The End of the Trump Era

Just as he promised he would, Donald Trump has refused to concede the U.S. presidential election to Joseph Biden. However, on Nov. 23, Emily Murphy, the Trump-appointed head of the General Services Administration, or GSA, finally allowed the Biden transition team to begin preparations for Biden’s assumption of the U.S. presidency on Jan. 20, 2021.

Between Nov. 3 and 23, Murphy had stubbornly refused to grant access to the Biden transition team on grounds that, in Ms. Murphy’s judgment, it wasn’t clear that Biden had won the election. Her decision to begin cooperating with Biden’s transition team was seen as a de facto admission by at least some in the Trump administration that Biden had won the election.

Widespread relief was felt in financial circles that a contested election outcome leading to widespread unrest in the streets, if not outright civil war, had been adverted. The stock market celebrated by rising to new all-time highs and the U.S. dollar rose against gold. However, Trump himself along with many if not most Republican politicians still refused to concede the election. Trump continued to claim that he had in fact won and that Biden and the Democrats had stolen the election through massive fraud.

In a normal U.S. presidential election, the losing candidate concedes the election and congratulates the winner within hours after the polls close on election day. If the election leads to a new president, the outgoing and incoming presidents and their aides work closely with one another until the transition is officially completed. Since the 1896 presidential election, when the losing “silver” Democrat William Jennings Bryan conceded to the victorious “gold” Republican William McKinley, the concession statement from the losing candidate has become an unwritten part of the U.S. Constitution.

This election year had unusual complications because of COVID-19, which made voting at traditional polling stations extremely dangerous. As a result, many voters voted by mail. This had the paradoxical effect of making voting easier for many voters. Perhaps of even greater importance, the racist and bigoted reelection campaign of far-right incumbent Donald Trump led to an extreme polarization of the U.S. electorate. Usually, the differences between the Democratic and Republican presidential candidates are obviously not very deep, if not virtually nonexistent. As a result, most voters, though they generally prefer one candidate to another, do not care that much whether their preferred candidate wins or loses.

But not this time. While Joseph Biden created even less excitement than the usual Democratic candidate, Donald Trump in contrast was either hated — the clear majority view in the U.S. and even more so in the world — or loved by his bigoted white racist supporters. The result was the largest turnout of voters for a U.S. presidential election in decades. As a consequence, the large number of mail-in ballots, combined with COVID-19, messed up the computer algorithms that since 1952 have enabled the networks to accurately call the election with only a minority of the votes counted.

The Current Industrial Cycle (Pt 3)

A deepening political crisis

On Aug. 23, African-American Jacob Blake was shot in the back by police seven times in Kenosha, Wisconsin. Blake is expected to survive but is paralyzed from the waist down. This latest police outrage triggered a wave of demonstrations by the Black Lives Matter movement in Kenosha and elsewhere. Two days later, a Trump supporter and police wannabe named Kyle Rittenhouse shot to death two Black Lives Matter protesters with a rifle he was carrying. Rittenhouse, who lives in Illinois, is a member of a fascist militia group that came to Kenosha for the announced purpose of defending the property of business owners from Black Lives Matter protesters.

The cops were seen thanking the fascists and offering them water. After Rittenhouse killed the two protesters, he walked up to the cops with his hands up. However, the guardians of “law and order” refused to arrest him. He was finally arrested and charged with murder only after he returned to Illinois. U.S. President Donald Trump then weighed in. Trump defended the young fascist killer claiming that Rittenhouse faced certain death if he had not acted to defend himself. Trump also attacked the alleged violence of “left-wing” — Black Lives Matter — protesters but defended the violence of Rittenhouse and other murderous right-wing counter-protesters.

The Current Industrial Cycle (Pt 1)

COVID-19 devastates the U.S.

It has now become clear that the COVID-19 pandemic has hit the U.S. harder than any other large nation — and most smaller ones. The U.S. ruling class and Trump administration have been particularly enraged by China’s ability to largely check the pandemic. China has had far fewer cases, hospitalizations, and deaths despite its far larger population. Though the U.S. has only about 4 percent of the population it has 25 percent of the world’s COVID-19 cases.

Both Trump and the U.S. ruling class as a whole, including Democratic presumptive nominee Joseph Biden, have stepped up their anti-China propaganda — often combined with old-fashioned red-baiting — on numerous fronts. In Trump’s case, the anti-China attacks have an openly racist character. He regularly refers to COVID-19 as the “Chinese flu” or the even more racist “Kung flu.” This is typical Trump.

Less commented on is the record of Vietnam. Vietnam acted early and effectively in controlling the pandemic, first reported in its northern neighbor late last year. According to the website Exemplars of Global Health, “Although Vietnam reported its first case of COVID-19 on January 23, 2020, it reported only a little more than 300 cases and zero deaths over the following four months.”

Exemplars reports that Vietnam’s “early success has been attributed to several key factors, including a well-developed public health system, a strong central government, and a proactive containment strategy based on comprehensive testing, tracing, and quarantining.” Not mentioned is the fact that none of the factors that have enabled Vietnam to deal so successfully with the COVID pandemic would have been possible without Vietnam’s successful struggle half a century ago against the attempt by U.S. imperialism to destroy it in the name of “fighting communist aggression.” The Southeast Asian country is still struggling with the effects of the infamous “Agent Orange” defoliation program and other effects of the brutal “American war,” as it is called in Vietnam.

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.

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.

The Crisis (Pt 8)

The dollar system, gold and the U.S. empire

The current international monetary system is a system of “fiat currency” centered on the U.S. dollar. It is bound up with the financial, political, and military system unofficially called the U.S. empire. To maintain the empire, the U.S. spends about 10 times more on its annual “defense” budget than any other country. Therefore, when it comes to raw military power, especially firepower and the ability to project it around the globe, the U.S. is a military power second to none. Unlike in the pre-1945 world, no other imperialist power can even think of challenging the U.S. militarily.

The U.S. empire in its modern form — in contrast to the North American U.S. proper and the relatively small but growing colonial empire that the U.S. had been building since the Spanish-American War of 1898 — dates to the lopsided victory of the U.S. over Nazi Germany (1 ) and Imperial Japan in 1945. Thereafter, and this was confirmed in the Suez Crisis of 1956, [link to posts which discuss this] no other imperialist power can undertake a major military operation without U.S. approval.

This emerging situation enabled the U.S. at the Bretton Woods Conference — held in Bretton Woods, New Hampshire, in 1944 — to establish the U.S. dollar as the world currency and the U.S. Federal Reserve System as the world central bank. The dollar remains the world currency even though the U.S. dollar since 1971 has not been convertible into gold.

Originally, the U.S. built up a huge gold hoard by running balance of trade surpluses that were the result of the superior productivity of its industrial, extractive and agricultural enterprises. The size of the U.S. gold hoard was further increased in the 1930s when with a new European war looming, European capitalists moved much of their gold to the U.S. in exchange for U.S. dollars. Some European governments moved their gold reserves to the U.S. for safekeeping as well.

The Crisis (Pt 5)

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.

The Crisis (Pt 1)

A personal note

In February, I was hit by a staph infection that had spread to the blood. This was the first serious illness of my adult life. Before this infection, I had been free of any illness more serious than the occasional cold or seasonal flu. I was really knocked off my feet and had to be hospitalized.

This was no fun. But no evil is without positive features. I got to see the medical system for the first time in my adult life from the inside. At least here on the West Coast, the medical system is staffed by a mix of many nationalities with a bias toward the Far East — the very group that President Trump with his racist attacks on the “Chinese virus” has made a target of his demagoguery. I was served by medical workers from France, the People’s Republic of China, Vietnam, the Philippines, and other nations.

Then as fate would have it in one those bizarre coincidences that life occasionally brings, the whole world was swept by the ghastly COVID-19 pandemic. Financial markets crashed and then much of the global economy was shut down including industrial production and world trade. Most importantly, employment entered a downward spiral. More than 10 million people in the U.S. have been forced to apply for unemployment insurance within two weeks, implying double-digit Depression levels of unemployment.

Political and Economic Crises (Pt 11)

Trump versus the Fed

On Sept. 3, the U.S. Institute of Supply Management reported that its widely watched index, based on a survey of industrial purchasing managers, had dropped to 49.1 percent. Any number below 50 indicates a declining trend in U.S. industrial production. The index has not been so low since September 2009, when the U.S. industrial economy was near the trough of the Great Recession.

The ISM reports: “Falling orders among foreign clients dragged on overall new business growth and producer confidence. The degree of optimism about the year ahead hit a fresh seven-year series low amid growing business uncertainty. As such, employment was broadly unchanged and spare capacity was used to clear backlogs of work.”

This is just the latest in a series of reports indicating that the U.S. and world capitalist economies are on the brink of recession. The Trump White House and the electoral wing of the Republican Party fear that Trump will face the reelection in November 2020 amidst full-scale recession conditions, dramatically reducing Trump’s chances of winning a second term.

Trump has responded by stepping up his public attacks on Jerome Powell, the conservative Republican banker Trump himself nominated to head the Federal Reserve System. In the wake of the annual August meeting of bankers at Jackson Hole, Wyoming, Trump declared Jerome Powell to be worse for the U.S. economy than even Chinese President Xi Jinping.

Trump is pursuing two aims here. First, he hopes that the Federal Reserve and its Open Market Committee will lower its target for federal funds and flood the banking system with newly created U.S. dollar reserves that will at least postpone the arrival of a full recession and mass cyclical unemployment until after November 2020. If this happens, Trump will be able to run as a “prosperity president.” Experience shows that U.S. presidents have a tough time winning second terms when they have to run for reelection near the low point of the industrial cycle.

Secondly, if a recession does arrive by election day, Trump wants to be able to point to a scapegoat — in this case, the Federal Reserve Board and the “international financial elites” out to destroy his nationalist “Make American Great Again” policies.

Jerome Powell, for his part, has promised that he will act “as appropriate” to keep the expansion going. The key words here are “as appropriate.” Powell is indicating to the markets that he will not jeopardize the dollar and the dollar system in an attempt to “keep the expansion going” like Trump is demanding. Somewhat reassured, investors caused the dollar price of gold to fall after Powell’s remarks, while interest rates on government bonds have rebounded.

Political and Economic Crises (Pt 10)

On the evening of July 28 (2019) in Gilroy, California, a 19-year-old white gunman, Santino William Legan, fired into a crowd of people attending the annual Garlic Festival. Legan was the racist grandson of a former county supervisor. He succeeded in killing three people, two of them children, before he himself went down in a hail of police gunfire — or, in another version, shot himself in the mouth after being wounded by police gunfire.

The following Saturday in El Paso, Texas, another young white male racist, 21-year-old Patrick Crusius, fired into a crowd at a local Walmart. Crusius killed 22 people and wounded dozens more before he was captured by police. Only a few hours later, a 29-year-old white gunman, Connor Betts, opened fire outside a bar in Dayton, Ohio. Before he was killed by police gunfire, Betts killed nine people, mostly African-American but also his own sister. In high school, Betts had expressed vicious misogynistic views.

Of the three white gunmen, the most “articulate” — and the only one to survive — is Patrick Crusius. He is the author of a racist manifesto that, echoing Donald Trump and other right-wing politicians, blamed white unemployment on — in addition to automation and corporations — the “Hispanic invasion” of Texas.

In his manifesto, Crusius hailed the March 15 massacre earlier this year by white racist gunmen of 51 Muslims at two mosques in Christchurch, New Zealand.

Political and Economic Crises (Pt 8)

Trade war intensifies as U.S. and world economy slows

The last month has been characterized by a major escalation of the trade war with the People’s Republic of China. In another important but largely overlooked development, Trump also increased tariffs on imports from India, opening yet another front in the expanding trade war.

Trump threatened but did not impose tariffs on imports from Mexico if the Mexican government did not curb the flow of Central American immigrants through its territory to the U.S. This allowed Trump to “energize” members of his racist base concerned that the U.S. is ceasing to be a “white country.” The moves against Mexico illustrate the current phase of imperialism, and I will examine the Mexican situation more closely next month.

All this has occurred against the backdrop of a global economic slowdown. “Sales of new U.S. single-family homes,” Reuters reported, “fell from near an 11-1/2-year high in April as prices rebounded and manufacturing activity hit its lowest level in almost a decade in May, suggesting a sharp slowdown in economic growth was underway.”

This confirms what I wrote last month about the inventory buildup that helped boost the annualized GDP rate of growth to 3.2 percent, signaling a slowing, not accelerating, U.S. economy. The White House and much of the media — especially in the headlines — gave the misleading impression that the GDP report indicated that the U.S. economy was accelerating and the recession danger was fading away.