From Zenith to Decline

In mid-September 2026, the Federal Reserve Open Market Committee held one of its meetings, which take place about every six weeks. This was not, however, an ordinary meeting. The week before was a rough one for U.S. imperialism in West Asia. Militias based in Iraq attacked the oil pipeline that runs east to west across the Arabian Peninsula ruled by the Saudi Arabian oil monarchy. Saudi Arabia, named after its ruling family, is the largest of the oil monarchies. To maintain the flow toward the Mediterranean and the world market, the oil must be pumped by stations located along the pipeline. In September, Iraqi militias using drones destroyed these pumping stations, halting the flow. It will take several months to rebuild them, and there’s a possibility they’ll be attacked again.

At the same time, Yemen’s government, pushing back U.S. puppets, established control of the Bab el-Mandeb strait, which controls passage into and out of the Red Sea. At this time, Yemen is the only Arab country openly at war with U.S. domination. It is allied with Iran and is thus considered part of the Axis of Resistance. As the Trump administration, through military force, tries to erode Iran’s control of the Persian Gulf, U.S. imperialism’s ability to control the flow of oil across the Arabian desert and the Red Sea is being cut off. To meet the new threats, the U.S. will have to deploy increased military forces to Yemen, Saudi Arabia, and the Red Sea. The war on Iran is increasingly turning into the West Asian war, or we could call it the U.S.-Israeli-West Asian war. Beyond lurks East Asia, whose largest country is the People’s Republic of China, the world’s leading industrial country — a title formerly held by the United States of America, but no more.

Palestine

On October 9, a new ceasefire in Gaza was announced. The last one took effect in January 2025 as Donald Trump assumed office. Many hoped this was the end of the Gaza genocide.

In March, the genocide resumed as Trump and Zionist entity leaders made clear their aims included the complete removal of the Palestinian population from Gaza. Kept open was whether this process was through ethnic cleansing or physical annihilation (literal genocide).

Physical annihilation was achieved by killing through mass bombing, cutting off food and water, causing manufactured famine, and disease.

Liberation Day

On April 2, President Trump announced his “Liberation Day” tariffs. As this blog concentrates on economic questions, this was the biggest event of the last month. But before I get to the tariff, I’ll look at other developments.

Kilmar Abrego Garcia lived and worked legally in Maryland since 2019. The Trump administration accused him of belonging to a gang, arrested and put him on a plane heading for a notoriously brutal El Salvadoran prison. He had not been convicted of any crime. They then claimed they’d committed an administrative mistake.

On April 10, the Supreme Court unanimously ordered the return of Kilmar Abrego Garcia. As of this writing (April 28), he remains imprisoned, and Trump has refused to follow the court’s order. [I wonder whether the high court regrets last year’s decision that even after leaving office, a president cannot be criminally prosecuted for any action taken while in office in pursuit of their duties? I don’t know the answer, but it seems the court is like a man sawing off the branch he is sitting on. -SW]

Genocide Joe

On Wednesday, Jan. 15, 2025, five days before Donald Trump took office, an agreement was announced for a ceasefire to take effect the following Sunday, Jan. 19. President-elect Trump sent Steve Witoff, like Trump a New York City real estate magnate, to negotiate — or rather, lay down the law — to the Netanyahu regime.

When Israeli leaders protested that it was Saturday, the Jewish Sabbath, Witoff, who is Jewish, swept these pious objections aside. He said that the Netanyahu regime would have to agree to terms established the previous May.

None of the tricks that worked under Trump’s predecessor to stop a ceasefire worked this time. It was an offer the Zionist entity could not refuse.

Missiles, Minerals, and Money

There have been a series of dramatic developments over the last several weeks. The most dangerous being the collapse of Syria’s Baath Party government and its replacement by imperialist-backed rebels who emerged out of Al Qaeda and ISIS. This removes Syria from the axis of resistance that supported the Palestinian resistance.

We have also seen an imperialist-backed attempt to overthrow the government of the country of Georgia, and in Romania, a right-wing, anti-NATO candidate won. The U.S.-NATO-backed Romanian regime solved this problem by having the constitutional court throw out the election.

There has also been an attempted coup by South Korea’s president to restore the dictatorship that dominated the country before 1987.

Palestine

To avoid any misunderstandings of what I am going to say here, I am a Jewish American who despises all forms of anti-Semitism. Like most Jews whose parents, grandparents, and great-grandparents came from Europe, I lost relatives in the Holocaust. I never knew them because they died in the gas chambers before I was born. I can also say that since childhood, I have never believed in the truth of the Jewish religion or any other religion.

As a child, I became fascinated with Charles Darwin’s theory of evolution, a fascination that’s never ceased. Since childhood, I have been an unconscious dialectical materialist and then a conscious dialectical materialist from early adulthood onward. I have never understood those trends in Western Marxism that reject the dialectic of nature and “diamat” (dialectical materialism), as the more I study the natural sciences, such as biology, physics, chemistry, and meteorology, the more I find materialist dialects everywhere.

I want to make crystal clear to Mr. Biden and Mr. Netanyahu that if you insist on carrying out genocide in Gaza or anywhere else in Palestine, you won’t do it in my name! Palestine will be free, from the river to the sea!

The Phony Crisis, the Real Crisis, and the Whip of Hunger

U.S. law prevents the federal government from allowing its debt to rise beyond a specific limit. As of May 2023, the limit is $31.4 trillion though this will be raised in the coming weeks. If either or both houses of Congress don’t, the federal government will be forced to reduce expenditures and forced into default. Finance capital won’t allow that.

On January 19, 2023, the day the legal limit was reached, the debt ceiling was not raised because of various technical loopholes in the law, but they are not unlimited. This is not the first time for this kind of artificial government debt crisis, which has become a regular feature of U.S. politics since the Obama administration. Treasury Secretary Janet Yellen estimates that the legal wiggle room (technical loopholes) will be exhausted by June 1, 2023. So while an over-the-weekend theatrical default is possible, the chance of an extended default is less likely than the Vatican announcing its conversion to Judaism or Islam.

Is the federal debt crisis just for show? Not at all. A bill will be passed within the next few weeks, raising the current $31.4 trillion debt limit. To become law, the bill must be passed by both houses of Congress and signed by the President. The Democrats narrowly control the Senate, but the House of Representatives has a slim Republican majority. The House already passed a bill to raise the debt limit, but it contains provisions cutting the budget. Of course, cutting the war budget is off the table — instead, the GOP wants to gut social programs. The most important provision is to attach work requirements to Medicaid and food stamps benefits, as well as measures to promote the production of more fossil fuels. They also want Biden’s limited student debt forgiveness canceled.

Where is the U.S. Economy Going?

In January, the U.S. Labor Department estimated that the non-farming sector of the economy created 517,000 new jobs on a seasonally adjusted basis. Reading the fine print, you see these new jobs exist only on the statistician’s worksheet. The estimate is that on a non-seasonally adjusted basis, the economy lost 2.5 million jobs. Just before the holidays, additional workers are hired to meet the extra demand and are laid off at the season’s end.

The variations are taken into account and smoothed over to reveal the underlying trend. This year, they figured about 3 million workers would be laid off. But these are estimates. Since only 2.5 million were let go on a seasonally adjusted basis, the economy created about half a million additional jobs. But how to make the seasonal adjustment is a complex subject. We are still in the aftermath of a collapse in the hotel and restaurant industries caused by COVID-19. Employment numbers tanked when people stopped traveling and eating out and have yet to return to pre-pandemic levels. Perhaps fewer workers than usual were hired this holiday season, so fewer workers were laid off when it ended.

Another factor was the unusually mild weather that occurred over the country in January. With little snow on the East Coast and Midwest, major storms were limited mainly to California. Wind-driven rain ravaged most of the state, except for higher elevations in the thinly populated Sierra Nevada and Cascade mountain ranges. The economy was disrupted less by winter storms than usual. Weather is not accounted for in making seasonal adjustments.

World Trade

Capitalist production is based on the world market. To understand the laws governing the capitalist system, one must understand those governing world trade. The orthodox or neoclassical theory of foreign trade is based on the theory of comparative advantage. [See “World Trade and the False Theory of Comparative Advantage” and “Comparative Advantage, Monopoly, Money, John Maynard Keynes, and Anwar Shaikh”]

The theory of comparative advantage holds that in national trade: the industrial capitalist with the lowest cost price when producing a commodity of a given use value and quality prevails in competition. In international trade: the capitalist with the comparative advantage prevails.

The view that different laws govern national and international trade precedes neoclassical economics. The originator of this theory is the classical British economist David Ricardo, who formulated the comparative law more clearly than neoclassical economists. This is because of his labor-based theory of value, where the value of a commodity of a given use value and quality is determined by the quantity of labor necessary to produce it.

Money and Anwar Shaikh

The U.S. Supreme Court’s decision on June 24, 2022, to strip women of their right to abortion dominates the news. The Court overturned its 1973 Roe v. Wade decision establishing abortion as a constitutional right. The other event dominating U.S. politics was the congressional hearings into the events of January 6, 2021. These issues unfold against a background of high inflation, a looming recession, and disastrously low approval ratings for President Joseph Biden. On July 11, T he New York Times/Siena College poll gave Biden a 33% approval rating. The same poll showed only 26% of Democrat voters support his renomination for a second term.

Democrats, appearing likely to lose control of the House and maybe the Senate, hope to recoup power by making abortion a prime issue. A bill to make abortion rights a federal law has gone nowhere. Democratic Senators Joseph Manchin and Kyrsten Sinema refuse to suspend a Senate rule that effectively gives the Republican Party veto power over all legislation, the filibuster rule. Democrats hope the outrage felt by women and many men over the Supreme Court decision will cause them to vote Democratic in the November congressional elections. These elections will determine the make-up of Congress for the final two years of Biden’s term.

However, attempts by Democrats to profit from the outrage over the Court decision were undermined when it was revealed Biden made a deal with Senate Republican leader Mitch McConnell to nominate anti-abortion Republican Chad Meredith to a lifetime federal judgeship. This deal — though it appears to have fallen through — is typical of Biden’s 50-year-long political career. As a young Senator, Biden played a crucial role in securing Senate approval of Republican President George H.W. Bush nominee Clarence Thomas to a lifetime position on the Supreme Court. Thomas joined the Court majority in throwing out the right of abortion as a constitutional right.