Wednesday, June 29, 2022

Something to Know - 29 June

London, UK / September 19 2009:  Smashed Heinz tomato ketchup bottle with spaltter in a violin shape on the sidewalk / pavement.

Plenty of news to unpack.  The problem is where do you start?   Trump's mess is a whole lot worse than even Tricky Dicky's.   So, if you are in need of catching up with the testimony presented yesterday at the 1/6 Investigation, here is lady HCR .  What is being presented today is the work of a friend, and a local professor of economics from CalState LA - Andy Winnick.   The other evening, he presented two topics of interest that you might appreciate - his opinions on three issues in the news that strike at the heart of confusion and discontent which we navigate every day.   So here are the topics 1) inflation,  2) the war in Ukraine, and 3) the Supreme Court:

We are living in a complicated economic time right now, but there is a lot of very false information being circulated about the causes of the inflation we are experiencing.  Let's talk about what may be contributing causes but are NOT the primary cause of the inflation.
1. Food Prices and the disruptions caused by the war in Ukraine.
The U.S. is a net EXPORTER of virtually all of the grains and other food stuffs that are normally exported from Ukraine. We are not buying significant quantities of higher priced grains.

2. Higher wages and the Gov't anti-pandemic expenditure programs.
Prices are going up faster than wages and family income net of inflation have fallen, NOT increased.  This is not a wage push inflation, nor is it being caused by government expenditure  programs, almost all of which have been terminated some time ago.

3. Supply chain disruptions and higher shipping costs.
These have been a contributing factor in some specific lines of products, like computer chips and cars, but these have been caused by greedy corporations destroying domestic production in seeking cheap products produced by poorly paid foreign labor and having moved to "just in time" supply chains to avoid the costs of maintaining inventories – all designed to increase profits and hold down domestic wages and incomes.

4. The high cost of oil and natural gas due to the sanctions imposed on Russia
But the U.S. is a net exporter of both oil and gas, and to the extent we do import certain specialty types of oil, we could compensate for that by increasing the exports of the oil and gas we produce. Yes, there are world prices of oil and gas, but out refineries do  NOT have to charge them to domestic consumers.  They charge the high world prices, far higher than their costs of production, merely to increase their profits.

Which brings us to the primary, real cause of the inflation.  
5.   The dramatic increase in corporate profit margins.
Corporate profit margins are the highest in more than 40 years.  And these historically high levels of corporate profits are NOT being used to further economic growth by being plowed into investments in either new technologies or expanded production facilities.  INSTEAD they are being paid out to the richest elements in our society in the form of stock buybacks or higher dividends.

And Biden and his Council of Economic Advisors and the Treasury Dept KNOW this is the case.  The last four Administrations, 2 Dems, 2 Republica  have pursued absolutiely no anti-trust programs. Biden started to mount one, giving orders to all the relevant depts and agencies to begin to prepare new anti trust programs.  But then dropped this effort when he immediately got massive blowback by the leaders of the large corporations and the rich.



The most important issue is NOT the war in Ukraine itself.  It is that we have moved into a whole new period of world history and geopolitics, and most activists in the Democratic Party do not even realize it..

From the fall of the USSR in 1989-91 until this year, the world has been uni-polar, there has been only one real world power, both militarily and economically -- the U.S., and we knew it and flouted it.  That period is over.  We are now entering a tri-polar world.  Both China and Russia are determined to be viewed, accepted and act as world powers, both militarily and economically.  Russia has the nuclear weapons, but not the economic wherewithal to really put this off.  The issue with Russia is how do we contain it and help Ukraine, and at the same time avoid a nuclear war.

But China has the economic, military and technical/scientific power to become the dominant world power.  It is now the dominant economic force in 52 of 54 African nations and in most Latin American nations.  Its Belt and Road program includes the first railroad across Africa and the first from China through Pakistan to the Indian Ocean.  It includes control of the main port facilities in Greece and in Sri Lanka.  It is moving to control much of the security interests of the nations of the South Pacific. And China has become a primary trading partner of the European Union and Australia.  Their military forces are massive and technologically more advanced in many regards than ours.  They just launched their 3rd aircraft carrier, have operational hypersonic weapons, which we do not, are the first to land on the far side of the moon. They mean to be dominant and are willing to work with Russia to undercut us and the EU politically.

How we deal with these problems will be the tasks of the next decade and beyond, and it is not clear that our leadership really understands this.  It is certainly clear that the leadership of the Democratic Party has not even begun to think seriously about this.
We have to wake up our Party and prepare it for the next period in world history.

The Issue of the Supreme Court.

We have to come to terms with the fact that the Supreme Court is no longer a functional part of our democratic system. The five key conservatives were appointed by Presidents who failed to secure a majority of the popular vote and were confirmed by a U.S. Senate that was not ever designed to be democratic, and is certainly not democractic (small "d") either in its make up or in its functioning (the filibuster). And it will do far more harm to our freedoms and our society if it is not IMMEDIATELY RESTRUCTURED. Our focus has to be on
(1) Maintaining control of Congress in the next election and expanding our number of Senators
      to at least 52.
(2) Eliminating the filibuster.  
(3) Immediately expanding the number of Justices by 4, from 9 to 13,
      or our democracy, such as it is, is lost.

"Ketchup smear clean up in the executive dining room, aisle 45"

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