Re: The crisis of bourgeois economics
Posted: Sat Apr 30, 2022 2:24 pm
The United States has destabilised the world economy
The International Monetary Fund has announced that the global economy is entering
a major slowdown, downgrading the growth prospects of 143 countries. At the same
time, inflation rates have reached historic levels. Around the world, hundreds of millions
of people are falling into poverty, particularly in the Global South. Oxfam has sounded
the alarm that we are ‘witnessing the most profound collapse of humanity into extreme
poverty and suffering in memory’. What is producing this immense human suffering?
An economic crisis ‘made in Washington’
On 13 April, US Treasury Secretary Janet Yellen claimed that this global economic
deterioration was due to the Russian war in Ukraine. This is factually incorrect. Although
the conflict has worsened the situation, the key driver which has destabilised the world
economy is the massive inflationary wave that had already built up in the United States
and has now begun to crest on the world. Prior to the war in Ukraine, US inflation had
already tripled in recent years from 2.5% (January 2020) to 7.5% (January 2022) before
accelerating further to 8.5% (March 2022) after the war broke out.
‘This isn’t Putin’s inflation’, the Wall Street Journal editorial board noted. ‘This inflation
was made in Washington’.
The US consumer market absorbs a fifth of the world’s goods and services; as the
demand for these goods outstrips the global supply, the tendency for US inflation to
spread around the world is very high. The average Commodity Research Bureau Index,
a general indicator of global commodity markets, has risen astronomically: as of
25 April, year-to-year prices have soared for oil (60%), palm oil (60%), coffee (56%),
wheat (45%), natural gas (139%), and coal (253%). These price increases have sent
shock waves through the global economy.
This instability is inseparably connected to US economic policy. Since 2020, the United
States has increased its budget by $2.8 trillion. To finance this budgetary expansion,
US government increased borrowing to 27% of the gross domestic product
(GDP), and the Federal Reserve Bank increased the money supply (the quantity of
money issued) by 27% year-on-year. Both of these increases are the highest
in US peacetime history.
These huge US economic packages were generated to put cash in the hands of
consumers. The US government focused on the economy’s demand side by putting
money into circulation for consumption, but it did not increase spending on the
economy’s supply side by putting money into investment. From 2019–21, 98% of
US GDP growth was in consumption, while only 2% was in net investment. With a
large increase in demand by consumers and almost no increase in supply, a huge
inflationary wave grew in the United States.
Investing in Guns or People?
Inflation in the United States, which has global implications, is a by-product of its
economic priorities. For the past half-century, US governments have not used
the country’s social wealth to make substantial social investments in areas such
as education, healthcare, and infrastructure, nor have they invested in the
manufacturing sector to increase supply. Instead, to manage inflation the
government has chosen to push an agenda which cuts demand. These cuts in
demand have already lowered living standards; for instance, real wages in the
United States have fallen by 2.7% in the past year.
Instead of making social investments to prevent such economic downturns,
the US government has prioritised its military, which receives a budget increase
every year. In 2022, the Biden administration proposed a military budget of
$813 billion, a 9.2% increase over the military budget in 2021 – larger than the next
eleven highest spending countries combined. To justify this massive expenditure,
the Biden administration, like the Trump administration before it, has invoked the
need to ‘combat threats’ posed by China and Russia.
A reduction in US military spending would free up government funds to invest in
education, healthcare, infrastructure, and manufacturing. However, this would
necessitate a shift in US foreign policy, which does not appear to be on the horizon.
Until that time, the people of the United States and other countries will have to
sustain the costs of Washington’s new Cold War.
https://news.nocoldwar.org/wp-content/u ... g_2_EN.pdf
*************************************************
Takashi Murakami (Japan), Tan Tan Bo Puking – a.k.a. Gero Tan, 2002.
I cannot live on tomorrow’s bread: The Seventeenth Newsletter (2022)
Posted Apr 29, 2022 by Vijay Prashad
Dear friends,
Greetings from the desk of Tricontinental: Institute for Social Research.
On April 19, the International Monetary Fund (IMF) released its annual World Economic Outlook, which forecasted a severe slowdown in global growth along with soaring prices. ‘For 2022, inflation is projected at 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies–1.8 and 2.8 percentage points higher than projected in … January’, the report noted. IMF Managing Director Kristalina Georgieva offered a sobering reflection on the data: ‘Inflation is reaching the highest levels seen in decades. Sharply higher prices for food and fertilizers put pressure on households worldwide–especially for the poorest. And we know that food crises can unleash social unrest’.
What is the root cause of this extraordinary wave of inflation? U.S. President Joe Biden blamed Russia’s war in Ukraine: ‘What people don’t know is that 70 percent of the increase in inflation was the consequence of [Russian President Vladimir] Putin’s price hike because of the impact of oil prices’. However, even The Wall Street Journal editorial board noted that ‘this isn’t Putin’s inflation’. Georgieva of the IMF has tried to walk a middle ground, saying that ‘Russia’s invasion of Ukraine has created a crisis on top of a crisis’. Her view mirrored that of the World Economic Outlook, which pointed out that ‘the crisis unfold[ed] while the global economy was on a mending path but had not yet fully recovered from the COVID-19 pandemic’.
The No Cold War platform, with whom Tricontinental: Institute for Social Research has a close working relationship, has produced a very important intervention into this debate. Briefing no. 2, The United States Has Destabilised the World Economy, which appears below, makes the case that a governing factor in the current inflation crisis is the outsized impact of the United States on the global economy; here, U.S. military spending, the scale of the United States in global consumption, the role of the Wall Street-Dollar-IMF regime, and other factors play a key role. We hope you find briefing no. 2 useful and circulate it widely.
| NoColdWar | MR OnlineThe International Monetary Fund has announced that the global economy is entering a major slowdown, downgrading the growth prospects of 143 countries. At the same time, inflation rates have reached historic levels. Around the world, hundreds of millions of people are falling into poverty, particularly in the Global South. Oxfam has sounded the alarm that we are ‘witnessing the most profound collapse of humanity into extreme poverty and suffering in memory’. What is producing this immense human suffering?
An Economic Crisis ‘Made in Washington’
On 13 April, U.S. Treasury Secretary Janet Yellen claimed that this global economic deterioration was due to the Russian war in Ukraine. This is factually incorrect. Although the conflict has worsened the situation, the key driver which has destabilised the world economy is the massive inflationary wave that had already built up in the United States and has now begun to crest on the world. Prior to the war in Ukraine, U.S. inflation had already tripled in recent years from 2.5% (January 2020) to 7.5% (January 2022) before accelerating further to 8.5% (March 2022) after the war broke out.
‘This isn’t Putin’s inflation’, the Wall Street Journal editorial board noted.
This inflation was made in Washington.
The U.S. consumer market absorbs a fifth of the world’s goods and services; as the demand for these goods outstrips the global supply, the tendency for U.S. inflation to spread around the world is very high. The average Commodity Research Bureau Index, a general indicator of global commodity markets, has risen astronomically: as of 25 April, year-to-year prices have soared for oil (60%), palm oil (60%), coffee (56%), wheat (45%), natural gas (139%), and coal (253%). These price increases have sent shock waves through the global economy.
This instability is inseparably connected to U.S. economic policy. Since 2020, the United States has increased its budget by $2.8 trillion. To finance this budgetary expansion, the U.S. government increased borrowing to 27% of the gross domestic product (GDP), and the Federal Reserve Bank increased the money supply (the quantity of money issued) by 27% year-on-year. Both of these increases are the highest in U.S. peacetime history.
Carmen Lomas Garza (USA), Tamalada, 1990.
These huge U.S. economic packages were generated to put cash in the hands of consumers. The U.S. government focused on the economy’s demand side by putting money into circulation for consumption, but it did not increase spending on the economy’s supply side by putting money into investment. From 2019–21, 98% of U.S. GDP growth was in consumption, while only 2% was in net investment. With a large increase in demand by consumers and almost no increase in supply, a huge inflationary wave grew in the United States.
Investing in Guns or People?
Inflation in the United States, which has global implications, is a by-product of its economic priorities. For the past half-century, U.S. governments have not used the country’s social wealth to make substantial social investments in areas such as education, healthcare, and infrastructure, nor have they invested in the manufacturing sector to increase supply. Instead, to manage inflation the government has chosen to push an agenda which cuts demand. These cuts in demand have already lowered living standards; for instance, real wages in the United States have fallen by 2.7% in the past year.
Instead of making social investments to prevent such economic downturns, the U.S. government has prioritised its military, which receives a budget increase every year. In 2022, the Biden administration proposed a military budget of $813 billion, a 9.2% increase over the military budget in 2021–larger than the next eleven highest spending countries combined. To justify this massive expenditure, the Biden administration, like the Trump administration before it, has invoked the need to ‘combat threats’ posed by China and Russia.
A reduction in U.S. military spending would free up government funds to invest in education, healthcare, infrastructure, and manufacturing. However, this would necessitate a shift in U.S. foreign policy, which does not appear to be on the horizon. Until that time, the people of the United States and other countries will have to sustain the costs of Washington’s new Cold War.
Joseph Bertiers (Kenya), The Bar, 2020.
Against the shallow assessment that global inflation is caused by Russia’s war on Ukraine and the Western sanctions on Russia, No Cold War’s briefing no. 2 points its finger at the root of the crisis: the distortions produced by U.S. military spending and by the Wall Street-Dollar-IMF regime gripping the world economy.
In December 2021, the IMF’s Georgieva said that Europe’s governments must not allow economic recovery to be endangered by the ‘suffocating force of austerity’. This is part of the West’s astonishing double-standards: at the same time, the IMF has enforced harsh austerity measures on the countries of Africa, Asia, and Latin America. As Oxfam notes in a new analysis, during the pandemic’s second year (from March 2021 to March 2022), the IMF approved 23 loans to 22 countries in the Global South–all of which either encouraged or required austerity measures. For example, the IMF’s $2.3 billion loan agreement with Kenya required a four-year public sector pay freeze alongside higher taxes on gas and food, all while 63 percent of Kenyan households experience multidimensional poverty, according to a report by the Kenya Institute of Public Policy Research and Analysis (KIPPRA).
The austerity policies that impact the vast mass of the populations in these countries must be reversed. We need less money spent on war and more money spent to solve what Frantz Fanon called the obstinate facts of human life, such as hunger, illiteracy, and indignity.
Langston Hughes’s poetry focused on the impact of these ‘obstinate facts’ on the lives of people in the United States, people who fought against a life built on wages that equalled ‘two bits minus two’. In 1962, the United States spent $49 billion on its military ($431 billion in 2022 dollars); in 2022, as noted in briefing no. 2, the U.S. government proposes to spend $813 billion on its military, larger than the military spending of the next eleven countries combined.
There is immense social wealth available to us, but it is spent on the parts of human life that are most destructive rather than productive. In 1962, as the U.S. military budget began to balloon, Langston Hughes wrote:
I tire so of hearing people say,
Let things take their course.
Tomorrow is another day.
I do not need my freedom when I’m dead.
I cannot live on tomorrow’s bread.
Freedom
Is a strong seed
Planted
In a great need.
I live here, too.
I want my freedom
Just as you.
We need to advance to the goal of human emancipation now. Not tomorrow, but now.
Warmly,
Vijay
https://thetricontinental.org/newslette ... on-crisis/
********************************************
Fossil fuel lobbyists continue to seize on Russia’s war in Ukraine to push long-term interests
Originally published: The Intercept on April 25, 2022 by Lee Fang (more by The Intercept) (Posted Apr 28, 2022)
Since the Mountain Valley pipeline was announced eight years ago, the proposal to transport fracked natural gas from West Virginia to export terminals in southern Virginia has faced regulatory hurdles and local opposition. The main concern is that the project runs through environmentally sensitive waterways and farmlands, putting them at risk of spills–while further promoting the development of fracking throughout West Virginia.
Now, after nearly a decade of lobbying, the energy crisis sparked by Russia’s war in Ukraine appears to have turned the tide, with federal regulators supporting a construction route that could bring the pipeline into service as early as next year.
Filings show that the pipeline’s boosters were quick to capitalize on the Ukraine crisis to sway policymakers. In federal appellate courts last month, attorneys for the pipeline project argued that with the U.S. ban on imports of Russian natural gas, “domestic supplies will become all the more important to the nation’s energy needs.” Completing the pipeline, the attorneys wrote, “indisputably would provide a meaningful step toward building out U.S. oil and gas infrastructure, freeing up additional natural gas for domestic consumption and export to Europe.” Other pipeline supporters, including Sen. Joe Manchin, D-W.Va., heavily cited the war in Ukraine to press administration officials to swiftly approve the project as a matter of national security.
Soon after, on April 8, the Federal Energy Regulatory Commission unanimously approved the plans to build the pipeline across 180 bodies of water and wetlands, a decision that analysts view as the final step in overcoming the hurdles that had placed the project in jeopardy for years.
The progression of the West Virginia pipeline project is one of many fossil fuel priorities now reshaped by the devastation wrought by the war in Ukraine. In the first days of the war, the American Petroleum Institute, which represents industry giants such as Exxon Mobil and Chevron, argued that it heightened the need for greater development of U.S. oil and gas reserves and for expedited approval of pipelines and other infrastructure.
“As crisis looms in Ukraine, U.S. energy leadership is more important than ever,” API tweeted at the outset of Russia’s incursion into Ukraine. Soon after, other oil and gas companies joined the fray. In early March, the chief executives of TC Energy, Enbridge, the Williams Companies, and Kinder Morgan cited the war to call for the rapid approval of natural gas pipelines that have faced opposition from activists and regulators.
Critics of the industry immediately countered that more fossil fuel development would take too long to provide any short-term relief. Gas and oil are global commodities, and small increases in U.S. production won’t have any immediate impact on domestic energy prices.
But rising utility and gas prices have rattled policymakers. Last month, following pressure from industry sources, including natural gas exporters, the Biden administration rolled back plans to evaluate natural gas pipelines on climate and environmental justice grounds. The Interior Department also announced a plan on April 15 to resume the sale of leases to drill on federal lands for oil and gas.
In recent weeks, more and more fossil fuel interests have piled on. This month, lawyers for Sempra Energy filed a letter to FERC urging approval of the North Baja pipeline, a project to transport liquified natural gas to export terminals on Mexico’s western coast. The project, the attorneys said, carried additional urgency “in light of the recent Russian invasion of Ukraine” and “concerns about energy security for Europe and Central Asia.”
TC Energy, formerly known as TransCanada, filed an amended request for approval of its Alberta XPress project, which would expand an existing natural gas pipeline system. The “beneficial domestic and international end uses” of the project, the company said, have “recently grown exponentially” with Russia’s invasion of Ukraine and the need for oil and gas exports to the global market.
K&L Gates, a law firm that represents Rio Grande LNG, a project to construct a site with five liquified natural gas trains in Texas, similarly petitioned FERC, calling for quick approval action given “Russia’s invasion of Ukraine and the stranglehold Russia has on Europe’s energy supply.”
Fossil fuel-backed interests are also attempting to use the Ukraine war to shape the Biden administration’s proposed rules around carbon capture and sequestration. Harry MacDougald, an attorney who has led industry-backed lawsuits to overturn the Environmental Protection Agency’s endangerment finding on greenhouse gas emissions, filed comments to the White House Council on Environmental Quality arguing that any carbon capture rules should not limit the potential for greater oil and gas development. “With Russia’s criminal invasion of Ukraine, the national imperative of increasing U.S. petroleum production is readily apparent,” MacDougald wrote.
Lobbyists for a range of other industries–including power plants, refrigerator manufacturers, software developers, and telecommunications providers–have also wasted no time in using Russia’s invasion of Ukraine as a talking point to influence decisions on a wide array of policies, from tariffs to environmental rules. The comments range from urgent calls to action on vital economic issues to precarious arguments that stretch the imagination to fit the Ukraine crisis into a domestic U.S. context.
The Competitive Enterprise Institute, a libertarian think tank backed by business interests including Google, filed a document with the Federal Trade Commission opposing new guidelines for enforcement against business mergers that pose monopolization risks. The think tank argued that a transparent process for such a potentially costly new enforcement regime was important to consider, particularly given the “geopolitical uncertainty surrounding Vladimir Putin’s invasion of Ukraine.”
The American Public Power Association, the lobby group that represents electric utilities around the country, including a large number of coal-burning power plants, in March submitted comments to the EPA opposing new limits on wastewater pollution, in part by pointing to the “immense pressure on fuel and energy prices” caused by “the recent war in Ukraine.”
Microsoft and the U.S. Telecom Association have filed letters with the Commerce Department urging greater government investments in semiconductor development by pointing to the supply chain problems worsened by the war in Ukraine. “The shortage has been further exacerbated by Russia’s war with Ukraine, which has strained the supply chain for critical minerals and other raw materials and exposed further vulnerabilities in the semiconductor supply chain,” wrote Sarah O’Neal, an attorney with Microsoft.
Ukraine provided about half of the global supply of semiconductor-grade neon, a colorless and odorless gas used to control lasers for the production of specialized computer chips. The shortage from the war, with plants in eastern Ukraine under occupation, has alarmed automotive manufacturers. The Motor & Equipment Manufacturers Association, the automotive parts trade group, called attention to the potential global shortage in a letter urging the Biden administration to take rapid action to bolster the domestic semiconductor supply.
And the Air-Conditioning, Heating, and Refrigeration Institute and the North American Association of Food Equipment Manufacturers are among the lobby groups pushing for a relaxation of U.S. tariffs on steel by citing the crisis in Ukraine.
Other petitioners urging relaxed U.S. government interference in the market are less persuasive. Mike Schafer, the head of a fish processing plant, petitioned the Biden administration for “laws changed to bring fish products to humanitarian use and K through 12 school lunch programs.” Schafer asked for a range of government support for the fishing industry, including grants for international marketing to feed “all the refugees from Ukraine” who “could really use fish protein.”
https://mronline.org/2022/04/28/fossil- ... interests/
War, starvation, environmental catastrophe, these are what we get when we allow the capitalists 'their' profit.
They spend a significant portion of those profits convincing us otherwise and still remain the richest ruling class in history. How long?
The International Monetary Fund has announced that the global economy is entering
a major slowdown, downgrading the growth prospects of 143 countries. At the same
time, inflation rates have reached historic levels. Around the world, hundreds of millions
of people are falling into poverty, particularly in the Global South. Oxfam has sounded
the alarm that we are ‘witnessing the most profound collapse of humanity into extreme
poverty and suffering in memory’. What is producing this immense human suffering?
An economic crisis ‘made in Washington’
On 13 April, US Treasury Secretary Janet Yellen claimed that this global economic
deterioration was due to the Russian war in Ukraine. This is factually incorrect. Although
the conflict has worsened the situation, the key driver which has destabilised the world
economy is the massive inflationary wave that had already built up in the United States
and has now begun to crest on the world. Prior to the war in Ukraine, US inflation had
already tripled in recent years from 2.5% (January 2020) to 7.5% (January 2022) before
accelerating further to 8.5% (March 2022) after the war broke out.
‘This isn’t Putin’s inflation’, the Wall Street Journal editorial board noted. ‘This inflation
was made in Washington’.
The US consumer market absorbs a fifth of the world’s goods and services; as the
demand for these goods outstrips the global supply, the tendency for US inflation to
spread around the world is very high. The average Commodity Research Bureau Index,
a general indicator of global commodity markets, has risen astronomically: as of
25 April, year-to-year prices have soared for oil (60%), palm oil (60%), coffee (56%),
wheat (45%), natural gas (139%), and coal (253%). These price increases have sent
shock waves through the global economy.
This instability is inseparably connected to US economic policy. Since 2020, the United
States has increased its budget by $2.8 trillion. To finance this budgetary expansion,
US government increased borrowing to 27% of the gross domestic product
(GDP), and the Federal Reserve Bank increased the money supply (the quantity of
money issued) by 27% year-on-year. Both of these increases are the highest
in US peacetime history.
These huge US economic packages were generated to put cash in the hands of
consumers. The US government focused on the economy’s demand side by putting
money into circulation for consumption, but it did not increase spending on the
economy’s supply side by putting money into investment. From 2019–21, 98% of
US GDP growth was in consumption, while only 2% was in net investment. With a
large increase in demand by consumers and almost no increase in supply, a huge
inflationary wave grew in the United States.
Investing in Guns or People?
Inflation in the United States, which has global implications, is a by-product of its
economic priorities. For the past half-century, US governments have not used
the country’s social wealth to make substantial social investments in areas such
as education, healthcare, and infrastructure, nor have they invested in the
manufacturing sector to increase supply. Instead, to manage inflation the
government has chosen to push an agenda which cuts demand. These cuts in
demand have already lowered living standards; for instance, real wages in the
United States have fallen by 2.7% in the past year.
Instead of making social investments to prevent such economic downturns,
the US government has prioritised its military, which receives a budget increase
every year. In 2022, the Biden administration proposed a military budget of
$813 billion, a 9.2% increase over the military budget in 2021 – larger than the next
eleven highest spending countries combined. To justify this massive expenditure,
the Biden administration, like the Trump administration before it, has invoked the
need to ‘combat threats’ posed by China and Russia.
A reduction in US military spending would free up government funds to invest in
education, healthcare, infrastructure, and manufacturing. However, this would
necessitate a shift in US foreign policy, which does not appear to be on the horizon.
Until that time, the people of the United States and other countries will have to
sustain the costs of Washington’s new Cold War.
https://news.nocoldwar.org/wp-content/u ... g_2_EN.pdf
*************************************************
Takashi Murakami (Japan), Tan Tan Bo Puking – a.k.a. Gero Tan, 2002.
I cannot live on tomorrow’s bread: The Seventeenth Newsletter (2022)
Posted Apr 29, 2022 by Vijay Prashad
Dear friends,
Greetings from the desk of Tricontinental: Institute for Social Research.
On April 19, the International Monetary Fund (IMF) released its annual World Economic Outlook, which forecasted a severe slowdown in global growth along with soaring prices. ‘For 2022, inflation is projected at 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies–1.8 and 2.8 percentage points higher than projected in … January’, the report noted. IMF Managing Director Kristalina Georgieva offered a sobering reflection on the data: ‘Inflation is reaching the highest levels seen in decades. Sharply higher prices for food and fertilizers put pressure on households worldwide–especially for the poorest. And we know that food crises can unleash social unrest’.
What is the root cause of this extraordinary wave of inflation? U.S. President Joe Biden blamed Russia’s war in Ukraine: ‘What people don’t know is that 70 percent of the increase in inflation was the consequence of [Russian President Vladimir] Putin’s price hike because of the impact of oil prices’. However, even The Wall Street Journal editorial board noted that ‘this isn’t Putin’s inflation’. Georgieva of the IMF has tried to walk a middle ground, saying that ‘Russia’s invasion of Ukraine has created a crisis on top of a crisis’. Her view mirrored that of the World Economic Outlook, which pointed out that ‘the crisis unfold[ed] while the global economy was on a mending path but had not yet fully recovered from the COVID-19 pandemic’.
The No Cold War platform, with whom Tricontinental: Institute for Social Research has a close working relationship, has produced a very important intervention into this debate. Briefing no. 2, The United States Has Destabilised the World Economy, which appears below, makes the case that a governing factor in the current inflation crisis is the outsized impact of the United States on the global economy; here, U.S. military spending, the scale of the United States in global consumption, the role of the Wall Street-Dollar-IMF regime, and other factors play a key role. We hope you find briefing no. 2 useful and circulate it widely.
| NoColdWar | MR OnlineThe International Monetary Fund has announced that the global economy is entering a major slowdown, downgrading the growth prospects of 143 countries. At the same time, inflation rates have reached historic levels. Around the world, hundreds of millions of people are falling into poverty, particularly in the Global South. Oxfam has sounded the alarm that we are ‘witnessing the most profound collapse of humanity into extreme poverty and suffering in memory’. What is producing this immense human suffering?
An Economic Crisis ‘Made in Washington’
On 13 April, U.S. Treasury Secretary Janet Yellen claimed that this global economic deterioration was due to the Russian war in Ukraine. This is factually incorrect. Although the conflict has worsened the situation, the key driver which has destabilised the world economy is the massive inflationary wave that had already built up in the United States and has now begun to crest on the world. Prior to the war in Ukraine, U.S. inflation had already tripled in recent years from 2.5% (January 2020) to 7.5% (January 2022) before accelerating further to 8.5% (March 2022) after the war broke out.
‘This isn’t Putin’s inflation’, the Wall Street Journal editorial board noted.
This inflation was made in Washington.
The U.S. consumer market absorbs a fifth of the world’s goods and services; as the demand for these goods outstrips the global supply, the tendency for U.S. inflation to spread around the world is very high. The average Commodity Research Bureau Index, a general indicator of global commodity markets, has risen astronomically: as of 25 April, year-to-year prices have soared for oil (60%), palm oil (60%), coffee (56%), wheat (45%), natural gas (139%), and coal (253%). These price increases have sent shock waves through the global economy.
This instability is inseparably connected to U.S. economic policy. Since 2020, the United States has increased its budget by $2.8 trillion. To finance this budgetary expansion, the U.S. government increased borrowing to 27% of the gross domestic product (GDP), and the Federal Reserve Bank increased the money supply (the quantity of money issued) by 27% year-on-year. Both of these increases are the highest in U.S. peacetime history.
Carmen Lomas Garza (USA), Tamalada, 1990.
These huge U.S. economic packages were generated to put cash in the hands of consumers. The U.S. government focused on the economy’s demand side by putting money into circulation for consumption, but it did not increase spending on the economy’s supply side by putting money into investment. From 2019–21, 98% of U.S. GDP growth was in consumption, while only 2% was in net investment. With a large increase in demand by consumers and almost no increase in supply, a huge inflationary wave grew in the United States.
Investing in Guns or People?
Inflation in the United States, which has global implications, is a by-product of its economic priorities. For the past half-century, U.S. governments have not used the country’s social wealth to make substantial social investments in areas such as education, healthcare, and infrastructure, nor have they invested in the manufacturing sector to increase supply. Instead, to manage inflation the government has chosen to push an agenda which cuts demand. These cuts in demand have already lowered living standards; for instance, real wages in the United States have fallen by 2.7% in the past year.
Instead of making social investments to prevent such economic downturns, the U.S. government has prioritised its military, which receives a budget increase every year. In 2022, the Biden administration proposed a military budget of $813 billion, a 9.2% increase over the military budget in 2021–larger than the next eleven highest spending countries combined. To justify this massive expenditure, the Biden administration, like the Trump administration before it, has invoked the need to ‘combat threats’ posed by China and Russia.
A reduction in U.S. military spending would free up government funds to invest in education, healthcare, infrastructure, and manufacturing. However, this would necessitate a shift in U.S. foreign policy, which does not appear to be on the horizon. Until that time, the people of the United States and other countries will have to sustain the costs of Washington’s new Cold War.
Joseph Bertiers (Kenya), The Bar, 2020.
Against the shallow assessment that global inflation is caused by Russia’s war on Ukraine and the Western sanctions on Russia, No Cold War’s briefing no. 2 points its finger at the root of the crisis: the distortions produced by U.S. military spending and by the Wall Street-Dollar-IMF regime gripping the world economy.
In December 2021, the IMF’s Georgieva said that Europe’s governments must not allow economic recovery to be endangered by the ‘suffocating force of austerity’. This is part of the West’s astonishing double-standards: at the same time, the IMF has enforced harsh austerity measures on the countries of Africa, Asia, and Latin America. As Oxfam notes in a new analysis, during the pandemic’s second year (from March 2021 to March 2022), the IMF approved 23 loans to 22 countries in the Global South–all of which either encouraged or required austerity measures. For example, the IMF’s $2.3 billion loan agreement with Kenya required a four-year public sector pay freeze alongside higher taxes on gas and food, all while 63 percent of Kenyan households experience multidimensional poverty, according to a report by the Kenya Institute of Public Policy Research and Analysis (KIPPRA).
The austerity policies that impact the vast mass of the populations in these countries must be reversed. We need less money spent on war and more money spent to solve what Frantz Fanon called the obstinate facts of human life, such as hunger, illiteracy, and indignity.
Langston Hughes’s poetry focused on the impact of these ‘obstinate facts’ on the lives of people in the United States, people who fought against a life built on wages that equalled ‘two bits minus two’. In 1962, the United States spent $49 billion on its military ($431 billion in 2022 dollars); in 2022, as noted in briefing no. 2, the U.S. government proposes to spend $813 billion on its military, larger than the military spending of the next eleven countries combined.
There is immense social wealth available to us, but it is spent on the parts of human life that are most destructive rather than productive. In 1962, as the U.S. military budget began to balloon, Langston Hughes wrote:
I tire so of hearing people say,
Let things take their course.
Tomorrow is another day.
I do not need my freedom when I’m dead.
I cannot live on tomorrow’s bread.
Freedom
Is a strong seed
Planted
In a great need.
I live here, too.
I want my freedom
Just as you.
We need to advance to the goal of human emancipation now. Not tomorrow, but now.
Warmly,
Vijay
https://thetricontinental.org/newslette ... on-crisis/
********************************************
Fossil fuel lobbyists continue to seize on Russia’s war in Ukraine to push long-term interests
Originally published: The Intercept on April 25, 2022 by Lee Fang (more by The Intercept) (Posted Apr 28, 2022)
Since the Mountain Valley pipeline was announced eight years ago, the proposal to transport fracked natural gas from West Virginia to export terminals in southern Virginia has faced regulatory hurdles and local opposition. The main concern is that the project runs through environmentally sensitive waterways and farmlands, putting them at risk of spills–while further promoting the development of fracking throughout West Virginia.
Now, after nearly a decade of lobbying, the energy crisis sparked by Russia’s war in Ukraine appears to have turned the tide, with federal regulators supporting a construction route that could bring the pipeline into service as early as next year.
Filings show that the pipeline’s boosters were quick to capitalize on the Ukraine crisis to sway policymakers. In federal appellate courts last month, attorneys for the pipeline project argued that with the U.S. ban on imports of Russian natural gas, “domestic supplies will become all the more important to the nation’s energy needs.” Completing the pipeline, the attorneys wrote, “indisputably would provide a meaningful step toward building out U.S. oil and gas infrastructure, freeing up additional natural gas for domestic consumption and export to Europe.” Other pipeline supporters, including Sen. Joe Manchin, D-W.Va., heavily cited the war in Ukraine to press administration officials to swiftly approve the project as a matter of national security.
Soon after, on April 8, the Federal Energy Regulatory Commission unanimously approved the plans to build the pipeline across 180 bodies of water and wetlands, a decision that analysts view as the final step in overcoming the hurdles that had placed the project in jeopardy for years.
The progression of the West Virginia pipeline project is one of many fossil fuel priorities now reshaped by the devastation wrought by the war in Ukraine. In the first days of the war, the American Petroleum Institute, which represents industry giants such as Exxon Mobil and Chevron, argued that it heightened the need for greater development of U.S. oil and gas reserves and for expedited approval of pipelines and other infrastructure.
“As crisis looms in Ukraine, U.S. energy leadership is more important than ever,” API tweeted at the outset of Russia’s incursion into Ukraine. Soon after, other oil and gas companies joined the fray. In early March, the chief executives of TC Energy, Enbridge, the Williams Companies, and Kinder Morgan cited the war to call for the rapid approval of natural gas pipelines that have faced opposition from activists and regulators.
Critics of the industry immediately countered that more fossil fuel development would take too long to provide any short-term relief. Gas and oil are global commodities, and small increases in U.S. production won’t have any immediate impact on domestic energy prices.
But rising utility and gas prices have rattled policymakers. Last month, following pressure from industry sources, including natural gas exporters, the Biden administration rolled back plans to evaluate natural gas pipelines on climate and environmental justice grounds. The Interior Department also announced a plan on April 15 to resume the sale of leases to drill on federal lands for oil and gas.
In recent weeks, more and more fossil fuel interests have piled on. This month, lawyers for Sempra Energy filed a letter to FERC urging approval of the North Baja pipeline, a project to transport liquified natural gas to export terminals on Mexico’s western coast. The project, the attorneys said, carried additional urgency “in light of the recent Russian invasion of Ukraine” and “concerns about energy security for Europe and Central Asia.”
TC Energy, formerly known as TransCanada, filed an amended request for approval of its Alberta XPress project, which would expand an existing natural gas pipeline system. The “beneficial domestic and international end uses” of the project, the company said, have “recently grown exponentially” with Russia’s invasion of Ukraine and the need for oil and gas exports to the global market.
K&L Gates, a law firm that represents Rio Grande LNG, a project to construct a site with five liquified natural gas trains in Texas, similarly petitioned FERC, calling for quick approval action given “Russia’s invasion of Ukraine and the stranglehold Russia has on Europe’s energy supply.”
Fossil fuel-backed interests are also attempting to use the Ukraine war to shape the Biden administration’s proposed rules around carbon capture and sequestration. Harry MacDougald, an attorney who has led industry-backed lawsuits to overturn the Environmental Protection Agency’s endangerment finding on greenhouse gas emissions, filed comments to the White House Council on Environmental Quality arguing that any carbon capture rules should not limit the potential for greater oil and gas development. “With Russia’s criminal invasion of Ukraine, the national imperative of increasing U.S. petroleum production is readily apparent,” MacDougald wrote.
Lobbyists for a range of other industries–including power plants, refrigerator manufacturers, software developers, and telecommunications providers–have also wasted no time in using Russia’s invasion of Ukraine as a talking point to influence decisions on a wide array of policies, from tariffs to environmental rules. The comments range from urgent calls to action on vital economic issues to precarious arguments that stretch the imagination to fit the Ukraine crisis into a domestic U.S. context.
The Competitive Enterprise Institute, a libertarian think tank backed by business interests including Google, filed a document with the Federal Trade Commission opposing new guidelines for enforcement against business mergers that pose monopolization risks. The think tank argued that a transparent process for such a potentially costly new enforcement regime was important to consider, particularly given the “geopolitical uncertainty surrounding Vladimir Putin’s invasion of Ukraine.”
The American Public Power Association, the lobby group that represents electric utilities around the country, including a large number of coal-burning power plants, in March submitted comments to the EPA opposing new limits on wastewater pollution, in part by pointing to the “immense pressure on fuel and energy prices” caused by “the recent war in Ukraine.”
Microsoft and the U.S. Telecom Association have filed letters with the Commerce Department urging greater government investments in semiconductor development by pointing to the supply chain problems worsened by the war in Ukraine. “The shortage has been further exacerbated by Russia’s war with Ukraine, which has strained the supply chain for critical minerals and other raw materials and exposed further vulnerabilities in the semiconductor supply chain,” wrote Sarah O’Neal, an attorney with Microsoft.
Ukraine provided about half of the global supply of semiconductor-grade neon, a colorless and odorless gas used to control lasers for the production of specialized computer chips. The shortage from the war, with plants in eastern Ukraine under occupation, has alarmed automotive manufacturers. The Motor & Equipment Manufacturers Association, the automotive parts trade group, called attention to the potential global shortage in a letter urging the Biden administration to take rapid action to bolster the domestic semiconductor supply.
And the Air-Conditioning, Heating, and Refrigeration Institute and the North American Association of Food Equipment Manufacturers are among the lobby groups pushing for a relaxation of U.S. tariffs on steel by citing the crisis in Ukraine.
Other petitioners urging relaxed U.S. government interference in the market are less persuasive. Mike Schafer, the head of a fish processing plant, petitioned the Biden administration for “laws changed to bring fish products to humanitarian use and K through 12 school lunch programs.” Schafer asked for a range of government support for the fishing industry, including grants for international marketing to feed “all the refugees from Ukraine” who “could really use fish protein.”
https://mronline.org/2022/04/28/fossil- ... interests/
War, starvation, environmental catastrophe, these are what we get when we allow the capitalists 'their' profit.
They spend a significant portion of those profits convincing us otherwise and still remain the richest ruling class in history. How long?