Gold, Overproduction, and the Emerging Monetary Crisis

On November 8, Senate Democrats made a deal with Republicans to end the government shutdown. The deal was attacked by many podcasters allied with the Democratic Party’s progressive wing.

Led by President Trump, Republicans threatened to cut or end funding for the SNAP (food stamps) program. In 2024, some 41 million people depended on the program.

In the face of court orders, they backed down, but the Supreme Court allowed them to go ahead with the cutoff. Hours before eight Democrats caved to Republican demands and announced they’d vote to end the government shutdown on Republican-Trump terms.

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]

Gang Warfare

For weeks following Israel’s murder of Hamas leader Ismail Haniyeh in Tehran on July 31, the world wondered if (and when) Iran would retaliate. Haniyeh was heavily involved in diplomatic activity to end Israel’s genocidal bombing in Gaza. He had been in Tehran for the inauguration of Iran’s new president, Masoud Pezehkian.

Iran was widely expected to react by launching a drone and missile counterattack on Israel as in April, but this time to causing greater damage. Much to the surprise of most observers, Iran took no military action. It seems that the Iranian leaders were engaged in intense diplomatic activity to arrange a ceasefire to end, or at least suspend, Israel’s genocidal bombing campaign on Gaza.

Hezbollah, the Lebanese political-religious resistance organization, was also negotiating for a ceasefire. Its leader, Hassan Nasrallah, was one of the most popular and respected political leaders in Lebanon.

Presidential Election Goes From Bad to Worse

Note

Since this was written, the U.S. presidential election has gone from worse to far worse due to Joseph Biden’s disastrous performance in the June 27 debate with Donald Trump. Though I am no expert on these matters, Biden seemed to show signs of dementia. Dementia is not at all unusual for a man of his age.

All types of dementia are progressive, which means they get steadily worse over time. It’s hard to see how Biden will be able to serve as president until January 20, 2029.

The Democrats are discussing whether they should dump Biden—which would seem to be a no–brainer—and how to do that. As things stand, there appears to be almost nothing between Donald Trump and the White House. The truth is that the U.S. political system is ill-designed to handle this type of situation. I will have more to say on this next month.

How Vietnam Won, Part 1

On January 14, 2024, 400,000 pro-Palestinian anti-genocide demonstrators marched in Washington, D.C., to the White House (occupied by the Democrat President “Genocide Joseph Biden”). Tens of thousands more marched in support of Gaza in San Francisco, California, the following day.

The stakes could not be higher. Those of us living in the United States have a special responsibility to do all we can to force the government to halt its support to Israel. Though it is the Israeli government carrying out the genocide on the ground, it could not commit these nightmarish crimes without the financial, political, military, and moral support provided by the government headed by Genocide Joe.

The genocide — there is no other word for it — has continued without let-up in Gaza. Israel aims to kill people directly or through hunger and disease, then drive out the rest of the population as far away as possible from Palestine. The January 3 edition of the Middle East Monitor reports, “According to the Times of Israel, Prime Minister Benjamin Netanyahu’s coalition is discreetly exploring the acceptance of thousands of migrants from Gaza, with the Democratic Republic of Congo being one of the countries under consideration. ‘Congo will be willing to take in migrants,’ said a senior source in the security cabinet, ‘and we’re in talks with others.’”

Can the Palestinians Win?

The year 2023 was dominated by Israel’s genocidal campaign in Gaza beginning in October. It was supposedly in response to the Operation Al-Aqsa Flood attack on Israel by Hamas [Islamic Resistance Organization] and other Palestinian resistance organizations on October 7, 2023. Many so-called liberals, progressives, socialists, and even some Marxists have attacked the alleged excesses Palestinian fighters committed, such as beheading Israeli babies, raping Israeli women, kidnapping children, etc. Many of these claims of excesses have since been discredited. These “progressives” claim they sympathize with the Palestine people in their struggle against Israeli apartheid. But they then lecture that the Palestinians must conduct their struggle without violence or harm to “innocent Israeli civilians.”

It’s now clear that many of the civilian deaths were the result of the Israeli army itself firing into areas that were allegedly occupied by Palestinian fighters and their Israeli captives. Our “liberal” friends insist there is still a residue of Palestinian excess. But how could it be otherwise, considering how Zionists have treated the Palestinian people for the last 75+ years? Before October 7, there was the day before. Yet the so-called friends of the Palestinians insist we in the West must equally condemn Palestinian excesses, real or alleged, and Israel’s crimes. They want to support only a “pure” national liberation struggle without any “excesses.” In other words, they do not support any national liberation struggles at all!

They argue that today’s Palestinian liberation movement is dominated not by secular democrats like the Palestinian Liberation Organization of the past that fought for a secular democratic state for all of Palestine’s residents. The PLO’s program included the separation of church and state with equal rights for Christians, Muslims, and Jews to practice their respective religions. This is what these “friends” support as an alternative to Zionist apartheid with Judaism as the state religion.

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.

Law and Bonapartism in U.S. Politics

I’m pausing my critical review of Anwar Shaikh this month. Instead, I’ll devote this post to examining the current economic and political situation as it appears from the belly of the beast.

The economic contradictions of the capitalist system are coming to a head. This happens just before a universal crisis of general commodity overproduction. It’s particularly marked this time due to the frenzied character of the COVID aftermath boom. We’re seeing the contradiction between the capitalist system’s drive to continuously expand production and the limits on production imposed by the market’s ability to absorb commodities at a profit.

The Federal Reserve System is trying to slow the U.S. economy to a sustainable pace without sending it into a politically damaging recession. It says it wants less hiring and a slower expansion of production to fight inflation. Inflation is seen to be the result of too little commodity production relative to demand. How does reducing the number of people employed and slowing the production rate reduce inflation? Shouldn’t the answer be to produce more and employ more?

Fighting Bonapartism by Bonapartist Methods

On August 8, former U.S. President Donald Trump announced that the FBI was searching his luxurious palace-like mansion in Mar-a-Lago in Palm Beach, Florida. Trump wasn’t in Mar-a-Lago. He was in his Trump Tower residence high above Manhattan in New York City, another one of his many residences. Trump claimed he observed the FBI search live on close circuit TV. The FBI raid was ordered by U.S. Attorney-General Merrick Garland. President Joseph Biden claimed he didn’t know about the raid in advance.

The search warrant, soon made public with redactions, is a legal document U.S. police agencies — in this case, the FBI — need for a legal search without the approval of the person who is being searched. According to U.S. law, to obtain a search warrant, the police agency conducting the search must convince a judge — in this case, a federal judge — that there is probable cause of a crime. The alleged crimes being investigated center on Trump’s possession of secret documents with various degrees of classification. Documents with high degrees of classification are documents whose contents are hidden from the American people and everybody else, except for certain high-ranking government officials, for “national security” reasons.

The classified documents allegedly stored at Mar-a-Lago without authorization might include military secrets (including those of nuclear weapons), as well as information, if made public, embarrassing to powerful people. They are supposed to be stored in highly secure government buildings — it’s a crime to hold them in a private residence or other unsecured location. Only Trump and a handful of government officials know what’s in them.

The abortive 18th Brumaire of Donald John Trump

Joseph Biden was sworn in as the 46th president of the United States and Kamala Harris as vice president on Jan. 20, 2021. But it was an inauguration unlike any other. Washington was occupied by 20,000 National Guard troops. Nobody without a pass was allowed anywhere near the ceremony. One reporter on the eve of Biden’s inauguration said something to the effect that on Jan. 20 Washington did not look anything like America. But the point is this is exactly what the United States of America looks like now. The real questions are, how did the U.S. get this way and where is it going?

Four years earlier, the capitalist ruling class looked on with a mixture of great hope and some trepidation as Donald John Trump was sworn in as the 45th president of the United States. On one hand, Trump was a brazen amateur compared to even the least prepared of his predecessors. He had never served in the armed forces or held an elective office, nor had he served in a U.S. cabinet or any other government post. Indeed, he never held any job outside his family business besides his role as a TV showman.

Once in office, Trump wasted no time in starting a trade war with China but also with the U.S.’s imperialist satellite “allies” such as Germany and the other EU countries. There were fears in the ruling circles that this was endangering the world order that had emerged out of the U.S. victory against Nazi Germany and Imperial Japan. This world “order,” which Joseph Biden is now trying to reinvigorate, was based on a compromise agreement between the victorious U.S. and its defeated imperialist rivals that emerged after World War II.