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.
Unfortunately, I do not have the time or the information to write about these events at this time.
What I will cover this month is the confrontation between Russia and the U.S. world empire over Ukraine, the Donbass, and Crimea.
Missile crisis 2024-style
The November 17, 2024, New York Times revealed that the lame-duck Genocide Joe Biden administration authorized Ukraine to use the Army Tactical Missile System (ATACMS – pronounced “attack-’ems”) to attack Russian targets inside land that is indisputably Russian.
ATACMS is a super-sonic (not hyper-sonic) battlefield missile manufactured by the Lockheed Martin corporation. It is about four meters (thirteen feet) long and has a range of up to 300 kilometers (190 miles). Until now, the U.S. has allowed Ukraine to use it only in territory claimed by both Russia and Ukraine. According to Wikipedia, “On 23 June 2024, an incident occurred during an attack on Sevastopol, where Russian air defense missiles were fired at multiple ATACMS missiles resulting in explosions that caused 2 to 4 deaths and more than 150 injuries on Uchkiivka Beach, where locals reported that no air raid warning had taken place and people on the beach were not able to evacuate.” The attack created outrage in Russia.
In the weeks preceding the revelation, the Euromaidan regime in Kiev, echoed by the Western capitalist press, went on a campaign claiming that North Korean (Democratic People’s Republic of Korea) soldiers had entered the war on the side of Russia. I have no special knowledge of whether any North Koreans are in or near Ukraine. However, it seems that there would be little point in sending those forces into battle against Ukraine, considering that North Korea is located thousands of kilometers from Ukraine.
I do, however, have a special interest in World War II because it marks the transformation of U.S. imperialism into a world empire. I have watched videos of German propaganda from the final weeks of World War II on the internet. The desperate Nazi regime was trying to rally what was left of their armed forces and the German people in a last-ditch effort to save Adolf Hitler’s regime. Nazi propaganda claimed that “mongoloids” from the Far East were overrunning the German Reich inhabited by Aryan white people, of course, a blatantly racist appeal. This is not surprising as the Nazi regime put race at the center of its ideology.
Could the Ukrainian Euromaidan regime be doing something similar today with its claim that North Korean soldiers are threatening to overrun the white Ukraine? This seems all the more likely considering that the Ukrainian nationalists who play such a powerful role within the Kiev regime are strongly influenced by the ideology of the Nazis to the point they wear or have tattoos of swastikas and other such symbols on their skins and clothing, much to the embarrassment of their democratic imperialist Western masters?
In recent months, the tide of war turned, forcing Kiev to retreat from much of the territory it claims, especially in the Donbass. (1) There are now reports that Kiev is having trouble finding recruits for its army. Young and not-so-young men are being forced to serve. The December edition of “Peoples World” reports that “The Star (the British newspaper “Morning Star” -SW) reports that Gallup’s latest surveys, not counting the Russian-speaking eastern provinces and Crimea, show that the people back a negotiated settlement. Some 52% told Gallup they want this solution, despite fear of coming out against the war that is illegal in Ukraine. They told Gallup they want an immediate end to the fighting”.
The wave of anti-Russian nationalism that swept Ukraine after Russia launched what its government called the special military operation to drive the Ukrainian army out of the Donbass has now dissipated. The population is turning against the war and the corrupt, repressive, pro-U.S.-NATO Nazi-ridden government of Volodymyr Zelensky.
Things are further complicated by the election of Donald Trump to the presidency for a second term. The core of both the Democratic and the Republican parties, what I call the Party of Order, supports the war. Opposition to the U.S.-financed war that has been expressed within the two-party system has been largely confined to the Republican Party.
The U.S.-orchestrated coup that established the far-right Nazi-ridden Kiev regime in 2014 occurred under Democrat Barack Obama and was carried out by Democrat Victoria Nuland. During Trump’s first term, he was attacked by Democrats as an agent of Russia. They claimed that he was only elected due to Russia’s interference in the 2016 presidential election, where he won the electoral college but lost the popular vote to the Democrat warmonger, presidential candidate Hillary Clinton.
The Democrats went so far as to impeach Trump during his first term on the grounds that he had pressured Zelensky to urge Ukrainian prosecutors to investigate the activities of Joseph Biden’s son Hunter in Ukraine. They hoped this would help them defeat Trump in the 2020 election. (2)
After Democrats gained a majority in the House of Representatives, they responded by impeaching Trump on the grounds he briefly withheld weapons shipments to Kiev to make Zelensky investigate Hunter Biden. Hunter Biden was later convicted of other crimes in the U.S. After years of promising not to, on December 1, 2024, President Biden pardoned his son for any federal crimes — not just the crimes for which he was convicted — between 2014 and 2024. This gross abuse of the presidential power of pardon has few if any precedents in U.S. history.
On August 6, as Russia made steady advances in the Donbass, Ukraine launched a ground attack on Kursk Oblast in Russia. Ukraine forces suffered huge losses and there has been no slackening of the Russian offensive in the Donbass as it moves to drive the Ukrainians out of Kursk. On November 17, the New York Times revealed that the Biden White House authorized Ukrainian use of ATACMS in Kursk. This threatens to change the character of the war.
According to many Internet sources, ATACMS — and its British and French counterparts — cannot be operated without the help of U.S., British, and French technicians who alone have access to the launch codes. The Russians see the use of these weapons as leading to a shooting war between Russia and the United States, France, and Britain.
What would happen if, let’s say, Russia gave missiles to Cuba or Mexico that were operated by Russian technicians targeting the U.S. in south Florida, Texas, New Mexico, Arizona, or southern California? Wouldn’t this be seen as a direct military attack on the United States?
Such a crisis in 2024 is more threatening than the October 1962 Cuban missile crisis. (3)
Shortly after the New York Times article, ATACMS and similar missiles were launched into indisputable Russian territory.
Despite the assertion that these missile strikes are Ukrainian in origin, the involvement of U.S.-NATO military personnel in operating the U.S. ATACMS and similar British and French missiles leads Russia to regard these missile attacks as armed acts by the United States, Britain, and France against its undisputed territory.
Russia responded by attacking a Ukrainian factory built during the period of Soviet power, using a new hypersonic (faster than the speed of sound by 10 to 12 times) missile with a range of thousands of kilometers. When such a missile hits a solid object its velocity drops abruptly to zero, and a tremendous amount of heat is generated, causing significant damage. These missiles do not have to carry chemical or nuclear warheads. According to some reports, Russia also has been working on chemical explosives that work with hypersonic missiles.
There is some talk that if the Biden administration continues its attacks on Russia, it could retaliate with hypersonic missiles on NATO targets in Poland, Britain, or France. In an address to the people, Putin announced a revision of Russia’s nuclear doctrine to treat an attack by a non-nuclear nation in collaboration with a nuclear one as an attack by the nuclear nation on Russia. Russia reserves the right to launch a nuclear counterattack on the nuclear nation.
Clearly, the Biden administration has brought the United States to the brink — and some ways over the brink — of a shooting war with Russia. Trump and some of his supporters claim he will end the Ukrainian war within twenty-four hours before he even assumes office. In this war so far, the Ukrainian people have been the biggest losers.
A trillion dollars worth of minerals
According to the publication “Eurasia,” the South Carolina Republican and rabidly pro-war Senator Lindsay Graham, when in Kiev, said that the Ukrainians “are sitting on a trillion dollars worth of minerals that could be good to our economy.”
Another internet publication, “Responsible Statecraft,” quotes Graham: “This war is about money. People don’t talk much about it. But you know, the richest country in all of Europe for rare earth minerals is Ukraine. Two to seven trillion dollars worth of minerals that are rare earth minerals, very relevant to the 21st century.”
Graham declared, “Ukraine’s ready to do a deal with us, not the Russians. So it’s in our interest to make sure that Russia doesn’t take over the place.”
Well, whatever you think of Republican Senator Lindsay Graham — and I admit I am no fan — here he is telling the truth about why U.S. imperialism has brought the world to the jagged edge of World War III over Ukraine. Considering his record, we cannot rely on Trump to save us from Biden’s policies, just as we couldn’t have counted on Kamala Harris had she won the November election.
Trump’s victory is part of a global trend that has seen gains by parties of the far right. We have seen similar results in Italy, France, and Germany. The post-Covid shutdown inflationary surge drove down real wages across the globe. Voters disgusted by falling wages turned against so-called center-left or center-right parties, pro-U.S.-NATO, throughout Europe, most recently in Romania.
All too often, the victors have been parties of the far right. The Romanian Constitutional Court solved the problem by throwing out the results of the election, saving democracy from the far right by throwing out the results of democratic elections. Why have these far-right parties benefited in countries as different as the United States and Romania over left-progressive parties?
Things were different 75 years ago. Thanks mainly to the Soviet Union but also to the resistance of the peoples of Europe largely led by the communist parties, Nazi Germany and Fascist Italy were defeated. The crimes of fascism, particularly of Nazi Germany, were exposed before a shocked world. This led to the hope that a socialist victory would follow fascism’s downfall in Eastern and Western Europe. It was natural for people to vote for the left parties that represented their hopes for a better world. Even in conservative Britain, to the shock of many, the Labor Party routed Winston Churchill’s Tories in the 1945 election.
Then came the Cold War, launched by U.S. imperialism against the Soviet Union and the international communist movement. A new wave of capitalist prosperity, whose causes we have been exploring throughout this blog, soon set in. The post-war revolutionary wave in Europe began to lose momentum as the rule of European capitalism, thoroughly subordinated to U.S. imperialism, was stabilized first by U.S. military occupation and then reinforced by renewed capitalist prosperity.
Under this pressure, splits appeared in the international communist movement. It began with the split between the Soviet Communist Party and the Yugoslav Communist Party in 1948. Nikita Khrushchev’s denunciation of Stalin at the 20th Party Congress of the Soviet Communist Party led to further splits in the international movement. At the end of the decade, the two most powerful communist parties, the Communist Party of the Soviet Union and the Chinese Communist Party split. As a result, by the early 1970s, the People’s Republic of China found itself in a virtual alliance with the United States. In 1979, a brief war broke out between China and the newly unified Vietnam.
Perestroika, a dirty word
The worst blow came in 1985 with Mikhail Gorbachev’s rise to power in the Soviet Union. Between March 1985, when the Central Committee of the Communist Party elected Mikhail Gorbachev as its General Secretary, and August 1991, the Soviet Communist Party suffered major internal splits and fell apart.
Following a so-called coup and then a counter-coup in August 1975 that brought anti-communist Boris Yeltsin to power in the Russian Soviet Republic, the Soviet Communist Party was outlawed throughout the Soviet Union. A few months later, the Soviet Union was formally dissolved, and the international communist movement was thrown into chaos.
Many communist parties dissolved, changed their names, or were reduced to a shadow of their former selves. The hopes that were so strong in 1945 that the international communist movement was about to usher in a new socialist world were gone. Even right-wing anti-communist-led trade unions and social democratic parties found themselves on the defensive.
For years, the anti-communist wing of the world workers’ movement had lived a parasitic existence off the international communist movement. Anti-communist labor leaders argued that if the bosses didn’t grant concessions to the workers under their leadership, the communist influence among these workers would grow. When the Soviet Union and the international communist movement were powerful, this was an argument that the bosses could not ignore. But, as the Soviet Union and the international communist movement weakened, this leverage with the bosses also weakened. When the Soviet Union was overthrown, and the old international Communist movement largely broke up, this leverage disappeared.
As of 2024, the international communist movement has not yet been rebuilt. As a result, the current generation of workers does not have the revolutionary hopes that the Russian Revolution gave their grandparents and great-grandparents. However, the grim predictions of those communists who opposed Gorbachev’s perestroika throughout the world in the 1980s have been more than fully justified by the course of events. In the late 1980s and early 1990s, when Gorbachev made concession after concession to the U.S. empire, he justified it by saying they were removing the nightmare of a third world war. Gorbachev and his counterrevolutionary supporters claimed that universal human values that transcend class antagonisms justified his unilateral surrender to imperialism. No more would people fear that they might not live another day or wake up in the morning to a nuclear war.
What happened? Not only were the planned economies of the Soviet Union and Eastern Europe thoroughly wrecked with disastrous consequences to the great mass of the people — though a few have grown rich — but now we are closer to a third world war than we ever were during the Cold War. No wonder Mikhail Gorbachev is hated by the people of Russia, and perestroika (Russian for restructuring) is now a dirty word in Russia.
Neither the center-right, the center-left, nor the far-right capitalist parties have the answer to the massive problems that decaying monopoly capitalism is causing the working class and its allies throughout the world. In the long run, this favors a resurgent communist movement that learned the lessons of the events of Gorbachev’s perestroika and the subsequent destruction of the Soviet Union and its socialist allies, and the subsequent massive retreat of all tendencies within the global workers’ movement. However, this process is taking time because of the mass demoralization and disorientation of the victory of the Russian counterrevolution.
Are today’s surging far-right parties the equivalent of the fascist parties that played such a disastrous role in the politics of Europe between the two world wars? Fascist parties weren’t simply extreme conservative parties using chauvinist racist rhetoric, though they were that. Nor were they simply mass movements, though they were also that. The fascist parties were, above all, mass militia movements based on angry middle-class youth that waged civil war on the organized worker’s movement in their countries. These attacks on the organized worker’s movement attacked all tendencies in the labor movement, from the most conservative-reactionary Catholic labor unions to the communist parties of the Third International. However, the communists were, in every case, the main target.
As the fascist parties grew, the big capitalists and landowners were originally put off by their radical sounding and, at times, even socialist demagoguery. Benito Mussolini (1883-1945), considered the founder of Italian and broader European fascism, had been a leader of the Italian Socialist Party before World I. As the fascist parties grew and civil war waged in the streets intensified, the capitalists and landowners began to step up their financing of the fascists.
Eventually, the capitalists decided that the only way they could create a strong government to deal with the economic crisis was to agree to the fascists coming to power. Once in power, all tendencies of the worker’s movement were outlawed. The fascists evolved from a mass militia movement into an administrative apparatus designed to prevent the re-emergence of the worker’s movement in any form.
The fascist regimes went beyond the normal bureaucratic police apparatus typical of a normal capitalist state. This made it difficult to organize even illegal movements against the fascist governments. Before then, there were powerful revolutionary upsurges of the workers’ movement that, unlike what happened in Russia, failed to take state power. The wave of disappointment and demoralization that followed fueled fascism’s growth.
Fascism’s 19th-century U.S. predecessor
Though fascist groups existed in the 20th century, in the U.S., they never got close to winning national political power. However, European fascism had a 19th-century U.S. predecessor. Reconstruction followed the defeat of the slaveholders’ rebellion in the southern United States. Groups like the original Ku Klux Klan and other militia-like groups attacked supporters of Reconstruction.
The most radical supporters of Reconstruction wanted to abolish all vestiges of slavery, break up the large plantations, and distribute the land to formerly enslaved Africans and poor whites. While this was not a socialist program, it was a radical (bourgeois) democratic one. Both exploited groups had a common interest in deepening Reconstruction and carrying it through to its logical conclusion. If Reconstruction had been carried through to the end, the U.S. would be a very different country today.
As we know, a mass redistribution of land was not carried out. The failure to take Reconstruction to its next step led to its defeat and opened the door to the subsequent reaction that swept the South. This reaction was further encouraged by the depression, which began with a Wall Street crash in the latter part of 1873. This led to a long period of mass unemployment for workers and low prices for farmers.
This economic depression undermined the anti-slavery Republican Party. The party, including its radical pro-Reconstruction wing, was further undercut by a series of corruption scandals that marked the Republican administration of President Ulysses S. Grant, who held power from March 4, 1869, to March 4, 1877. These developments opened the door to the resurgence of the reactionary racist Democratic Party in the 1876 presidential election.
That election pitted Republican Ohio politician Rutherford B. Hayes (1882-1893) against the New York racist Democrat Samuel J. Tilden (1814-1886). The results hung on the disputed results of the Florida vote (similar to the 2000 election, but with higher stakes). Tilden won the official popular vote and claimed he won Florida, giving him the electoral votes needed to assume the presidency. But, in the words of Wikipedia: “Although Tilden defeated Hayes in the official popular vote tally, the election involved substantial electoral fraud, voter intimidation by paramilitary groups like the Red Shirts, and disenfranchisement of Black Republicans.”
In the 20th century, the fascist militias were called the color of the shirts that members wore while engaged in street fighting and intimidation. In Italy, it was the black shirts; in Germany, the fascists wore brown shirts.
The colored shirts were necessary to distinguish the fascist militia members from the workers’ militias they were fighting. In the U.S. South, as the reaction fought to overturn Reconstruction, some of the reactionary militias were called red shirts. In addition to the red shirts, there were the hooded bands of the Ku Klux Klan that terrorized the formerly enslaved people. Republican supporters pointed out that Tilden won the popular vote in Florida only due to the racist terrorist campaign of the red shirts and other terrorist bands and demanded the Florida electoral vote be given to Hayes. There was even talk of renewed civil war. (4)
The crisis ended in a compromise between the Republicans and Democrats. Tilden and the Democrats conceded the election to the Republicans, and Hayes assumed the presidency on March 4, 1877. Hayes, in return, agreed to withdraw federal troops from the South, effectively handing over the region to the racist Democrats and their proto-fascist bands of red shirts and hooded Klansmen.
Frustrated poor whites felt that they gained nothing from Reconstruction and that the northern Yankees were exploiting them. Many were recruited into the militias on the basis that they represented the superior race compared to the formerly enslaved Africans. For this reason, most of the democratic gains of Reconstruction beyond the formal abolition of slavery were reversed. The Southern Republican party, based on formerly enslaved people, was crushed, and the one-party rule of the Democratic party that was to last into the 1960s was established.
With the Reconstruction supporters terrorized into submission, a form of apartheid called Jim Crow segregation was established in the Southern states. On a national scale, basing itself on the now one-party rule in the South, the discredited Democratic party was revived on a national scale.
In this way, the South was transformed into a bastion of reaction that imposed the Jim Crow regime on the U.S. South. Even today, it remains a bastion of reaction. What did the capitalists get out of this? A lot, actually.
With the slaveholders’ rebellion defeated, slaveholders as a separate class were dissolved. The capitalist class had nothing more to fear from it. Now, they would turn to face the growing class of wage workers. By tolerating and even supporting a proto-fascist movement of Southern reactionaries — the word fascist had not yet emerged out of Italy — the capitalists gained important allies among disorientated poor Southern whites. These whites were stirred up by propaganda about the glories of the slaveholder’s South and the superiority of a white master race. This provided a model for the European fascists of the 20th century.
The Democratic Party was saved from well-earned extinction. The resurgent party used the one-party South, the “solid South,” as its base to revive in the North. The northern Democrats had many demagogues claiming to be champions of the workers, including immigrant workers as well as poor farmers — as long as they were white. The greatest of these was William Jennings Bryan (1860-1925). Bryan was the Democratic candidate for president in 1896 when the U.S. economy was struggling to throw off the effects of the 1893 economic crisis.
With stunning oratory, Bryan won over many discontented Northern whites, especially small farmers being crushed by the ongoing deflation. (5) Bryan famously advocated the return to the free coinage of silver at a rate of 16 to 1. He was far less successful among workers who were not in favor of the devaluation of the media (the dollar) in which they were paid than he was among debt-ridden small farmers.
Before the Civil War, Democrats claimed that the chief ally of Northern white workers were the Southern slaveholders. If slavery was overthrown, the Democrats, champions of the white worker, explained, the formerly enslaved African Americans would flood Northern labor markets and undersell the white workers.
In the decades that followed the Republican betrayal of Reconstruction, the Democrats in the unions did all they could to keep unions segregated for white workers only. This helped prevent the union movement from forming a labor party or shifting their votes to the Socialist Party, the U.S. section of the Second International. Why build a new party based on the working class when the allegedly pro-white worker Democratic Party already existed?
In the 1930s, the great union movement of the Congress of Industrial Organizations (CIO) largely bypassed the South. The reason was that the fascist-like political atmosphere there made union organization difficult — and physically dangerous. From then on, industrial capitalists shifted their production to the Southern states to take advantage of the union-free environment. This gradually undercut the position of industrial unions in the North.
Also, there was the CIO leaders’ alliance with the Democratic Roosevelt administration. Why risk embarrassing Southern Democrats whose racist one-party regimes helped keep the New Deal Democrats in power and the Republicans out of power? During the New Deal period, Franklin Roosevelt remained aligned with Jim Crow Southern Democrats, as did many liberals and progressives. No civil rights bills were passed under Roosevelt’s New Deal. As a result, the modern post-Jim Crow South remains a bastion of reaction. Trump could never have become president without tapping into the tradition of Southern white racism and reaction that has not been overcome to this day.
Today’s far-right parties in Europe are often linked to the traditions of their fascist past. But so far, these parties have not created militias on the scale of the fascist militias of the 1920s and 1930s that waged virtual civil war on the workers movement and its allies. Whatever its ideology or attitude toward past fascist parties and regimes, a right-wing party is not a truly fascist party — however reactionary — without these militias. As I have explained in previous posts, fascist parties have no specific ideology. The ideology the fascists employed was borrowed from the traditional conservative-reactionary ideology of their particular country with a sprinkling of populist-socialist demagoguery that was necessary to mobilize middle-class youth.
This doesn’t mean that today’s far-right reactionary parties have no ties to militia formations. To use the U.S. — the country that I know best — as an example, the Trump-led Republican party has many ties to armed proto-fascist militia formations. But the Republican Party, in its modern guise, is a traditional right-wing capitalist political party; its ties to the militias are different than Mussolini’s original fascist party as it took shape during and after World War I and Hitler’s National Socialist Party (Nazi party) as it came together after World War I. Unlike present-day Republicans, the Italian Fascists and the German Nazis were political parties built around a militia movement. Today’s Republican party uses militias as an axillary instrument.
This doesn’t mean that a new fascism could not develop out of today’s far-right parties and the militia formations or incipient formations that are linked to them. However, the bigger story is that the growing class antagonisms intensify as the basic economic contradictions of capitalism grow more intense. These contradictions lead, in turn, to increased class contradictions. The way to fight today’s fascist tendencies is not to vote for the U.S. Democratic Party or similar parties in Europe. Rather, it is to build new communist parties that have learned the bitter lessons not only of fascism but of the 1980s and 1990s. Eventually, as world imperialism crumbles before the struggles of the peoples of the Global South, there will be a showdown between the two main classes of capitalist society, the working class and the capitalist class. The middle class will be split between the two. If the showdown doesn’t end in the victory of the working class, the fascists will grow strong again, organize militias based on frustrated youth, and wage civil war on the workers and their allies.
Now, I want to return to examining how long-term changes in the production and value of gold affect the evolution of the world capitalist economy.
The place of the crisis of 2007-08 in history
After the crisis of 1968-1982 came to an end, though the dollar price of gold fluctuated, it trended downward between 1980 and 2000. In 1980, the dollar price of gold closed at $594.90. After that, the dollar price drifted lower, closing in 1996 at $369.00. The following year saw the so-called Asian crisis that devastated the economies of Indonesia and other Asian countries. It later spread to Russia in 1998 and Argentina in 2001. This crisis produced a flight of money capital from Asian countries into the U.S. dollar. During this crisis, the role of the dollar as a means of payment was central. Cash is king when a crisis occurs, and the U.S. dollar is cash under the dollar system.
As a result, the dollar price of gold fell further to $288.05 in 1997. In 1999, as the crisis eased in Asia, money capital flowed back to Asia, eager to buy assets at fire sale prices. This renewed outflow into Asia enabled the dollar price of gold to stabilize, closing out 1999 at $290.25.
The next year, 2000, saw the beginning of a recession in Silicon Valley, the associated dotcom crash, a general recession in the U.S., and stagnation in Europe. The housing industry, which usually turns down just before a general recession, did not do so this time. The reason: Just before the recession, the federal funds rate was still above 6%. It fell sharply during 2000-2002, falling below 2%. The sharp fall in interest rates not only prevented the general recession from deepening but also prevented a recession in the housing industry. This meant overproduction, or as it is called in the housing industry, overbuilding continued without interruption through the recession. In effect, the housing industry skipped a recession. This meant that in the next recession— the Great Recession of 2007-09 — the housing industry had two recessions in one.
In 2000, the rise in global gold production that had been underway since the early 1980s came to an end. The recession stagnation of 2000, reflected in the missed housing recession, was too mild to act as much of a stimulus to gold production. In this respect, the situation was similar to that in 1970, when gold production also failed to be stimulated.
In 2001, global gold production began to decline, not simply stagnate. In addition to the relative mildness of the recession, there were two other reasons for the reduction of gold production. One was the rise in prices defined in gold terms that had gone on since the early 1980s. However, though the price of commodities recovered considerably from the low levels of the 1980s, it was still below the 1970s levels.
The other reason was the deteriorating natural conditions in the gold mining industry caused by the depletion of the South African mines. The effect of deteriorating natural conditions is to increase the value of gold relative to all other commodities. It reduces both the direct prices measured in terms of the use value of gold as well as prices close to the direct price, which is also defined in terms of the quantity of the use value of the money commodity. Production prices are those that equalize the profit rate among all branches of production, including the branch that produces money material.
Capitalists do not see value; they see market prices and prices of production. Capitalists measure the size of capital in money terms — in terms of the use value of gold measured in some unit of weight. Just as production prices do not differ much from direct prices, the relative sizes of capitals in measured gold terms are close to their relative sizes measured in terms of abstract human labor measured in some unit of time.
If the market prices of all commodities were equal to their production prices, capitals of equal size, measured in the use value of the money commodity invested in all branches of production, would yield equal profits to their owners in equal periods of time.
There has never been a day in the history of the capitalist mode of production when this was true, but it is also true that market prices cannot get too far from production prices without setting into motion economic forces that will pull market prices back toward production prices. Whenever the commodity market prices rise above the production prices, the profit rate in the sphere of production that produces money material drops below the average rate of profit. Capital will then flow away from the production branch that produces money material to other more profitable branches.
Remember that prices consist of imaginary quantities of gold. Gold itself has no actual price as prices are defined in gold terms. So, the price of gold would then be defined in terms of itself. Capital invested in the production of money material does have a profit rate that itself must be measured in gold terms, so the profit and rate of profit of the branch of industry producing money material must be measured in terms of the use value of its own product.
When the general price level rises above the general level of the production prices as it does in prolonged prosperity, the production of money material begins to slow down. The accelerated accumulation of real capital pushes up market prices above production prices, and at some point, the accumulation of money capital must slow down. Under a system of floating exchange rates, as the production of new gold slows down, if the Federal Reserve (or any central bank and currency) continues to create dollars at the same rate, the dollar price of gold rises.
Between 1980 and 2000, as the gold production rate increased, the dollar gold price continued to drift lower, with some ups and downs. This was the result of market prices, defined in terms of gold’s use value, being below production prices. After 2000, the gold dollar price changed direction and began to rise due to the shift from rising to falling gold production. This indicated that the commodity market prices had again risen above production prices.
By the end of 2006, the gold dollar price hit $635.70. The following year, just before the big crash, the gold dollar price closed at $836.50. This wasn’t the only thing that was rising. In 2003, dollar prices rose by only 1.90%. In 2007, dollar prices rose by 4.10%. The Federal Funds rate was 1.00% in 2003, but by 2006, it rose to 5.25%. The decline in gold production or slowdown in the accumulation rate of money capital meant a rise in the interest rate since a higher rate was necessary to equalize the demand for gold with its supply. This brought with it a new depreciation of the U.S. dollar, as well as a rise in the federal funds rate from 1.00% in 2003 to 5.25%. These were signs that a new, more serious crisis than any that had occurred during the Great Moderation was not far off.
As the dollar depreciation against gold resumed in 2001, the Federal Reserve faced a growing dilemma. The super-crisis of 1929-33 taught about the dangers of allowing a deflationary spiral to get out of control. Led by Keynes, the official political economy drew the conclusion that the gold standard, by artificially repressing the ability of the system to create additional dollars, led to economic disaster with all the political consequences that followed. If a deep slump threatens, the system should expand the money supply to whatever level necessary to halt deflation and recession.
One part of the money supply
One part of the money supply is the legal tender currency, paper dollars and coins made of base metals used for small change. Legal tender money can be divided into two parts. One part consists of actual bills and coins, which the lay public considers money. The second part consists of the Federal Reserve’s financial promises to commercial banks that are payable in legal tender currency at the demand of the banks and through the banks by the demands of the public for legal tender dollar bills and coins.
When the deposit-owning public demands paper money or legal tender coins — much less often now than before electronic payments by credit card or smartphone swipes — the commercial banks pay out of vault cash. As bank branches pay out vault cash to depositors the banks run down their money supply. Then, the banks go to their district Federal Reserve Bank and withdraw money in the form of dollars and coins made of base metal to rebuild their supply of vault cash to meet their depositor’s demands.
Where does the Federal Reserve Bank get its legal tender bills and coins? It gets them from the Treasury Department’s mint, which owns a printing press for bills and coin-making machines. Under the current system, the Treasury cannot directly spend these legal tender instruments, as they do not yet function as money until they are delivered to the Federal Reserve Banks. Then, the Federal Reserve Bank pays them out to commercial banks. The commercial banks then use them to redeem the deposits at the demand of the depositors. Where do the commercial banks get the deposits they keep with the Federal Reserve? Today they do this mostly by selling government securities to the Federal Reserve. The Federal Reserve purchases these securities and credits the commercial bank’s account that sells them. When the Federal Reserve or other central banks carry out these operations, it is called open market operations.
In addition, the Federal Reserve Bank purchases commercial paper from commercial banks. This paper represents commodities in exchange for promissory notes. The bank re-discounts the paper it purchased by selling it to the central bank. Before the Depression, the federal debt was far smaller than it is now, and re-discounting was the chief way that the Federal Reserve and other central banks created additional currency. Today, the re-discounting of commercial paper is secondary to open market operations involving government debt.
The other part of the money supply
The other part of the money supply consists of credit money created by commercial banks. This credit money is created when a commercial bank makes a loan to the borrower’s account. Credit money is also created when loans are made and imaginary deposits are made. These imaginary deposits retire when loans are repaid, canceling the imaginary deposit.
The Federal Reserve and other central banks have no direct control over the amount of credit money the commercial banks create. But, bank-created credit money can only function as a means of circulation if it is redeemable on demand into legal tender money. If the Federal Reserve slows down the rate at which it creates money, the money that stands behind commercial bank-created credit money declines. If it declines too much, there will be a run on the banks that the government-run deposit insurance systems wouldn’t be able to stop. Therefore when the Federal Reserve reduces the rate at which it creates money, the banks can raise the interest rates they charge for the loans they grant, and eventually, they have to reduce the rate at which they create additional credit money.
In the early days of the Federal Reserve, the law required that the Federal Reserve banks keep 40 cents in gold behind every dollar of liabilities owed to the commercial banks. The other 60 cents could be backed by commercial paper backed by commodities the Federal Reserve banks had re-discounted. This meant that non-money commodities backed 60 cents of every deposit while the other 40 cents were backed by gold, the money commodity.
In 1932 during the super-crisis, government securities of the Treasury were added to the assets that could be used to back up 60 cents of every dollar. By the late 1960s, the Federal Reserve had created so many dollars relative to the gold in the Treasury’s vaults that the legally required gold cover behind every dollar was abolished. It was now possible for the Federal Reserve to create dollars without any legal restrictions simply through open market operations and re-discounting.
The Federal Reserve creates a portion of the money supply called the monetary base. This consists of legal tender bills and coins, including vault cash, plus the deposits the commercial banks keep at the Federal Reserve. Under the current monetary system, the Federal Reserve controls the quantity of the monetary base measured in dollars.
But that’s all the Fed controls. Under the gold standard, the central bank controlled the quantity of gold each currency unit represented. However, under the current system of floating exchange rates, the Federal Reserve System only controls the quantity of the monetary base measured in terms of dollars, etc. Under a gold standard, the central bank controls the quantity of gold each dollar represents but does not control the quantity of dollars created. Under the current system, the Federal Reserve System controls the total size of the monetary base in dollars. However, it does not control the quantity of gold that a dollar represents. With or without a gold or gold exchange standard, the central bank cannot control the quantity of gold the monetary base represents or the purchasing power of the total base.
Nor can the central bank control — with or without a gold standard — the size of the total money supply, whether measured in terms of currency units, the amount of gold it represents, or its purchasing power, which is defined as the total quantity of legal tender existing outside the walls of the Federal Reserve plus the quantity of commercial bank-created credit money.
The central bank cannot control the velocity of circulation of either legal tender money (token money) or commercial bank-created credit money, regardless of whether a gold standard exists.
During the super-crisis of 1929-33 bank runs — particularly those between 1931 and 1933 — shrunk the supply of commercial bank-created credit money. Faced with runs, commercial banks called in loans and refused to make new ones to build up their cash reserves to meet the panic-stricken demands for cash. This meant that bank loans were being retired with few new loans granted, shrinking the quantity of commercial bank-created credit money. When commercial banks failed, their deposits became unavailable to their owners until their assets were liquidated and the depositors paid off at pennies on the dollar. Starting with the New Deal, the government made a series of reforms designed to prevent bank runs.
First, the dollar was made inconvertible into gold within the U.S. proper. People were forbidden to own monetary gold in the form of gold bars, gold coins, or Treasury-issued gold certificates. The Roosevelt administration feared that if this were not done many capitalists would exchange paper dollars for gold which would have made it impossible for the administration to keep the dollar price of gold on the international market at $35.00 an ounce without restricting the quantity of dollars that the Federal Reserve System was creating. However, because the ratio of gold to commodity measured in terms of their price tags rose sharply during the supercrisis, this particular measure was not necessary.
Second, the government-run bank insurance system, the Federal Deposit Insurance Corporation, was set up, and commercial banks were obliged to pay into it. This insurance fund is available to pay off the deposits of banks that are declared insolvent when their deposit and other liabilities exceed their assets. This prevents deposits below a certain size, now $250,000, from being lost. This keeps the smaller depositors from panicking and withdrawing their money on such a scale that the banks are forced to call in their loans, causing the credit system to freeze as happened in the 1931-33 and earlier crises.
In the following years, more steps were taken to stave off bank runs. Bank runs destroy credit, but they also liquidate overproduction. The deposit insurance schemes lead to what is called a moral hazard. In the days when the government did not insure deposits, depositors had to risk losing their money if the bank was badly run. Because of the FDIC, even if the bank is a huge swindle company, depositors are led to believe their money is safe. When bank runs threaten, in the interests of maintaining the financial system’s stability, the FDIC announces it will insure deposits above the official insured level. This last happened in the 2023 Silicon Valley Bank banking crisis.
When a run on the banks threatens the commercial bank-created credit money system, a monetary crisis is said to occur. From the smallest retail purchases — like buying a morning coffee — commercial bank-created money has become ubiquitous.
The whole modern money and credit system runs on top of a relatively tiny amount of legal tender money. If a massive bank run occurs that bankrupts the FDIC, and business begins to demand payment in legal tender money (cash), demand would collapse to a far greater extent than in 1931-33. Then the majority of workers in the U.S. and around the world could be thrown out of work, creating a social and political crisis on an unimaginable scale.
There is another type of monetary crisis that has become common in the modern capitalist monetary system. That is a run not on the banks but against the dollar into gold. This occurs on a small scale whenever the dollar price of gold spikes. In recent weeks (this is being written in December 2024), we saw first a run-up in gold’s dollar price that briefly hit $2800 before falling back toward $2500. In the wake of this mini run against the dollar and other currencies linked to it, and despite the moves of the Federal Reserve to reduce the federal funds rate, long-term interest spiked despite the reduction in the federal funds rates. This mini monetary crisis so far at least is minor compared to the crises that occurred during the 1970s, especially in 1979-80.
However, the pattern we see is that runs on gold are followed by run-ups in interest rates. The greater the run into gold, the greater the rise in interest rates. The more the Federal Reserve moves to prevent crises by creating additional dollars, the greater the chances of runs of paper money into gold, which not only creates inflation in dollar prices but also leads to rises in interest rates. This is illustrated by the period between March 1968, when the gold pool collapsed, and 1979-80, which saw the biggest run from the dollar into gold that has occurred so far. This led to a surge in dollar prices, as well as a fall in real wages. It also led to the highest interest in the history of capitalism in 1981-82.
The prolonged economic crisis of 1968-82, especially its final phase in 1979-82, taught the Washington policymakers that they could not avoid a grave economic crisis by flooding the banking system with newly created legal tender money — or promises by the Federal Reserve to pay — with no legal restriction on how much money the Fed can create. When the central banks take this road, the demand for money, a characteristic of capitalist crisis, is redirected from legal tender money created by the central banks into the actual money material — gold. Gold is not money material because governments recognize it as such but because they are forced to recognize it as money because the economic laws that govern capitalism make gold money material.
Now, let’s return to the crisis of 2007-09. The approaching crisis first showed itself in the subprime mortgage housing market in 2006-07. Commercial banks granted mortgages to people who could not possibly pay them. One technique they employed was the balloon mortgage. Initially low interest rates on these mortgages were designed to create the impression that the people taking out these mortgages could actually pay them. But the interest rate rose sharply after a few years. The banks issuing these mortgages had no intention of holding on to them but instead sold them off to pension funds, investment banks, etc. Investment banks then created secondary securities backed by mortgage-backed securities sold to individual investors — money capitalists. In this way, the entire mortgage system was transformed into a huge swindle.
The credit system forms a chain. A owes B, who owes C, and so on. If A cannot collect from B, A can attempt to collect from C, but if A can’t find anybody that can pay in the chain, A is out of that money (as are B and C). As the credit system grows faster than the monetary base, which it virtually always does during periods of prosperity, it becomes more complex as derivative securities are built on top of primary securities, like mortgages, that cannot be paid.
The opportunities for all kinds of swindling grow. The art of creating additional bad securities on top of bad securities is called financial engineering. Chains tend to collapse at the weakest link. By 2007, it could not be denied that a mass of derivative securities had been created on top of bad subprime mortgages that were as bad as the subprime mortgages that backed them. The weakest link in the credit chain in 2007 was the subprime mortgages and derivatives sold by investment banks built on top of the bad mortgages.
At first, the media claimed that the subprime mortgage crisis was contained and that the rest of the economy and credit system were sound. But, the subprime mortgages were neither contained nor the rest of the credit system sound. Instead, the subprime mortgages were merely the weakest link in a chain of credit about to break into a thousand-and-one places. The real problem was that the production of commodities measured in terms of price tags had grown far faster than the quantity of actual gold money that formed the base of what had become a gigantic swindle. According to the law, the Federal Reserve had the magical power to create additional money to repair any breaks in the credit chain before the entire chain collapsed. All this with money that could, according to the economists and economic textbooks, be created out of thin air.
The media did not explain that if the Federal Reserve abused its power to create money out of “thin air,” the demand for gold would inevitably soar, leading to renewed massive depreciation of the dollar. This, in turn, would cause runaway inflation, lower real wages, and force a sharp increase in interest rates.
Faced with this situation, the Federal Reserve Board found that it had to do some financial engineering of its own. On one hand, it had to limit the creation of new dollars enough to avert a repeat of the 1970s when there was a rush to exchange dollars for gold. On the other hand, it had to prevent a run into dollars that would bring down the whole inflated credit system, with results far worse than those experienced during the 1931-33 crisis. If anything like that happened, the dollar’s role as a means of payment rather than circulation would assert itself on a massive scale. This would suck dollars out of the circuits of circulation as people used them to pay off debts or hoard them rather than spend them.
As demand dried up, the full extent of the relative overproduction of commodities would be revealed. Commodities would pile up unsold in warehouses, production would be slashed, and tidal waves of layoffs would spread as in 1931-33. The Fed had to give the impression that it would flood the banking system with its magic money. No repeat 1931-33 would be allowed. But this had to be done without triggering a new 1979-80 run against the dollar and other currencies into gold.
It was the ghost of 1931-33 as well as the ghost of 1979-80 that haunted the Federal Reserve. As the chain of payments, beginning with the subprime mortgage sector, the weakest link in the credit system, threatened to break in 2007, the gold’s dollar price approached and finally exceeded the previous record set in January 1980. The room for the Federal Reserve to maneuver was running out. By 2008, it could no longer be denied that the entire capitalist world faced a serious financial crisis, which, in reality, was a crisis of the relative overproduction of (non-money) commodities relative to gold.
The long-term consequences of 1970s, early ‘80s high interest rates
Capital flows from areas of lower profitability to areas of higher profitability. In a world of nation-states, capital has a tendency to flow from countries with a lower rate of profit to countries with a higher rate of profit. This law is modified once we take into account political factors. Industrial capitalists are reluctant to invest their capital in what they view as either hostile or highly unstable countries. For example, as long as China was wracked by civil wars, despite the rock-bottom value of Chinese labor power, the extreme political risks limited the inflow of capital into China.
Unlike money capital, industrial capital cannot easily move from one area to another. Once an industrial complex has been created, significant amounts of capital are tied up in it. It can take decades for all the industrial capital to depreciate, passing all its value into the commodities it produces.
Large-scale industrial capitalists cannot easily, if at all, move their fixed capital to other countries. When the capital represented by the industrial complex has been thoroughly used up, industrial capitalists can build a new industrial complex in a country where the value of labor power is lower, and the rate of surplus value is higher.
As capitalist industrialization proceeds in a country, the demand for labor power rises, though at a lower rate than production since constant capital grows much faster than variable capital. The higher demand for the commodity labor power allows real wages to rise. It even allows labor power to increase its value or at least prevent a fall in value. In response the industrial capitalists will move production to countries only as existing industrial complexes are fully depreciated and shut down.
However, since this process unfolds relatively slowly, industrial capitalists with vast quantities of productive capital cannot simply write off the value of existing fixed capital without incurring massive losses. However, everything remaining equal, if the capitalists are forced by a crisis to scrap industrial complexes, they will search for a location when they build a new industrial complex in countries where the value of labor power is lowest. This creates the pattern we observe today, where capitalist industry is developing rapidly in some countries in the Global South. As far as wages are concerned, the result is a race to the bottom.
We also know that in the long run, long-term interest rates must be lower than the rate of profit. It is less risky to purchase interest-bearing securities that can easily be sold and turned into money on the money market than to tie up capital for decades in modern massive industrial complexes. Unlike securities, massive industrial complexes are not so easy to sell.
If interest rates rise above the rate of profit, the longer this imbalance persists, the greater the temptation for capitalists to dismantle aging industrial complexes for scrap and put the proceeds into the money market.
This drives interest rates below the rate of profit, prompting industrial capital to build even larger industrial complexes to replace the old ones, though not necessarily in the same locations or countries.
After the prolonged crisis of 1968-1982 finally ended, interest rates were much higher than before the crisis began with the collapse of the gold pool in March 1968. However, declining interest rates remained abnormally high for many years. Generally, interest rates are much lower after a crisis than on the eve of the crisis. It is not merely the high rate of profit that stimulates the formation of new industrial capital. Just as significant is the gap between a low rate of interest and a high rate of profit. After 1982, the profit of enterprise was squeezed for many years. In contrast, in a typical industrial cycle, large amounts of money capital were directed into the circuits M-M’ as opposed to the circuits M-C-P-C’-M’.
Not only did this reduce the rate of growth in the post-crisis capitalist economy. When recovery finally took hold, large amounts of capital flowed into countries of the Global South, creating great masses of industrial capital that replaced much of the productive capital that had been located in the imperialist countries that had been destroyed in or immediately after the prolonged 1968-82 crisis.
Conditions were especially favorable for the rapid industrialization in the People’s Republic of China due to the great people’s revolution that was victorious in 1949. As Chinese politics stabilized in the post-Mao era, China opened up to foreign investment. Back in the 1940s and early 1950s, the leaders of revolutionary China hoped that China would industrialize with the help of an inflow of Western capital, especially from the United States. However, the Cold War and the extreme hostility of the United States toward revolutionary China blocked the way.
However, after Mao died in 1976, a changed world political and economic situation made it possible for China to make intensive use of foreign capital to industrialize the country, encouraging the development of native Chinese capital as well. After 1978, Mao’s successors were finally able to carry out the program that they had originally planned to do but were unable to carry out after 1949. The leaders of U.S. imperialism had feared the Soviet Union and China would renew their early Cold War alliance. But this did not happen. With vast amounts of capital flowing into China within a few decades, China began to emerge as a major commercial competitor of the United States. But global politics were about to take a new turn.
The counterrevolutionary destruction of the Soviet Union between 1985 and 1991 was the greatest political victory for capital since 1917. The U.S. no longer had to worry about a renewed alliance between the Soviet Union and China. Instead, they faced a China that would outstrip U.S. industrial production within a few decades and became a major economic competitor in a way the Soviet Union — which had built a shut-in socialist economy that maintained minimal trade relations with the surrounding capitalist world — had never been. But it wasn’t only China, industrialization was speeding up throughout the Global South. The world was and is less and less a peasant world and more and more a workers’ world.
This whole process was accelerated by the prolonged period of high interest rates, which were the direct result of the failed effort to demonetize gold in 1968 and 1982. Although this effort failed, it eroded capitalist confidence in the dollar and other linked paper currencies, leading to a prolonged period of high interest rates and the subsequent deindustrialization of the U.S. and other imperialist nations.
By the beginning of 2008, the leaders of U.S. imperialism feared that if they continued expanding the quantity of money to stave off a crash, the rise in gold’s dollar price would accelerate. The result would not only have been a huge rise in inflation, but it would also have implied a renewed 1970s-style explosion in interest rates. This could have created a new wave of deindustrialization that would end the U.S. world empire for good. The leaders of U.S. imperialism feared that if interest rates soared as they did in the 1970s, they could, to paraphrase Che Guevara, face two or three or more Vietnams. (6)
But, as the 2008 economic crisis approached its climax, they feared they could face a bank run worse than even 1931-33 if they did not move to increase the quantity of paper money.
Next month, we will examine the course of action that the leaders of U.S. imperialism actually followed and the economic laws at play.
To be continued
(1) At the time of the 1917 Russian Revolution, the Russian-speaking people of Donbass — an industrial center that was the most important coal-producing region in the Russian Empire, where core iron and steel production industries with a strong organized working class were located — wanted to be part of the new Russian Socialist Federative Soviet Republic. However, Lenin convinced them to be part of the Ukraine. The natural conditions meant that Ukraine was ideal for agriculture and it was an overwhelmingly peasant country. Lenin studied the peasant question more closely than any other Marxist of his time and realized there was little chance that working-class pro-Soviet forces could prevail in Ukraine without Donbass. By making Donbass part of Ukraine, the country would be given a proletarian head and provide a proletarian leadership for the Ukrainian poor peasantry against the rich peasantry. This made the Soviet Ukraine possible. (back)
(2) Hunter Biden was a member of the board of directors of Burisma Holdings, a Ukrainian gas and oil company. However, he had no expertise or experience in the field of natural gas and oil production. He was the son of the then-vice president of the United States, Joseph Biden. It seems obvious that the only reason he was named to the Burisma board was his family tie to the U.S. vice president. Realizing that Joseph Biden was likely to be his Democratic opponent in the presidential election of 2020, Trump was eager to find dirt on the Biden family that he could use. In an attempt to pressure Zelensky into having Ukrainian prosecutors investigate Hunter Biden, Trump apparently briefly held back some weapons to Ukraine. At that time the Russian Special Military Operation had not yet begun. Trump was impeached by the then-Democratic majority in the House of Representatives but was acquitted by the Senate so he stayed in office. (back)
(3) In 1962, the Soviet government then headed by Nikita Khrushchev, convinced a reluctant Cuba to accept nuclear-armed missiles. At this time the Soviet Union was capable of launching a first strike on the United States, though it never considered doing so. The Soviets had liquid fuel missiles, which meant that in the event of a U.S. first strike, the USSR could not have launched them before the U.S. missiles and their nuclear warheads arrived to destroy the Soviet missiles. The Soviet Union had limited means of launching a second strike since it had no bases close enough. The U.S. had many bases near the Soviet Union.
It would be only a few years before the Soviet Union would have solid-fuel intercontinental missiles that could be launched if incoming U.S. missiles were detected before impact. Khrushchev feared a first strike before then, so he proposed shipping the nuclear-armed missiles in secret to defend Cuba against a threatened U.S. invasion.
Cuban leader Fidel Castro suggested instead that the Soviet Union and Cuba announce the arrival of the missiles publicly in advance, relying on the fact that the majority of the people of the world sympathized with the Cuban people. Since the victory of the Cuban Revolution, the U.S. has encouraged violent resistance by Cuban counterrevolutionaries. In 1961 the U.S. backed an invasion by the counterrevolutionaries to overthrow the revolutionary Castro government. The counterrevolutionary army was defeated within hours, enraging the United States. The threat of a U.S. invasion of Cuba was then and is still today very real. Khrushchev rejected Castro’s advice and the missiles were sent in secret. The U.S. government found out about the missile deployment and accused the USSR of lying about it, something they could not have done if Khrushchev had followed Fidel’s advice.
President John F. Kennedy addressed the U.S. people, revealing the Soviet deployment. For about a week it looked as though World War III was imminent. Khrushchev and Kennedy worked out a compromise. Under the terms of the compromise, Khrushchev agreed to remove the missiles in return for a secret promise by the U.S. to dismantle its missiles in Turkey and a promise by the Kennedy administration not to invade Cuba. (back)
(4) In the 2000 election, heavy police activity on election day prevented many African Americans from voting in Florida. At the time, the Governor of Florida was Jeb Bush, the brother of the Republican presidential candidate George W. Bush. If the African American voters had been allowed to reach the polls, the Democratic candidate, Vice President Albert Gore, would have won the Florida popular and electoral college votes. However, the official count showed George W. Bush the winner by a tiny margin, giving him the presidency. The election was so close that a recount was declared. While it was underway, a mob of Republican operatives attacked the Miami-Dade county building where election workers were carrying out the recount and stopped it by force. This attack on election workers was called the Brooks Brothers riot. It foreshadowed the attack on the U.S. Capitol building on January 6, 2021, where rioters supporting Donald Trump attempted to stop the certification of the election of Joseph Biden to the presidency.
At that point, the U.S. Supreme Court intervened, and the Republican majority on the court ordered the recount to be stopped. Later unofficial recounts established that even ignoring the police activity on election day — that should by any reasonable democratic criteria have invalidated George W. Bush’s alleged victory — Albert Gore had won the popular vote in Florida in the 2000 election. However, both Gore and the Democrats surrendered to the Supreme Court, and George W. Bush was duly installed as president of the United States on January 20, 2001. (back)
(5) The discovery of rich gold mines in the Klondike reversed the deflation after 1896. Bryan, though he was the Democratic candidate for president two more times after 1896, never again had the impact of his 1896 campaign. At the end of his life, Bryan was a prosecutor for the state of Tennessee in the infamous Scopes Trial, where John Scopes, a high school biology teacher, was accused of teaching the theory of evolution. This was a crime in a state-funded school under Tennessee law at the time. Scopes was defended by the legendary defense attorney Clarence Darrow.
Many progressives and liberals see Bryan as a champion of the common person who advocated progressive ideas for his time. However, Bryan, as a Democrat, never spoke out for the rights of the oppressed African American people at a time when Jim Crow segregation was tightening its grip on the South and racism was widespread in the North. His role in the Scopes Trial shows that Bryan was, in many ways, a forerunner of today’s racist Christian Right. The Christian Right, in the name of Christianity, opposes Darwin’s theory of evolution, just as Bryan did in his time. (back)
(6) In April 1965, Che Guevara departed from Cuba to lend his skills as a guerrilla commander in revolutionary movements in other parts of the world, from the Congo to Bolivia. At the time, he wrote a message directed to the Organization of Solidarity with the Peoples of Asia, Africa, and Latin America (OSPAAAL), also known as the Tricontinental, titled, “Create Two, Three . . . Many Vietnams, That is the Watchword.” https://www.marxists.org/archive/guevara/1967/04/16.htm (back)
A Critique of Crisis Theory 