Archive for the ‘Prices of Production’ Category

The Crisis (Pt 6)

May 24, 2020

U.S. unemployment hits Depression levels

In April, the U.S. Labor Department U-3 measure of unemployment hit 14.7 percent. The U-3 rate had been used over the last year or so to claim that unemployment was the lowest since 1969. In fact, it is designed to greatly underestimate the real level of unemployment. Even some Federal Reserve Board officials admit that the real rate of unemployment is over 20 percent and fast approaching the all-time quasi-official estimate of 24.9 percent that occurred at the very bottom of the Depression in March 1933. Nobody denies that the number of unemployed in the U.S. is in the tens of millions — around 50 million if you believe AFL-CIO President Richard Trumka.

However, it is claimed by Trump and most economists that the current unemployment crisis is the result of the deliberate shutting down of the economy made necessary by the COVID-19 pandemic. What is occurring, according to this logic, is not the long-feared Depression II but the “Great Suppression.” Though unemployment generally declined after March 1933 — except for the sharp but short-lived Roosevelt recession of 1937-38 — “full employment” did not return until the U.S. had entered World War II in 1941. This time, it is claimed by Trump and many economists, in contrast to 1933 there is no underlying economic crisis. Therefore, “full employment” will return much more quickly. The pandemic will have run its course within months, as Trump claims, or at most within several years, as claimed by more cautious economists.

Therefore, the argument goes, while still a terrible situation it is not quite Depression II. Though unemployment may be as bad as during the Depression, it won’t last nearly as long. Anyway, Depression-level unemployment is the necessary price we have to pay to stave off the much greater evil of millions of deaths in the U.S. alone from COVID-19. Not surprisingly, Donald Trump, who had been planning on running on “prosperity and full employment” as shown by the Labor Department’s U-3 unemployment rate, is leading the charge to “open America for business.”

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The Crisis (Pt 5)

May 17, 2020

U.S. infection rates rise as states move to reopen

More and more U.S. states are moving to reopen non-essential businesses though there is no sign the COVID-19 epidemic is dying down. “Take the New York metropolitan area’s progress against the coronavirus out of the equation, Nicky Forster, Carla K. Johnson, and Mike Stobbe wrote May 4 in an Associated Press article, “and the numbers show the rest of the U.S. is moving in the wrong direction, with the known infection rate rising even as states move to lift their lockdowns. … ”

According to a leaked CDC document that appeared in The New York Times and Washington Post, the government projects that new COVID-19 cases will increase 225,000 a day by June, with deaths climbing to 3,000 per day. In early May, when this is being written, new cases are only 25,000 with deaths a mere 2,000. This despite all the social distancing and stay-at-home orders.

With President Trump leading the charge to reopen America for business, state and local governments are competing with one another for which one can lift the social distancing and stay-in-place orders the fastest. So far, these are the only policies that have slowed the pandemic in some areas.

In reality, the pandemic is still gaining momentum nationwide. Thanks to Trump and various state and local governments, the spread of COVID-19 in the U.S. could very well accelerate further in the coming months. A similar pattern is emerging in other capitalist countries. Of course, the growth of the pandemic in one country, particularly one as large as the U.S., is a threat to people of all other countries, since the virus does not respect national boundaries.

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Political and Economic Crises (Pt 12)

October 13, 2019

Political crisis engulfs the U.S. and Britain

On Sept. 24, 2019, Democratic Speaker of the U.S. House Nancy Pelosi announced the opening of an impeachment inquiry directed against Donald Trump. This is not yet an actual impeachment of the U.S. president, still less his removal from office. But it is considered a major step toward impeachment, which had appeared to be a dead letter after the Mueller report failed to produce any evidence that the 2016 Trump campaign had collaborated illegally with the Russian government.

A CIA whistle-blower reported that he or she had heard from other government officials that President Trump had withheld military aid to Ukraine to pressure the Ukrainian government to investigate Hunter and Joseph Biden. Joseph Biden is considered a front-runner in the race to be the Democratic presidential nominee for the 2020 election. Since the 2014 Euromaidan coup spearheaded by fascist and openly pro-Nazi elements, Ukraine has been reduced to the status of a virtual U.S. colony. The Democrats consider this colonization of Ukraine a great achievement of the Obama-Biden administration.

In the wake of the Euromaidan coup, the younger Biden was appointed to the Board of Directors of Burisma, Ukraine’s leading producer of natural gas, in an obvious move to please Ukraine’s new masters. If Trump demanded in a meeting he held with Ukrainian President Volodymyr Zelensky that Zelensky investigate the Bidens or else the U.S. would withhold military aid, Trump would violate U.S. laws that prohibit seeking the aid of a foreign government in a U.S. election. The Democrats failed to prove that Trump received such aid from the Russian government in the 2016 election. Now they believe they are on the verge of proving it concerning Ukraine’s government.

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Political and Economic Crises (Pt 9)

July 21, 2019

Scandals that rocked the Trump administration this month included sex scandals involving both the current president and former President Bill Clinton. Another scandal involved “detention centers” for immigrants, which are finally being called by their right name — concentration camps. The prisoners held in these camps are desperate people — men, women, children and infants — forced to flee desperate conditions in Central America created by U.S. imperialism under both Republicans and Democrats.

Particularly outrageous is the detention of children and even infants, who are held in cages and go without basic medical care (resulting in some children dying in the camps), toothbrushes, and bathing. The conditions in which these concentration camp victims are held would be scandalous even if they involved adult prisoners convicted after fair trials of terrible crimes. When the victims are children and infants, even the term popularized after the post-WWII Nuremberg Trials of German Nazi leaders for “crimes against humanity” seems somehow trite.

Trump supporters claim it is outrageous to call the detention centers concentration camps, pointing out there are no gas chambers or crematoria in these camps. This much is true. However, there were no gas chambers or crematoria in the Nazi concentration camps of the 1930s. There were also no children in the 1930s-era Nazi concentration camps. That did not prevent the Nazi government, which originally held “only” adult Communists, trade unionists, and some Social Democrats in “protective custody,” from calling them concentration camps. It was only during World War II that non-political women, children and infants — most Jews and Roma people — were taken to concentration camps equipped with gas chambers and crematoria.

As these revelations became known, a growing movement has emerged demanding that the concentration camps be shut down. On July 12, reports circulated that ICE, the U.S. federal secret police agency in charge of enforcing immigration laws, were planning massive raids on Sunday, July 14. In response, a series of demonstrations swept the U.S. demanding that the concentration camps be shut down and immigrants be allowed to stay.

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Political and Economic Crises (Pt 7)

May 26, 2019

April 30 Venezuela coup fails as trade war with China intensifies

On April 30, the Trump administration backed by the “Party of Order” launched a major new attempt to overthrow the democratically elected government of Venezuelan President Nicolas Maduro. Juan Guaidó, claiming he had major military support, announced that “Operation Freedom” – the coup – had entered its final stage. The hope of Trump, Mike Pence, John Bolton, and Eliot Abrams, supported by Democrat Speaker of the House Nancy Pelosi and Senate Minority Leader Charles Schumer, was that the Maduro government would be overthrown by May Day – the international workers’ holiday.

The hope of Trump and the Democrats was that Trump-appointed Juan Guaidó – perhaps on May Day itself – would be installed as the puppet “interim president.” The counterrevolutionary victory would then be ratified in a hastily organized election in which the overthrown Chavistas would be banned from participating, thus guaranteeing a victory for the pro-imperialist reactionaries.

Instead, the coup never got off the ground, and the Chavistas staged one of the largest May Day demonstrations in years, completely dwarfing the small, dispirited actions held by the Guaidó forces. Of course, the events of April 30-May 1 were only a battle – but an important one. A battle has been won but the war continues. The Trump administration still indicates that if all else fails it reserves the right to pass from economic and political war to a full-scale military invasion.

If the coup had succeeded, Trump, who has promised to banish socialism forever, would have celebrated what to him – and his class – would have been a major victory. When Trump uses the term socialism – a term of many meanings – he is not using it in the sense Lenin used it in his classic work “State and Revolution.”

In that work, Lenin defined socialism as the first stage of the future communist society. In this stage, private ownership of the means of production and with it the division of society into classes, along with commodity-money relations of production, have already died out.

But Lenin explained that socialism, while a form of communism, is an imperfect communism because people will still be paid, at least in part, according to their work rather than according to their needs, as would be the case in the higher form of communist society.

Trump, in contrast to Lenin, means by “socialism” the policies advocated by modern European social-democratic parties. These parties advocate a capitalist society with laws that limit the workday to 40 hours or less so workers have time to participate in politics; the right of workers to organize into unions and political parties and establish a mass workers’ press; and recognition of housing and education as rights along with social guarantees such as unemployment insurance, social security, and the right to medical care regardless of income and the ability to pay.

These things, even when taken together and fully realized, are still very far from Lenin’s definition of socialism. Under social-democratic “socialism,” society remains divided into a class of capitalist buyers of labor power and workers who sell their labor power and through their unpaid or surplus labor produce surplus value. The U.S. has achieved less of the elements of “socialism” in the modern social-democratic sense than virtually any other advanced capitalist country.

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Political and Economic Crises (Pt 4)

February 24, 2019

Trump and ‘Party of Order’ unite to declare war on Bolivarian Venezuela

On Jan. 23, after conferring with U.S. Vice President Mike Pence, Venezuelan right-wing politician Juan Guaidó declared himself “interim president” of Venezuela. The United States promptly recognized Guaidó as the “interim president.” Trump refused to rule out a military attack against Venezuela if the government of President Nicolas Maduro and the Venezuelan people resist the U.S. government’s appointment.

In a series of moves that included breaking diplomatic relations with the legitimate government, appointing a puppet government in its place, seizing state assets and handing them over to the puppet government, demanding that Venezuela’s military support the puppet, and threatening direct military action if the Venezuelan military refuses, “commander-in-chief” Donald Trump’s order amounts to a declaration of war against the government and people of oil-rich Venezuela.

As part of the war drive, Trump imposed a full-scale economic blockade against Venezuela. The assets of the state oil company held abroad, including its U.S branch Citgo, has been seized and handed over to the puppet Guaidó “government.” Venezuelan bank accounts have been frozen, including $1.2 billion in gold bullion held in the Bank of England.

Venezuela is one of a bloc of three large oil-producing countries, the other two being Iran and Russia, that is not under the control of the Empire. If Trump succeeds in his war against Venezuela, the pressure on Iran and Russia will increase. For the moment, the war against Venezuela is being fought with economic methods, but this could change at any moment.

Even if the war remains economic, this doesn’t change the fact that it is a war of aggression and, as such, a crime against humanity. By Feb. 6, the European countries of Austria, Belgium, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Iceland, Latvia, Lithuania, Luxembourg, Macedonia, Netherlands, Poland, Portugal, Spain, Sweden, and the UK had recognized the U.S.-appointed “interim president.”

Latin American countries that resist the Empire continue to recognize the legal government of Venezuela. These include socialist Cuba – no surprise there – Bolivia Uruguay, Nicaragua, and the new nationalist government of Mexico, which came to power in January after many years of right-wing rule. On the other hand, Latin American countries ruled by right-wing governments belonging to the so-called Lima group announced that they recognize the Trump-appointed Guaidó as Venezuela’s “interim president.” Among the Latin American governments recognizing Guaidó is the new far-right government of President Jair Bolsonaro in Brazil.

Beyond Latin America, Israel also announced its support for the coup government. In contrast, Syria continues to recognize the Maduro government. Russia, China and Iran also continue to recognize Maduro as the sole legitimate president of Venezuela.

There is a general pattern here. Governments that are integrated into the U.S. empire quickly recognized the coup government and joined the U.S. declaration of war against Venezuela. All other governments recognize Maduro as head of the only legitimate government of Venezuela.

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Political and Economic Crises (Pt 3)

January 21, 2019

On Dec. 20, 2018, it was announced that U.S. “Defense” Secretary James “Maddog” Mattis was resigning. Mattis resigned in protest over President Trump’s decision to withdraw 2,000 U.S. troops fighting in northeast Syria and cut in half the number of U.S. troops fighting in Afghanistan.

It was originally announced that Mattis would stay on until Feb. 28, which would allow time for President Trump to nominate a successor and for the successor to confirmed by the Republican Senate. Within days, however, it was revealed that “Maddog” would at the president’s insistence leave by Jan. 1. Mattis was replaced “on a temporary basis” by Patrick Shanahan, a former Boeing executive. Shanahan’s official title will be “acting” secretary of defense. Unlike Mattis, Shanahan is a civilian who comes from the industrial capitalist side of the military-industrial complex.

Since he assumed office on Jan. 20, 2017, Trump had been surrounded by a ring of generals, the most prominent of which was Mattis. General Mattis was known to be an enthusiastic supporter of the war in Afghanistan as well as all the other colonial wars the U.S. has been fighting around the world, including the war in northeastern Syria. Even more important, he is a strong supporter of NATO, which acts as the military wing of the U.S. world empire.

Trump, in contrast to Mattis and other generals who have surrounded Trump until recently, has expressed skepticism about continuing the wars in Afghanistan and Syria. According to the U.S. government, U.S. troops are in Syria to fight the remnants of ISIS and protect “our allies” the Kurds against NATO member Turkey.

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Political and Economic Crises (Pt 2)

December 23, 2018

As boom slows, political instability rises in the imperialist countries

As 2018 winds down, political instability is sweeping the Western imperialist countries – both the United States and Western Europe. In the United States, as part of a plea bargain with federal prosecutors, Michael Cohen, Trump’s former lawyer and “fixer,” pleaded guilty to violating with “Individual 1” U.S. campaign finance laws. Cohen faces three years in prison.

It is no secret that “Individual 1” is one Donald J. Trump, the current president of the United States. According to Cohen’s plea, Trump directed Cohen to break U.S. campaign finance laws in order to pay “hush money” to porn star Stormy Daniels and “Playboy playmate” Karen McDougall. Trump paid the hush money because he didn’t want the headlines of his extramarital affairs to dominate the news in the weeks leading up to the U.S. presidential election.

Since these payments violated federal election law, it is clear that Trump committed felonies. These felonies, it should be pointed out, are not connected with the so-called Mueller probe into whether Trump, other members of the Trump family, or other associates violated U.S. laws as part of their alleged collusion with Russia in the 2016 elections. That is a separate matter. So far, Mueller and his prosecutors have not presented concrete evidence of law-breaking on the part of Trump in this matter, though there continues to be much speculation about this possibility in the media.

Theoretically, Trump can now be impeached because he committed felonies, which meets the U.S. constitutional standard for impeachment for “high crimes and misdemeanors.” Some Democrats have suggested that in light of these facts impeachment proceedings against Trump in the House of Representatives should now commence. However, there is also a general feeling that crimes centered on sexual affairs are not sufficient grounds to remove a president from office. After all, who in Washington has not had an affair or two or more? While the Democrats will have a majority in the U.S. House of Representatives beginning in January, they would need a large number of Republican votes in the Senate to reach the two-thirds’ majority necessary to remove Trump from office.

The Republicans are reluctant to remove Trump on impeachment charges. If they do vote to remove him, they will likely lose Trump’s white racist “base,” which continues to adore him. The “Trump base” will be furious if their adored leader is removed over what is essentially a sex scandal. Can Trump – and this is a concern for those ruling-class circles of the “Party of Order” who do not like Trump – be removed from office without splitting the Republican Party in such a way that its continued existence as one of the two “major parties” in the two-party system would be in question?

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Political and Economic Crises

November 25, 2018

I had originally planned to deal with the current state of the industrial cycle in this post. I assumed I would make a few passing comments on the U.S. mid-term elections and then go into the economic analysis. However, it became clear that the political crisis gripping the U.S. has reached a new stage. At the same time, the industrial cycle that began with the Great Recession of 2007-09 has now entered its terminal stage.

I have therefore decided to begin with the political crisis this month and, events allowing, examine the terminal stage of the current industrial cycle next month. One way or another, the interaction between the political crisis represented by Trump’s rise to power and the developing cyclical economic crisis will dominate national and global politics between now and the 2020 U.S. presidential election.

This blog has centered on capitalist economic crises, especially the periodic crises of overproduction. The industrial cycle with its periodic crises of overproduction and the political crises and wars that can turn into revolutions – or counterrevolutions – are closely intertwined in ways that are not always obvious.

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Modern Money (Pt 5)

October 28, 2018

In recent weeks, U.S. politics were dramatically shaken by the Republican drive to get Trump’s Supreme Court nominee Judge Brett Kavanaugh confirmed by the U.S. Senate despite charges that he violently sexually assaulted women in high school and later while a student at Yale University. Though Kavanaugh was an extremely right-wing federal judge, his nomination was expected to go smoothly, with virtually unanimous support from the Republicans and some Democrats. That changed when a respected California professor of clinical psychology, Dr. Christine Blasey Ford, revealed that a drunken Kavanaugh had tried to rape her at a high school party. According to Dr. Ford, when she attempted to cry for help, Kavanaugh put his hand on her mouth causing her to fear that he might accidentally kill her.

Normally, a nominee for high office, let alone the Supreme Court, facing charges for crimes far less serious than attempted rape would be expected to withdraw his candidacy for the sake of “the nation and his family.” But not this time. Demonstrators, mostly women, descended on Washington demanding that the Senate reject the Kavanaugh nomination. After riveting testimony by Dr. Ford and a temper tantrum rebuttal by an outraged Kavanaugh, the Senate by a 50 to 48 vote confirmed Kavanaugh as one of nine Supreme Court justices. Every Republican with the exception of Senator Lisa Murkowski of Alaska, who voted “present,” voted for Kavanaugh’s confirmation. Every Democrat, with the exception of West Virginia Senator Joe Manchin, who voted to confirm Kavanaugh, voted against the nomination.

The Republicans hope the backlash against the women protesters, horrified that an accused rapist like Kavanaugh could ever be seated on the high court, will electrify their racist misogynistic base and limit the expected Democratic gains in the November 2018 mid-term elections. The conventional wisdom is that while the Democrats will win a somewhat larger majority than previously expected in the House they will face defeat in their bid to retake the Senate. If the Democrats against current expectations do win a majority in the Senate, they will have the power over the next two years to reject future Trump nominations to the Supreme Court.

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