Communist Party USA

  An ABC News–Washington Post poll reports that 70% of Americans say the economy is in bad shape. They’re onto something. The Bureau of Economic Analysis reported a 6.2% inflation rate, and the Bureau of Labor Statistics reported a net 1% year-to-year drop in real wages. That’s a fundamental no-no for the working class, which has little income to spare, with more debt than assets. Workers are quitting their jobs at unprecedented rates. The labor participation rates are also at historic lows despite a “tight” labor market. All these signs add credit to those economists who predicted a “K-shape” recovery: meaning, the elites are doing fine, 70% of Americans are not. The ABC/Post poll also shows that 55% of respondents disapprove of President Biden’s handling of the economy. Stoking this discontent, the Republicans are weaponizing the inflation issue by criticizing Biden’s Build Back Better program as inflationary. This is a falsehood. Neither passing, nor failing to pass, the BBB will do much on the inflation. But passing it will lay the groundwork for the structural repairs to the human and physical infrastructures in our society. And, with respect to truly financing the repairs — the U.S. military budget, assisted by a real policy of peaceful coexistence, can fund the entire recovery and turn swords to plowshares in national service too — without inflation. Some will argue, and Democratic messaging will surely emphasize, correctly, that blaming Biden for inflation is misplaced. The inflation is global, driven by a) the supply chain shortages; b) pent-up demand for goods  (which must be transported), not services, from those who did not lose income during the pandemic; and c) global energy prices reacting to surges in demand after dropping production during the pandemic. Had alternative, affordable non-fossil fuel sources been online, the energy shock may have been relieved. It’s clear that the fall of fossil fuel usage and the rise of alternatives must be carefully synchronized to avert both price and supply volatility. But the contending powerful interests that must be “balanced” to make stable green progress are nullifying the government’s ability to take stronger initiative. A key obstacle is the political divisions that make corporate forces more powerful than the government. The supply chain problems could be eased through greater U.S.-China cooperation, instead of competition, passage of the infrastructure bills to update U.S. ports, and faster COVID relief in the global South. Even if implemented, though, these shifts aren’t likely to turn things around quickly. Food production is also dependent on supply chain “just in time” systems. Droughts worsened by climate change have an impact on prices as well. The structural problems keep getting bigger. Even decisive, united leadership might take years to reach a new equilibrium. However, for workers in the bottom part of the “K” — those who are quitting their jobs and going on strike in record numbers because of low wages and harsh conditions throughout the pandemic — whether or not Biden is responsible may be irrelevant. Pain is pain. The Federal Reserve has limited tools to curtail inflation. The principal tool is the none-too-subtle move to raise interest rates and “cool” off the economy. Avoiding a recession, though, means that the response to such cooling must be “soft” and gradual. Further, it is not clear that raising interest rates will cure inflation, if inflation is more of a reflection of structural problems than just cyclical “overheating.” If the Fed responds to inflation with interest rate hikes, recession will likely result, deepening the crisis, and further weakening wages via the classic unemployment method. If the Fed does not respond to…

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