May 30, 2023 – Letters from an American
What looked like it could be catastrophic for the nation, its people, and its economy, the results coming from a so-called too old eighty-year old man negotiating the US budget appears to be far better than expected. And far better than what Repubs are offering up.
Now it is up to the House to put the budget on the floor for a vote. McCarthy has done what little he could do. The radicals have to pass it or take the blame for global economic failure. If the US sneezes, the world catches pneumonia. Republicans are already going to take a beating on Abortion laws. Adding an economic failure to it will add to the issues come 2024.
May 30, 2023, Letters from an American, Prof. Heather Cox Richardson
On the Letters from an American site, Prof. Heather citing Biden . . . “[O]ne of the things that I hear some of you guys saying is, ‘Why doesn’t Biden say what a good deal it is?’”
President Joe Biden said to reporters yesterday afternoon before leaving the White House on the Marine One helicopter.
“Why would Biden say what a good deal it is before the vote? You think that’s going to help me get it passed? No. That’s why you guys don’t bargain very well.”
Biden’s unusually revealing comment about the budget negotiations was actually a statement about his presidency. Unlike his Republican opponents, he has refused to try to win points by playing the media and instead has worked behind the scenes to govern, sometimes staying out of negotiations, sometimes being central to them.
The result has been, as Daily Beast columnist David Rothkopf summarized today, historic. Biden has worked to replace 40 years of supply-side economics with policies to rebuild the nation’s economy and infrastructure by supporting ordinary Americans. The American Rescue Plan gave the United States a faster economic recovery from the COVID pandemic than any other major economy. The Bipartisan Infrastructure Law has already funded more than 32,000 projects in more than 4,500 communities in all 50 states, Washington D.C., and U.S. territories.
The Inflation Reduction Act made the biggest investment in addressing climate change in our history, and according to University of Washington transportation analyst Jack Conness, it and the CHIPS and Science Act have already attracted over $220 billion in private investment, much of it going to Republican-dominated states: Tennessee, Nevada, North Carolina, and Oklahoma have each attracted more than $4 billion; Ohio, more than $6 billion; Arizona, more than $7 billion; South Carolina, more than $9 billion; and Georgia, more than $13 billion.
Victoria Guida in Politico yesterday reported that the reordering of the economy under Biden and the Democrats has reversed the widening income gap between wage workers and upper-income professionals that has been growing for the past 40 years. The pay of those making an average of $12.50 an hour grew by almost 6% from 2020 to 2022, even after inflation.
AB: I assume you all know what percent Labor is in the cost of manufacturing.
Those gains are now at risk as pandemic measures end and the Fed raises interest rates to bring down inflation, although the wage increases are only a piece of the inflation puzzle: Talmon Joseph Smith and Joe Rennison of the New York Times today reported that companies raising their prices to “protect…profits” are “adding to inflation.” In other words, companies pushed prices beyond normal profit margins during the pandemic and the economic recovery, then maintained those higher profit margins with the Russian invasion of Ukraine, and continue to maintain them now.
AB: Contrived supply chains have also been an issue the same as they were in 2008.
The fight over the debt ceiling is both an example of the different approaches to negotiation on the part of Biden and Republicans like House speaker Kevin McCarthy (R-CA), and part of the larger question about the direction of the country.
On January 13, 2023, Treasury Secretary Janet Yellen warned McCarthy that the Treasury was about to hit the borrowing limit established by Congress and that she would have to resort to extraordinary measures in order to meet obligations until Congress raised the debt ceiling.
On March 9, as part of the usual budget process, Biden produced a detailed budget, which was a wish list of programs that would continue to build the country from the bottom up. He told McCarthy he would meet with the speaker as soon as he produced his own budget, which McCarthy could not do because the far-right House Freedom Caucus (these days being abbreviated as HFC) wanted extreme cuts to which other Republicans would never agree.
On April 26 the House Republicans passed a bill that would require $4.8 trillion in cuts but was quite vague about how it would do so apart from getting rid of much of the legislation the Democrats had just passed. HFC members said they would not raise the debt ceiling until the Senate passed their bill. That is, they would drive the United States into default, crashing the U.S. and the global economy, until the president and the Democrats agreed to their policies. Even then, they would raise it only until next spring, with the expectation that it would then become a key factor in the 2024 election.
Biden insisted all along that he would not negotiate over the debt ceiling, which pays for money already appropriated under the normal process of Congress and which Congress raised three times under former president Trump even as he added $7.8 trillion to the national debt. Biden said he would happily negotiate over the budget. McCarthy, meanwhile, was out in front of the cameras and on social media insulting Biden and insisting that it was Biden’s fault that talks took so long to get started.
Late Saturday, the two sides announced an agreement “in principle” to raise the debt ceiling for two years—clearing the presidential election. As the Washington Post’s Catherine Rampell noted, it protects current spending on Social Security, Medicare, and Medicaid; keeps tax rates as they are; increases spending on defense and veterans’ programs; leaves most other domestic spending the same; cuts a little from the expanded funding of the Internal Revenue Service; and tweaks both the permitting process for energy projects and the existing work requirements in the food assistance program.
As Rampell points out, “this much-ballyhooed ‘deal’ doesn’t seem terribly different from whatever budget agreement would have materialized anyway later this year, during the usual annual appropriations process, under divided government. To President Biden’s credit, the most objectionable ransoms that Republicans had been demanding are all gone.”
Now the measure has to get through both parties, with congressmembers back in Washington today after the holiday weekend. Freedom Caucus members are howling at the deal. Representative Chip Roy (R-TX) is threatening to bottle the measure up in the House Rules Committee, which decides what bills make it to the floor. The Freedom Caucus forced McCarthy to stack that committee with far-right extremists as part of his deal for the speakership (it has nine Republicans but only four Democrats on it). But Josh Marshall of Talking Points Memo suggests that McCarthy’s alliance with Representatives Jim Jordan (R-OH) and Marjorie Taylor Greene (R-GA) might pay off here, since the two have thrown their weight behind the measure.
Even if the measure does pass before the June 5 deadline when the Treasury runs out of money, it has had an important effect. As Rampell noted, it has weakened the United States. It has enabled both China and Russia to portray the U.S. as unstable and an unreliable partner. As if to prove that criticism, Biden had to cancel a trip to Australia and Papua New Guinea, where he was strengthening the Indo-Pacific alliances designed to weaken Chinese dominance of the region. (And Russia continues to involve itself in U.S. politics: today Tara Reade, the woman who in 2020 accused Biden of sexually assaulting her, appeared on Russian television next to alleged spy Maria Butina to say she has fled to Russia out of fear for her life in the U.S.)
Writing in Foreign Policy, Howard W. French sees a more sweeping problem with the debt ceiling fight: it “highlights America’s warped priorities.” “[W]hen a rich and powerful country finds it easier to cut back on the way that it invests in its people, in education, in science, and in making sure that the weakest among them are not completely left behind than to curtail useless and profligate weapons spending,” he said, “there are reasons to worry about the foundations of its power.”
The Federal Reserve is, and remains, a socialist Keynesian mechanism that constantly creates political inflation with its unconstitutional printing of worthless Fed notes, which have no basis in practical value except to accrue national debt. Why the gold/silver standard was ended, and the silver certificate replaced by worthless Fed notes cannot be answered without specifically pointing to the procession of events that were intended by socialists to end the prosperity of the republic and the rule of Constitutional law over American finance.
In 1913, the Fed Act was quietly, covertly, and underhandedly designed and ushered through Congress with the intention of illicitly replacing the coinage and valuation of all U.S. money by the Legislative branch, Article 1, Section 8, Clause 4, with an international banking cartel, the Federal Reserve. The illegal mechanisms had been put in place by the late 1960s, when Keynesian tricky Dick Nixon unilaterally ended the gold/silver standard with the sordid blessing of Congress and ended the circulation of silver coinage and use of the silver certificate replacing it with worthless Federal Reserve notes and non-silver coinage. This egregious perversion of finance immediately caused a five-cent candy bar and other consumer items to rise in cost over 100 percent in 1966-67, and over a 500 percent increase in 1980. The pre-1960 candy bar, and its equivalent candy, which was much larger than the near-$2.00 2023 candy bar, was five cents or less for over 100 years, from 1855 to 1965; as all other consumer items during that timeframe were under one dollar, supported by gold, in unit price.
It seems simply idiotic that the proven economic means for ensuring an elimination of inflation and the lack of prosperity among the average American People were deliberately eliminated by the wealthy elite of the federal government over a planned period of time. Yet, the poison of socialism dispensed through the behavioral control of the American electorate by no-less than a continuing 3 percent of the wealthy fascist federalists in control in the murky swamp of DC depended upon a control of the value and distribution of money. This period of time was from 1913 until 1950. Yet, another very important element of the Keynesian dimension occurred in the late 1940s, starting in 1944. The federal government secretly held meetings in Bretton Woods, New Hampshire directed by, mainly John Maynard Keynes, Harry Dexter White, and directors of the Federal Reserve under the auspices and authority of, first, FDR and, later, Harry Truman. These meetings were comprised of an international consortium of bankers and wealthy financiers from over 36 nations and were called negotiations for a secret treaty that would alter the structure of American finance and the U.S. money. The Bretton Woods conferences were the covert beginning of the International Monetary Fund (IMF), the global economy, and the transformation of the sovereign American dollar into a world reserve currency based upon, supposedly, an amorphous world gold standard. Bretton Woods was the forerunner of WTO as the Federal Reserve Act was the bastard child of the Hamiltonian National Banking Act and the Second Bank of the United States, which President Andrew Jackson de-chartered and banned in 1831. The Bretton Woods Act was confirmed by the U.S. Senate as a treaty in late 1944 by a quorum vote of only 65 sitting U.S. Senators. The prolific economic analyst and writer Henry Hazlitt wrote the two defining books exposing Keynesian economics and Bretton Woods as the unconstitutional dismal failure that they were. These books were “Bretton Woods and World Inflation,” and “The Failure of the New Economics.” Every literate U.S citizen man and woman of the American electorate should read these two books, and they are available at low cost from Amazon on the Internet.
The 19th Century European warmongering finance fascists, the Rothchilds, had coined an expression that was utilized by the fascist federal pragmatists of the 20th Century. “Control of the money and finances of a nation will lead directly to the behavioral of that nation’s people.” These fascist millionaires didn’t say this very loudly and very few of the U.S. citizen electorate, the people over 18 years of age who have the privilege of voting, have realized over time that the Great Depression was actually triggered by a sore lack of paper money and coin backed-up by gold/silver in 1929, caused by the Federal Reserve covertly taking nearly one-half of the paper and coin out of circulation between 1926 and 1929. These facts were revealed through the meticulous research of conservative economist Dr. Milton Friedman during the 1960s at the University of Chicago. Why would the Fed do such a despicable thing? Well, during the Great Depression the value of paper money and coin remained stable while the availability of circulated money was scarce and unemployment very high because companies had to lay-off so many workers because the companies did not have the money to pay salaries and hourly wages. This sore condition was the result of a Keynesian socialist mechanism designed to redistribute wealth among the rural farming families and the urban populations of city dwellers. Keynesian socialist FDR succeeded in creating by the Great Depression a middle class of American working families through his socialist National Recovery Act and their austere dependency upon the teat of the federal government. This was the plan that was originally intended to ultimately control, over time, the political and social behavior of the American People and to ensure that only a mere fraction of those People would acquire wealth and political control throughout their lives through a sad diminution of liberty and freedom. Knowledge is ultimately power and I surely hope that the foregoing true facts of economic history illuminate the minds of the unknowing American electorate and trigger them into demanding a restoration of those essential economic features that were taken from the republic. By elimination of the Fed, repealing the 1913 Federal Reserve Act, restoring the U.S. gold/silver standard, reissuing silver certificates, and removing the USA from the global economy political inflation will be effectively eviscerated. It happened from 1789 to 1965 and prosperity can happen again.