On Thursday, the Commerce Department reported that the US economy shrank for the second quarter in a row, bringing it into a “technical recession.”
The economic contraction is being accompanied by a series of layoffs that threatens to become a torrent as the economy slows further. This month, more than 30,000 layoffs occurred in the technology sector alone. Last week, Ford announced 8,000 layoffs, heralding a further bloodbath in the auto industry.
Amid the swirl of economic data, it is always necessary to understand that these numbers are the abstract expression of underlying social and class forces, that “the economy” is not some kind of machine, but is based on definite social relations and operates through them. This is particularly necessary when considering the latest economic data.
A debate has now broken out in the media and financial commentary circles as to whether this “technical recession”—defined as two consecutive quarters of economic contraction—is a real one or not.
The key issue here is not one of definitions, but what are the essential class interests at work, particularly with regard to the policies of the US Federal Reserve, the key financial institution of the capitalist state.
Fed policies are always couched in various forms of jargon that cover up the real agenda through a series of mystifications aimed at making it appear the central bank somehow stands above class interests, regulating economic life in the interests of the population.
Amid the flurry of words, the essence of the present situation is this: The central bank, the guardian of the interests of the corporations and finance capital, has set out to engineer a marked slowdown, and, if necessary, a major economic contraction. The aim is to suppress the wage demands of the working class under conditions where inflation has risen to the highest level in four decades.
This assault is being waged through the mechanism of higher interest rates, which are being lifted at the fastest rate in decades under the banner of the fight against inflation. But interest hikes will not bring down gas prices or untangle supply chains. The objective is to bring about an economic contraction so that pay demands are suppressed.
The present policy agenda reprises that of Fed Chair Paul Volcker in the 1980s, when interest rates were lifted to record heights, inducing the deepest recession to that point since the Great Depression. Today’s Fed Chair Jerome Powell has expressed his admiration for Volcker on numerous occasions, making clear he is more than prepared to follow the same path.
Former US Treasury Secretary Lawrence Summers has insisted that containing inflation means inducing higher jobless levels for five years or a 10 percent unemployment rate for at least a year.
As with every other economic issue and statistic, inflation is embedded in the class structure of society, a historical examination of which reveals the origins of the present US and global spiral.
The global financial crisis of 2008, set off by the more than two decades of increasing financial speculation preceding it, led to the largest corporate and financial bailout in history. The US government handed out hundreds of billions of dollars in rescue packages, and the Fed began the policy of “quantitative easing”—injecting money into the financial system so that the speculation on Wall Street that had precipitated the crisis could continue.
And continue it did. After reaching a nadir in March 2009, the stock market went on a spectacular bull run. But it was based on a continuous supply of cheap money by the Fed.
In March 2020, as the COVID-19 pandemic struck, Wall Street and financial markets went into a meltdown, fearing that the imposition of necessary public health safety measures would impinge on the flow of profits extracted from the working class, and the stock market bubble would collapse.
Two key policies resulted. Under the banner of the “cure cannot be worse than the disease,” the necessary policy of COVID-19 elimination was rejected in the US and by governments around the world. At the same time, trillions more dollars were pumped into the financial system. In the US, the Fed doubled its holdings of financial assets from $4 trillion to $8 trillion virtually overnight, at one point spending a million dollars a second.
Herein are the origins of the global inflationary spiral. The refusal to undertake a global policy of COVID-19 elimination because of its potential impact on the stock markets had major consequences in the real economy, as the spread of COVID-19 led to a supply chain crisis.
The monetary system was expanded by the central banks, leading to still further asset speculation in 2020 and 2021. Another factor is the endless increases in military spending as billions are funneled into the proxy war against Russia in Ukraine.
In their drive to increase interest rates, Fed Chair Jerome Powell along with other central bankers continually refer to what they call the “tight labour” market, in which demand must be brought into balance with supply.
Under conditions where the deaths inflicted by COVID-19, ongoing infections and the growing impact of Long COVID have led to the withdrawal of millions from the workforce, the only way to lift the increase of the supply of labour above demand is through the imposition of unemployment.
And that process is already underway as a result of the interest rate hikes initiated by the Fed so far. The auto industry has indicated new hirings are at a standstill, and layoffs are set to follow. In the interest-rate sensitive sectors of high-tech, layoffs have already started with more to come.
Workers are not just in a conflict with individual employers, but are engaged in a political struggle in which the union bureaucracy functions as the chief enforcer of the demands of the capitalist state and its agencies.
Moreover, the fight for wage increases, necessary as that is, is a struggle against the effects of much deeper-going problems. A review of the economic history of the past period shows that every measure taken by the ruling class to deal with an economic crisis led inevitably to its eruption in a new and more malignant form.
Thus the “solution” to the financial crisis of 2008 set up the conditions where in 2020 rational scientific measures to deal with COVID-19 were rejected, lest their implementation lead to a financial market collapse. But the “let it rip policy” that ensued has now led to an inflationary spiral which the leading agencies of finance capital are determined to “resolve” by making the working class pay, if necessary through mass unemployment.
That deafening sound Americans are hearing all around them is the Good Ship Democratic Party crashing against the jagged rocks of political reality.
With the November 2022 midterm elections just weeks away, early projections point to a Republican Party electoral tsunami that could bury the Democrat party for the next several voting cycles.
Polls by Rasmussen, Emerson, and Trafalgar show the Republicans up by as much as 10% over Democrats in the generic ballot. The Real Clear Politics "poll of polls" has Republicans projected to win a minimum of 223 House seats, the Democrats 179, giving the GOP de facto control of the House of Representatives.
RCP has identified another 33 congressional contests as toss-ups, races considered too close to call. Of those 33 seats 29 were considered solidly Democrat until this election cycle. Now Democrats must spend precious resources to defend seats they thought they owned. Republicans could end up with a 240-plus-seat majority.
Just last June, a young Republican female candidate of Hispanic background, Mayra Flores, won a Texas house seat that has been in Democrat hands since the Civil War ended, and did so with the help of a large swath of Hispanics in the district.
Flores's victory confirms a belief, long held in conservative circles, that Hispanics are trending GOP, forming a voting bloc with the tens of millions of middle-class Americans who increasingly associate the Democrats with runaway inflation, crime in the streets, and the importation of thousands of illegal migrants. Hispanics share Republican conservative values on abortion, parental rights regarding their children's education, and religious freedom.
Democrats fool themselves if they imagine that President Biden's slumping approval numbers are the sole reason for their bleak prospects. Yes, in 44 states, more voters disapprove of Biden than approve. A recent Quinnipiac poll has Biden at 31% approval and a whopping 60% disapproval. History demonstrates that presidents who were underwater by Bidenesque levels — Obama, Clinton, and the like — can cost their parties between 60 and 70 seats in the midterms.
Certain that Biden is the main source of the Democrats' poor 2022 election prospects, the Washington Post just ran an editorial begging Biden to resign now.
However, Biden's leadership deficiencies are not the only cause of the Democrat party's electoral woes. The party's progressive agenda is out of step with a center-right America. To make matters worse, Americans perceive the Democrats to be tone-deaf to the concerns of average Americans.
Americans expected Democrats, who control both houses and the presidency, to be working feverishly to solve the problems that concern them most, such as inflation, the economy, violent crime, election integrity, school issues, abortion, election cheating, and illegal immigration. A full 56% of Americans think we are in a recession. Two of three live paycheck to paycheck. Many Americans are now turning to local food banks to feed their families.
But when they turn on Sunday morning talk shows, all they hear are liberal media pundits and Democrat leaders prattling on about climate change, the war in Ukraine, the January 6 hearings, COVID-19, and LGBT issues. This is a total disconnect between Democrats and the American voter.
Worse, over the last few years, thanks to COVID-related mandates and economic lockdowns, voters have come to regard Democrats as a party quite comfortable with exerting autocratic top-down control over citizens' behavior.
Americans will not soon forget that Democrat mayors and governors used COVID as an excuse to declare national and local emergencies that enabled them to trample on a plethora of citizens' civil liberties for months at a time.
And just in case voters might forget the lockdowns, Democrat-run cities like San Diego and Louisville are reinstating all forms of mandates and restrictions in reaction to a slight increase in COVID cases this summer.
Since Democrats cannot run on the economy, crime, the border crisis, or inflation, they have decided to attempt to campaign on "cultural issues."
Good luck with that. A recent Echelon poll reveals a wide and growing chasm between Democrat progressives and both Hispanics and working-class Americans on a host of cultural issues.
In the poll, Hispanics and members of the working class revealed that they agree with the statement "America is the greatest nation in the world," believe that you get ahead in America through hard work, think "athletes should only be allowed to play on sports teams that match their birth gender," and want their police departments fully funded.
Progressives in the poll took the exact opposite position on every one of these issues. Ironically, the poll reveals that it is progressives, not Hispanics, who believe that America is a systemically racist nation.
Hispanics, like most middle- and working-class Americans, are rejecting not just Biden, but the entire Democrat progressive ethos and the policies that emanate from that ideology, and are naturally attracted to a party that champions their values.
Do not expect a chastened Democrat party to learn any lessons from its coming 2022 election losses and moderate its progressive agenda. The Democrats most likely to lose their seats are the party's so-called moderates running in "purplish" districts. Progressives running in deep blue progressive districts in NYC and San Francisco will keep their seats and be in position to run the party and set its agenda.
In 2023, party progressives will double down on the pursuit of their agenda items, including eliminating fossil fuels, putting all elections under federal government control, passing a federal late-term abortion bill, raising taxes on the middle class, packing the Supreme Court, keeping the U.S. southern border porous, and enhancing administrative agencies' ability to control Americans' lives.
The GOP House members will propose legislation that promotes the party's commonsense, centrist America First vision for the next decade: creating prosperity and opportunity for all citizens, restoring American energy independence, protecting our borders, restricting government power to its constitutional limits, and maintaining a strong defense while avoiding unnecessary foreign interventions.
And polls indicate that Americans are choosing the GOP's vision of America's future over that of the progressive Democrat party, leading to the Republicans taking the House in 2022 and the Senate either in 2022 or in 2024, along with the presidency.
The two parties are evolving into entities espousing inherently contrary views of the direction America should take economically, politically, and culturally.
Pundits and media talking heads point to this emerging ideological bifurcation as evidence that America has become a "fundamentally divided" nation. These critics could not be more wrong. This divergence in philosophy and political agenda really signifies that Americans finally have a genuine choice about the kind of country they want America to be.
Sociologist Michael G. Zey, Ph.D. is the author of Ageless Nation, Seizing the Future, and The Future Factor, Professor, Montclair State University (retired). www.zey.com. twitter.com/futurist3000. Facebook.
VIDEO
Tucker Carlson: Nothing like this has ever happened
https://www.youtube.com/watch?v=4R6TDCFr9UY
Bye-bye, Biden
Would any other American president have committed as many gaffes and missteps as Joe Biden has and still be said to love America?
What other free-country world leader has treated his own people so badly and been allowed to stay in office?
What other world leader cannot string two cogent sentences together and still remain in office? Joe Biden is non compos mentis and should remove himself from the White House before he is removed by his own party or before he further collapses the American economy and its status on the world stage. It cannot get much worse.
Clearly, the man is cognitively in decline. His many gaffes, word salads, blank stares, popcorn temper flare-ups, weird demeanors, creepy whisperings, touchy-feely gropings with women and children, and his monumentally wrong-headed economic policies are enough to turn the strongest of stomachs.
Biden has single-handedly destroyed America's energy independence.
He has personally made America a ridiculous paper tiger in the eyes of our enemies who want us dead or conquered.
Joe Biden has fist-bumped the most powerful oil-producer on the planet in a way that signals an utter lack of seriousness.
He has opened the borders and welcomed terrorists and murderers.
Biden seems to deliberately want to link arms with the socialists among us in order to drag America's standard of living down to that of Venezuela's. Food shortages, brownouts and blackouts, a severely reduced reputation as the planet's finest fighting force, and other admirable things America was known for have, have been destroyed or crippled by this impaired president.
Joe's policies are bankrupting America.
In order to kowtow to the climate cretins in Congress whose policies would further damage our economy, he has implemented policies and executive orders that drag America down from the Trump-high economy and energy independence to the Biden-low of scarcity, inflated prices, worker shortages, and supply line problems that would never have happened under Trump.
His failure to address the light-speed increase in crime is inexcusable.
He has done all that with the energy of an aging retriever and the political instincts of Barbra Streisand.
Joe Biden has done more to drop-kick America back to the political, fiscal, and energy Stone Age than any president in memory.
Under Biden, our social and economic infrastructure has been all but decimated. It is almost as if he has signed on to an America-last agenda. For that matter, does he even know what his agenda is? Or has he delegated his presidency to pre-Trump power brokers?
Worst of all, Joe Biden's policies regarding racial matters have reignited a previously placid racial state. He is now exacerbating a simmering situation between white and black that hasn't been seen since the '60s.
While doing this, he has turned our once illustrious military into a race-based adversarial social experiment, pitting our fighting forces against one another instead of against our enemies abroad. How can the American military defend our country against a vicious socialist, communist, or radical Islamic threat if our own fighting forces are pitted against each other by color? This is treasonous because what he has not directly promoted, he has allowed.
If Biden does not remove himself, he should be removed for terminal gross incompetence. The people who are actually running this administration need to be removed as well. Obama's not easily hidden, radical, "fundamentally transformational" policies show through Biden's actions loud and clear. No one is fooled about who is actually running America while Biden and doctor Jill high-tail it off to Delaware for some pudding.
As for his designated successor, Kamala Harris, becoming POTUS, let's deal with one disaster at a time. She can be removed as well, and perhaps someone sane (certainly not the ethically challenged, slurring Nancy Pelosi and her marble-mouthed inanities) will turn this energy and economic disaster around for the sake of all decent Americans who love this country and want her and her people to prosper. Perhaps now is a good time for the Manchins, et al. to jump this sinking Democrat ship and sign on with an America-first agenda. Even the berserkers in the media are starting to pile on, a sure sign that bumbling Biden is bad for the brand.
Joe Biden is a shuffling, sputtering wrecking ball. We cannot afford him.
American voters have learned a brutally hard and expensive lesson in the debilitating year and a half of the Biden cuckoo's nest: never vote for another Democrat until all the demented socialists, perverts, political prostitutes, and outright quislings within the party are removed. And maybe not even after that until they moderate their slavering lust for control and brainless collectivism.
We need our pipelines re-opened. We need to stop printing money. We need to regain our status abroad. We need to clean out the schools that are producing millions of little degenerate socialists and infantilized adults who can see no farther than their iScreens. We need borders and the rule of law. We need fertilizers and farmers again. We need to rid America of the CDC, the IRS, and the NEA, to name only three. We need people who remember God and the founding of America. We need people who know what a woman is.
The GOP needs some fumigating as well, but at least we on the right tend to love America, family, God, and individualism. Make socialism and radical leftism unacceptable again. Make America great again by your vote. Vote Republican as though your life and liberty depend on it, because they do.
Image: Screen shot of a live television broadcast, enhanced with Adobe Camera Raw filters.
With Biden in office, America’s southern border has vanished entirely.
https://mexicanoccupation.blogspot.com/2022/06/is-joe-bidens-open-borders-destroying.html
Seems the illegal migrants are filling the Washington shelters now and she "fears" they are being tricked? Notice she didn't offer any specifics about such trickery, which is a fancy way of saying there hasn't been any trickery. Illegal border crossers are being offered free bus rides from Texas to Washington and a lot of them are taking the governor up on it, heading for the free stuff there after paying $7,000 to cartel human smugglers for the crossing. Cartels make money, cities and states lose money, and migrants get to stay in America for free.
Mexico’s government has been issuing travel visas to most migrants, including members of caravans, that enter through the southern border, those visas give the migrant a specified time to travel freely through Mexico, Breitbart Texas reported. Most used those documents to reach the U.S. border.
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