U.S. is NOT headed for a recession says Steven Mnuchin – Treasury secretary makes extraordinary claim in the middle of coronavirus crisis after the worst week on Wall Street since the Great Recession, but admits a 'slowdown' is inevitable
- Treasury Secretary Steven Mnuchin said Sunday morning that the U.S. will not go into a recession due to the economic fallout from coronavirus
- 'I don't think so,' Mnuchin said when asked if a recession was likely
- 'The real issue is not the economic situation today,' he insisted. 'This is a unique situation. We are going to have a slowdown'
- The assertion came as markets experienced the worst since the 2008 crash
- The biggest drop came Thursday morning after Trump's Oval Office address
- Coronavirus symptoms: what are they and should you see a doctor?
Steven Mnuchin said Sunday morning that the U.S. is not heading for a recession, despite his admission that the markets will experience a 'slowdown' from the fall out from the coronavirus outbreak.
'I don't think so,' Mnuchin told ABC This Week when asked if a recession was likely.
'The real issue is not the economic situation today,' the Treasury secretary insisted. 'This is a unique situation. We are going to have a slowdown. Later in the year economic activity will pick up as we confront this virus.'
He also asserted that Americans shouldn't focus on the daily ups and downs and 'mood' of the stock market.
The Dow saw a rocky few days, dropping thousands of points throughout the week, with a slight reprieve Tuesday as Trump promised a bipartisan economic stimulus package with a trip to Capitol Hill.
Treasury Secretary Steven Mnuchin said Sunday morning that the U.S. will not go into a recession due to the economic fallout from coronavirus
'The real issue is not the economic situation today,' the Treasury secretary insisted. 'This is a unique situation. We are going to have a slowdown'
Markets experienced the worst week since the 2008 economic crisis as the White House struggled to strike a bipartisan deal with lawmakers and confusion over the travel ban rocked investors
Markets saw its biggest of the week on Thursday, plummeting 2,000 points the day after Donald Trump's Oval Office address, where he announced he was shutting down travel from Europe and mistakenly claimed that would affect cargo – which was interpreted by investors to mean trade goods between Europe and the U.S.
The 10 per cent plunge caused markets to see its worst close since 1987 – and the week was the worst since the recession following the 2008 crash.
Friday, however, the markets saw a major recovery nearly 2,000 points as Mnuchin and House Speaker Nancy Pelosi's fruitful negotiations brought a bipartisan bill to the House floor.
'I think what you saw is the stock market reacting very positively to the bipartisan bill,' Mnuchin told ABC's Chief White House Correspondent Jonathan Karl Sunday morning.
'The stock market is going to go up, it's going to go down. We can't focus on every day – the mood,' he said.
Trump expressed his support for the bipartisan measure on Friday in a tweet ahead of the House vote.
Mnuchin is part of the administration's coronavirus task force, and he headed the efforts to pass a bipartisan bill through Congress on Friday by engaging in talks with House Speaker Nancy Pelosi this week
Mnuchin is a member of the Trump administration's coronavirus task force.
He and Pelosi have a close relationship and have struck bipartisan agreements in the past.
The two engaged in several conversations this week to reach an agreement on a bill after Trump continuously pushed for a payroll tax cut, which Democrats, and some Republicans, expressed disinterest in including in the package.
Mnuching also responded Sunday to confusion over the 'cargo' halt mentioned in Trump's speech.
'I don't think in an Oval Office address you can address every single issues as you're discussing it,' Mnuchin claimed.
'I don't think he got things wrong at all,' he continued. 'And we were very clear that people misinterpreted the comment on cargo. And we immediately put out a statement to clarify that.'
Trump’s budget proposal: A new offensive in the social
counterrevolution
12
February 2020
Donald Trump’s proposed
federal budget is an announcement that the American ruling class is deepening
its offensive against the social rights and living conditions of the US and
international working class.
The proposed cuts would
transfer trillions of dollars from the masses of working people into the hands
of the financial aristocracy and affluent upper-middle class, having
devastating consequences for hundreds of millions of workers from cradle to
grave and exposing the utter fraud of Trump’s claim to represent the “forgotten
men and women.”
Trump proposes to cut
$900 billion from Medicaid, $500 billion from Medicare, $24 billion from Social
Security and billions more from after school programs for working class
children, programs for homeless students, aid for impoverished rural schools,
programs that subsidize federal student loans, food stamps and programs for
impoverished infants and their mothers. It also places the US military on a war
footing toward “great power” rivals Russia and China, including a $50 billion
plan to modernize the US nuclear arsenal.
Trump’s proposed cuts
to departments such as Education (8 percent), Interior (13.4 percent), Housing
and Urban Development (15.2 percent), Health and Human Services (9 percent) and
Environmental Protection (26.5 percent) are steps toward dismantling social
programs and government regulation of corporate activity.
The announcement of the
White House budget proposal begins the staged process in which the Democratic
Party feigns indignation over the proposed cuts only to ultimately accede to
many of the demands. Under conditions where the vast majority of Americans are
demanding increased spending on social programs, higher taxes on the rich and a
redistribution of wealth, the inevitable outcome of the bipartisan budget
negotiations will be to shift the entire political establishment further to the
right.
This was previewed by
Democratic Speaker of the House Nancy Pelosi who, when asked last Thursday
about Trump’s forthcoming budget, said:
I say to my members all
the time, ‘There is no such thing as eternal animosity. There are eternal
friendships, but you never know on what cause you may come together with
someone you may perceive as your foe right now. Everybody is a possible ally in
whatever comes next.’
This offer of
friendship to Trump came less than 24 hours after the collapse of the
Democratic Party’s impeachment effort, a process in which Pelosi and Democratic
impeachment managers called Trump a “traitor” and stooge of Russia for
withholding $391 million in military aid to the right-wing nationalist
government in Ukraine, which provides money and arms to far-right paramilitary
forces. Speaking the language of McCarthyism, the lead Democratic impeachment
manager Adam Schiff said Trump was obstructing the US from arming Ukraine, an
imperative that ensures “we can fight Russia over there so we don’t have to
fight Russia here.”
The denunciations of
Trump by the Democratic leadership on questions of imperialist foreign policy
and the Democrats’ crusade for internet censorship contrast with their appeals
to bipartisan friendship on social and domestic policy.
From the day Trump took
office, the Democratic Party has facilitated Trump’s attack on living
conditions and democratic rights, first by diverting and suppressing mass
protests that erupted immediately following Trump’s inauguration in January
2017 and in response to his travel ban and attacks on immigrants, and then,
over the last three years, by voting for major elements of Trump’s agenda.
In June 2019, the
Democrats voted overwhelmingly to support passage of Trump’s record $750
billion Pentagon budget, which allowed the government to continue to detain
prisoners at Guantanamo Bay and provided $3.6 billion in “back-fill” funding
for Trump’s border wall.
In June 2019, Democrats
voted to provide Trump with $4.6 billion to fund Immigration and Customs
Enforcement (ICE) and Customs and Border Protection (CBP) despite massive
opposition to family separation and the detention of immigrant children,
ongoing issues which the Democratic Party and corporate media have essentially
blacked out from national coverage.
These are only the most
egregious examples. Trump’s corporate tax cut, which the proposed budget will
extend, was initially proposed by the Obama White House. Obama slashed funding
for food stamps, Medicare, and programs for impoverished children and other
programs.
Today, some Democratic
presidential candidates have used Trump’s budget proposal as an opportunity to
demand further deficit reduction, verbally opposing his budget but focusing
attacks on Bernie Sanders’ proposals to modestly increase social spending.
The Washington Post noted yesterday
that after Trump’s budget was leaked in the Wall Street Journal, “Former vice
president Joe Biden has warned Democrats not to embrace an agenda that calls
for unrealistic social policy goals, and Buttigieg declared at a town hall
event in Nashua, N.H. on Sunday that it was time to get serious about the
rising deficit, even though ‘it’s not fashionable in progressive circles to
talk too much about the debt.’”
The Democratic-aligned
corporate media has greeted Trump’s budget with far less concern than the
prospect that Vermont Senator Bernie Sanders will win the Democratic
nomination.
In the lead-up to
yesterday’s New Hampshire primary, television personality Chris Matthews
claimed that socialists will carry out “executions in Central Park,” while
Chuck Todd compared Sanders supporters to Nazi “brown shirts.”
This language shows
that however serious their internal conflicts, both factions of the ruling
class are allied in the existential struggle to protect the wealth of the financial
aristocracy from the growing mood of social opposition from below. They do not
fear Sanders, a longtime Washington insider and loyal Democratic caucus member.
What they fear is the growing leftward movement among workers, youth and
students reflected in the support for Sanders which the Vermont senator may not
be able to control.
All factions of the
ruling class view the mass demonstrations in France, Chile, Puerto Rico, Sudan
and elsewhere as signs of what is to come.
Trump, having emerged
victorious from the impeachment, is preparing for the class battles ahead by
building a fascistic movement and threatening to stay in power regardless of
the outcome of the 2020 elections.
Sections of the
Democratic Party are using a different technique, elevating figures like
Sanders and Democratic Socialists of America (DSA) member Alexandria
Ocasio-Cortez to feed popular illusions that the Democratic Party can be
reformed, that the ruling class can be pressured to enact progressive social
policy and that no independent social struggle is required.
This is a hopeless
utopia. Even if Sanders manages to win the nomination in the face of widespread
corruption in the DNC, his entire program amounts to asking the network of
generals and CEOs who run America to voluntarily part with trillions of
dollars. In explaining the futility of Franklin Roosevelt’s New Deal, Leon
Trotsky wrote that the New Dealers “wind up by appealing to the monopolists not
to forget decency and the principles of democracy. Just how is this better than
prayers for rain?”
The Socialist Equality
Party’s candidates in the 2020 elections—Joseph Kishore for president and
Norissa Santa Cruz for vice president—call on workers and youth to break with
the two parties of American capitalism and harness their immense social power
in the struggle for control of the commanding heights of the world economy.
The entire budget
proposed by Trump totals $4.8 trillion—far less than the $27 trillion possessed
by the world’s 2,170 billionaires. Redistributing the world’s wealth requires
the building of a mass revolutionary movement to confiscate the wealth of the
financial aristocracy and place the world’s productive forces under the
democratic control of the international working class.
Trump outlines massive cuts
in Medicaid and Medicare in 2021 budget plan
By Kevin Reed
President Trump is
planning to release a 2021 budget on Monday that includes deep cuts to
Medicare, Medicaid, Social Security and other mandatory and discretionary
spending while also increasing funding for the military, according to a report
in the Wall Street Journal.
The Journal report, based on
information provided by a senior administration official, said that the $4.8
trillion budget “charts a path for a potential second term” by planning to
raise military spending by 0.3 percent, to $740.5 billion, and lowering
nondefense spending by 5 percent, to $590 billion, for the fiscal year that
begins October 1, 2020. The cuts to social programs would be below the level
Congress and the president agreed to in a two-year budget deal last summer.
Emboldened by his
acquittal in the Senate impeachment trial last Wednesday, Trump is making it
clear that he is going on the offensive to attack the working class by
proposing to cut essential programs and increase the military budget in
preparation for future imperialist wars. The budget also calls for $2 billion
in new funding for the southern US border wall that is a critical element of
the Trump administration’s extreme right-wing racist campaign against
immigrants.
The new White House
budget proposes to cut spending by $4.4 trillion over ten years by reducing
mandatory programs by $2 trillion. This includes $292 billion from safety-net
programs by changing the work requirements to receive Medicaid and food stamps
and $70 billion by restricting access to disability benefits.
The plan to attack
Medicare in particular is an explicit repudiation of Trump’s campaign promises
in 2016 that he would protect this program, which underwrites health care
coverage for nearly all Americans aged 65 and older, and for many disabled
people of all ages. Other reported cuts include a 21 percent reduction to State
Department and foreign aid funding, a 26 percent cut to the Environmental
Protection Agency and a 15 percent cut to the Department of Housing and Urban
Development.
Press reports
suggesting the Pentagon budget will rise only 0.3 percent, after three years of
whopping increases, are likely a political smokescreen by the White House. Much
of the increase in military spending comes in the form of an Overseas
Contingency Operations fund that is not accounted for in the regular budget.
Last year, the Trump administration proposed a similar dodge, but the increases
were ultimately made in the regular Pentagon budget, not the OCO, and dutifully
rubber-stamped by both the Republican-controlled Senate and the
Democratic-controlled House.
Besides direct Pentagon
spending, there will be war-related increases in the Department of Veterans
Affairs (13 percent), the Department of Homeland Security (3 percent) and the
National Nuclear Security Administration (19 percent).
In order to fulfill his
goal of returning American astronauts to the moon by 2024—which was presented
as a major objective in his State of the Union address last Tuesday, President
Trump is also proposing a 12 percent increase in NASA funding next year.
There are two
interconnected and overriding considerations in the 2021 budget plan. Together
these amount to a significant acceleration of the wealth transfer from the
working class to the top one percent that has been underway for the past four
decades.
The first priority is
the maintenance of the $1.5 trillion tax cuts—enacted in 2017 and set to expire
in 2025—for corporations and the wealthy, which reduced government revenues and
drove deficits up to 4.7 percent of GDP, significantly higher than the 2.7
percent average of the past 50 years. The second consideration is the drive to
reduce and eventually eliminate the social programs like Social Security,
Medicare, Medicaid and food stamps, on which the most vulnerable sections of
the working class and poor depend.
The federal deficit is
estimated at $1 trillion for 2020, more than double what the Trump
administration claimed in the budget and tax cut proposals in 2017. The new
plan claims the deficit will be reduced by a total of $4.6 trillion in the next
decade and will be completely eliminated by 2035. During the 2016 election
campaign, Trump promised to completely pay off the federal debt in eight years.
Instead, it has rocketed upwards to $23 trillion, the largest of any country in
the world.
Meanwhile, the plan
assumes a pace of overall economic growth that is significantly higher than
that which is predicted by most economists. The Trump budget plan projects an
economic growth rate of 3.1 percent in the final quarter of fiscal 2020 and 3.0
percent in all of 2021 and the rest of the decade. The US economy has been
growing at a quarterly average rate of approximately 2.2 percent throughout the
Trump presidency. The Congressional Budget Office projects growth rates of
between 1.6 and 1.7 percent over the next ten years.
Trump claimed he would
accelerate US economic growth to four and even five percent, but this is
impossible under capitalism, dominated by financial speculation, wage cutting,
and militarism. The plan also makes the assumption that interest rates will
remain at historic lows for another ten years.
The budget plan will
have little immediate effect, since neither the Democratic-controlled House nor
the Republican-controlled Senate would agree to such massive cuts on the eve of
the elections. Instead, the document represents an assurance by Trump to
corporate America of the general trajectory of his administration, assuming he
remains in office.
As has been the case
throughout the Trump presidency, including during the disastrously unsuccessful
attempt to remove him from office, the Democrats are mouthing opposition while
preparing to collaborate with the White House on the 2021 budget. Several
provisions are designed for the purpose of providing a path for House Democrats
to negotiate with Trump, such as the offer to carve $130 billion from Medicare
prescription drug costs by forcing a drop in prices.
Typical of the
posturing by Democrats was a statement released on Friday by the House Budget
Committee majority that said it was on “high alert” for attempts by the
administration to circumvent Congress. “If the budget is as destructive and
irresponsible as the President’s previous proposals, House Democrats will do
everything in our power to stop the cuts and policies from coming to pass,”
they said.
THE REASON TRUMP IS NOT PROSECUTING EMPLOYERS OF
ILLEGALS IS TO KEEP WAGES DEPRESSED!
More Americans Are Going on Strike
For decades, the
decline of the American labor movement corresponded to a decline in major
strike activity. But new data released by the Bureau of Labor Statistics, or
BLS, indicates a recent and significant increase in the number of Americans who
are participating in strikes or work stoppages. As a report from the
left-leaning Economic Policy Institute explained on Tuesday, strike activity
“surged” in 2018 and 2019, “marking a 35-year high for the number of workers
involved in a major work stoppage over a two-year period.” 2019 alone marked
“the greatest number of work stoppages involving 20,000 or more workers
since at least 1993, when the BLS started providing data that made it possible
to track work stoppages by size.” Union membership is declining, but workers
themselves are in fighting shape.
EPI credits the
strike surge to several factors. Unemployment is low, which bestows some
flexibility on workers depending on their industry. If a work environment
becomes intolerable or an employer penalizes workers for striking or
organizing, a worker could find better employment elsewhere. (Though federal
labor law does prohibit employers from retaliating against workers for
participating in protected organizing activity, employers often do so anyway,
and under Trump, the conservative makeup of the National Labor Relations Board
disadvantages unions when they try to seek legal remedies for the behavior.)
The other reason
undermines one of Donald Trump’s central economic claims. Though the president
points to low unemployment as proof that his policies are successful, the
economy isn’t booming for everyone. Wage growth continues to underperform.
People can find jobs, in other words, but those jobs often don’t pay well. As the
costs of private health insurance rise, adding another strain on household
budgets, Americans are finding that employment and prosperity are two separate
concepts.
Without a union,
exploited workers have few options at their disposal. They can take their
concerns to management, and hope someone in power feels pity. They can stage
some kind of protest, and risk the consequences. Or they can find another job,
and hope their new workplace is more equitable than the last. Lackluster wage
growth suggests that this last option is not as viable as some right-to-work
advocates claim. Unions afford workers more protection. Not only do they
bargain for better wages and benefits, union contracts typically include
just-cause provisions, which make it more difficult for managers to arbitrarily
fire people for staging any sort of protest at work. Discipline follows a set
process, which gives a worker chances to improve. Retaliation still happens,
but would likely happen more often were it not for union contracts, which are
designed to act as a layer of insulation between workers and managers with ill
intent.
The new BLS data
reveals that despite their relatively small numbers, unionized workers are
exercising the power afforded them by their contracts. Elected officials ought
to listen to what this activity tells them. A strike wave is a symptom that the
economy is actually not as healthy as it superficially looks. Nobody withholds
their labor unless they’ve exhausted all other options. Strikes and stoppages
stem from exasperation, sometimes even desperation. Workers know they’re
playing a rigged game, and they’re running out of patience.
“The remarkable thing is how weak wages are, how weak the
economy is, given that as a result of the tax bill we have a $1 trillion
deficit.”
Donald Trump is ‘just wrong’ about the economy, says Nobel
Prize-winner Joseph Stiglitz
President Donald Trump told business and political
leaders in Davos, Switzerland last week that the economy under his tenure has
lifted up working- and middle-class Americans. In a newly released interview,
Nobel Prize-winning economist Joseph Stiglitz sharply disagreed, saying Trump’s
characterization is “just wrong.”
“The Washington Post has kept a tab of how many lies and
misrepresentations he does a day,” Stiglitz said of Trump last Friday at the
annual World Economic Forum. “I think he outdid himself.”
In Davos last Tuesday, Trump said he has presided over a
“blue-collar boom,” citing a historically low unemployment rate and surging
wage growth among workers at the bottom of the pay scale.
“The American Dream is back — bigger, better, and stronger than
ever before,” Trump said. “No one is benefitting more than America’s middle
class.”
Stiglitz, a professor at Columbia University who won the Nobel
Prize in 2001, refuted the claim, saying the failure of Trump’s economic
policies is evident in the decline in average life expectancy among Americans
over each of the past three years.
“A lot of it is what they call deaths of despair,” he says. “Suicide,
drug overdose, alcoholism — it’s not a pretty picture.”
The uptick in wage growth is a result of the economic cycle, not
Trump’s policies, Stiglitz said.
“At this point in an economic recovery, it’s been 10 years since
the great recession, labor markets get tight, unemployment gets lower, and that
at last starts having wages go up,” Stiglitz says.
“The remarkable thing is how weak wages are, how weak the
economy is, given that as a result of the tax bill we have a $1 trillion
deficit.”
As the presidential race inches closer to the general election
in November, Trump’s record on economic growth — and whether it has resulted in
broad-based gains — is likely to draw increased attention.
BLOG: THE GREATEST TRANSFER OF WEALTH TO THE RICH OCCURRED
DURING THE OBAMA-BIDEN BANKSTER REGIME
“The middle class is getting killed; the middle class is getting
crushed," former Vice President Joe Biden said in a Democratic
presidential debate last month. "Where I live, folks aren't measuring the
economy by how the Dow Jones is doing, they're measuring the economy by how
they're doing," added Pete Buttigieg, a Democratic presidential candidate
and former Mayor of South Bend, Indiana.
Trump has criticized Democrats for tax and regulatory policies
that he says will make the U.S. less competitive in attracting business
investment.
“To every business looking for a place where they are free to
invest, build, thrive, innovate, and succeed, there is no better place on Earth
than the United States,” he said in Davos.
Stiglitz pointed to Trump’s threats last week of tariffs on
European cars to demonstrate that turmoil in U.S. trade relationships may
continue, despite the recent completion of U.S. trade deals in North America
and China.
“He can’t help but bully somebody,” Stiglitz said.
Max Zahn is a reporter for Yahoo Finance. Find hi