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Dr. Richard Wolff, From Crisis to Recovery, Neoliberalism, Trumponomics

Real Economics to show why #Trumponomics will deepen the Crisis and why only #Socialism could revive Economy

Glimpse into America’s future: Trumponomics = Reaganomics on steroids

“Hiring freezes, an end to automatic raises, a green light to fire poor performers, a ban on union business on the government’s dime and less generous pensions — these are the contours of the blueprint emerging under Republican control of Washington in January.”

trumponomics-is-reaganomics-on-steroids

During the election campaign Clinton and Trump mastered all manipulation techniques to divide the American masses along the Left-Right imaginary opposition. The de facto Right-wing, warmongering Clinton was fooling the progressive part of the American masses, meanwhile the equally warmongering Trump was provoking the nationalist Right-wing by fuelling an unprecedented degree of racism and hatred against the victims of the US wars.

  • But both Trump and Clinton share the most essential premise: Capitalism. They are both representatives of the very aristocracy imposing the very system that has been destroying America for many decades now. The “democratic freedom” to elect Trump or Clinton as president amounted to no more than the “freedom” to decide which executioner shall perform the task of finishing the murder of America.

In a recent post, the ultimate purpose behind Trump’s populist economic policy has been revealed.

Trump’s promises amount to no more than populist lies of the same dimension and purpose as those of Hitler’s in the past used to be. Trump’s false claims ‘to make America great again’ via a policy that will actually trigger the opposite of the promise, ie further deepen the Recession,  signifies a unique threat of world war 3.
Hitler et al did the exact same thing before and during the 2nd world war. They used the same deceitful rhetoric to pull the masses of Europe into such a degree of hatred against other nations and races that was enough to ignite WW2, and was enough to obtain mass-support for collecting all the poor – both migrants AND the domestic poor! – into concentration camps.

This post is now updated and reposted as an analysis to demonstrate that Trumponomics is no more than a bunch of massive lies, used by Trump for the purpose to mislead and distract the American masses and thus to create a mass-base for the fascist Trump administration’s warmongering agendas. Trumponomics is not only NOT the way to economic Recovery – it is simply Reaganomics on steroids – that is, a certain road deeper into economic hell than ever.

When Trump is promising ‘more jobs’ by measures of mass-deportation, racism and banning immigrants, he is doing exactly what Hitler was doing in the 30’s and 40’s. Trump’s goal is the same as Hitler’s was.
Like Hitler et al did in the past, Trump at present is scapegoating immigrants and non-white races in order to convert the masses’ hatred of Capitalism into hatred of the main victims of Capitalism. Trump’s lies are to distract the American masses from the fact it is Capitalism itself to take the jobs of the American masses, not the immigrants and not the non-white races.

On above point, a highly recommended recent analysis by top economist, Dr. Richard D Wolff:
“Global Capitalism: Nationalism and Scapegoating Foreigners [FEBRUARY 2017]”
https://www.youtube.com/watch?v=GlNmm-OoNvE

The ongoing deception behind the so-called trickle-down “economics”
Who killed the American dream, and why?

The Americans are being deceived – at present even deeper than before – both via the corporate mass-media and via the dreamers and deceivers on social media, who keep echoing the grand myth regarding the ‘job-creator’ Capitalist class, mostly in the context of Trump’s presidency and his deceitful claims on how to revive the US economy. Meanwhile the actual chain of cause and causation behind job-creation, especially in the volume that would trigger economic Recovery, remains hidden from the American public.

In contrast with the official narrative the Americans are exposed to, the future of the US economy – under ‘Trumponomics’ ie Reaganomics on steroids – will be forever-deepening crisis, mass-poverty and mass-unemployment, which then under the Neoliberal conditions of eliminated social security and welfare-state, would manifest in more and more visible forms of the publicly undeclared, nevertheless very real modern Great Depression.

The real reason why the American dream has become a nightmare and turned into an ever-deepening economic crisis, is hidden even deeper that the real reasons behind the never-ending American wars. The Capitalist class heavily relies on the fact that the vast majority in America and all over the world never studied finance and economics, and many of those who did are unable to apply their knowledge to reality in a critical and pragmatic manner. The American people are especially prone to believing the authoritative false narrative about American exceptionalism, which is always associated with the assumed “achievements of Capitalism” – a myth maintained by the Capitalists-owned “information-outlets”. In consequence large masses are unaware of the actual processes behind the crisis that has been hitting America and the entire Western sphere, for decades now.

  • The actual reason why the American dream disappeared is the Neoliberal global project that the Capitalist class started in the 70’s. Another dirty little secret that the ruling elites keep from the masses: what made America great and what created the basis for the American dream was FDR’s democratic version of Socialism, NOT Capitalism.

The prosperity of the masses was made possible ONLY during a short period after 30’s Great Depression, after FDR  introduced his highly successful Social-Democratic New Deal – see the diagram on the right side – which enabled the majority to access quality education and organised the US economy in a way that allowed the majority to participate in the process of production. The fact that FDR has been the most popular president ever in the history of the US, who remained in office until his death after being elected 4 times (!) speaks volumes.

  • In other words, Capitalism was functional for the 99% only while the very essence of Capitalism was regulated out of Capitalism, ie while it was made impossible for a group to concentrate Capital to the degree that the Capital would become the ultimate means of controlling both economics and politics.

Then, after the 70’s, the Neoliberal U-turn marked by Reaganomics (in Europe Thatcherism) killed the American dream and reversed the mass-prosperity that FDR’s Democratic Socialism had established. The Neoliberal policy imposed by Reagan and his followers was to revoke all regulations that were in the way of concentrating Capital in the hands of a few. This process in the meantime erased the Middle Class and pushed the majority of Americans into a vicious cycle of economic collapse. The same process has taken place in other parts of the Western world.

Reaganomics-trickledown

The so called “trickle-down” – ie Neoliberal economics – that provides the basis for the Libertarian claims advocated by Trump  and his disciples – never worked. This economics is mere fairy dust that was not supposed to work, except for the very purpose to allow the richest to concentrate all the wealth and power. Because that is precisely the goal of the Capitalist class – the why’s and how’s are explained in detail in a former article.

Another dirty secret the rich are hiding from the public: by introducing the Neoliberal “trickle-down” pseudo-economics, the Capitalist class managed to eliminate any existing or potential competition. One glimpse at these charts is enough to realise this.

The Neoliberal bogus-economics destroyed the American dream and destroyed many once highly productive and prosperous American industrial areas such as Detroit, leaving behind vast mass-unemployment and abandoned ghost cities.

  • In line with the destructive Neoliberal fiscal policy the Smash and Grab financial system is devised to enable the rich to “buy” all resources and values of each country from self-issued $ trillions.

Meanwhile all government functions are eradicated through Trumponomics:

In one of the former interviews with Dr. Richard Wolff he explained how Reaganomics Killed America’s Middle Class: https://www.youtube.com/watch?v=ZdCNGkZoIZw
Trumponomics will continue and accelerate that devastating process.

The result of this trend is the opposite of Recovery. Trumponomics will further deepen the Recession that Reaganomics inflicted. The chart on the left side offers a visual demonstration of the ever-intensifying crisis-inflicting process under unregulated Capitalism.

The grand ‘job-creation’ myth is debunked

The central element of the false narrative maintained by the Capitalist class is the idea that production hence job-creation is an exclusive capability of Capitalists like Trump, for which the whole society should be eternally grateful.

Upon this populist lie, the American society has become a mass-congregation worshipping “job-creators” like Trump, and this lie plays a central part in Trump’s economic populism. As always, only knowledge can set us free from the devastating effects of the propaganda that Trump and his disciples are spreading in every context. Both dreamers and deceivers, and a multitude of fake Trump-fans on Twitter, are multiplying Trump’s populist claims (=LIES) regarding how his administration shall boost the US economy. These myths can and should be debunked only on the basis of actual knowledge of economics.

Ironically enough, the central claim that kept Trump in the position of a strong presidential candidate is weaker than a breath amidst a hurricane. More ironically, the fact that it is not the rich who create jobs has been admitted even by a fellow-gazillionaire of Trump’s, Nick Hanauer.

However, the entire story about the facts versus myths regarding the revered act of job creation, extends further than what the honest gazillionaire exposed.

  • For any new job to be created, in particular the vast number of new jobs that would make a difference on a macroeconomic level, the following conditions have to be met:

1) Purchasing power and demand. Creating jobs is possible only when an employer’s goal is to increase production. To create the number of jobs in the volume that would be necessary for an overall economic recovery would require a mass-scale increase in production. But increasing production on mass-scale requires existing markets with an existing mass-demand for the extra products and services that the increased mass-supply provided by the extra jobs would satisfy. Without existing extra demand, no extra jobs can be created. Not even one more job, let alone millions of jobs.

2) Financial incentives. The allegation that only the rich – and their incentives to invest in production – can create jobs is another false claim. Ever since the 70’s, the richest class has received ever increasing tax-breaks, enjoyed the benefits of offshore tax-havens and all forms legal and illegal tax-evasion, yet they stayed away from job creation. Instead, they engaged in numerous unproductive speculations and other fictitious transactions yielding unearned gains in the $ trillions, through which they accumulated wealth that is million times more than enough to “get by”. In addition, the sheer amount of interest- and dividend income that the richest receive daily, enables them to lead a royal lifestyle. For the rich to look for the opportunity to increase production thus to create jobs, is risky and not lucrative, hence not an existing motive. The incentive to create human (not robotised) jobs used to be a motive of the small- and middle-size business owners, that is of the middle class, but the middle class has disappeared, again, due to the Neoliberal policy that benefits only the super-rich.

3) Profit incentives. The rich refuse to create new human jobs not only out of convenience but out of profitability. Whenever and wherever they can, they robotise jobs, which evidently results in the opposite of what job-creation, ie in a decreasing number of human jobs. To robotise jobs is a false perception of progress as long as the 99% are left out of the benefits of such ‘progress’. Since it is the whole society who made such progress possible in the first place, the whole society should be rewarded by receiving generous welfare benefits, universal basic incomes and ever increasing wages to be at least partially compensated for their contribution.

4) Access to finances and/or means of production.
The claim that only the rich can create jobs simply because they are rich and experienced, is another myth that keeps society in a hostage situation. The truth is: if democratic governments revoked the Capitalist privilege of money creation and society had access to finances via nationalised central banks, such democratically supervised and managed money-creation would enable anyone with a decent business diploma and ambition to create jobs.

  • However, if condition 1) of the above 4) is NOT met, the act of new job creation, either by Trump, another Capitalist or a business school graduate – either motivated or not – remains impossible.
  • Therefore, the most fundamental requirement of job creation remains the condition that there is an existing purchasing power that will manifest as the aggregate demand for the goods and services produced by the created extra jobs.

However, such demand in America does not exist, and, worse yet, none of the agendas put forth either by Trump or Clinton would create such demand – to the contrary. Under the extant Neoliberal conditions even the existing demand is shrinking and this negative trend would continue and accelerate both under Trump or Clinton.

  • The Neoliberal trend is a vicious cycle and all vicious cycles are running at an accelerating rate.

The economic future under Trumponomics

job creator

  • In addition to the theory as per these process-flow diagrams, the empirical fact provides smoking-gun evidence that lowering the tax-rates of the corporations and the rich does NOT result in extra job-creation and does not trigger economic Recovery.

FACT: In the Neoliberal era, which was paved by ever-decreasing tax-burden of the top-income segments, the rich never grabbed the opportunity to create more jobs – to the contrary.

As for the ‘promise-land’ Trump is offering to the deceived masses, neither the further tax-break for the richest segment, nor the lower tax-rates of the lower income-brackets would increase the purchasing power.

The main criterion of new job-creation, the customer demand for extra production will remain a missing factor, due to these reasons:
– The real wages will stay low or even drop lower than ever. Under both Trump or Clinton the same pro-Capitalist interests are observed and the Capitalist class is interested in only one goal, to increase profits. Since in lack of demand they can’t expand their sales, the only way to keep profits high is to keep wages as low as possible. If Capitalists replace the immigrant workers with domestic ones, they will do without increasing the wages. And from wages that are around the poverty line, to pay less tax will not make anyone richer. Hence the demand won’t increase.
– The debts will remain and will continue to rise. Those who have relatively higher incomes and their disposable income would increase upon lower tax-rates, will still have to pay out debts (student loan, mortgage, credit card loans, car loans etc) hence they will have no extra bucks to spend on more products and services. Hence the demand won’t increase.
– The prices will remain high and will further increase. Even the existing demand is shrinking due to the high prices, hence only those products and services are purchased that satisfy the most elementary needs. Hence the demand won’t increase.
– For the “rest”, a vast percentage of Americans any tax-break will remain meaningless, since they are either on unemployment benefits or are jobless and homeless. Hence the demand won’t increase.

In the meantime, due to the low or even lower tax-rates of the rich, the US government would continue running on deficit. Therefore the US government would again borrow from the richest the very amount that the government would otherwise receive by taxing the rich. So the vicious cycle of debt-crisis-austerity-unemployment-crisis-debt would continue destroying the US economy.

Evidently, under Trump’s presidency, neither Trump nor his fellow-tycoons would pay a cent of tax into his Government, therefore the deficit and debt would run even higher than before. To replace the astronomical amount of taxes that Trump and his lobby should otherwise pay into the economy via taxes, Trump as a private Capitalist might lend several $ billions to his own Government, which amount would then be added to the extant odious public debt as the ‘responsibility’ of the ever-impoverishing majority of Americans to ‘repay’ via intensifying austerity.

After these considerations, to crack the hypothetical case of a possible Clinton’s presidency is a very simple task. She represents the exact same class as Trump is a member of, therefore her policy would have led to the exact same scenario, with the difference of seemingly ‘progressive’ slogans.

Yes, friends, governments in capitalist society are but committees of the rich to manage the affairs of the capitalist class.” ~ James Connolly

In other words: the political Establishment consists of the aristocracy and its servants — within both parties. Both parties serve the aristocrats, sometimes even the same aristocrats, but, in other matters, serve the agenda that’s shared among the richest people in both parties.” (Eric Zuesse: Another Way ‘Democracy’ Is Rigged in America)

Those women in the US who hoped to see a better future under a woman-president failed to remember that under Obama’s presidency the African American population suffered even more discrimination, poverty, police-harassment, than ever before.

The staggering amount of deceit and rip-off that the American people suffer now and will continue to suffer under Trump, is clearly unfathomable.

The oft-heard ‘argument’ that once a wealthy successful tycoon who already ‘got it made’ shall take the presidential seat, such presidency would deliver America from poverty, corruption and wars, can be debunked by another reminder as well: the wars and mega-corruption the American people suffered under the Capitalist Bush-dynasty. George Jr. Bush, regardless of his personal riches, went as far as allowed the monumental inside job, the 911 attack in order to drag the US into an endless series of imperialist wars on the Mideast and upon such pretext to tighten the fascist grip over the American people. Because the number 1 rule of Capitalism is rarely mentioned: the war industry is the top profitable industry and Capitalism is a system that is driven by one and only one rule: to obtain the highest possible profits. And to create an endless “demand” for their war-industry, the Capitalist class has been pursuing their endless war-agendas on false claims of self-defence. At present China and Russia are declared the main targets of the US war-aggression, but the long-suffering Mideast also remains in the centre of the Capitalist US-wars and colonisation agendas.

Due to the fact that the Capitalist class is in constant need of colonising wars, hence in constant need of enemies as pretext for their wars, what we can expect from either Trump or would have expected from his puppet Clinton, is more wars, more false-flag terror and more tightened “national security”, then again more wars, more false-flag terror and more tightened “national security” – and such loop to be repeated ad infinitum.

The actual route to make America ‘great’ again: Socialism

“The New Deal is plainly an attempt to achieve a working socialism and avert a social collapse in America; it is extraordinarily parallel to the successive ‘policies’ and ‘Plans’ of the Russian experiment. Americans shirk the word ‘socialism’, but what else can one call it?” (H.G. Wells)

As for a potential Economic Recovery, the question is then how to increase demand to trigger an upward macroeconomic process? How to increase the purchasing power?

Due to the disappeared middle class, ever increasing debt, intensifying austerity, cuts, lack of living wage, lack of welfare, and due to the high expenses of education and other basic needs, there is no way to boost the purchasing power. The Capitalist-imposed Neoliberal policy triggers and intensifies the exact opposite process, it further decreases the purchasing power. To try to fix issues by following the exact same route that created them, is evidently insanity to the infinite degree.

  • The only way to increase demand, thus to induce economic Recovery, is via the exact opposite route – a version of the social-democratic policy, which had been offered by presidential candidate Bernie Sanders until he was forced out of the election process. (Hardly a surprise.)

As we could see it proven from this analysis and from those listed under the References, there is no other way to boost Economy than the Socialist way. The mass-demand necessary to induce Recovery can’t just pop into existence as the Trumponomics dreamers and deceivers assume it would. Increase in demand needs to be positively generated via a process at the start of which there is a need of introducing public banking to finance entry of new companies into production sphere, to finance government projects to develop infrastructure as an indispensable requirement to foster macroeconomic expansion, to finance paying living wages as the ultimate basis of increasing demand, to provide affordable education and healthcare to create an able and healthy workforce and generous welfare benefits to ensure that those who temporarily are out of the workforce can re-enter later. Without these conditions demand will NOT increase and without extra demand for products and services there can be no extra jobs to produce these extra products and services.

The only way is the way Franklin Delano Roosevelt helped the American society out of the 30’s Great Depression. Such social-democratic economic policy is displayed on the right side of these diagrams.

  • The task ahead is enormous – not less than to recreate the middle class that Roosevelt’s socialist economic policy created in the 30’s, which then the 70’s the Reaganomics-Neoliberal trend has erased. (See diagram on the left.)

The task is not less than to introduce a new New Deal to rescue the many millions from starvation, joblessness and homelessness.

Unfortunately, the American public has been convinced, throughout centuries of profound indoctrination, that any taxation is “theft”. What they are never told is the fact that the act of robbery is done at the point when the rich minority grabs the privilege to finances and resources, when upon such self-granted privileges they privatise a nation’s most essential values and resources, which otherwise would belong to all citizens of a land. Compared to the necessity to roll back all privatisations as a requirement to restore justice in full, taxing the rich is not only NOT theft but a very generous compromise – a compromise that has historically proven to be grossly insufficient as to saving our future.

As for the near past, the next step towards Economic Recovery in America would have been voting Bernie Sanders – this is why he was removed from the equation. As for the near future, to rescue America – and the world – from the ever ready-to-hit Capitalist aristocracy, much more profound changes are needed.

Related Posts / References

Global Capitalism: Nationalism and Scapegoating Foreigners [FEBRUARY 2017]
https://www.youtube.com/watch?v=GlNmm-OoNvE

Michael Hudson: Donald Trump Wants to Make the 1% Even Richer
https://www.youtube.com/watch?v=No6PUjGmMP4

How Trump Could Bring on the Crash of 2016
https://www.youtube.com/watch?v=3klabW-pptk

Full Show 11/11/15: How Reaganomics Killed America’s Middle Class
https://www.youtube.com/watch?v=ZdCNGkZoIZw

FDR & The New Deal: How Progressive Policies Created the Middle Class (Documentary)
https://www.youtube.com/watch?v=4n6rQ8-GSz4

Reaganomics: 32 Years of Failed Policy | Interview with Richard Wolff
https://www.youtube.com/watch?v=-F2JIHNLQSc

How #Capitalism destroyed the family model and gave rise to loneliness, rage, militantism and prostitution
https://globalpoliticalanalysis.wordpress.com/2016/04/15/how-capitalism-destroyed-the-family-model-and-gave-rise-to-loneliness-rage-militantism-and-prostitution/

Clinton: “If I’m President, We Will Attack Iran … We would be Able to Totally Obliterate Them.”
https://globalpoliticalanalysis.wordpress.com/2016/04/02/clinton-if-im-president-we-will-attack-iran-we-would-be-able-to-totally-obliterate-them/

The old bogeyman-charade of the West: the reason why #Capitalism needs #FalseFlag and #ColdWar
https://globalpoliticalanalysis.wordpress.com/2016/02/21/the-old-bogeyman-charade-of-the-west-the-reason-why-capitalism-needs-cold-war/

Empire Files: Abby Martin Exposes What Hillary Clinton Really Represents
https://www.youtube.com/watch?v=PV_PLCC6jeI

Richard Wolff : Karl Marx was a genius.
https://www.youtube.com/watch?v=lRtggSypXq8

Trump has a plan for government workers. They’re not going to like it.
https://www.washingtonpost.com/news/powerpost/wp/2016/11/21/trump-republicans-plan-to-target-government-workers-benefits-and-job-security/

Neoliberalism – the ideology at the root of all our problems
https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

The Genocidal Global Politics and Neoliberalism
http://www.fatih.edu.tr/~jesr/Neoliberalism.pdf

HEIST: Who Stole the American Dream [FULL FILM]
https://www.youtube.com/watch?v=jlhYk1Y4ftk

Another Way ‘Democracy’ Is Rigged in America
https://globalpoliticalanalysis.wordpress.com/2016/03/17/another-way-democracy-is-rigged-in-america/

Pt2 – Rethinking the future beyond Left and Right: #Capitalism, the inimical idol
https://globalpoliticalanalysis.wordpress.com/2016/02/07/pt2-rethinking-the-future-beyond-left-and-right-socialism-the-actual-road-to-freedom/

The Smash and Grab global agenda behind #Debt, #Deficit and #Austerity – and what can we do about it
The Smash and Grab global agenda behind #Debt, #Deficit and #Austerity – and what can we do about it

A Brief History of Neoliberalism – introduction
https://soundcloud.com/n-h-morgan/a-brief-history-of-neoliberalism-introduction

State Capitalism versus Communism: What Happened in the USSR and the PRC?
Gabriel, S. ; Resnick, S. A. ; Wolff, R. D.
Critical Sociology, 07/01/2008, Vol.34(4), pp.539-556

The great austerity shell game
http://www.theguardian.com/commentisfree/2013/nov/04/great-austerity-shell-game

Billionaire Google CEO Thinks It Won’t Be So Bad When Robots Start Taking Our Jobs
http://www.huffingtonpost.com/2014/07/07/google-ceo-larry-page-part-time-jobs_n_5564044.html

The 10 biggest corporate layoffs of the past two decades
http://fortune.com/2015/09/20/biggest-corporate-layoffs/

Crisis versus Recovery flow-charts
https://globalpoliticalanalysis.files.wordpress.com/2013/11/crisis-vs-recovery-new.jpg

Banned TED Talk: Nick Hanauer “Rich people don’t create jobs”
http://www.youtube.com/watch?v=CKCvf8E7V1g

Nick Hanauer: Beware, fellow plutocrats, the pitchforks are coming
http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming?language=en#t-7205

Why Libertarianism Is So Dangerous & Wrong
https://www.youtube.com/watch?v=7GYf8Ph8KNQ

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About Sky Wanderer

Global Political Analysis, Research & Commentary. Multidisciplinary research and analysis revealing the big picture of the global status quo versus the mainstream myths. Searching the way out of the global financial tyranny and slavery, before the system ends up in a full-blown version of global fascism.

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