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The Final Countdown – 10/2/23 – Gaetz Prepares to Oust McCarthy as GOP Rift Continues

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Ted Rall
On this episode of The Final Countdown, hosts Angie Wong and Ted Rall discuss hot topics, including the potential ousting of House Speaker Kevin McCarthy by his fellow GOP congressmen. 
 
Steve Abramowicz – Owner & CEO of Mill Creek View 
Steve Gill – Attorney & CEO of Gill Media 
Mitch Roschelle – Media Commentator and Economist 
Nebojsa Malic – Serbian-American journalist 
 
The show kicks off with owner & CEO of Mill Creek View Steve Abramowicz sharing his perspective on the stop-gap funding and the potential of a Republican-led ousting of Kevin McCarthy. 
 
Then, attorney & CEO of Gill Media Steve Gill joins The Final Countdown to discuss Trump’s trial in New York City over fraud, and if this could play in his favor. 
 
The second hour begins with Media Commentator and Economist Mitch Roschelle sharing his insights on a poll from Bloomberg revealing that a majority of American investors foresee a recession.  
 
The show closes with Serbian-American journalist Nebojsa Malic weighing in on Slovakia’s Prime Minister returning to power, and the latest out of Ukraine. 
 
 
 

Why Business Wants a Recession

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Ted Rall

           Give Jerome Powell credit for candor: the Fed chairman admits that his policy of increasing interest rates to fight inflation might push the economy into a recession. “No one knows whether this process will lead to a recession or, if so, how significant that recession would be,” he recently told reporters.

            If it does, one sector won’t be entirely displeased: employers.

            According to the Deloitte accounting firm, a typical Fortune 500 company spends $1 to $2 billion a year on payroll, averaging between 50% and 60% of total spending. Controlling labor costs, unsurprisingly, is a top priority for employers.

            In the boom-bust cycle of labor-management negotiations, the post-pandemic Great Resignation has triggered a labor shortage, a phenomenon we rarely witness and tends to fizzle out fast. Workers are quitting and retiring early, tanking the labor force participation rate. Those who remain enjoy the upper hand at interviews that feel like the job prospect is sizing up the company rather than the other way around. Labor shortages are driving up salaries, shortening hours, prompting signing bonuses and forcing bosses to accommodate people who prefer to work at home. Just 8% of office workers in Manhattan are back in the office a full five days a week.

            The most recent data published, for June, finds that wages and salaries soared 16.8% on an annualized basis as benefit costs went up 14.4%.

            Workers, angry and resentful after decades of frozen real wages and merciless downsizing, are becoming demanding. This reversal of a power dynamic in which workers were supplicants and bosses called the shots has also strengthened labor unions that had been losing membership for years.

            This, some CFOs may be thinking, calls for a recession.

            Company profit margins are at a 70-year record high, up 25% each of the last two years as the result of raising prices during the pandemic. Which means that, even allowing for an 8% inflation rate, a generic S&P 500 corporation should easily be able to ride out the average 26% earnings decline suffered in the most recent typical recessions that took place in 1990, 2000 and 2020. (A bigger crisis like the 2008-09 Great Recession, which reduced earnings by 57%, is another matter.)

            No corporate officer would voluntarily reduce earnings. Or would they, in order to get something more valuable: regaining leverage over labor?

            Traditional conservative allies of big business are openly arguing in favor of higher unemployment. “The recent drop in work and labor force participation—particularly among young workers—is troubling [my emphasis],” writes Sarah Greszler in a white paper for the Heritage Foundation, the right-wing think tank. “Job openings, at 11.3 million, remain near record highs, and record percentages of employers report unfilled positions and compensation increases.”

            Greszler summarizes: “Continued low levels of employment [sic] will reduce the rate of economic growth, reduce real incomes and output, result in greater dependence on government social programs, require higher levels of taxation, and exacerbate the U.S.’s already precarious fiscal situation.”

            Workers, of course, feel like they can finally breathe. High demand for labor means that they can quit positions where they feel unappreciated and/or undercompensated, pack up and move to another state and create a healthier balance between their family and work lives. The current situation is anything but “troubling.”

            Executives at employers like Apple, Tesla and Uber have had enough of workers calling the shots. They’re demanding that people get back to work — at the office — or find another job. “A quickly shifting employer-employee dynamic could give companies the ammunition to take a harder line against the full-time work-at-home arrangements that many employees have pushed for, according to corporate policies experts. In fact, they say more companies are likely to start pressing staffers to come back to the office — at least a few days a week,” reports CNBC. “The hybrid workforce is not going to go away, but the situation where employees refuse to come to the workplace at all is not likely to hold,” Johnny C. Taylor Jr. of the Society for Human Resource Management tells the network.

            Perhaps no one has told CEOs that at-home work empowers them too. Rather than hiring security goons to escort laid-off workers past their terrorized colleagues, companies can memory-hole the condemned by deactivating their remote-access passwords. Who’ll notice one less square on the Zoom screen?

I’m not subscribing to a dark Marxist suspicion that CEOs, the Fed and other powers-that-be are conspiring to slam the brakes on an economy that would otherwise be coming in for a soft landing as pent-up consumer demand from the pandemic naturally ebbs, in order to return their recently empowered employees to their rightful status as wage slaves. Powell and his fellow governors are doing what comes naturally to government, treating a disease based on a diagnosis that is close to a year out of date and, reasonably, including wage increases as part of their calculus of what constitutes a major driver of the inflation rate.

Business, however, does see what’s coming. If the captains of industry aren’t worried enough to be calling their pet politicians to demand an end to interest-rate hikes, one reason might be that they see a silver lining to the next recession.

(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, co-hosts the left-vs-right DMZ America podcast with fellow cartoonist Scott Stantis. You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

The U.S. Played Gorbachev for a Fool

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Ted Rall

            Mikhail Gorbachev, the last leader of the Soviet Union who died this week, was a member of that tribe of politicians who can diagnose a problem but doesn’t know how to treat it. As he grew up, he couldn’t understand why a nation blessed with extraordinary natural resources and an enviable geographically strategic position had so much trouble delivering economic prosperity to its people. “Mr. Gorbachev has said he finally realized, as regional party boss, that something much more serious was wrong with the Soviet system than just inefficiency, theft and poor planning. The deeper flaw was that no one could break out with new ideas,” The Washington Post wrote in his obituary.

            It is, however, possible to be too open to new ideas. Arms reduction negotiations with the United States led to increasingly close ties between the Soviet leadership under Gorbachev and the Reagan and first Bush administrations. He took meetings with advisers and officials of the World Bank and IMF, capitalist institutions for which the socialist utopian vision represented by the existence of the USSR presented an existential threat, and listened to their countless entreaties to reform the socialist economy, privatize state enterprises and replace the social safety net with brutal austerity. Do these things, he was told, and we will help you.

Of the many mistakes he made, Gorbachev’s biggest was to trust his biggest enemy, the United States.

            Socialism didn’t kill the Soviet Union; capitalism did. Privatization of small businesses and other of Gorby’s perestroika reforms tanked the Soviet economy toward the end of the 1980s. By late 1990 suppressed inflation, global recession and supply problems had sent the country into a tailspin. A desperate Gorbachev reached out to the Bush administration for assistance.

            At first, Bush almost behaved like a human being, promising the USSR up to $1 billion in loan guarantees to buy American agricultural products. “Instability in the Soviet Union is very definitely not, in my view, in the interests of the United States,” said Secretary of State James A. Baker III. “I want perestroika to succeed,” Bush said. “The Soviet Union is facing tough times, difficult times, but I believe that this is a good reason to act now in order to help the Soviet Union stay the course of democratization and to undertake market reforms.”

            Six months later, however, the tiny credits had expired and Bush refused to renew them. Bush also cooled to the suggestion that the U.S. should help bring the USSR in for a soft capitalist landing. “My only reservations are, will it help? Will it encourage reform?” Bush commented to Soviet requests for direct cash grants. “I think President Gorbachev knows we have understandable concerns about his creditworthiness and I hope he understands that I, and the other allied leaders, want to move forward.” Gorbachev was offered pennies on the dollar of the Marshall Plan-scale aid he needed to keep his country afloat.

            As the Soviet Union dissolved, the United States dithered. “A shortage of foreign capital is not what plunged your economy into crisis, nor can your economic ills be cured by a simple infusion of cash,” Bush lectured Gorbachev in August 1991. Neither statement, of course, was true. Gorbachev glumly noted the “increasingly obvious discrepancy” between America’s supportive rhetoric and “and the nature of our economic relations.”

            “Until Gorbachev’s resignation in December 1991, no American grants or loans would help the Soviet leaders in their struggle to turn 70 years of communist totalitarian rule into a Western-styled socialist democracy,” Diana Villiers Negroponte wrote in Wilson Quarterly.

            Disintegration of the former Soviet Union and the decision of the Western policymakers to sit on the sidelines chewing popcorn rather than offering a helping hand led to dire economic and social consequences in the 15 former Soviet republics, including Russia. Life expectancy plunged, with up to five million excess adult deaths in Russia during the 1990s. Birth rates collapsed. There was out-of-control crime and human trafficking. Boris Yeltsin, Gorbachev’s U.S.-backed replacement as president of Russia, was a fall-down-drunk alcoholic who once wandered out of the White House in his underwear to Pennsylvania Avenue where he tried to hail a taxi to get some pizza.

            Russia, a superpower that defeated Nazi Germany and terrified the United States with nightmare scenarios of communist dominoes falling all around the world, was looted, impoverished and humiliated. At bare minimum, the U.S. let it happen. At worst, they held the knife that plunged into Russia’s back—a scenario that seems more likely considering the zillions of times Republicans have given Reagan and Bush credit for defeating the Soviet Union in the Cold War.

            It is not hard to see why the Russian people wanted something different and better, or why they blamed Gorbachev for trusting the Americans. In 1996, when Gorbachev ran for president of Russia, he received less than 1% of the vote.

            He’d been played for a fool by his American friends.

(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, co-hosts the left-vs-right DMZ America podcast with fellow cartoonist Scott Stantis. You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

 

What’s Worse Than Inflation? Fighting Inflation.

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Ted Rall

            Inflation is a cancer. It eats away at savings and consumer confidence. But the tools the United States government uses to fight inflation are often worse—they’re a form of chemotherapy that’s even more likely to kill the economy than the underlying disease. When your car is careening down a hill, slamming on the brakes is an inexperienced driver’s first instinct. But it’s the last thing you should do. Unfortunately, the history of inflation-fighting indicates that monetary policymakers seem to prefer crashes to soft landings.

            Fueled in large part by massive deficit spending as the Pentagon tried to bomb its way to victory in the unwinnable Vietnam war, inflation ran rampant from the latter part of the presidency of Richard Nixon through that of his successor Gerald Ford, and infamously contributed to the destruction of Jimmy Carter’s reelection chances.

Inflation encourages consumer spending because, if you put off a purchase, it will cost more later. Enter Paul Volcker, appointed to the chairmanship of the Federal Reserve Bank in 1979. Determined to radically reduce spending and wages, he applied the anti-stimulus of sky-high Fed interest rates that peaked out at nearly 20% in 1981, Reagan’s first year in office. The result was two back-to-back recessions, which saw unemployment soar even higher than during the Great Recession of 2008-11.

            Inflation was dead for the foreseeable future. With the benefit of hindsight, however, the cost of taming inflation was too damn high.

            Reagan’s supply-side policies, which centered around tax cuts for large corporations and wealthy individuals coupled with austerity for everyone else, combined with Volcker’s hard line on inflation to create an anemic mid-1980s recovery before the 1987 stock market crash marked the start of yet another Republican bust.

It is, of course, impossible to brush away the cynical conclusion that crushing workers and their economic power was and remains a feature of the capitalist system and its stewards in government and finance. Reagan and his merciless smashing of the air traffic controllers union—leading to years of union-busting—coincided neatly with those 30+ years of non-existent raises, as well as private-sector union membership falling off a cliff. Throughout the 1950s, 1960s and 1970s, there were between 200 and 400 major strikes by labor unions each year. When Reagan left office in 1988, there were 40. There were just seven in 2017.

Unsurprisingly, taking away power from workers and giving it to bosses made things worse for workers. The Reagan years radically widened the income gap between low- and high-income earners for the following three decades—even though the average American worker was increasingly efficient and productive year after year. Between 1979 and 2019, productivity increased 60% while wages only went up 16%. Windfall profits went to shareholders and owners.

            Ironically, wage stagnation came to its merciful, all-too-brief conclusion in 2020, when people weren’t working at all. Between March and June of that year, when many furloughed workers were sitting at home during the COVID-19 pandemic lockdown, government stimulus checks  caused real wages to increase relative to inflation. Increased savings allowed employees to quit in droves in the so-called Great Resignation; labor unions chalked up some impressive victories as emboldened wage slaves stood up for themselves.

            The worst inflation crisis of the past century was sparked by the end of World War II-era price controls on a wide array of rationed commodities and a surge in pent-up demand. (The latter is, at a smaller scale, the main force behind inflation today.) In 1947, the inflation rate rose to 20%. What’s interesting is what the Fed did not do in response: raise interest rates. It couldn’t. It didn’t have that power then.

Instead, fiscal policy makers refused to extend additional credit to the big banks — which had contributed to inflation — and waited for consumers to satisfy their pent-up demand. This they did by 1948. With no one to slam on the brakes, there was a quick, mild recession in 1949 followed by an impressive period of economic expansion in the 1950s. This episode from the Truman era strongly suggests that current Fed policy of raising short-term interest rates is a mistake. The only solution to pent-up demand is no solution at all. Just sit back and wait.

(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, co-hosts the left-vs-right DMZ America podcast with fellow cartoonist Scott Stantis. You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

 

The Boom-Bust Cycle of Capitalism

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Ted Rall

With salaries representing the biggest expense for employers, it’s not paranoid to suggest that, as soon as workers begin to gain advantage in a tight labor market, bosses are ready to tank the economy to keep workers’ wages in check.

SYNDICATED COLUMN: George H.W. Bush Hagiography is the Elites’ Finest Accomplishment

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Ted Rall

Image result for highway of death

Even by the recent can’t-believe-your-eyes-and-ears standards of American elitist hagiography this week’s over-the-top-of-the-top praise of George H.W. Bush was astonishing.

What separated Bush41apalooza from such previous pseudo-griefathons as those for Ronald Reagan and John McCain was that there was so little to work with. Not that it stopped the media.

I knew this was an insane historical benchmark when a major network interrupted its coverage of the G-20 summit with the BREAKING NEWS that George W. Bush had issued a statement about his dead dad: “George H.W. Bush was a man of the highest character and the best dad a son or daughter could ask for.” Stop the presses!

When a right-wing Republican like Bush dies you can count on a Democrat to deliver his most fulsome praise. “America has lost a patriot and humble servant,” said Barack and Michelle Obama. “While our hearts are heavy today, they are also filled with gratitude…George H.W. Bush’s life is a testament to the notion that public service is a noble, joyous calling. And he did tremendous good along the journey.”

Trump lies constantly but it took the death of Bush 41 for American “leaders” and their media mouthpieces to fully commit to speaking an English language whose words have no meaning whatsoever. In this dystopia I’d call Orwellian save for the fact that old George’s prophecy didn’t anticipate its hilarious absurdity, a man who ran for president three times qualifies as “humble.” A commander-in-chief who ordered the massacre of tens of thousands of innocent people in one of the most gruesome war crimes ever recorded—the “Highway of Death” following the ceasefire that ended the Gulf War—is described as having great character—yet no one upchucks all over the camera lens as if it were a Japanese prime minister.

A steward of the economy who refused to stimulate a tide or raise any boats in the middle of a brutal six-year-long recession can be called many things but not—before the Obamas—“joyous.” Preppy, I’ll give you. Joyous, no.

John Sununu, Bush’s chief of staff, explained in 1991, that doing “tremendous good” was actually contrary to Bush’s governing philosophy: “The President feels very strongly that the free-market system operates best when it does not have its hands tied by government, is not shackled by a system that erroneously thinks it can improve it by command and control.” Bush chimed in: “I do not want to see the government pick winners and losers.” Except his government did create losers: his refusal to fund AIDS research killed tens of thousands of gay men.

“I’m in favor of behavioral change,” Bush said to justify his policy, a brazen sop to the Christian Right. “Here’s a disease where you can control its spread by your own personal behavior.” Memo to gays: don’t have sex. So “joyous.” So much “tremendous good.” Guess we’ll never get that apology now.

Fawning over dead presidents and the occasional dead presidential candidate is always repugnant considering they’re such a callous and bloodthirsty lot of greed-dogs. But Bush 41—his death dance is different.

Like him or not, Reagan was a consequential person with undeniable political acumen. Even under Democrats Clinton and Obama we have continued to accept the Gipper’s redefinition of the social contract from a culture of looking out for one another to every man for himself. His easy aw-shucks vocal delivery made the most liberal voters sleep through eight years of budgetary, tax and military mayhem—no easy feat.

Likewise John McCain was a deeply—mostly—flawed man who nonetheless had enough of an engaging story, his experience as a POW in Vietnam, for the hagiographers to blow up into a fairly credible heroism narrative, overcoming the uncomfortable fact that the war he volunteered to kill in is understood to have been immoral and illegal.

Bush, on the other hand, has always been a former president universally understood to be a do-nothing failure. Screwed up the economy, set the stage for his son’s Iraq War, refused to turn post-Cold War Russia into a friend and ally, preferring to watch the former USSR plunge into chaos and mass starvation so his big banker backers could swarm in and loot state-owned enterprises. You could call him the Republican Jimmy Carter but Bush—unlike Carter—was never rehabilitated by history or the electorate. Whereas Carter (actually humbly) dedicated himself to Habitat for Humanity during his long post-presidency and so earned respect, Bush 41 just—what? Showed up for presidential reunion photo-ops? He just nothinged. Even Republicans didn’t much care for him.

Were you surprised that Bush died because you didn’t know he was still alive?

There was once a time when, when presidents died, you imagined that at least some of the network news talking heads believed some of what they read to you, that some of the mawkish tributes were heartfelt. No more.

The fakery is so phony they don’t even bother to hide it anymore.

Like Winston Smith at the conclusion of “1984,” the bullet in the back of the rotting head of BS American democracy comes almost as a release.

(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, is the author of “Francis: The People’s Pope.” You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

 

 

Recession/Recovery

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Ted Rall

When people lose good jobs, their misery is downplayed. When they get new, worse jobs, it’s categorized as big progress – even though their worse off than before. Such is the nature of the current “recovery,” which has replaced lost jobs with worse ones.

LOS ANGELES TIMES CARTOON: Roommates from Hell

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Ted Rall

Roommates

 

Southern California has always had one of the priciest real estate markets in the United States, but in recent years the gap between what people can afford to pay for rent or mortgage and median housing prices has opened to a gaping chasm.

Tim Logan of the Times reports about new data that reflects just how bad things have gotten for most Southlanders:

            Nearly half of all working-age adults in Los Angeles and Orange counties live in a home with another adult who is not their spouse — a higher percentage than any other big city in the country, according a new report by real estate website Zillow. In second place: the Inland Empire.

Economists at Zillow crunched U.S. census numbers and found that 47.9% of adults in metro L.A. lived in “doubled-up” households in 2012, a number that has grown rapidly — up from 41.2% in 2000 — as the recession and yo-yo-ing housing market have pushed more people to share apartments.

“You’ve got a lot of households that are blending together,” said Zillow economist Skylar Olsen. “They’re doing that to make housing more affordable.”

That’s especially true in Southern California, where relatively high costs and relatively low wages combine to create what is, by some measures, the least affordable housing market in the country, especially for renters.

One has to wonder: how is this sustainable? Although there’s been some improvement in the economy, unemployment, especially long-term, remains stubbornly high. Wages remain stagnant. You can’t squeeze blood out of a stone. Won’t people just move away to somewhere more affordable?

Maybe eventually. For the time being, the pull of family ties, whatever work they currently hasveand just plain inertia is keeping hundreds of thousands of people stuck in houses and apartments that they can’t really afford. Until things turn around, maybe, someday, who knows when, they are doubling up and tripling up with friends, lovers and random people they find on Craigslist. As someone who has from time to time been forced to participate in the so-called “sharing economy” to make ends meet, I have nothing but sympathy for this situation.

Having a roommate you don’t want, simply for economic reasons, violates your privacy and sense of personal calm at least as much as secret government surveillance programs that intercept your email. This goes double if, like me, you are an introvert.

For this week’s cartoon, however, I do appreciate the fact that this predicament makes for a fun sight gag. If I had the ability to add sound here, imagine all the characters either snoring or growling ominously like zombies.

The Bad News About the Good News

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Ted Rall

35% of Americans have debts and unpaid bills that have been reported to collections agencies. But it’s not all bad news. The collections industry is hiring. But wait.

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