From this week's edition of the Global Research News Hour
The policies animating sectors of the world, from the Democratic benches in Washington, to the Mainstream corporate media, to EU leaders throughout Europe, are shaking up the globe. They could lead to the end of NATO as we have known it. America gobbling up land masses in the Western Hemisphere, including Canada, and more.
Dr. Jack Rasmus says that this is not an instance of Trump losing his mind. It is a determined decision to restructure the U.S. economy – the fourth in a series of other restructurings that took place since 1917-1918. The following is an excerpt of the entire discussion carried out between Dr. Rasmus and Michael Welch on the Global Research News Hour on Friday March 14.
Dr. Jack Rasmus, Ph.D Political Economy, was a former teacher of economics at St. Mary’s College in California. He is the author and producer of the various nonfiction and fictional workers, including the books The Scourge of Neoliberalism: US Economic Policy From Reagan to Bush, Clarity Press, October 2019; Alexander Hamilton & The Origins of the Fed, Lexington books, March 2019; and Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression. Jack is the host of the weekly radio show, Alternative Visions, on the Progressive Radio Network, and a journalist writing on economic, political and labor issues. His site is jackrasmus.com and his twitter handle is @drjackrasmus.
Global Research: Greenland and the Panama Canal were threatened with annexation, possibly with military force by Trump. Is America turning back to the 19th century Monroe Doctrine imperial conquest, or are they making nightmare threats to get a less harsh goal?
Jack Rasmus: No, the empire is consolidating, restructuring. You know, we’ve had these periodic restructurings of the American empire for over a century now.
World War I was the first as the U.S., after it finished its first imperial foray offshore the continent with the Spanish-American War, 1898-1903. You know, that war was funded by taxing property owners, and it didn’t go over very well. And the U.S. imperialists knew that, you know, if they were going to participate in a conflict in Europe, which was imminent by 1912, that they would have to restructure.
They could not participate in that, and nor could the U.S. empire, now beginning to economically move offshore, really play with the European empires if it did not have a position in terms of its currency and its military. So what happened in World War I was we created a central bank, the Federal Reserve, which was really dominated and run by the New York banks. That’s why the New York Fed to this day handles all the international transactions and the currency issues, you see.
It’s kind of like the central bank within the central bank. And we created a new fiscal system based upon the corporate income tax, which, by the way, taxed mostly the rich. The working class was not covered because they weren’t making enough money by the income tax in 1916-17.
So we had a new fiscal monetary policy. And after World War I, of course, the U.S. dollar became the co-currency along with the British pound, and the U.S. stepped on to the global stage. Well, another restructuring occurred with World War II.
And in that one, obviously, the dollar and the U.S. became the hegemonic economy and country in the world. The Brits and the French had to pretty much sign over their empires to the U.S. They kept vestiges of it and then lost that. And we had a new monetary policy and a new fiscal policy, a new industrial policy, and a new external policy.
So every time you have a restructuring, it’s usually related to the empire either expanding its role, participating, or the third restructuring, which followed in the wake of the collapse economic crisis of the 1970s, economic and political. A third restructuring has been called neoliberalism, occurred late 70s, early 80s, and expanded in various ways throughout it. We had a new mix of fiscal, monetary, industrial, external policies that enabled the U.S. empire to expand once again.
It was really a class-based policy, neoliberalism, and it was about taming its capitalist challengers, which were Japan and Europe at the time, and weakening its non-capitalist challenger, the Soviet Union. It proved to be successful. It also was successful in attacking working class and their unions in the U.S. and the social movements and so forth.
So it was very successful imperial policy. That’s how you need to understand neoliberalism. Neoliberalism, I’ve always said, is kind of an obfuscating term.
It’s really about imperialism and class-based politics. So that neoliberalism succeeded for several decades, but then the contradictions, as I argue in my new book, began to intensify in the 21st century. And since the 2008 crash, and then the 2020 crash, and in between slow growth, what we’ve had is an increasing inability of the neoliberal policies to deliver for the empire.
And what we have today is the empire as it’s structured here in the neoliberal period is unaffordable. They’ve got to restructure it with the purpose of reducing the cost or moving the costs to areas of the empire that are considered more fundamental and more strategic. The U.S. has decided, at least this wing under Trump, has decided that the Ukraine war at $350 billion is a waste of money.
The trillions of dollars thrown into the Middle East with the war against terrorism and certain countries hasn’t produced significant results. And NATO is a waste of money. NATO doesn’t need, we don’t need to keep providing a security umbrella to Europe.
And that’s what Trump keeps saying. He says, pay your own way. I mean, you know, you’re rich enough.
Why are we paying your way? Well, we’re paying their way so they can maintain these nice social program and benefits for their population because they don’t have to fund a defense. Now, of course, they’re trying to realize they have to do that now. And what we’re going to see in Europe is funding warfare at the expense of welfare.
That’s coming. And even their media is talking about that, Financial Times and others. So that’s in progress right now.
We can return to that topic. But what it means is that the U.S. is cutting its costs, you know, whether it’s NATO, whether it’s Ukraine, whether it’s the Middle East, whether it’s the 800 bases around the world, whether it’s USAID and NED and all the other wasted expenditures, which are part of the empire. And it’s looking back into the Western Hemisphere and saying, well, you know, we’ve got to shore up our strategic homeland here, which is North America, Western Hemisphere.
And that’s how you got to understand Greenland and the Panama Canal. You see, this isn’t crazy Trump. This is very conscious policy.
They know what they’re doing here. What they’re doing in Greenland is they’re trying to, America’s trying to develop an Arctic strategy. It’s way behind the curve with Russia’s Arctic strategy, which is well developed.
The U.S. virtually has no Arctic strategy, even though it has Greenland at the western side of its Arctic. I mean, Alaska, it wants Greenland at the eastern side. Right.
And then, of course, it’s got to somehow get the northern Canadian territories in shape here for that Arctic strategy, because as the Arctic clearly is, you know, the ice cap is disappearing, it’s opening up a transition, a pathway for Russia and especially China to Europe. That’s a strategic estuary or whatever you want to call it there on the western side of Greenland. So, the U.S. wants to consolidate that in Arctic strategy, control, basically prevent the flow of Chinese commercial shipping through that pathway there.
And there are rare earths in Greenland that they want to exploit. Panama is similar. Panama is about checking China.
You see, China has been buying up properties and deepening its influence within the Panamanian government. And the U.S. is no, no, no. And it’s already taken moves, put pressure on the Panamanian government, which has cut a number of projects, economic projects, with China as a result.
Also, the Panama Canal needs to be enlarged significantly. And Panama doesn’t have the money and doesn’t want to do the enlargement. Why? Because the new Ford class U.S. aircraft carriers can’t make it through the canal as it exists.
So, it’s strategic in that sense. And in the latest development, BlackRock recently just bought up the ports on both sides of the Panama Canal as the beginning of this. And the Panamanian government is backing down and talking about more U.S. control and influence of the canal itself.
So, both the canal and Greenland are part of long-term strategic moves to check Russia and to check China. And that’s how it should be seen. And to talk about the 51st state of Canada is really to put pressure on Canada, I think, to really go along with the developing of a Northern Arctic strategy and also as a way of Trump raising funds through tariffs in order to also help fund the restructuring of the empire.
You see, it’s not just saving foreign aid and foreign adventures and unnecessary expenditures abroad, but it’s also the tariffs, the primary objective. There’s two objectives of Trump’s tariffs. One is to politically browbeat allies and whomever for political objectives.
Like in Mexico, it’s all about really the immigration and fentanyl flows and so forth. And it works. It works.
Well, we saw the same thing with Panama. It works because Trump found in his first term, even though his trade strategy failed to check China, it did raise significant revenues. And Biden continued those revenues, by the way.
And Trump sees revenues as a key way of reducing the debt and the budget deficit by raising revenues, but also as a way of moving the expenditure cuts, whether they’re in Europe or wherever, or whether you raise money, to move that money into new weapons investments. You see, the US is way behind China and even Russia in drone technology and in hypersonics and ballistic missiles and so forth, and AI and so forth. Well, it’s pretty much in a big competition with China for AI.
But there’s a lot of crash weapons programs that need to be funded, and the empire structure cannot fund it now because it’s throwing away all hundreds of billions of dollars every year in places that aren’t strategic to US interests anymore. Ukraine is not strategic to US interests, and even conflict with Russia is not strategic Russia per se. The big challenge to the empire is the BRICS and the Global South, which is really the most serious challenge, I think, to the empire, certainly even more so than both Japan and Europe and Soviet Union during the 80s.
The Global South in the 80s was a non-entity. It was undeveloped, and it was pretty much exposed to whatever pressures the US wanted to put on it, economic or political. Well, that’s not the case today.
The Global South is industrialized. It’s a major player in the world now, and it’s the future major player. And the BRICS could undermine the dollar and the currency and international payment system and so forth.
And I think the Trump wing of the capitalists realize that, and they’re trying to orient to the Global South. But to do that, they got to put this Ukraine nonsense to bed, you see. And then they got to pull financially out of Europe, which they’re going to do.
And the Europeans, of course, see this, and they’re panicking, right? Because now they got to raise their own industry, their own weapons industry, which is virtually non-existent, especially next generation technology weapons like AI and so forth. Europe’s not even a game when it comes to AI. 90% of all the AI patents are filed by the US and China.
So Europe is the backwater of technology right now. It’s the backwater of banking. Its industry development lags the US in a whole number of ways.
The US is making Europe a dependency, an economic dependency, not just because of sanctions and blowing up the Nord Stream thing, which made them dependent on US gas and oil, but driving Russia out of the European economy altogether, in which American companies are flooding in the vacuum. But US policies that have to do with taxes, even under Biden, tax policies were passed that’s just sucking money capital out of Europe right now. And on top of that, we got the tariffs now, the tariff policies, right? And on top of that, you’ve got Europe saying, we’re going to remilitarize, we’re going to develop weapons, we’re going to spend $800 billion to develop a weapons industry, which is at the tip of the iceberg, by the way.
Germany is going to spend $500 billion just on infrastructure, who knows how much more for weapons. So we have this massive weapon industrialization going on in Europe. But Europe can’t produce the weapons, at least for another five years.
It takes that long to really develop these factories, plus they’re way behind in AI and will remain behind. So what’s all this about? Well, the US is going to pull out of Europe and the NATO bases and that wasted expenditure. But guess what? The Europeans are going to raise bonds and raise money.
And where are they going to get the weapons in the meantime? From the US. But they’re going to pay full market price now, you see. That’s the difference.
Well, it will make Europe even more dependent on the US economically. This whole war with Russia was really about debilitating the Russian economy and regime change. Well, that didn’t work at all.
In fact, quite the opposite happened, but it weakened Europe. And I kind of think that was always the plan B of the United States with this war anyway, make Europe dependent on it, drive Russia out of Europe altogether, not just out of energy, right? And make Europe dependent on US industry and US banks. And that’s happening.
That’s happening as we speak. So the US does not have to throw money at Europe anymore, does not want to. It needs to develop its own weapons industry even more.
It needs to take care and consolidate the empire in the Western Hemisphere once more. And it needs to orient toward taking care of its lake called the Pacific Ocean, you see. So that’s what’s happening.
It’s a restructuring a la 1980s economic restructuring, a la World War II, 1944, Bretton Woods, a la you know, 1917-18. The empire goes through these periodic restructurings. It changes the mix of its economic policies.
It forges new political institutions, global. And that’s how you must see what’s going on. Now, the problem in the US is the whole capitalist class is not united around that particular vision.
You still got the old guard, the Democrats and a huge bureaucracy that’s blown up after 50 years in the US of the empire neoliberalism, right? They’re fighting back. They don’t want to change anything. They wanted to keep everything the way it is.
Well, you’ve got this domestic element of this restructuring, which is, well, we’re going to cut cost the government and we’re going to move it somewhere else. And the Democrats don’t want to do that. They want to keep the, I mean, they are totally blind and terribly led and have no alternative to what’s going on, except no change, keep it the same, keep it the same.
And of course, the bureaucracy likes that because the bureaucracy has done quite well. It’s really expanded over the last 40, 50 years. So you got this alliance between the Democrats and the old bureaucracy, and you got Trump, which is more than just MAGA now.
They’re all signed of a new coalition there, and they want to change things. And it’s going to be a protracted fight here for some time to come.
GR: Jack Rasmus, in terms of this stage of restructuring, having to face new realities in the empire and so on and so forth, I have to also ask about restructuring for whom? I mean, when he was inaugurated, Donald Trump had 13 billionaires in his camp, including Elon Musk and Jeff Bezos.
Elon Musk is a major player in his team. I remember Michel Chossodovsky talking about how the COVID crisis was the excuse, he says, deliberately planned to engineer a broad economic depression, cancel millions of jobs, impoverish people with the lockdowns, and then appropriate and redistribute the wealth that remains among the wealthy. And according to a 2022 report by Oxfam International, while 263 million people could be pushed into extreme poverty that year, the world’s billionaires saw their collective wealth go up by $12.7 trillion.
That’s about 42% what they had during the pandemic. Now, effectively, it’s like the 1929 stock market crash, right? Now, is this new restructuring of the U.S. economy actually being designed specifically for the status of the billionaire class in America in mind? I mean, make sure the Americans know who’s really in charge in this new restructured America, in other words.
JR: Well, you know, they certainly benefit from all this, and their interest pushing it means even more money for them.
So you can’t separate out the advantages and the benefits that flow to the very rich, the capitalists and the billionaires and the tech, you know, the new leading edge of capitalism. And they lever it, they take advantage of it. And, you know, that’s part of the deal to get it pushed through.
You can’t separate out their interests and the whole restructuring because they’re the big beneficiaries of the whole thing. They make money when wars are started and they make money when wars are ended. And that’s what’s going on in Ukraine.
You know, all this talk about minerals and everything. And the deal is really about how we’re going to, quote, redevelop what’s left of Ukraine and who’s going to really get that money. Well, it’s going to be the capitalists who get the money.
Europe has its pot of money called the Russian assets, 300 billion, right? Well, the U.S. doesn’t have a pot to pay its capitalists to redevelop Ukraine. That’s what this 500 billion is about. Create a pot, right? Some of it will go to, you know, U.S. capitalists who are already deeply entrenched in Ukraine, by the way, and they’ll get that money just as the European capitalists will get some of the Russian money, right? That’s how they make money off of ending wars, just as they make money off of starting them.
So I don’t think it’s a question of either war or what came first. You know, the capitalists saying, you know, Peter Thiel and all those guys saying, well, we want you to do this, Trump. It’s a very fluid thing where, you know, certain people for domestic reasons and for economic reasons and for foreign policy reasons sort of come together.
Some of the many may not even know of this bigger picture, but, you know, conditions push them along in that direction. You know, as far as the COVID thing, yeah, they made a lot of money. The billionaires made a lot of money.
That’s documented. That’s fact. Well, how did they make the money? Well, mostly they made it off of financial assets.
Well, how did they get it off of financial assets? Well, the monetary policy was such that it gave them free money. You know, the Fed gave $4 trillion more to bankers and investors. They didn’t need it because this, you know, the COVID thing wasn’t like 2008 where you had the financial system collapse, where they threw $4 trillion to prevent the further collapse.
No, no. The banks and the financial system was not in trouble in 2020, but they threw $4 trillion at them anyway. They took advantage of the crisis, you see, and stocks just blew right through the whole COVID thing in the last two years.
Stock markets are up, what, 50 to 65 percent just in two years, last two years. So, yeah, these policies benefit, are always benefiting the very wealthy, especially the finance capitalists and the technology companies and the energy companies, these leading edge in the capitalist class. You know, your local real estate guys aren’t big players in all this, but the big capitalists always benefit from this.
And yeah, they took advantage. I don’t know if they told Trump, you know, what to do here. You know, it’s kind of hard to make those connections, but you, it’s obvious you’ve got a huge smoking gun.
The 2008-09 policies benefited them tremendously. The 2021 policies, in which, by the way, we spent $10 trillion. 2021, 6.7 trillion in fiscal stimulus, another $4 trillion in monetary stimulus, $10 trillion.
And what did we get for the economy in the full two years that the economy was open, 22, 23, 24? We barely got 2% GDP growth. So, we threw $10 trillion at the economy to get an average, historical average, GDP growth, which means fiscal and monetary policy are broken in this country. That’s part of the contradictions you see of neoliberalism.
They’re just not working anymore, but boy, are they funneling the wealth, both through monetary and fiscal policy, into the hands of the billionaires and all of them below them on the capitalist pyramid.
GR: Would you care to comment on the selection of Mark Carney as the new leader of the Liberal Party and, you know, ultimately the new Prime Minister of Canada? I mean, he was a former Goldman Sachs banker and the governor of the Bank of Canada and the governor of Bank of England, and he reportedly directed the Canadian government on how to avoid the effects of the 2008-2009 financial crisis. On the tariffs from Donald Trump, Carney had said the following, I believe. He said that, well, he said he would go with the dollar-for-dollar tariffs and, in fact, aim it at them with the least impact on Canadians.
So, do you think this is the best strategy for avoiding or diminishing the effects of Donald Trump’s tariffs?
JR: Well, I see Carney as put in place there by the finance capitalists, who are not just Canadian finance capitalists, but, you know, finance capitalism just sort of breaches country boundaries, right? They want a normal, quote, normal controlled change in the restructuring of the tariff and external policies. You know, Trudeau was just a big problem. Trudeau was just aggravating the hell out of Trump, and he was a big drag on trying to contain and control the whole process of the restructuring and tariff policy going on.
Carney is a person who, you know, will work closely with his finance capitalist cousins in the US and Canada and elsewhere, and they will try to bring some rationale to the whole process of what’s going to happen with tariffs and other policies as well. So, you know, the capitalists see him as the right guy to sort of tame and control the whole process that’s going to happen. Trudeau was just going to aggravate it.
He was going to maybe take it out of control, you know, and cause, you know, extreme tit for tat. We saw the same exchange, you know, with Ford and Trump, you know, Ford, the Ontario guy there, saying, oh, we’re going to put tariffs at 25% on your electricity. So Trump just, you know, bumps it up to 50%.
You know, he sends a signal to him, you know, you better get this guy out of the picture, right? Let’s talk with Carney and, you know, there’ll be a settlement. There will be some increase in what Canadians are going to have to pay with the tariffs, but it will be controlled. It will be kept in a reasonable range.
And that’s what I see Carney as the selection and what his role will be.
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