The decision to raise interest rates by three-quarters of a percentage point, with new rate hikes on the way, will further depress wages, which have stagnated for decades, increase unemployment and personal debt and make food and other basic necessities more expensive.
Raising interest rates usually induces a recession. But the oligarchs are more than willing to extract blood from the working class. Inflation reduces investment returns. It disrupts leveraged financial strategies.
Prices are not rising because of wages. They are rising because of supply shortages and price gouging by corporations and oil conglomerates. U.S. corporations posted their biggest profit growth in decades by raising prices during the pandemic. Corporate pretax profits rose last year by 25 percent to $2.81 trillion, according to the Bureau of Economic Analysis.
That's the largest annual increase since 1976, according to the Federal Reserve. When taxes are included, last year's corporate profit rose to 37 percent, more than any other time since the Fed began tracking profits in 1948.
The Billionaire Class
Antitrust laws and breaking up monopolies would ease the strain of inflation and lower prices. Rationing would break inflation. So would a wage-price freeze. Nationalization, reversing the capture of public utilities, the health care system, banking, and other services by corporations, would also blunt price rises.
But the billionaire class is not about to impose measures that diminish their profits. They will keep their monopolies. They will keep their grip on what were once public assets. The message from the billionaire class is this: the economy is run for our benefit, not yours.
Ukrainians, enduring a war of attrition with the infusion of tens of billions of dollars of weapons from the U.S. and Europe, know the future. War is the chief business of the state. It enriches the arms industry. It expands the military budget. The U.S. now sends $130 million a day in military aid and assistance to Ukraine, part of the $55 billion in aid promised by Washington.
The U.S., struggling with societal breakdown and an ailing economy, sees its military as the only mechanism left to destroy global competitors, especially Russia and China.
Russia, hemmed in by an expanding NATO in Central and Eastern Europe, and China harassed by a succession of carrier groups in the South China Sea, which Washington has called a "national interest," have been united as U.S. adversaries.
China sees the waterways of Asia and the Pacific as part of its sphere of influence, as Russia sees Ukraine and other neighboring states. The aggressive military posturing of the U.S. on the borders of China and Russia has provoked an unnecessary cold war, one many Washington policy makers nonchalantly expect may evolve into a hot war amongst nuclear armed nations that would potentially obliterate life on the planet.
There is an intensifying scramble for control, with Russia's invasion of Ukraine and China's building of air bases from Japan to Australia along the Asian littoral, giving it the ability to attack warships, including aircraft carriers, in the western Pacific.
The refusal of the U.S. to accommodate itself to a multipolar world and to chase the chimera of unrivaled global hegemony has seen Russia and China solidify an alliance, an alliance cold warriors worked hard to prevent. The hostilities, a self-fulfilling prophecy by U.S. warmongers, delights the Washington establishment whose goal is to perpetuate endless war.
You know you are in trouble when Henry Kissinger, who has called for Ukraine to cede territory to Russia and open negotiations with Moscow "in the next two months before it creates upheavals and tensions that will not be easily overcome," is a voice of sanity.
Despotic governments need an enemy to justify the repression of dissidents, the reduction and cancellation of social programs and the iron control of information. Wars justify the unjustifiable " black sites, kidnapping, torture, targeted assassinations, censorship and arbitrary detention " off-the-book war crimes. War induces a state of perpetual paranoia and fear. It demands mass obedience.
"The war is not meant to be won, it is meant to be continuous," George Orwell writes in 1984.
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