAFTA, impose 35%-45% tariffs on Mexico and China, stop China currency manipulation, offshoring, anti-immigration wall, etc.—all of which represent pandering to working class discontent. Trumponomics = ‘Law and Order First’ economic recovery plan. How Trump is cleverly targeting disaffected working class voters in key swing states of Pennsylvania, Ohio, Michigan, Wisconsin, Virginia, North Carolina, and Florida as key to an electoral victory in November. Jack predicts the election outcome will depend on who, Trump or Clinton, is able to turn in those states the white working class, un- and under-employed 20-something youth, Hispanic, and independents voting blocs in those key states. Who has the bigger base, and who (Trump or Hillary) can turn out more of that base in these key states will determine the outcome. Trump has the advantage currently in turnout, Jack concludes as Hispanics and disaffected youth may sit home during the election. Trump could win. Much will depend on the TV debates.
A centerpiece of Trump’s campaign, that is gaining support for him among white working class voters in key swing states like Pennsylvania and Ohio, is his attack on free trade treaties from NAFTA to TPP. Today’s show examines the conditions behind the current stagnation of global trade the past 18 months, growing wage stagnation and income inequality in the US, and increasing US voters’ associating of their loss of quality jobs and declining wages with free trade. Dr. Rasmus briefly reviews policies in China, Japan, Europe, and the slowing of world trade. How US economic elites—from the Business Roundtable and others— are becoming terrified of Trump’s successful manipulation of voter discontent with free trade. The elements of Trump’s position on trade are discussed, including ‘tearing up’ treaties, imposing tariffs on Mexico and China, charges of China as currency manipulator, tax policy incentives encouraging job offshoring, and US visa policies. Jack critiques Trump’s positions and concludes that Trump—like Obama before and Hillary now—is simply pandering to the discontent and will reverse his promises on trade if elected. Pandering to the trade issue, however, may just provide Trump enough votes to win key states’ electoral majorities.