There’re claims to economics and then there’s actual economics 

The political economist Richard Murphy:

The assumption that there is anything economically rational about what Trump is doing is shattered by the fact that it is clear that what is happening is not a tariff war, but a battle being waged by the USA against the economic consequences of it being possessed of the richest and most powerful economy in the world, combined with it being the creator of the world's reserve currency, meaning it has been able, for decades, to fund its excess consumption, from which the people of the USA have benefited enormously, by running trade deficits with countries around the world for which the USA has not needed to make settlement because the world has been willing to take and hold dollars that they never redeem in exchange for massively subsidising the US lifestyle in this way.

An economist, Paul Krugman:

What does America gain from the dollar’s special role? You often find people declaring that it’s only thanks to the dollar’s power that the United States has been able to run persistent trade deficits – people have to take our money, you see. But even a quick glance at international balance of payments statistics reveals that countries whose currencies play no exceptional role whatsoever are perfectly capable of running deficits over long periods of time; all that matters is that they are perceived as reliable debtors who offer good investment opportunities.

So what are the advantages of owning a reserve currency? You get to borrow in your own currency – but then, so do other countries (again, this comes down to your reliability, not your currency’s special status). And there’s nothing in the data suggesting that you can borrow more cheaply than other safe borrowers.

What you’re left with, basically, is seigniorage – the fact that some people outside your country hold your currency, which means that, in effect, America gets a zero-interest loan corresponding to the stash of dollar bills (or $100 bills mainly) held in the hoards of tax evaders and drug dealers around the world. In normal times, this privilege is worth something like $20 billion to $30 billion a year; that’s not a tiny number, but it’s only a small fraction of 1 percent of America’s gross domestic product.

One of those little proofs that if you put the word “political” in front of another - as with “social” in front, or “studies” after - then you have wholly destroyed the meaning of the word being so modified.

Tim Worstall

https://www.adamsmith.org/blog/therere-claims-to-economics-and-then-theres-actual-economics

 

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YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

 

Child poverty soars as UK Labour government slashes welfare to fund armed forces

Tania Kent

 

 

UK Chancellor Rachel Reeves’ plan to slash £15 billion in public spending in the Labour government’s Spring Statement has already thrown tens of thousands of children deeper into poverty.

The cuts were made to fund upping military spending by billions to reach a targeted 2.5 percent of GDP by 2027. Reeves announced an extra £2 billion for the Ministry of Defence towards this target. 

Sir Keir Starmer’s right-wing government—with just nine months in office—is now the only Labour government in history that has increased child poverty under its rule. 

Official figures for 2024 showed a record 4.5 million children are living in poverty. The government policies will throw a further 250,000 people into poverty at a stroke, including tens of thousands of children. Child Poverty Action Group estimates that 30,000 more children will have fallen into poverty by April 6 due to Labour’s policies. It expects the overall number to rise to 4.8 million by the end of this parliament.

The most vulnerable and defenceless in society were targeted by the Spring Statement, with Reeves imposing brutal cuts of £4.8 billion on the disabled. The universal credit health component, claimed by many disabled people, will be cut by 50 percent and frozen for new claimants until 2030. Reeves announced that welfare spending as a share of GDP “will fall between 2026-27 and the end of the forecast period [2030].”

Annual poverty figures published by the Department for Work and Pensions (DWP) showed that cuts to disability and incapacity benefits will push 50,000 children and 200,000 disabled adults into relative hardship by the end of the decade. But even these dire statistics have been assessed independently as being a gross underestimation of the real impact the cuts will have.

According to the New Economic Foundation (NEF), the “cuts will hit Disabled people by almost £2 billion more than the reported figures and could see around 100,000 additional people pushed into poverty.”

It noted, “The headline figures downplayed the scale and impact of these cuts by factoring in the decision not to proceed with a policy announced by the previous government and pencilled in, but never fully confirmed, by this government. This policy would have changed the Work Capability Assessment (WCA) to make it harder for people to qualify for a higher rate of universal credit (UC) on the basis of illness or disability.”

Labour announced in their Green Paper published along with Reeves’ statement that the WCA would be scrapped altogether in 2028, and that they would not implement the previous government’s planned changes ahead of that. The Tory government was never likely to be able to implement its WCA plans anyway because they had already been struck down by a High Court ruling.

Labour then attempted to claim that they would effectively be “spending” £1.6 billion—the projected savings had the policy gone ahead—and had therefore lifted 150,000 people out of poverty.

As the Resolution Foundation pointed out: “Using this phantom policy to offset the scale and impact of actual cuts happening in the real world is akin to suggesting that you should feel better off because your boss had thought about cutting your wages but then decided against it.”

Labour’s attacks on the Personal Independence Payment (PIP) system and on the health top-up in UC will see the ill and disabled people lose out on £7.5 billion by 2029-30, according to Office for Budget Responsibility (OBR)

This will lead to a dramatic rise in the figures, released last week, showing an extra 100,000 children were living below the breadline in the year to April 2024—the final full year of child poverty statistics for the last Conservative government. It is the third year running that child poverty has increased.

Food poverty and hunger also rose, with 300,000 more children in households reliant on food banks over the previous 12 months, and an increase in children in food insecure families—meaning they struggled to afford regular and healthy meals.

More than a quarter of UK children (28 percent) experienced material deprivation, a measure designed to assess whether households are able to afford basics that constitute a minimum acceptable standard of living—such as food, clothes, toys and school trips.

Faced with overwhelming opposition to the sadistic policy, Labour has nonetheless refused to abolish the two-child benefit cap introduced by the Tories in 2017. The cap restricts child universal credit and tax credits allowances to the first two children in a family, unless the children were born before April 2017.

Maintaining the cap will throw more children into poverty. Hitting poorer families disproportionally, in April 2023, the cap affected 422,000 (55 percent) of the 772,000 families with three or more children claiming Universal Credit or Child Tax Credit.

Labour’s general election manifesto promised an “ambitious strategy to reduce child poverty”, alongside a commitment to end “mass dependence” on food banks and charity food handouts, which it called “a moral scar on our society”. In office it has imposed a savage and rapid offensive against the social rights and gains of the working class.

This is just the tip of the iceberg. Just over 370,000 people who currently claim PIP will lose eligibility due to the cuts and another 430,000 who would have been eligible for the benefit in the future will not get it. On average they will lose £4,500 a year.

However, the Resolution Foundation estimates that a single adult, who is now eligible for PIP and incapacity benefits but who no longer qualifies for the payment when they are reassessed could be £9,600 a year worse off. This is because when the work capability assessment is scrapped in 2028, eligibility for the incapacity element will be aligned with PIP eligibility.

Disabled families already experience high levels of poverty, with the annual “households below average income” report showing that almost half (44 percent) of all children living in poverty were living in a household where someone has a disability.

Separate data published by the Department for Work and Pensions (DWP) from its family resources survey found just under a third of households (31 percent) where someone claims PIP disability benefit were food insecure.

The number of children in households that are at risk of or unable to afford enough food is at its highest level since food insecurity measures were introduced in 2020. More broadly, 4.7 million people living in disabled households are experiencing food insecurity. This includes 1.6 million children.

Dr. Philip Goodwin, chief executive officer of the UK Committee for UNICEF, points out that the UK has seen “the highest increase in child poverty of any OECD and EU country in the past decade and today’s [March 27] shocking figures show the situation is getting worse”.

Many of the children living below the poverty line are under five, he noted. “The consequences of poverty can last a lifetime and are especially harmful for babies and young children. Growing up in poverty damages children’s life chances—making them less likely to be school ready at age 5 and increasing their risk of developing health issues like asthma and obesity,” said Goodwin.

The Labour government is targeting even larger budgets for assault in its June Spending Review, including education budgets.

Education Secretary Bridget Phillipson is considering cutting school spending by £500 million and even ending universal free meals for infants, as part of negotiations with the Treasury.

According to the Times, Phillipson also offered to axe funding for free period products in schools as well as dance, music and PE schemes. They were part of a package of measures being put forward by Phillipson as Whitehall departments are instructed to identify cuts of up to 11 percent.

Protests against attacks on welfare are underway, and must be extended to workplaces, schools and communities to end the subordination of the social rights of the working class to increased profits and war spending.

https://www.wsws.org/en/articles/2025/04/06/tenj-a06.html

 

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Revolt of the rich: Wealthy elites have waged a fifty year class war—and won

    By Jeremy Kuzmarov

 

The 2024 election between Kamala Harris and Donald Trump makes clear that the U.S. has two right-wing parties and no effective left-wing opposition.

Trump and the GOP support regressive tax policies and fervent anti-immigrant measures while the Democrats offer a Republican-light domestic economic program combined with hawkish foreign policies that earned Kamala Harris the endorsement of neo-conservative hardliner Dick Cheney.

With both parties competing to screw over working class people, culture war issues have become determinant in elections over the past generation, with the Democrats embracing identity politics in an attempt to mask their commitment to advancing corporate interests almost as egregiously as the GOP.

David Gibbs’s new book Revolt of the Rich: How the Politics of the 1970s Widened America’s Class Divide argues that the roots of today’s dystopian political landscape lie in the successful strategies of wealthy businessmen in the 1970s.1

Prior to that time, a social compact prevailed under the New Deal order, lasting roughly from 1932 to 1968, by which the power of corporations was curtailed to some extent by unions and economic policies were adopted by governing elites that contributed to middle-class growth.

Designed largely to avert the prospect of social revolution in the Great Depression, these policies included regulation of the banking structure under Glass-Steagall, progressive income tax rates, a relatively robust social safety net, laws granting unions organizing and collective bargaining rights, and government commitment to funding public education.

After some of the first New Deal measures were passed, J.P. Morgan, the DuPont family and wealthy Texas oil barons funded the Liberty League, which flooded the country with incendiary propaganda accusing President Franklin Delano Roosevelt of bringing socialism to the U.S., and tried to unseat him in a coup.

The coup failed and, when Dwight Eisenhower, a Republican, became president in the 1950s, he preserved core New Deal programs.

Things changed in the 1970s when wealthy businessmen, who had accommodated themselves to the New Deal, became alarmed by declining corporate profits,2 inflation and the political activism of the 1960s generation.

They began marshaling funds into right-wing think tanks and lobbying groups and, with the support of President Richard M. Nixon, worked to develop a conservative counter-establishment that helped shift the country’s political-economic landscape dramatically rightward.

Right-wing economists associated with the Mont Pelerin Society, including Milton Friedman and Friedrich Hayek, were at the heart of the conservative counter-establishment, along with Christian evangelical preachers like Jerry Falwell and Billy Graham, who mobilized their legions of followers in support of the right-wing power shift.

Friedman’s book Capitalism and Freedom, arguing for deregulation, privatization, and fiscal austerity, was particularly influential in helping to facilitate the displacement of Keynesian thinking and its emphasis on a robust public sector, which predominated during the New Deal era.

Contrary to the depiction of some historians, Richard Nixon was a highly ideological president. He sought to advance a conservative agenda consistent with the worldview of Mont Pelerin Society economists like Friedman who in the 1950s and 1960s was considered “radical right” and part of a “lunatic fringe” to quote Gibbs.3

An influential member of the Mont Pelerin Society, George Shultz, a professor of Industrial Relations at the University of Chicago with Friedman who became Secretary of State under Ronald Reagan, served in the Nixon administration as Treasury Secretary, Labor Secretary and director of the Office of Management and Budget.4 Shultz was one of many Mont Pelerin Society alumni appointed to influential positions in the Nixon administration.5

An important element of Nixon’s agenda, according to Gibbs, was to galvanize corporate interests to fund right-wing think tanks like the Heritage Foundation, the American Enterprise Institute and the Hoover Institution, as counterweights to centrist think tanks like the Ford Foundation, Brookings Institution and Council on Foreign Relations.

Further, Nixon championed millionaire-funded conservative lobby groups like the American Legislative Exchange Council (ALEC), which sent brochures to legislators around the country advocating for conservative social and economic policies.

Corporate America’s strategy in this period was showcased in a leaked memo from future Supreme Court Justice Lewis Powell, a Virginia corporate lawyer with close ties to the tobacco industry, calling for a massive influence campaign aimed at Congress, state legislatures and courts and which was to be promoted on television and in the mass media and educational systems. The main goal was to combat liberals, New Left and supporters of consumer rights advocate Ralph Nader who wanted to transform the political-economic system along more socialist lines.6

Powell’s memo inspired a flurry of activity by business lobby groups, including the U.S. Chamber of Commerce and National Association of Manufacturers, to transform the political culture of the country in a right-wing direction, including by altering school curricula and financing university faculty.

The ideas of Milton Friedman were disseminated through the Public Broadcasting Service (PBS) in the Free to Choose series, which showcased Friedman’s economics in simplified form for the lay viewer in ten episodes which first aired in 1980.7

In addition to influencing the mainstream, there was an effort to build up a distinctly conservative media and to establish media watchdog groups, like Accuracy in Media, that monitored and fought against alleged anti-business press coverage.8 The watchdog groups pushed mainstream media outlets like The New York Times to adopt a more conservative cast than previously.9

A key part of the strategy of “the rich in revolt” was to try to divide the working and middle classes along lines of religion, race and culture. Over time, they pushed identity politics in a way that would prevent an inter-racial movement from developing capable of challenging corporate power.

The Libertarian movement took off in the 1970s with funding from the Koch Brothers, oil billionaires, and other rich donors who aimed to advance a radical free market dogma.

In foreign policy, right-wing businessmen associated with military industries formed lobby groups such as the Committee on the Present Danger, which played up the phony Soviet “threat” and advocated for a major increase in defense spending and an end to Nixon-Kissinger’s détente policies.

They also supported the deregulation of global financial markets and exchange rates and maneuvered to ensure U.S. global dollar supremacy, including by supporting a blood pact with Saudi Arabia by which the Saudis agreed to sell their oil in U.S. dollars in exchange for U.S. weapons and security guarantees.10

Neo-conservative intellectuals like Irving Kristol were clever in playing off a growing public consciousness over human rights in the 1970s to advocate for more military interventions to stop human rights abuses, maligning leftist intellectuals like Noam Chomsky who spotlighted the human rights atrocities of U.S. client regimes and political-economic imperatives underlying them.

While many of the neo-con writers were ideologically driven, others were opportunists who were able to parlay their advocacy for higher military budgets and war into lucrative consulting jobs with military contractors or large corporations that profited from U.S. overseas interventions.11

The Committee on the Present Danger’s co-founder, David Packard, was also a co-founder of Hewlett-Packard, which did major computing work for the U.S. military and intelligence agencies, and its first co-chairman, Henry H. Fowler, was a partner at the Wall Street investment firm of Goldman Sachs.12

Gibbs points out that the New Right’s method of drawing together disparate groups for unified action had no counterpart on the left, which fragmented after the 1960s into single issue groups focused largely on identity politics (race and gender 13) or environmentalism rather than trying to mobilize the working class.

Collapsing after the end of the Vietnam War, the anti-war movement was anemic in response to the massive military buildup of the late 1970s and early 1980s and the disinformation that accompanied it.

The labor movement had been severely weakened by McCarthy-era purges along with deindustrialization and the shift to a service economy, and many union leaders embraced a militaristic foreign policy.

A sizeable number of leftists at this time were inclined to write off the white proletariat as unreachable and perhaps not worth reaching—a viewpoint advanced by left-wing intellectual gurus like Herbert Marcuse who paved the way for modern-day identity politics.14

When Hubert Humphrey and Augustus Hawkins proposed a full employment bill in Congress in 1975, the AFL-CIO opposed it, and women and environmentalist groups offered only minimal support at best, doing nothing to mobilize people to help get it passed.15

President Jimmy Carter ended up signing a watered-down version of the bill, which merely encouraged the government to pursue full employment, and the legislation was soon forgotten.16

Gibbs presents Carter as a fundamentally conservative leader who set the groundwork for the right-wing “Reagan Revolution” as much as Richard Nixon.

Carter’s close ties to corporate America were apparent in his membership in the Rockefeller-financed Trilateral Commission, which was dedicated to restoring U.S. global supremacy after the Vietnam War.

When he was governor of Georgia, Carter most influential adviser was Charles Kirbo, a senior partner in the Atlanta law firm of King & Spaulding, which represented Coca Cola.17

A key event in Carter’s presidency was the 1979 appointment of a Rockefeller protégé, Paul Volcker, to head the Federal Reserve, a decision Gibbs says was instrumental in fulfilling the conservative goal of redistributing wealth and income toward the privileged classes.

Volcker set extraordinarily high interest rates—characterized by German Chancellor Helmut Schmidt as the “highest since the birth of Jesus Christ”—and pushed for the imposition of austerity measures as part of the attempt to curb inflation, which had been artificially induced.18

As a result of the “Volcker Shock,” unemployment expanded to 10.8% and living standards were lowered, with Carter basically guaranteeing his own defeat in the 1980 election.

The grain belt of the Midwest was especially hard hit by the Fed’s policies, which produced waves of farm foreclosures and spikes in rates of mental illness and suicides resulting from harsh economic conditions.19

The harsh conditions and upward transfer of wealth were made worse by Carter’s deregulation of the airline, banking and trucking industries, the latter of which was transformed into a “sweatshop on wheels.”20

Carter’s support for economic austerity measures did not apply to the military as Carter expanded the military budget in his last two years, investing in high-tech weaponry associated with the “Revolution in Military Affairs.”21

Further, Carter began arming Islamic fundamentalists in Afghanistan in an effort to draw the Soviets into “the Afghan trap,” and ramped up the U.S. military presence in the Middle East.

Since the 1980s, the neo-conservative movement has completely taken over the U.S. foreign policy establishment with catastrophic results for all of humanity.

Within the U.S., the revolt of the rich described by Gibbs has helped to revitalize Gilded Age-level social inequalities and destroyed the American Dream for younger generations that are saddled with massive student debt.

Interestingly, Gibbs shows in his book how the rich will precipitate societal crisis—both at home and abroad—including by creating artificial recessions, so that they can introduce draconian policies the public would never otherwise support. We have seen this strategy play out most recently in very dramatic form.

Another disturbing focus of Gibbs’s study is on the acquiescence of wide strata of the population to an economic policy program that has harmed almost everyone. Key is the failure of the political left, which continues to make the same mistakes over and over again and to dither as Rome burns.

https://mronline.org/2025/03/11/revolt-of-the-rich-wealthy-elites-have-waged-a-fifty-year-class-war-and-won/

 

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Child Poverty Is Public Policy in the UK

BY

GRACE BLAKELEY

It’s no surprise that Tories are fine with keeping kids in poverty. But if the Labour Party refuses to oppose such a heartless policy, Labour doesn’t deserve to be in power.

https://jacobin.com/2023/07/child-poverty-uk-tories-labour-austerity-data

 

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This is a list of countries by their number of billionaire residents, based on annual assessments of the net worth in United States Dollars of wealthy individuals worldwide.

https://en.wikipedia.org/wiki/List_of_countries_by_number_of_billionaires

 

 

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YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT.

 

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.