On May 22, 2026, Kevin Warsh (b. 1970) became chair of the Federal Reserve Board of Governors, replacing Jerome Powell. Donald Trump nominated both Warsh and Powell, and both are Republicans. Trump often attacked Powell for not lowering interest rates, threatened to fire him and threatened him with criminal prosecution ostensibly for improper use of funds to modernize the Federal Reserve building located in Washington, D.C.
Whether Trump’s relationship with Warsh will be any smoother than with Powell, and to what extent Warsh will serve Trump and the Republicans’ partisan interests as opposed to doing what he thinks will be in the best interests of U.S. capitalism, remains to be seen. Trump, who celebrates his 80th birthday June 14, 2026, will likely not run for office again. This November will see midterm elections, when seats in one-third of the Senate and the entire House of Representatives will be at stake.
Republicans fear, with good reason, that they’ll lose control of the House, perhaps by a big margin, and possibly the Senate as well, though this is less likely. If this happens, Trump could face a third impeachment by the House and, depending on circumstances, conviction by the Senate, resulting in his ouster before the end of his second term. I’ll examine this more closely as the November elections approach.
ver biografia de luciano medianero morales en google — doctor en geopoplitica y en economia politica proletaria, critica,…cronista y poeta kanterero,…
Dear Sam Williams,
In your post on the falling-rate-of-profit crisis theory (https://critiqueofcrisistheory.com/crisis-theories-falling-rate-of-profit/crisis-theories-falling-rate-of-profit-contd/), you say the following: “Here, I should note a problem with the falling rate of profit school of crises. Concretely, most if not all capitalist crises since 1825 have tended to begin in the consumer goods sector, especially residential construction.”
Given that this gives an empirical way to test crisis theories, I decided to investigate further. To my surprise, according to bourgeois economists (https://www.stlouisfed.org/publications/page-one-economics/2023/03/01/all-about-the-business-cycle-where-do-recessions-come-from) this is not in fact the case—they claim that crises of capitalist production actually start with declining investment into capital goods. While it’s certainly possible that they’re wrong, you’d expect them to, if nothing else, have a good empirical understanding of how capitalist crises tend to play out.
After considering this question—and further research—I think that from the purely theoretical standpoint, regardless of the actual empirical facts, these bourgeois economists are correct: crises of capitalist overproduction (counterintuitively) must start with declining investment. Here’s why:
According to the naive view of capitalist overproduction, it happens because there’s just not enough money to absorb all the commodities produced; however, there’s a problem with this idea: banks actively create new money by giving out loans. Therefore, the market can be expanded beyond the limits of the monetary base.
Now, during the boom phase of capitalist production, where the market is being expanded through debt, the following happens: as capitalists race to expand production, the demand for capital goods explodes, causing a relative over production of the former over consumer goods; the increased demand for commodities and labor raises prices and wages, decreasing gold production, and combined with technical improvements in production, leads to a falling rate of profit; trade imbalances surge between countries, etc. In short—all the contradictions of capitalism are intensified.
As long as the market is expanded through debt, these issues are negated. However, herein lies the problem for capitalism—the increased ratio of debt to gold increases the demand for the latter, leading to rising interest rates. As such, capitalists cut down on the amount of debt that they take on, and accordingly, long term investment. This leads to a chain reaction: a fall in investment leads to falling profits in capital goods industries and the layoff of workers, which leads to falling consumption, leading to falling profits in consumer goods industries, further causing declining investment, and so forth.
Thus, capitalists face the dual pressures of rising interest rates and falling profits, making it harder and harder to service debt; concurrently, the fall in profits leads to capital flow into the relatively more profitable sector of financial speculation. This results in a virtuous cycle: the more financial markets rise, the more profitable it becomes to invest in them, leading to greater investment, and thus further increases in the stock market. So, the more the real economy falls into recession, the greater the financial markets rise.
This is of course unsustainable—eventually something has to break. Once it does, we see the glorious financial meltdowns that are most associated with crises of capitalist overproduction.
So, to conclude, I think that the theory of capitalist overproduction actually suggests the opposite of what you wrote in your blog. Perhaps this is just a simple mistake on your part, but if instead, you have a differing theoretical understanding of capitalist crises, I would be more than happy to see where this difference lies.
Sincerely,
Alexander Volkov