Corporate Joe on the Picket Line

Over the last month, the news in the U.S. (the world’s leading imperialist power) was dominated by three main stories. The first is the strikes against the Big Three automakers by the United Auto Workers (UAW). The second is the continued struggle of the Party of Order against the presidential candidacy of Donald Trump. As of early October 2023, Trump appears to have built a sizeable lead in the Republican primary, with all the other candidates fading fast. The third story was confined mainly to the financial pages but is of particular interest to the readers of this blog. That story is the crash of the U.S. government bond market.

A government bond crash gets much less attention than a stock market crash, though it’s really more important. A stock market crash lowers interest rates. Unless a recession is already underway — like the famous 1929 stock market crash — a crash that relaxes the money market and lowers interest can postpone a recession. This happened in the crash of October 1987, when it lowered interest rates and prolonged the ongoing economic expansion by several years.

While a government bond crash doesn’t prevent the federal government from continuing to borrow money (increasing the cost to the taxpayer), it does increase the interest rate that both businesses and consumers have to pay. For example, housing construction had been slumping but began to recover last summer as mortgage rates began to decline. This raised hopes for a “soft landing” of the U.S. and the world economy. But now mortgage interest rates are rising to their highest levels since before the 2007-09 crisis, and housing starts renewed their decline.

Written and Unwritten Laws

On August 1, 2023, a Washington, D.C., grand jury, at the urging of special prosecutor Jack Smith, indicted Donald Trump on four felony counts. The counts center on Trump’s illegal attempts to remain in office after he’d clearly lost the 2020 presidential election in both the popular vote and, what legally counts, the electoral college. On August 15, a Georgia grand jury indicted Trump and 18 supporters on racketeering charges. The charges involve the alleged attempt by Trump and his supporters to steal Georgia’s electoral vote and, in effect, suppress the African American vote. More on this in coming posts as the situation unfolds.

As I explained last month, in the U.S., the transfer of power from one president to the next involves both written and unwritten laws. One unwritten law is that the defeated presidential candidate, either Democrat or Republican, concedes the election after The New York Times declares their opponent the winner in the electoral college. The defeated candidate then offers their support to the new president-elect. Trump defied this law. Instead of congratulating Joseph Biden, the electoral college winner — and the popular vote winner — Trump claimed he had won the election by a “landslide” and that the official vote tallies were false. Many of Trump’s Republican supporters, as well as some non-supporters who needed the votes of his base to win their reelection — claim that Trump’s latest federal indictment, as well as the latest indictment in the State of Georgia, is an attack against the right of free speech.

Now it’s true that the U.S. Constitution’s First Amendment guarantees the right to free speech. U.S. residents and citizens have the right to lie, except to police officers, federal agents, or under oath. They do have the right to refuse to talk to police officers and federal agents under the Fifth Amendment, which protects persons from having to provide testimony against themselves. Police officers and federal agents, though, have the right to lie to suspects, though not the right to lie to jurors — which, of course, doesn’t mean they never do. This is one reason why defense attorneys are almost unanimous in advising people to never talk to a police officer or federal agent in the absence of an attorney.

Whip of Hunger, part 2

As May drew toward its end, the media was full of reports that the world economy was teetering on the edge of catastrophe. If the media is to be believed, the threat came not from the unsold commodities that accumulated due to the COVID aftermath boom. Rather, they said that unless the Democrats and Republicans reached a last-minute agreement to raise the debt limit, the government will be forced into default as the Treasury runs out of money.

In last month’s post, I declared that this crisis was fake. Sure enough, “at the last minute,” the crisis was averted. On Saturday, June 3, President Biden signed the compromise agreement allowing the government to keep borrowing into 2025. The compromise bill sailed through the House of Representatives with 314 voting yes and 117 voting no. In the Senate, the vote was 63-to-36. No small portion of that borrowed money will go to servicing federal government debt, the bulk of which is owned by wealthy capitalists.

Karl Marx on the national debt

Karl Marx wrote:

“The only part of the so-called national wealth that actually enters into the collective possessions of modern peoples is their national debt. Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgiven.” (Capital, Volume 1, Chapter 31, Genesis of the Industrial Capitalist)

Trump Charged

On April 4 in New York City, former President Donald Trump was arraigned in court on 34 felony charges brought by the State of New York — not the Federal Government. He became the first president to be charged with crimes — felonies — after leaving office. In the United States, arraignment is when the charges are read, detailing the laws allegedly violated. Then, the defendant enters a plea, guilty or not guilty (Trump pleaded not guilty). He was released without bail and promptly flew on his private jet to his luxurious home — one of many — at the Mar-a-Lago resort in Palm Beach, Florida, near Miami.

Even if Trump is found guilty by a jury — which wouldn’t be until 2024 at the earliest — he would not be barred under law from again running for or serving as president. Eugene Debs, the Socialist Party presidential candidate, ran from his prison cell in 1920. Trump is the opposite of Debs in terms of the class he represents, in morality, and in almost every other way. It’s hard to imagine the 2024 Republican nominee running from prison! Nobody expects Trump to serve a minute in prison even if convicted of every count and all appeals fail. The point of the charges isn’t to put him in prison but to keep him out of the White House.

Many liberal and progressive observers delighted to see Trump charged are dubious that these charges will stick. The charges of falsifying business records are misdemeanors under New York State law, not felonies. In the Clinton impeachment of 1998, the underlying crime involved an affair with someone, not his wife. Bill Clinton had an affair with young aide Monica Lewinsky. From a purely moral standpoint, Clinton’s affair with the young aide was worse than Trump’s affair with porn star Stormy Daniels who is well-versed in the ways of the world.