As this year’s economic crisis has developed, the U.S.-centered corporatocracy has desperately been trying to maintain the illusion of growth, or at the least the illusion that the current contraction is sure to end and things will return to normal. But as unemployment claims in the U.S. have continued to rise, and factors like the cold war with China have thrown the NATO countries into further economic chaos, it’s become clear that the stock market has been overly optimistic about a coming recovery. Market Watch wrote last month that “The rebound will be much more gradual than the V-shaped pattern investors are betting on.”
But true to the “it’s always worse than you think” pattern within the collapse of capitalism, this assessment in itself was overly optimistic. An economic recovery for the capitalist world isn’t going to be a gradual process from here on out, because far bigger economic shockwaves are just around the corner. Whatever semblances of revitalization the economy experiences in the coming months, they’ll be more than negated by the dollar crash of 2021.
Economist Stephen Roach said last week that evidence supports the formerly crazy idea that a dollar crash is coming, and that he sees this crash happening by the end of next year. To see the evidence, he said, you only need to look at the vast economic contractions that have occurred this year as at the very least 11% of the population has become unemployed. He pointed out that “The current account deficit in the United States, which is the broadest measure of our international imbalance with the rest of the world, suffered a record deterioration in the second quarter. The so-called net-national savings rate, which is the sum of savings of individuals, businesses and the government sector, also recorded a record decline in the second quarter going back into negative territory for the first time since the global financial crisis.”
It’s because of this internal weakening for U.S. imperialism that the rest of the world will soon decide to forsake Washington’s currency, and that a dollar crash will soon happen. If U.S. capitalism gets hollowed out enough, Washington’s perceived legitimacy as a reliable financial ally will be lost, resulting in a crash that will make the U.S. economy all the more weak. “Lacking in saving and wanting to grow, we run these current account deficits to borrow surplus saving, and that always pushes the currencies lower,” Roach said. “The dollar is not immune to that time honored adjustment.”
Part of the catalyst for this crash will be the fact that under the dysfunctional paradigm of neoliberalism, Covid-19 still isn’t on its way to winding down within the country. “As we head into flu season with the new infection rates moving back up again with mortality unacceptably high, the risk of an aftershock is not something you can dismiss,” Roach said. In accordance with the phenomenon he’s assessed of the U.S. sabotaging the stability of its own currency through neoliberal deterioration and isolationism, he also concluded that “America has abdicated its global leadership role.”
When the dollar crash comes, it will create a U.S. economic shrinkage similar to the one-third GDP decline that occurred in the second quarter of this year. Which will expose the profound market instability that was explained last month by the economist Yanis Varoufakis: “Capitalism is no longer what it used to be… What is fascinating at the moment is that you have the highest level of share prices and lowest level of dividends. Have you noticed that? So profitability is negative, profits are on the floor and share prices are on the ceiling… I don’t think that reducing taxes or announcing that you are going to an austerity mode is going to do anything to turn this liquidity bubble into an investment drive.”
With this further asset loss for the bourgeoisie will come more moves by the biggest corporations to consolidate capital. U.S. billionaires, who’ve collectively gained $845 billion during the pandemic so far, will gain hundreds of billions more while tens of millions more people slip into poverty. Hunger, which has tripled in the U.S. in the last year, will expand as inflation is exacerbated, and as the government compensates for a ballooning trade deficit by taxing beleaguered American consumers more. In this near future, one where the U.S. financial decoupling from China has greatly advanced, no powerful outside presence will be able to fund the saving deficit of a country that’s lost its exorbitant privilege.
With no magical solutions to turn to, and being unwilling to abandon neoliberalism, the capitalist ruling class will turn to austerity. Ever more social services will be stripped away, wages will further be lowered, and corporations like Amazon and eBay will profiteer from the desperate masses like they’ve been profiteering from Covid-19. The growing poverty and social dysfunction will make it even harder for the U.S. to reduce Covid-19 cases, further normalizing the virus as one of the mundane parts of contemporary American capitalism—like homelessness or hunger or lack of access to healthcare.
The foundations of our socioeconomic system will be in ruins, with everyone below the bourgeoisie or the labor aristocracy having to work for poverty wages, try to live off of welfare, or turn to crime. It will be a refutation of the American consumer lifestyle, one that exposes the unacknowledged reality about how wealth is created: consumption isn’t the cause of economic growth, it’s the result of growth. Without growth being present to sustain people’s former flow of spending money, the system will further devolve into price gouging, debt peonage, and dependence on labor that comes from slave-level wages.
It will be the third wave of depression that’s hit the country in the last thirteen years, a wave that even more thoroughly discredits capitalism in the minds of the masses. By studying revolutionary theory and organizing within the parties that can serve as the revolutionary vanguard, we’ll be able to build a proletarian movement in place of the neoliberal cultural hegemony that’s been shattered. In these final months before the dollar crash hits, stay focused on these activities. The chaos that you’ll experience amid the crisis is a symptom of the intensification of capitalist contradictions within the imperial core, and the move towards an outcome where proletarian revolution becomes mostly viewed as a practical necessity.
2020 Will End With The U.S. Moving Much Closer To Dictatorship
This election is a contest between two wings of the U.S. capitalist ruling class: the ones who want nationalistic protectionism, and the ones who want to return to the Obama-era paradigm of liberal international cooperation. Throughout the last four years, Trump’s reckless and isolationist fascism has damaged U.S. imperial power by weakening U.S. relations with Europe and damaging America’s global reputation, which is why the pro-Biden wing of the ruling class wants Trump to lose.
To help disrupt the system as much as is doable within the parameters of electoral politics, this year I’m voting for the Marxist third party candidate Gloria La Riva. But given the extremely tense nature that this ruling class rivalry has taken on, there’s nothing I can do to stop the country’s decaying facade of a “democracy” from further falling off.
Trump and his team are fully prepared to steal this election, one way or another. Trump and the GOP have been purging voters from the rolls and making it harder for people to vote by mail. Already, Trump has manufactured a funding crisis for the U.S. Postal Service with the goal of suppressing the vote. To help ensure that this will result in the appearance of victory, Trump plans to declare victory on Election Day before final results are tallied, and to disqualify as many mail-in ballots as possible. Trump’s efforts to encourage future right-wing vigilante shooters like Kyle Rittenhouse (who the White House has been portraying as a hero) is clearly part of a campaign to build up a presence of pro-Trump militias who can intimidate election officials and pro-democracy protesters. Trump’s instruction at this week’s presidential debate for the white supremacist militia the Proud Boys to “stand back and stand by” confirms this.
As a last resort, Trump will declare the election “rigged” and refuse to leave office, something that he’ll try to pull off by inciting his supporters to commit violence. This will be the outcome if Republican voter suppression doesn’t work as well as it did in 2016. And whichever candidate is sworn in next year, this election will serve as a catalyst for the further erosion of democracy and freedom.
You can’t expect otherwise in a situation where the two factions of the imperial core are engaging in a struggle for power that’s just one dispute away from escalating into massive violence. This is a battle between oligarchic sects that are both ready to resort to drastic measures. The nationalist wing is prepared to unleash militia violence, fueled by misinformation from the president and by far-right conspiracy theories like QAnon. The internationalist wing is prepared to use the intelligence agencies to engage in widespread censorship and McCarthyist persecution of dissidents, justified through media propaganda about how the U.S. is supposedly being destabilized by foreign powers.
The Orwellian propaganda tactics of the latter faction were just demonstrated by a tweet from CNN pundit Wolf Blitzer, who proclaimed: “You know who probably loved the debate last night? Russia, China and Iran. The U.S. intelligence community says they’ve been trying to sow political discord in the U.S. for years. Their goal: to create political chaos and weaken the U.S. They probably said: Mission Accomplished.” This kind of paranoid and xenophobic rhetoric will continue to be ratcheted up by our political and media establishment after the election, allowing for power grabs that will be equally dangerous whether Trump or Biden wins.
After the 2016 election, the U.S. media went into a years-long frenzy over “Russiagate,” the ultimately evidence-lacking conspiracy theory that Trump had colluded with Russia in order to win the election. At the behest of the intelligence agencies, Facebook, Twitter, Google, and YouTube imposed ever-tighter censorship policies, systematically driving down the viewership of anti-imperialist, anti-capitalist, and pro-social justice media outlets. In 2017, the DHS also forced RT America to register as a foreign agent, furthering the atmosphere of intimidation towards radical or foreign journalists. Since last year’s Mueller report proved Russiagate’s skeptics right, there’s been an ongoing paradigm where websites and social media accounts which challenge the State Department line are silenced by these tech companies.
To help manufacture consent for this escalating crackdown on freedom of information, the corporate media and the intelligence agencies have been frequently warning of operations by Russia, Iran, and China to interfere in the 2020 election. With the baseless claim from this June that Russia has offered bounties to the Taliban for killing U.S. troops in Afghanistan, Russiagate and its militaristic messages have been adapted to the current era. CIA-tied outlets like the Washington Post have also been claiming that Russian “disinformation” campaigns are tied to the Black Lives Matter protests. Whatever chaos ensues in the coming months and years, whether it’s an attempted coup from a fascist sitting president or new waves of lower class revolt, it will also be portrayed as part of an insidious scheme by Washington’s adversaries. A Trump victory will be yet another opportunity for the media to sensationalize about how the U.S. is being subverted by foreign actors, and how the voices of dissension implicitly need to be crushed.
The unprecedented surveillance, policing, anti-whistleblower, and military resources that the president has gained in these last four years will come in handy for a dictatorial crackdown amid this tense post-election environment. The consequence of Russiagate, and of the other propaganda campaigns of Washington’s Cold War 2.0, is that the military and militaristic thinking are getting more and more integrated into American society. The 2021 Pentagon budget, which accommodates both the ongoing U.S. wars in the Middle East and the increasing military buildup against Russia and China, is what’s come from this descent into a paradigm of escalating war. These cold war advancements, along with the increasing censorship against radical voices, all tie in with the police brutality and deterioration of democracy that the country is now experiencing.
For socialists, anti-war activists, colonized peoples, the poor and working classes, immigrants, and the other disfavored or marginalized groups within the country, all of this will mean even more uncertainty and danger. As Covid-19 death rates in the U.S. remain steady, and as the country heads into a double-dip depression, the conditions for the lower classes continue to deteriorate. And the crackdown from the state will get even more deadly as the potential for unrest continues to grow.
This war between the rival factions of the imperial core, with all its byproducts of censorship, intelligence agency crackdowns, and a toxic and McCarthyist political discourse, will further drag our society into authoritarian late-stage capitalism.
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