The Crisis (Pt 9)

After police murder of George Floyd, demonstrations and uprisings sweep U.S.

On June 1, a combined force of military police, park police, and Secret Service brutally cleared an area around the White House of peaceful demonstrators who had been protesting the May 25 murder by Minneapolis police officers of African-American George Floyd. To clear the crowd, these military-police forces used a low-flying helicopter, tear gas, and stun grenades. This was so that President Donald Trump could appear in front of a nearby church Bible in hand.

Trump, who had earlier been sheltering in a special bunker beneath the White House, threatened to invoke the Insurrection Act of 1807, which would permit him to order the military to suppress the massive wave of demonstrations and uprisings that have been sweeping the U.S. since the police murder of Floyd. Trump’s threat to use the military, if carried out, would be a major step towards a military-Bonapartist dictatorship. (1)

Trump’s threats led to a wave of complaints by mostly Democratic politicians and warnings of some retired generals, including Trump’s former Secretary of “Defense” General James “Maddog” Mattis, not to use the military against peaceful demonstrators. Republican leaders, with a few exceptions, either supported Trump or maintained an icy silence.

In light of Trump’s Bonapartist inclinations, fear has been expressed by Democratic leaders, including presumptive presidential nominee Joseph Biden, that if Trump loses the Electoral College vote in November he may attempt to hold onto power on grounds that the results of the election are “fake” or claim “illegal aliens” voted. Trump earlier claimed that he had been denied a victory in the popular vote in 2016 because “illegal aliens” voted. Alternately, Trump might move to “postpone” the elections citing riots in the streets.

It all began May 25, Memorial Day, in the “liberal” city of Minneapolis, Minnesota, where the murder by police officers of African-American George Floyd was recorded on a cell phone. For nine minutes, Minneapolis police officer Derek Chauvin kept his knee on George Floyd’s neck while other officers kept their knees on Floyd’s back. Floyd shouted, repeatedly, “I can’t breathe.” Shortly thereafter, George Floyd was dead. The cops claimed that Floyd had passed a counterfeit $20 bill.

Chauvin and three of his fellow officers were fired, but only Chauvin was originally charged with third-degree murder. As always, the prosecutors are doing all they can to protect their fellow “law enforcement officials.” Only after weeks of nationwide demonstrations and rebellions were the charges against Chauvin upped to second-degree murder and the three other officers charged with lesser offenses. This even though a cell phone video shows that the other cops present were clearly accessories to the murder. Demonstrators are demanding that Chauvin be charged with first-degree murder.

The police murder of Floyd was an almost exact replay of the murder of African-American Eric Garner on Staten Island, a borough of New York City, on July 17, 2014, by New York City police officer Daniel Pantaleo. Garner’s last words were also “I can’t breathe.”

It isn’t as though the events in Minneapolis were an isolated incident, though that would be bad enough. On Feb. 23, African-American Ahmaud Arbery was shot to death in the U.S. state of Georgia by former police officer Gregory McMichael and his son Travis. This, too, was caught on video.

Then a few weeks later, on March 13, in Louisville, Kentucky, just as the COVID-19 pandemic was hitting the U.S. with full force, a young African-American woman and EMT worker Breonna Taylor lost her life. She had planned to become a nurse, risking her life by helping to bring medical care to sick people. On March 13, her life ended. But it wasn’t the COVID-19 virus that killed her.

Instead, Taylor’s killers were Louisville police who entered Taylor’s apartment without knocking and guns blazing, killing the young medical worker. Her alleged crime, according to “law enforcement”? Well, none. The cops say they made a mistake when exercising a “no-knock warrant” and kicked down the wrong door when they entered Taylor’s apartment and murdered her.

The officers say they had received the no-knocked warrant as part of an investigation of two people suspected of selling drugs — itself a nonviolent crime — and, well, mistakes happen. There are many examples of similar police murders over the last few years, mostly of African-Americans, but also of “brown” Hispanics and Native Americans, even some white people, but they are too numerous to list here.

Countless thousands of people in cities across the U.S. have finally had enough of violent and often murderous “law enforcement officers.” They have hit the streets in increasing numbers, braving the COVID-19 virus as well as curfews enforced by brutal police using rubber bullets, tear gas, mace, and stun grenades. Thousands have been arrested, and many U.S. cities, generally led by Democrats, imposed curfews in an attempt to break the momentum of the demonstrators, and later were forced by massive protests to lift them.

Donald Trump, sensed the possibility of riding a “white backlash” — though many of the demonstrators are white, much like Richard Nixon did in 1968. (2) He tweeted, “When the looting starts, the shooting starts.” This was taken from a remark made by a notoriously racist Miami Florida police chief in 1967. Trump also threatened protesters who were demonstrating against the police killing in front of the White House — as Trump sheltered in a bunker beneath the White House — with “vicious dogs.” This too is a 1960s reference. Back then, police used vicious dogs to attack civil rights demonstrators in the U.S. South protesting against Jim Crow segregation laws. These laws were still being enforced into the early 1960s by state and local governments in the U.S. South while the federal authorities did nothing to stop them.

Much has changed since Richard Nixon rode the “white backlash” to the White House in the 1968 election. Then the U.S. economy was booming and the U.S. was a much “whiter” country than it is today. Now, unlike 1968, the U.S. is the center of a global pandemic with more deaths by far than any other country and with Depression-level, double-digit levels of unemployment. Its economy has long been in decline and now is in shambles. However, just as the U.S. rulers are so far still refusing to concede health care as a human right rather than a commodity, they have up to now refused to rein in police violence. This is the situation now rapidly developing (3) and I will try to assess it in next week’s post. For now, I will return to the economy, which forms the background to the current astonishing events unfolding on the streets of the U.S.

The Bernanke Fed and the crisis of 2008

As we saw last week, the Federal Reserve System under Ben Bernanke refused to increase the rate of growth of the dollar monetary base — which measures the rate of growth of Federal Reserve-created dollars — until the full-scale panic hit Wall Street in September 2008. However, this time starting in June 2019 and when the real extent of the COVID-19 pandemic became apparent, in March 2020, the Fed was already moving to expand the monetary base.

Between 2015, when the U.S. dollar monetary base hit what was until recently an all-time high, and June 2019, the Fed shrank the monetary base by approximately 20 percent as part of a program designed to stabilize the dollar-centered international monetary system. To do this, the Fed had to destroy a certain portion of the dollars it had created in a series of waves beginning in the fourth quarter of 2008.

This “money-printing spree,” dubbed “quantitative easing,” aimed first at checking the crisis that had broken out in full force in September 2008. It also aimed to jump-start what the Fed hoped would be a strong recovery. Though the recovery came and persisted, it never gained much momentum. Instead, it turned out to be the weakest on record.

In December 2018, a stock market sell-off was followed by the development of a mild manufacturing recession. These were the first signs of the approach of a new generalized recession. Further confirming the approaching recession, in September 2019, was the so-called “repo crisis.” All this occurred before there was even a hint of the COVID-19 pandemic. Faced with these first signs of an approaching recession, the Federal Reserve ended the contraction of the dollar-denominated monetary base and began to expand it once again.

This was in contrast to the actions of the Bernanke Fed in 2007-2008. The Bernanke Fed had refused to accelerate the rate of growth of the monetary base until panic hit Wall Street in September 2008 with the failure of giant Lehman Brothers investment bank. With this experience in mind, Powell refused to wait until a full-scale recession developed. Between June 2019 when the Fed halted the contraction in the monetary base and January 2020, the dollar monetary base rose by a historically high 5.1 percent. The dollar price of gold rose by about $100 an ounce in response to the Fed actions, reflecting a still slight but definite devaluation of the U.S. dollar.

Mid-cycle slowdown?

Powell, much like Bernanke had in 2007-08, claimed that the U.S. economy was experiencing a “mid-cycle slowdown” (4) and that he was taking these actions to make sure that the “expansion” would continue. If the 2019 industrial recession was only a “mid-cycle” slowdown, the implication was that the rising phase of the industrial cycle proper still had years to run.

However, with the U.S. and world economy entering the 11th year of an admittedly lackluster expansion, previous experience would indicate that the rising phase of the industrial cycle was well past its “mid-cycle” point. Also, the U.S. had already experienced a “mid-cycle” slowdown in 2014-16, which had hit certain branches of the U.S. industrial economy — especially energy — quite hard. This had contributed to the Electoral College victory of Donald Trump in the 2016 election. Then, in September 2019, the repo crisis hit Wall Street, which gave further evidence that a new generalized recession was not far off. To stave off, or at least moderate, the approaching recession, the Fed was obliged to pump billions more into the banking system.

It is impossible to know what the Fed leaders really think, but did Powell believe that the U.S. economy was only facing a “mid-cycle” slowdown, or was he simply attempting to reassure the public and the markets to prevent panic? It seems that Powell was attempting to postpone the approaching recession beyond the November election and reduce its impact when it did arrive in 2021.

By 2021, the election would be over. Powell and other Fed leaders had good reason to fear that if they didn’t reverse the shrinkage of the monetary base, the recession might well arrive before November 2020, which among other effects would have likely meant considerable losses for the Republicans in Congress as well as a probable Democratic victory in the presidential election.

While Powell may have had no love for Donald Trump — who has repeatedly attacked him and even threatened to fire him at one point — he was nominated by Trump and he is, after all, a Republican. Even if Powell and other Fed leaders wouldn’t mind the replacement of Trump by the more conventional conservative Democrat Joseph Biden, they would want to prevent a full-scale rout of the Republican Party at the congressional and state and local levels.

Once the real character of the pandemic became obvious in March, and the U.S. economy tanked bringing double-digit unemployment, the Fed wasted no time in rapidly expanding the dollar-denominated monetary base. Between March 4 and May 20, the Fed increased the size of the monetary base by 45.72 percent, an astounding rate of increase over such a short period. The Fed was no longer attempting to postpone a cyclical recession, which was overdue anyway. It was trying to prevent the COVID-19 “shutdowns and stay-in-place orders” from triggering a credit collapse that could transform the COVID-19 recession with its double-digit Depression levels of unemployment into a prolonged “Greater Depression” that could match or exceed in length as well as depth the 1930s Depression.

The Fed has even indicated that it would be willing to purchase corporate “junk bonds.” When the Fed purchases a corporate bond, just as when it purchases a Treasury bill, it does so with newly created U.S. dollars. The decision of the Federal Reserve System to “monetize” investment-grade corporate bonds, let alone junk bonds, goes way beyond normal central bank operations. It flirts with the idea of allowing private corporations to in effect issue their own dollar-denominated currency. (5)

Normally, the Fed avoids purchasing even U.S. Treasury bonds, because this could easily degenerate into allowing the U.S. government to finance its operations by simply “printing money.” If this is extended to private corporations, they also acquire the right to “print their own money.” If anything like this ever becomes generalized for any period of time, the result would be a runaway inflation or indeed the hyperinflation of the U.S. dollar. This would destroy the dollar system and with it the entire dollar-dominated world monetary system. The U.S. world empire would be finished.

If the economy shows significant signs of recovery and falling unemployment later this year as the economy “reopens,” the Fed will be expected, just as it did start at the very end of 2008, to slow down its current dollar-printing spree. And assuming that the COVID-19 pandemic doesn’t surge to such levels that the economy has to be closed down again, nipping any recovery in the bud — and there are already signs the pandemic is indeed worsening as the “reopening” begins (6) — the Fed would then be expected to slow down its creation of new dollars just as it began to do at the end of 2008.

However, there is a difference between the slowing down of the creation of new dollars to more “normal” rates and the destruction of the extra dollars that were and still are being created at present. If all the dollars that have been created during the first and second quarters are destroyed later this year as the economy picks up, there would be a spike in interest rates that by itself will threaten or at least slow the incipient recovery.

More likely, the Fed will simply slow or at most temporarily halt the creation of new dollars for a while, as they did in the years that followed the 2008 panic. The Federal Reserve System will aim to prevent a sudden rise in interest rates that would threaten to derail the recovery while staving off the risk of a massive rise in the dollar price of gold that would then trigger a dollar devaluation-driven inflation. Since under the dollar system, the U.S. dollar backs all other currencies, a dollar devaluation-driven inflation would inevitably spread around the globe.

Nouriel Roubini predicts a ‘Greater Depression’ for the 2020s

Before the pundits settled on the term “Great Recession” to describe the 2007-09 economic crisis, the term “lesser depression” was considered. The problem for the pundits was that there are not supposed to be “depressions” anymore, only mere recessions. So they decided to name the 2007-09 economic crisis the “Great Recession.”

But what would happen if a Depression worse than the 1930s — one with even official unemployment over 25 percent, for example — arrives? Well, that couldn’t be just a “recession” great or otherwise. So if economic pundit and bourgeois economist Nouriel Roubini is right, future generations will refer to the “Great Depression” of the 1930s and the “Greater Depression” of the 2020s.

Roubini explains why he believes that a full-scale “Greater Depression” is coming in a piece that appeared on April 28 in the online Project Syndicate. Roubini points out that neither the U.S. nor the world capitalist economy was, Donald Trump notwithstanding, in good shape on the eve of the COVID-19 pandemic.

“While there is never a good time for a pandemic, Roubini writes, the COVID-19 crisis has arrived at a particularly bad moment for the global economy.” In other words, the global economy was already on the verge of a downturn that the Powell Fed was desperately trying to postpone when the pandemic hit. But there were other problems besides an approaching cyclical recession. “The world,” Roubini writes, “has long been drifting into a perfect storm of financial, political, socioeconomic, and environmental risks, all of which are now growing even more acute.”

Roubini fears the rising tide of economic nationalism that threatens to rip the global economy apart will disrupt “supply chains.” This plus the colossal growth of debt, both governmental, corporate and individual, plus the Fed’s move to create a mountain of new dollars to stave off the collapse of this credit bubble, will, he believes, trigger a new episode of stagflation. The stagflation will then form the bridge between the current “Greater Recession,” as he calls the “COVID recession” — though this “greater recession” already features Depression levels of unemployment — and the “real” Greater Depression he expects to arrive around the middle of the current decade.

As Roubini sees it, the growing risk of deflation “is also creating a massive slack in goods (unused machines and capacity) and labor markets (mass unemployment), as well as driving a price collapse in commodities such as oil and industrial metals.” The Fed’s desperate attempts to stave off deflation will then, Roubini believes, trigger stagflation.

“In the short run, governments will need to run monetized fiscal deficits to avoid depression and deflation,” Roubini writes. “Yet, over time, the permanent negative supply shocks from accelerated de-globalization and renewed protectionism will make stagflation all but inevitable.”

What Roubini calls “de-globalization” and “permanent negative supply shocks,” I call rising economic nationalism, which is breeding a growing wave of political nationalism and racism. Or in Roubini’s words: “The backlash against democracy will reinforce this trend. Populist leaders often benefit from economic weakness, mass unemployment, and rising inequality. Under conditions of heightened economic insecurity, there will be a strong impulse to scapegoat foreigners for the crisis.”

Of course, Mr. Roubini doesn’t mention the growing resistance to racism and reactionary imperialist chauvinism as reflected in the current massive wave of demonstrations sweeping the U.S. and much of the world. But to be fair to Roubini, these didn’t begin until after he had written his article.

But the dangers of what Roubini calls “populism,” by which he essentially means fascism, are very real. The danger of fascism will grow if the current demonstrations and rebellions don’t lead to a rapid revival of the workers’ movement, not only in the trade union sense but above all in the political sense. If the workers’ movement revives, it will open the door to the resolution of the current ecological-biological, economic, and political crises in the form of the U.S. and global socialist revolution. This is not, however, an outcome that Mr. Roubini particularly relishes. Instead, he hopes for a solution that will somehow revive capitalism without fascism and war.

Stagflation, the bridge to the Greater Depression

As Roubini realizes, if stagflation does indeed develop, it will end in a “greater Volcker shock,” though Roubini doesn’t use this term, which will be necessary to stabilize the capitalist monetary system once again. Taking into account the far higher levels of relative debt, both at the level of government, capitalist enterprises, and indebted individuals, than that which existed in the days of the first Volcker shock, the result would then be the Greater Depression Roubini foresees.

While there is no way to be sure about the timing of events, the trend toward stagflation followed by a Greater Depression is clear enough. When the 2008 crisis hit, it was described by the bourgeois economists as a freak once-in-a-century event. Though the U.S. dollar and its satellite currencies were devalued once again against gold, the situation did not degenerate into a new round of stagflation during the remainder of the 2007-2020 industrial cycle. But the century that was supposed to separate the events of 2008 from the next crisis that would require “quantitative easing” turned out to be only 11 years long. How long will the new “century” last before the next “black swan” event occurs causing the Federal Reserve System to once again engineer an explosion in the monetary base?

The level of gold production and stagflation

One variable that will have a considerable impact when stagflation arrives is the level of gold production. Experience has shown that stagflation and more severe economic crises than usual are far more likely to develop during periods of depressed or declining gold production than during rising periods of gold production. The 1970s stagflation developed as gold production declined between 1970 and 1975 and then stagnated between 1975-80. These years saw the “Great Recession” of 1973-75 and only four years after that the Volcker shock. The level of manufacturing employment in the U.S. has yet to recover, though 40 years have passed since the 1979-80 Volcker shock.

Earlier in the century, the sharp rise in market prices in terms of gold — not simply devalued currencies — during and immediately after World War I led to a sharp depression in gold production that didn’t bottom out until 1921. The sharp deflation of 1920-21, finally brought the recession in gold production to an end. However, the 1920-21 deflation still kept the prices of commodities calculated in terms of gold above the pre-World I levels and above the prices of production of most commodities. The result was that global gold production only partially recovered during the 1920s, remaining below the levels reached on the eve of World War I. The depressed level of gold production continued even as the 1920s economic boom caused global commodity production to rise above the best levels of the pre-World War I period. The Depression of the 1930s soon arrived.

In contrast, periods of rising gold production have led to periods of both capitalist economic expansion and the relative political stabilization of capitalism. The surge of gold production that was triggered by the super-crisis of 1929-33 and continued throughout the rest of the Depression created the money material that both financed World War II and then the several decades of rapid capitalist economic growth that followed. This capitalist prosperity led to the relative stabilization capitalism — compared to the catastrophic years between August 1914 and August 1945 — that characterized the post-World War II years.

Likewise, after the Volcker shock, the exceptionally low level of commodity prices in terms of gold led to a rise in world gold production between 1980 and 2001. Though economic growth in Europe and the U.S. did not return to the robust post-World War II levels, between 1980 and 2001, we saw only “mild” — that is ordinary — recessions and a few “mini-recessions but no crises comparable to the “Great Recession” of 1973-75, the Volcker shock recession of 1979-82, or the Great Recession of 2007-09, still less the Great Depression. In turn, the capitalist political stabilization and relative capitalist prosperity of those years also facilitated the counterrevolutions in the Soviet Union and Eastern Europe — even if it were not the only cause — which then greatly strengthened imperialism and capitalism.

After 2008, the recession in the global gold production of 2001-2008 was reversed. Once again, global gold production rose to record levels, though the rate of increase has petered out over the last several years. This new rise in gold production after the Great Recession of 2007-09 was in contrast to the stagnation of gold production after the “Great Recession” of 1973-1975. This rise in global gold production allowed the full industrial cycle of 2007 to 2020 to run its course, though it never gained much momentum on the upside. The reason was that the Great Recession didn’t even remotely go far enough to complete the “shift from a credit to a monetary system” that would be necessary for a return to a post-World War II-like rate of growth.

What put the “great” in the Great Recession was the depletion of the South African gold mines, which became evident at the turn of the current century. The Great Recession lowered commodity prices calculated in terms of gold, which made possible the opening and profitable operation of a series of new gold mines that produced just enough gold to stave off a new “stagflation” followed by a new Volcker shock in the years after 2008.

In the U.S., the result of this very relative capitalist prosperity was just enough to enable Obama to win a second term and therefore keep the people off the street in large numbers. However, the long-term unemployment, and even more importantly underemployment, that persisted during the very limited Obama prosperity, combined with the 2014-2016 “mini-recession,” which was all but ignored by the capitalist media, led to the Electoral College election of Donald Trump in 2016. The coming to power of the racist Trump has once again destabilized U.S. and global politics — big time!

Gold production and the COVID-19 recession

The pandemic seems to have sharply reduced gold production, which perhaps explains that while the dollar price of gold failed to rise during the fourth quarter of 2008 it has risen during the “COVID recession” to just above $1,750 an ounce at times. This is still a relatively modest dollar devaluation considering the explosive rise in the monetary base engineered by the Powell Fed. Just as in the fourth quarter of 2008, the increased demand for U.S. dollars as a means of payment has worked to limit the rise in the dollar price of gold — or more accurately to postpone this rise. This works against an immediate rise of U.S. dollar devaluation-driven inflation and the development of stagflation.

Before the pandemic, global gold production was leveling off though not yet declining. The pandemic caused a sharp decline in gold production. This is a short-term factor and due to gold bullion’s nature as money material is relatively unimportant assuming that it is indeed short lived and that “normal” levels of gold production are quickly restored. The reason is that unlike other commodities, money material is not “consumed” but rather accumulated through the entire history of capitalist and even pre-capitalist commodity production. Therefore, as a first approximation all the gold bullion that has been produced from ancient times onward still exists.

However, before the pandemic, many bourgeois observers believed that due to the reduced exploratory budgets of the capitalist gold mining companies, gold production was set for a prolonged decline. Therefore, even assuming global gold production returns to a “normal level” as gold miners and refinery workers are forced to return to work by their profit-hungry bosses, gold production may very well then enter a prolonged decline lasting for years.

If this is the case, there is virtually no doubt that world capitalism will be in for a rough ride in the 2020s, whether or not things work out exactly as Roubini foresees them. If gold production, however, resumes a rising trend that persists over some years, events may unfold at a slower pace.

Regardless of the level of gold production, the failure of the post-2008 “monetary stabilization” and the return to “quantitative easing” within little more than a decade points toward the approach of a grave crisis sooner or later of the U.S. dollar-based international monetary system, with all the consequences in the form of “stagflation” and a new Volcker shock. The level and trend of gold production, however, will play an important role in determining to what extent the coming crisis of the U.S. dollar and the dollar-centered international monetary system comes sooner as opposed to later.

Roubini’s hope

Roubini writes: “By the 2030s, technology and more competent political leadership may be able to reduce, resolve, or minimize many of these problems, giving rise to a more inclusive, cooperative, and stable international order. But any happy ending assumes that we find a way to survive the coming Greater Depression.” Roubini should have added a new surge in gold production to this mix, but that is beyond his understanding as a bourgeois economist.

Roubini is pointing to the fact that his class, the capitalists, did survive the Depression of the 1930s, so maybe they will survive the even worse Greater Depression that Roubini foresees over the coming decade. I have mentioned above some factors, especially the level of gold production over the next decade that could postpone things somewhat, though we certainly shouldn’t count on this happening. We also don’t know the future of the current pandemic or possible new pandemics that the experts are warning against.

But assuming a full-scale Greater Depression does indeed unfold over the next decade, this does not guarantee that it will end in the transformation of global capitalism into socialism. Socialism won’t come automatically, no matter how severe the crises of capitalism become. The ability of capitalism to survive the catastrophic years that began in August 1914 and included the Great Depression and ended 31 years later with the A-bombing of Hiroshima and Nagasaki in August 1945 did lead to a few decades of greatly accelerated capitalist economic growth and the relative stabilization of capitalism.

In 1945, in the wake of the disasters of two world wars within a generation, the Depression, and the victory of fascism in Europe, most Marxists considered a new wave of capitalist prosperity and political stabilization of capitalism virtually excluded. But the new capitalist prosperity came all the same and led to much disorientation.

But today, a new period of post-World War II-style capitalist prosperity would put into question the very survival of our civilization. The atomic bombs of 1945 soon gave way to the hydrogen bombs that if ever used in a war would destroy human civilization for thousands of years if not forever. And now we see other threats to civilization posed by global warming and the general environmental disruption caused by capitalism that many experts see as lurking behind the current global pandemic. Can we survive another post-1945 style revival of capitalism?

This is why the current rebellion sweeping the United States of America, still by far the most powerful imperialist country in the world, is so important. Will this rebellion be a herald of a movement towards the socialist transformation of the United States and the world, or will it end in a new, if brief, stabilization of American and world capitalism such as Roubini is hoping for in the 2030s? If something like this were to occur, it would very likely be but a prelude to the final collapse of our civilization. And this as far as capitalism is concerned is the very best case.

Therefore, as the events now unfolding on the streets of the United States — and not only in the United States — demonstrate, the future of our civilization is hanging in the balance.

To be continued.


1 Trump’s threats to impose what could turn into an open dictatorship have been called fascistic by many on the left and some Democrats. However, even if such a dictatorship is established, it would not be a truly fascist regime. Mussolini and Hitler headed huge mass parties, based on the middle class, which included large militia forces designed for waging civil war in the streets. These street-fighting militia forces were called Black Shirts in Italy and Brown Shirts in Germany after the color of the uniforms that these street-fighting forces wore.

While there are fascist militia forces in the U.S. today, they are not anywhere near large enough or centralized enough to impose a dictatorship. If Trump moves towards an open dictatorship, he will have to rely on the military and the police. While Trump would have the support of the vast majority of police officers, the ranks of the military, which includes many African-Americans and Hispanic people, are another matter altogether. This is the real reason why generals including the former secretary of defense are warning Trump not to use the military against the American people. If the facade of (bourgeois) democracy, such as it is in the U.S., as well as the almost two and a half centuries of uninterrupted constitutional rule that survived even the bloody U.S. Civil War, were to disappear, the door would be open for a new civil war and full-scale revolution. (back)

2 In 1968, racism among U.S. whites was so strong that Nixon managed to win both the popular and the Electoral College vote even though Governor of Alabama George Wallace, who was one of the last of the Jim Crow Democrats, was also running for president on an extremely racist “law and order” platform. Running well to the right of Nixon, Wallace took votes away from the more “moderate,” “dog-whistling” racist Nixon. Despite this split in the white racist vote, Nixon won both the popular as well as the Electoral College vote anyway. In 2020, Trump will not have to share the “white backlash” vote. (back)

3 Earlier this year, Bernie Sanders’ presidential campaign for the Democratic nomination completely dominated left-of-center politics in the U.S. while the streets were quiet. Now, though the year hasn’t even reached its midway point, Sanders seems virtually forgotten. (back)

4 These mid-cycle “slowdowns” are sometimes called “Kitchin recessions” by bourgeois business-cycle specialists after British statistician Joseph Kitchin (1861-1932), who described them in the early part of the 20th century. They involve movements of inventories, what Marx called commodity capital. Commodity capital consists of unsold commodities that contain surplus value. These commodities must be sold before the surplus value contained in them can take the form of profit. Profit is defined as surplus value in money form. Before Kitchin, Marx and Engels also noted the lesser fluctuations that occur within the industrial cycles.

If Bernanke believed he was facing a mere “Kitchin recession” in 2007-08, he was wrong. Since the U.S. economy has already experienced a “Kitchin recession” between 2014 and 2016, it seems unlikely that the industrial downturn that was developing in 2019 and the beginning 2020 before the COVID-19 pandemic struck with full force was a mere “Kitchin recession.” That would involve a contraction of commodity capital but not a major downturn in capital investment — fixed capital. In reality, the U.S. economy had already passed through its “mid-cycle” “Kitchin recession” and was due for a full-scale downturn in the industrial cycle proper. (back)

5 Giving private corporations the authority to in effect print their own dollars is a somewhat — irony intended — bigger threat to the dollar than George Floyd’s attempt to pass a counterfeit $20 bill — assuming he did attempt to pass a counterfeit bill — which was the alleged crime for which he was in effect executed, without the benefit of trial, by the Minneapolis police. (back)

6 Even if the COVID-19 pandemic accelerates either immediately or when fall/winter again arrives in the Northern Hemisphere, it can be confidently predicted that the business community, including the gold mining and refining industry that produces money material, will resist any moves to again “close down” the economy, even if it means millions of more deaths. (back)