Image by Hossam el-Hamalawy via Flickr
with Chris Hedges
Originally on RT America on Feb 13, 2022
The Chris Hedges YouTube Channel on Jun 29, 2022
On the show, Chris Hedges interviews economist Richard Wolff on the precarious state of the US economy and its consequences.
A bipartisan group of senators are crafting legislation to impose sweeping sanctions on Russia if it engages in what they consider hostile action of any kind against the Ukraine. New Jersey Senator Robert Menendez, the chair of the Foreign Relations Committee, calls the legislation “the mother of all sanctions bill.”
The bill led in the House by Gregory Meeks of the House Foreign Affairs Committee, like Menendez a Democrat, demands that the administration “not cede to the demands of the Russian Federation regarding NATO membership or expansion.” This cuts off the ability to discuss Moscow’s core demands, including a ban on future NATO membership for Ukraine.
The proposed sanctions target Russian banks, state-owned enterprises, government debt, energy firms, and the Nord Stream 2 pipeline, as well as many individual members of the government and military. They are the most extensive economic sanctions the US has attempted to deploy since the post-Cold War global economy was constructed. The sanctions, if enacted, would remove Russia from SWIFT, the international financial transaction system that uses the US dollar as the world’s reserve currency.
The proposal to cut Russia off from SWIFT, while it will certainly hurt the Russian economy, will also further push Russia, along with China and other countries, especially those such as Cuba and Iran that are also targeted by the United States, to create their own global monetary exchange system.
If the US dollar is no longer the world’s reserve currency, it will seriously erode the already precarious health of the US economy, not only because the dollar would significantly decline in value, but because the treasury bonds sold to fund the huge US deficits would no longer be attractive investments.
The US is already reeling under the ascent of the People’s Republic of China, whose economy will be larger in terms of its footprint in the global economy than the US by the end of this decade.
The desperate financial tricks, flooding the global market with new dollars, and lowering interest rates, which staved off a major depression after the 2000 dotcom crash and 9/11, were accelerated after the 2008 global financial meltdown.
Easy access to money at unprecedentedly low interest rates incentivized every corporation in the country to borrow massively from the Federal Reserve, often to paper over shortfalls and bad investments. The result is that US businesses are deeper in debt than at any time in history.
Added to this morass is rising inflation, caused by businesses that have increased prices in a desperate effort to make up for lost revenue from the economic downturn caused by the pandemic. This inflation has forced the Fed to curtail the growth of the money supply and raise interest rates, which then pushes corporations to further raise prices. No matter which way you look, serious financial dislocation in the United States seems inevitable.
Chris is joined by Richard Wolff, visiting professor in the Graduate Program in International Affairs of the New School in New York, who has also taught economics at Yale University and the Sorbonne. He can be found at Democracy at Work.
From the archives:
America’s Real Adversaries are its European and other Allies, by Michael Hudson
Chris Hedges: Temp: The Real Story of What Happened to Your Salary, Benefits and Job Security
Max Lawson: World’s Richest Doubled Their Wealth While Millions Fell Into Poverty
Thoughts on the Left’s Response to Capitalism’s Global Death Spiral, by Gary Olson
The Tragedy of the Worker, by Aragorn Eloff
Working Conditions are Getting Worse in the US, by Pete Dolack
Government Debt and Deficits Are Not the Problem. Private Debt Is. by Michael Hudson
Dandelion Salad 
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?”a messiah”, really??
Yeah, a “messiah,” really. But you have to understand that I think we need an ENORMOUS change in our way of life, or else climate apocalypse is going to kill us all quite soon. Our society presently is based on separateness, selfishness, bullying, hoarding; that results in enormous externalized costs which are destroying the ecosystem. The alternative is sharing, caring, friendship, which we used to do until 12,000 years ago. More details about this in https://leftymathprof.wordpress.com/simplified/ .
I remember meeting Richard in COP21 in Paris in 2015 and have been following him ever since.
Clearly unlimited debt is the Achilles heel of unlimited growth. The planetary limits can never be dépassés so it is debt that will collapse and the imaginary futures that have been constructed with it….so many aborted programs.
Thanks for your comment, Peter.
Prof. Michael Hudson’s article from 2013 explains debt better, in my opinion: https://dandelionsalad.wordpress.com/2013/03/17/government-debt-and-deficits-are-not-the-problem-private-debt-is-by-michael-hudson/
Here’s another one from Hudson: https://dandelionsalad.wordpress.com/2019/07/30/the-coming-savings-meltdown-by-michael-hudson/
For many months, some people have been saying “the USA is on the verge of collapse,” but a lot of us haven’t understood what that meant. After watching this interview, I think I understand a little better what that means. I would point to two coming symptoms discussed by Hedges and Wolff:
1. Inflation is bad, and about to get worse. Prices are high and about to get higher on gasoline and groceries, which we all must buy, and rent, which most of us must pay. Great hardship, bitterness, anger, homelessness, starvation, a dog-eat-dog society.
2. Wealth is getting more concentrated in few hands. Debt is enormous. A few rich people like Bezos and Musk will say to the rest of us, “on paper, I own you.” They already reflect that attitude in their behavior toward their employees. At some point soon, the working class may say “we will no longer respect your pieces of paper; we have nothing to lose but our chains.”
3. Though it’s not part of the calculations that Hedges and Wolff discussed, time is running out: Washington is playing games with nukes, while the release of methane from the Arctic is speeding up. Eventually that’s going to be big, and personally I think much sooner than the corporate press is saying. (Think of tipping points, feedback loops, cascading failures.)
The questions remaining are these: Will the police and army fire on striking workers, or side with them? And will the workers see what is really going on, or will they be fooled by fake populists like Trump? Trump is only the obvious extreme; most high-ranking politicians in both money parties are fake populists. And “see what is really going on” is a matter of degree; many will see that change is needed but still won’t see that capitalism must be ended altogether. Different people see different parts of the truth. So I guess I don’t know what is coming.
For years I’ve wanted a leaderless revolution, but lately I’m reconsidering that. People are more likely to trust an individual than a committee. I’m starting think we actually need a charismatic leader, a messiah, someone who can explain “what is really going on” in simple terms that most of the working class will agree to, someone who the working class will trust, someone who can dodge the CIA. Someone like Bernie, but departing =farther= from the establishment. I don’t see anyone in particular, but perhaps a star will rise that we hadn’t noticed before.
Thanks, Lefty.