America’s Deteriorating Economic Performance
America’s Deteriorating Economic Performance
Paul Craig Roberts
The US military/security complex and its numerous supporters in the House and Senate can’t get enough of war. The one they have going in Ukraine has denuded NATO members and the US of weapons and ammunition, thus creating a massive resupply market for US armaments manufacturers. This is great profit news for the merchants of death, but it is a foolish policy to be warring with Russia when we are out of bullets.
Not content with our precarious position, Washington if fomenting war with China. NATO is no longer limited to the North Atlantic Treaty Organization. It has been expanded to the South Asian Treaty Organization.
Michael Hudson, my sometime coauthor, tells us about it in “The Looming War Against China” https://www.unz.com/mhudson/the-looming-war-against-china/ . It is going to be a costly war for everyone, especially for the US as US manufacturing has been relocated in China.
One of the good things that jumps out of Hudson’s article is that Washington’s wars on Russia and China have destroyed globalism. Hudson notes that the world has divided into blocs: America and its empire vs. the rest of the world. Hudson emphasizes the cost and loss of efficiency of this breakup, but in my view the silver lining is that globalism is Washington’s mechanism for hegemony and keeping other countries under its thumb. With the dollar as global money, Washington had no problem financing its huge trade and budget deficits. The breakup of globalism that Washington has caused is very much against Washington’s interest and permits the rise of a multi-polar world.
Hudson’s analysis cannot be obtained from the Council on Foreign Relations or any think tank, or from the State Department, Pentagon, National Security Council, or from any university. I recommend Hudson’s analysis. It will enhance your perception as events unfold, the meaning of which the media is incapable of explaining.
I have one cautionary note. Hudson makes a mistake that he often makes. In this case it is a purely gratuitous mistake as it has no relation to the points he makes. As I have corrected him many times, this time I will do so publicly.
Hudson associates the cause of American de-industrialization and the rise of the financialized economy with “Ronald Reagan’s tax cuts for the wealthy.” That is the way I read his sentence: “The United States has suffered an equally devastating shift of wealth and income to the Finance, Insurance and Real Estate (FIRE) sectors in the wake of Ronald Reagan’s tax cuts for the wealthy, anti-government deregulation, Bill Clinton’s ‘Third Way’ takeover by Wall Street.” I categorically reject that supply-side economics had anything to do with promoting predatory financialization and de-industrialization.
The purpose of the Reagan reduction in marginal income tax rates was to employ a supply-side approach to the problem of stagflation–the worsening trade-offs between inflation and employment, not to cut taxes for the rich. Demand-side approaches had failed. A few of us had a supply-side solution, and President Reagan and Congress agreed to give it a chance. It certainly worked. The Phillips Curve and worsening tradeoffs between employment and inflation disappeared.
The purpose of the reduction in marginal tax rates was to increase the earnings of labor and investment by reducing their tax cost. It worked. In place of the neoliberals’ prediction of a rise in inflation in response to tax rate reduction, inflation collapsed.
Hudson himself favors reducing the cost of labor and capital by subsidizing health care, education, and public transportation. This would provide the same living standard at lower wage rates, thus making US labor more competitive. Following his logic, if he is consistent he favors lower rates of tax on income as they also produce the same real income with lower wage rates. Indeed, they produce higher real incomes because of the incentive effects.
Hudson implicitly agrees with my explanation of supply-side economics as he agrees with me that the current inflation, which is being mistakenly fought, is a supply-side inflation from the reduced production caused by the Covid lockdowns and US sanctions, not a demand-side inflation caused by consumers.
Hudson also knows that financialization of the economy has been on track for a long time and that the laws that gave financialization its boost were enacted years after Reagan. I opposed them, as did former Chairman and CEO of the Chase Manhattan Bank George Champion. The Riegle-Neal Interstate Banking and Branching Efficiency Act passed in 1994. This law permitted the large banks to collect deposits outside their home states. The repeal of Glass-Steagall was in 1999. The repeal destroyed the separation of commercial and investment banking. Reagan’s last year as President was 1988. He left the White House on January 20, 1989.
Puzzled by Hudson’s repeated mischaracterization of supply-side economics as “tax cuts for the rich,” I have concluded that the answer lies in his leftwing background. Hudson is a man of the left, which in his day meant a man of the working class. High taxes on the rich were seen by progressives of his time as reducing the power of the rich. The left assumed that this would be beneficial to the working class, but high taxes on capital income also reduce investment and, thereby, the productivity of labor and wages.
In our time, the left has turned against the working class. The working class are the “Trump deplorables.” In the Woke ideology of today’s left, the white working class is seen as exploiters of people of color and others. The leftwing that Hudson was a part of no longer exists.
Hudson is correct that the reduction in tax rates, which was equal across the brackets, most benefitted the rich in dollar amount, but this is because the rich pay more in dollar amount. For today’s leftwing, equal rate reduction is not equity. Equity would be taxing the rich so heavily that their income after tax would equal the national average. In other words, a supply-side policy to lower the tax cost of labor and capital is not a possible policy choice in today’s Woke intellectual climate.
The emphasis on equity (equal outcomes) constrains economic policy and locks in the deterioration in American living standards that we are experiencing.
Hudson’s analysis leaves me convinced that the combination of de-dollarization with offshored US industry (import dependence) means a decline in the dollar’s exchange value and higher inflation that will further lower US living standards.
White America: Disappeared and Replaced
White America: Disappeared and Replaced
Paul Craig Roberts
In the United States the majority of the population remains white despite 58 years of mass immigration of non-whites. Despite remaining a large majority, white Americans are not only being replaced but are being disappeared along with their history.
You no longer see white families in corporate ads. If a family is shown, it is a black man, white woman and mixed race children, or it is an Asian woman, white man and mixed race children. A white family has been given negative meaning as a statement against “diversity.” Diversity has trumped the basis of a nation state, which is a homogeneous population. A diverse, multicultural population is a Tower of Babel, not a nation. Without a common culture, there is not a common interest. Without a common interest, there is no nation, only a geographical boundary.
Ever since the Equal Employment Opportunity Commission created racial quotas in defiance of the statutory prohibition in the 1964 Civil Rights Act, white Americans, especially heterosexual males, have been second class citizens in law. It has been legal for 59 years to discriminate against white heterosexual males in university admissions, employment, promotion, and protection by law.
Recently, the US Supreme Court ruled that race-based university admissions are impermissible and inconsistent with the 14th Amendment. The ruling is a half century too late. Discrimination against white Americans is now institutionalized. Blacks are a small percentage of the population, but they are over-represented in positions of power. For example, the Secretary of Defense is black. The incoming Chairman of the Joint Chiefs of Staff is black. The Superintendent of the US Air Force Academy is black, and all three agree that there are too many white officers in the US military. They have announced an official policy of discriminating against white military personnel by denying whites promotions in military rank. This is a fact, not a “conspiracy theory.” It could not be more clear that despite the Supreme Court’s ruling, discrimination against white Americans will continue unabated.
White people are being demonized out of existence, and they are helpless, despite being a majority in an alleged democracy, to do anything about it. To protest demonization is to defend whiteness which is regarded as proof of white supremacy. It is regarded as racist for a white to deny his guilt.
Museum curators, themselves white, present the works of white art in their collections as “racist works.” The artistic value and achievement of white culture has been turned into expressions of racism. Heather Mac Donald has documented examples of this in her articles in City Journal.
White Americans are helpless to stand up for themselves, because half of them–the blue state half–have succumbed to the brainwashing and indoctrination that white people–only white people–are “aversive racists” by birth and skin color, and as such are threats to people of color. This argument justifies restraints on white people, such as second class legal status in order to ameliorate “white privilege.”
The statue of Robert E. Lee, a work of art by famous sculptors Henry Shrady and Leo Lantelli, stood in Charlottesville, Virginia, in memory of Lee’s leadership of the Army of Northern Virginia for a century. It was taken down in 2021 and has been given to a black organization that has announced that it will melt down the statue and cast the metal into something else, perhaps another statue of George Floyd who killed himself by overdosing on fentanyl.
Why does black self-expression and celebration of black heritage require the elimination of white heritage? Robert E. Lee was highly regarded by the US military in the service of which Lee gave his youth and middle age. Offered command of the Union Army he said he could not invade his own state and declined the command. A former superintendent of West Point, Lee fought honorably and morally, and West Point barracks were named after him. Now his memory is erased and his presence in history destroyed by lies.
This is America today for white people, few of whom have the courage and awareness to protest. Essentially American white people are being erased. Try to find white Anglo-Saxons in the Biden regime.
You can see white replacement in California. In 1970 the population of California was 76% white. The state was solidly Republican through the 1980s. Today the white percentage is 32%. Whites have been replaced in California by Asian immigrants and illegal immigrant-invaders who walked in, unopposed, across the border with Mexico. Today the largest percentage of California’s population is Hispanic.
Let’s hope Hispanics quickly take over the state from the crazed white liberals whose anti-white policies are causing white flight from California at the rate of 300,000 per year. California, Reagan territory in the 1980s, is today a state where the Republican political presence is minuscule.
The current white liberal governor of California, Gavin Newsom is the most anti-white, anti-American governor in US history. His policies have proven to be devastating for California. Yet they are tolerated by the Hispanic and Asian majority. Recall efforts were defeated despite the shrinking quality of life in California. The colonization of America by immigrant-invaders proceeds.
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