President Biden gave his 'State of the Union address' on March 1st
2022. It was largely about improving the social conditions of the
people of the United States, as you would expect. United States is a
big and powerful country, but the US economic policy is not just
domestic. It also impacts the rest of the world, for good or bad.
A diverse and competitive domestic economy with a thriving middle
The speech, which is largely for domestic campaign purposes,
promises more money for veterans, help for the 23 million people
recovering from drug addiction, help for children's mental health,
subsidies for childcare for working mothers, improved police
accountability, tax the rich, build out and repair of roads,
airports and other infrastructure in disrepair, allow 'least cost'
pharmaceuticals, provide continuing Covid-19 measures for free, and
so on. You can read
the details here.
American society, like all developed Western societies, provides for
it's people's basic level comfort and security. But the trend toward
needing more and more state aid will accelerate. This is due to an
aging population, the diabetes epidemic, huge increases in anxiety
and stress (especially in the young), and the costs of coping with
heat, fires, floods, soil degradation, and ever rising food prices.
Constant increases in transfer payments means a need for more
government income. And the limits of printing Government IOU's has
been reached, because the money paid out in interest on Government
debt will soon reach totally unpayable levels. Debt has to be reined
Government income therefore requires taxpaying corporates, and a
middle class that is 'doing well'. These are the taxpayers and their
numbers have to keep increasing. Joe Biden proposes a 15% tax on all
corporate profits, and global cooperation to set this as a minimum
tax in all countries, to prevent companies basing themselves
overseas in low or zero-tax special zones.
He believes these proposals will fund his social programs and reduce
the deficit at the same time.
From exploitation of cheap labor to a living wage for all
The President highlighted the fact that American agriculture, in
particular, relies on cheap migrant labor. These people, mostly
Mexican, slog their guts out in the fields harvesting everything
that can't be mechanically harvested - sugar beet, strawberries,
vegetable of all kinds. No American will do this 'stoop labor' for
the low wages paid. Mr. Biden's policy is to give these people
citizenship. At the same time, he wants to raise the minimum wage.
And strengthen unions.
The principle appears to be 'rights are indivisible'. That is, there
cannot be a 'superior' right for American workers to receive a
living wage for their labor, but an 'inferior' right for a Mexican
laborer, so let's make them citizens and solve the problem.
Lowering the cost of living for Americans
If he succeeds in turning illegal migrants into citizens, labor
costs will rise, and the price of fruit and vegetables will rise as
We already know the cost of fertilizer will rise. The cost of oil
will remain high (unless there is a recession).
The pandemic has caused the cost of shipping to rise, which means
the cost of all consumer goods will rise.
"See what’s happening with ocean carriers moving goods
in and out of America. During the pandemic, about half a
dozen or less foreign-owned companies raised prices by as much as
1,000 percent and made record profits."
President Biden is talking about shipping costs and the cost of
container hire. These have followed the laws of supply and demand,
and at a time of high demand and limited supply. Why the limited
supply of goods? Because truly vast amounts of Western consumer
goods are made in China and Vietnam. China's policy of massive
lockdowns to control covid meant closed factories, staff shortages,
and consequently, shipping delays and supply shortages. Can these
bottlenecks and shipping costs be avoided?
Re-shoring American industry
The 'problem' for the USA is not so much lack of overseas goods and
not enough ships - it is lack of domestic manufacture. China's
factories are highly automated, but their overall cost structure is
lower. They pay lower hourly wages, and the costs of dealing with
factory wastes is evaded, to the detriment to the environment. (The
West is hardly innocent in this regard, but controls are now
tighter.) How can American businesses produce consumer goods cheaper
than the highly automated, low labor cost Chinese factories?
The President argues that American business can compete by first,
lowering costs, and second, by decreasing the manipulative power
that comes from industries being controlled by only a few big
"Lowering your costs also meant demanding more
competition. I’m a capitalist, but capitalism without competition
is not capitalism. Capitalism without competition is exploitation.
It drives up prices".
He doesn't explain how companies can 'lower costs'. I'm skeptical
much can be done, because the fundamental drive of a business is to
keep costs - including labor - as low as possible. Energy costs
can't easily be lowered in the short run, although solar panels on
industrial roofs may lower costs in the medium to long run. As for
market dominance by a few big corporates, well, you can scrutinize
them for price gouging if you like, but they employ the brightest
lawyers there are, so I doubt much will be discovered there.
In the face of these facts, what is the Presidents plan? There seem
to be 3 main elements. 1. Subsidize both foreign and local investment in new
factories in USA.
"to compete for the jobs of the future, we also need to
level the playing field with China and other competitors.
That’s why it’s so important to pass the bipartisan Innovation Act
sitting in Congress that will make record investments in emerging
technologies and American manufacturing.
We used to invest almost 2 percent of our GDP in research and
development. We don’t now. Can’t — China is.
<...> 20 miles east of Columbus, Ohio, you’ll
find<...>the ground on which America’s future will be built.
That’s where Intel, the American company that helped build Silicon
Valley, is going to build a $20 billion semiconductor “mega
site.” Up to eight state-of-the-art factories in one place.
Ten thousand new jobs. And in those factories, the average job —
about $135 — $135,000 a year.
Some of the most sophisticated manufacturing in the world to make
computer chips the size of a fingertip that power the world and
everyday lives, from smartphones, technology that — the Internet —
technology that’s yet to be invented<...>Intel’s CEO
<...>told me they’re ready to increase their investment from
$20 billion to $100 billion.
That would be the biggest investment in manufacturing in American
Companies are choosing to build new factories here when just a few
years ago, they would have gone overseas. That’s what is
Ford is investing $11 billion in electric vehicles, creating
11,000 jobs across the country.
GM is making the largest investment in its history — $7 billion to
build electric vehicles, creating 4,000 jobs in Michigan.
All told, 369,000 new manufacturing jobs were created in
America last year alone."
Many of these jobs are in high tech industries - industries where
China (including Taiwan) excel. Most jobs in Western countries (60%
or so) are in the low paid service industries. (And some of these
are being automated out of existence.)
The effect of building state-of-the-art modern manufacturies is to
promote technical education in general, and science, engineering and
math in particular. These are areas where America lags badly.
The most important effects are to ensure critical components such as
computer chips are always available locally, and to have a range of
good quality products available for export. America exports more
than 1 trillion dollars of goods and services every year. Goods and
services are biggest export by far, with travel and air transport
dominating. In fact America runs a pretty decent surplus in the
balance of trade in this area.
Another major export category is agriculture, dominated by soya
beans and wheat (USA is the world's second largest wheat exporter).
Supply of civilian aircraft and engines, cars and car parts also
make up a very large chunk of the US export income.
2. Reduce the value of the dollar
A low dollar makes US exports cheaper to buy. It makes imported
goods more expensive, which helps to steer consumers to local
manufacturers - presuming they are fairly competitive on price and
A low dollar makes fuel imports more expensive, which in turn acts
as a subsidy to a move to electric cars and more fuel efficient
A low dollar makes US government payments on debt easier to bear.
But makes price inflation higher.
The US status as a reserve currency needs to be reduced. It is
inevitable anyway, and a low dollar will help.
3. Own both businesses and important overseas resources
necessary for American industry
This has been American policy since the days it arranged a coup
against the Guatemalan Government as a favor to the United Fruit
Dwight D. Eisenhower was
elected U.S. president in 1952, promising to take a harder line
against communism; the links
that his staff members John Foster Dulles and
Allen Dulles had to the UFC
also predisposed them to act against the Guatemalan government.
Additionally, the U.S. federal government drew exaggerated
conclusions about the extent of communist influence among
Árbenz's advisers. Eisenhower authorized the CIA to carry out
Operation PBSuccess in August 1953. The CIA armed, funded, and
trained a force of 480 men led by Carlos Castillo Armas.
The coup was preceded by U.S. efforts to criticize and isolate
Castillo Armas' force invaded Guatemala on 18 June 1954, backed
by a heavy campaign of psychological warfare. This
included a radio station which broadcast anti-government
propaganda and a version of military events favorable to the
rebellion, claiming to be genuine news, as well as air bombings
of Guatemala City and a naval
blockade. The invasion force fared poorly militarily, and most
of its offensives were defeated. However, psychological warfare
and the fear of a U.S. invasion intimidated the Guatemalan
army, which eventually refused to fight. Árbenz briefly
and unsuccessfully attempted to arm civilians to resist the
invasion, before resigning on 27 June. Castillo Armas became
president ten days later, following negotiations in San Salvador.
Described as the definitive deathblow to democracy in
Guatemala, the coup was widely criticized internationally, and
strengthened the long-lasting anti-U.S. sentiment in Latin America.
Attempting to justify the coup, the CIA launched Operation PBHistory, which
sought evidence of Soviet influence in Guatemala among
documents from the Árbenz era; the effort was a failure.
Castillo Armas quickly assumed dictatorial powers, banning
opposition parties, imprisoning and torturing political
opponents, and reversing the social reforms of the revolution.
Nearly four decades of civil war
followed, as leftist guerrillas fought the series of U.S.-backed
authoritarian regimes whose brutalities include a genocide of the Maya peoples.
Russia has vast reserves of minerals, including gold, palladium,
titanium, nickel, silver, iron ore, rare earths, diamonds, coal
and more. It is also one of the largest oil and natural gas
producers in the world. This makes Russia a primary target of
American politcal-corporate greed.
USA's largest competitor for wheat sales is Russia. Brazil is the
largest competitor for Soya bean sales. China consumes almost 60% of
the world's soyabean exports, and it's demand is growing. France and
Germany are very important competitors for US aircraft sales.
Germany is the major competitor for US automobiles and auto parts.
The USA is the dominant manufactured food exporter in the world by a
good margin from European countries (Russia is about 9th largest).
At the moment USA competes with Russia for the sale of natural gas
to Europe. If USA business is to dominate, something must be done
about European and Russian competition.
the Biden economic plan
America has largely gone as far as it can with eliminating free
trade (it has unilaterally crippled the World Trade Organisation).
It can fiddle with tariffs to a certain extent, but not much. It has
found China and other countries have outbid it for many of the
mineral resources in Africa. China has bought up a very large chunk
of Iran's oil production (at a hefty discount, due to the US trade
embargo), and other Gulf countries hold tight to their sovereign oil
resources. Yemen's untapped mineral and oil resources have not been
able to be fully seized by any foreign country so far. Iraq oil
deals are a quagmire of corruption. The USA is illegally occupying
(and exploiting) Syria's oil reserves, including the Al Tanf
prospect, but I doubt they will be able to hold them very much
longer. So much for resources.
So what's left?
Lowering the value of the dollar and eliminating foreign
competition. All in all, Europe is the greatest competitor for US
exports. Russia is the biggest competitor for wheat exports, and
increasingly, for arms sales. It would be very useful to increase
the production costs for both, and reduce the market share of
Russia. Longer term, when Biden and his uni-party clones are 'done'
with Russia, they will squeeze their European 'partners' even
"We know that European leaders informally, so
to say, furtively, discuss the very concerning
possibility of sanctions being levelled not at Russia,
but at any undesirable nation,
and ultimately anyone includingtheEUandEuropeancompanies"
Vladimir Putin, President of the Russian Federation 17 June
Ideally, America would break Russia up in order to assign it a
subservient role as exporter of minerals, with the USA as majority
shareholder of the production companies.
"... production sharing arrangements dating back to the
Yeltsin era had been forced out of Russian government when it was
in dire economic straits during the transition from the Soviet
period and was in no position to negotiate optimal
deals...something like 262 such so-called production sharing
agreements (PSAs) were squeezed out of the Russian government by
western oil companies by the time Yeltsin retired.
After coming to power in 1999, President Vladimir Putin set
about the mammoth task of cleaning up the Aegean stables of
Russia’s foreign collaboration in the oil sector. The “decolonisation”
process was excruciatingly difficult, but Putin pulled it
through and got rid of as many as 260 (out of 262) PSAs. In
fact, Sakhalin-1 and Sakhalin-2 are the very last remaining
two PSAs harking back to post-Soviet Russia’s decade of
humiliation under Yeltsin."
Any surprises why the Biden Administration hates Putin so
much and wants him out of power in Moscow? "
M.K. Bhadrakumar 10
Ukraine is not only their instrument of destruction in this game,
but also this plan anticipates that the best of the newly privatized
Ukrainian companies (producers of oil, gas, steel, coal. neon,
wheat) will go to the US & west. Ukraine's aircraft industry
will be destroyed in favor of Boeing. Ukrainian industrial products
will be displaced by US and European products. Both Ukraine and
Russia, under the American plan, will be nothing more than providers
of raw material and consumers of American and EU manufactured goods.
"Do you know what the problem is? When did the problem
of 2014 and the coup in Ukraine emerge? This happened because
former President Viktor Yanukovich said that he needed to think
about the principles for Ukraine’s association with the EU.
Why? If you open and read specific principles and
requirements for Ukraine’s association, you will see that they
are completely excessive.
...they wiped out the foundations of all the main production
sectors. They simply opened up Ukraine’s customs borders to
relatively cheap and high-quality goods from EU countries, but
[Ukrainian] businesspersons would have been unable to raise
their heads and work. ...Yanukovich did not say that he did
not want to join the EU; he said that he needed to think and work
on these parameters...
We can see the result. I repeat, the entire [Ukrainian]
aircraft manufacturing industry has been lost completely.
Who needs the Ukrainian aircraft manufacturing industry? Add to
this the engine manufacturing industry. Motor Sich used to make
all aircraft engines. Who needs them except Russia? Nobody
needs them. Does Boeing need Ukrainian rivals?"
Vladimir Putin 17
At the same time, the value of the dollar should be pushed down.
This seems like an improbably big task. But the Americans have a
long standing plan, their '30,000 foot' medium term view.
The plan is as cunning as it is immoral.
For at least 10 years now there has been a campaign by the West to
demonize Russia, sometimes in the most grotesque and cynical ways.
The Russian state has been personalized as 'Putin', and a media
invented uncomplimentary avatar projected onto the western public
psyche. The campaign has been at least xenophobic, if not racist.
The Western propaganda campaign will probably prove to be the most
massive multi-country propaganda campaign in history.
Why do this?
Simple. To make immorality seem permissible.
The plan is use NATO's eastward expansion to the point the existence
of the Russian State is threatened, to corner it, with no place to
retreat except the sea. Then, when Russia acts to remove the threat,
the pre-propagandized public mind will not object to the virtual
close down of all export activity of the Russian State. And if the
Russian State collapses as a result, start feasting on Russia's most
"Question:Was Russia lured into the
conflict? Is it possible the West provoked Russia so it
would get stuck in a quagmire?
Lavrov: I can’t rule out that somebody wanted to bog Russia
down with this artificial conflict designed by the West.
American political experts say it would allow the US to fully
focus on countering China. This cynical and totally neocolonial
approach is very characteristic of our Western partners.
This may be true, after all, but we were adamant in
our attempts to avoid more bloodshed in Ukraine and prevent
the country from becoming a foothold for future attacks
against the Russian Federation. Our decisions were based
on the situation on the ground regardless of the plans of the
And the situation was concerning, mainly because the West
was doing everything in its power to make the situation more
dangerous to Russia."
Sergey Lavrov 2 March 2022.
Here's how the American Government plan works:
The USA set out to deliberately corner Russia into having to annex
Crimea - if Russia didn't, the USA would place missiles in Crimea
directly on Russia's border AND lock Russia out of the Black Sea.
Knowing that Russia would have to annex Crimea to prevent this, the
USA could demonize Russia, and introduce sanctions against it. In
the next stage, USA would create a pretext to unilaterally withdraw
from the Intermediate Nuclear Force Treaty, bring Ukraine into NATO,
and place multiple nuclear tipped missiles on multiple places on
Once again, the USA was fully aware that Russia simply could not
allow that - these missiles would reach Moscow in 10 minutes; and
future improved versions of the missiles even faster.
No doubt USA was aware that the Easternmost oblasts (provinces) of
Luhansk and Donesk might try to break away to protect their cultural
rights, and in particular the right to use the Russian language
(which Ukraine had vowed to suppress). It didn't matter to the US
plan either way, as there was still ample Ukrainian 'borderland' to
place missiles on.
Russia's only options would be either to try to persuade Ukraine to
agree to a mutual security agreement or invade Ukraine and occupy
it, perhaps permanently. At that point, the US trap would be sprung.
Russia would be placed under a full trade embargo, cut off from the
international settlement system, all ability to ship goods would be
crippled, essential components of industry cut off. Russia would
experience runaway inflation, job losses, international pariah
status, barred from sporting organisations, it's media would be shut
down by claims of disinformation, Russians wouldn't be able to
travel. In short, it would be finished. Soon people would riot on
the streets. America's pre-trained 'leaders' would emerge. Clashes
between the more liberal West and the highly conservative East of
Russia would break out.
Whether things stabilised or not, internal divisions and
indebtedness would weaken Russia enough to force it to 'sell the
family silver' at bargain prices. To the West.
How would the US dollar be affected? USA is well aware Russia and
China have moved to create an alternative bank settlement system,
outside Swift. USA is also aware that other countries will join the
new system because they are afraid they could fall victim to the
treatment meted out to Russia. Over time, the net result would be a
fall in the use of the US dollar, and so a gradual fall in value.
The usefulness of the US dollar as a central bank reserve currency
would fall, further eroding the value of the dollar.
How it's going
The USA, which has Government staff links to Ukraine - and therefore
a biase towards it - stood behind the February 2014 coup in Ukraine.
The neo nazi snipers who shot police and protesters alike were '80%
' responsible for the 'success' of the coup. The comprador President
who emerged took some of these neonazi elements into Government, and
also embedded them in the military.
USA called for contracts to build a base in Crimea even before the
date of Russia's lease of the navy base there expired. As expected,
Russia saw this as an existential threat, and on March 18th 2014 was
forced to annex Crimea and keep access to the Black Sea. World
outrage and the first tranche of trade restrictions followed. So
far, so good.
In April 2014 the eastern oblasts of Lughansk and Donesk broke away,
declaring themselves republics. A vicious intra-Ukrainian war broke
out, with many civilians killed and wounded, mostly by Ukrainian
Government fire on civilian areas. The would-be republics asked the
Russian President to recognise their status, but he refused, finally
convincing them to go for a treaty that allowed limited autonomy
In the meantime, the USA ramped up pressure with a revolving door of
'advisors' and 'trainers' coming to Ukraine. The US started to set
up bases and expand airfields to take large aircraft, such as
nuclear bombers. But Russia managed to shepherd an agreement through
the Security Council of the UN, an agreement which would end the
violence, establish Ukraine as a Federation, and allow the rebel
Oblasts their unique identities. The agreement, Minsk 2, was modeled
in part on the Kosovo settlement.
It would not have interfered with Mr. Biden's plans, but for a
single clause that would fatally sink all America's carefully
thought out machinations:
'10. Pullout of all foreign armed
formations, military equipment, and also mercenaries from the
territory of Ukraine under OSCE supervision. Disarmament of
all illegal groups.'
So the USA held out the false hope that Ukraine might be able to
join NATO. And advised Ukraine not to fulfill the UN Security
Council's Minsk Agreement.
Ukraine deliberately dodged it's obligations for 8 long years, with
Russia constantly trying to persuade it to comply. France and
Germany, supposedly co-mediators, did nothing to push Ukraine's
implementation along. USA, not a mediator, held all the influence on
Ukraine. USA duplicitously hinted at NATO membership for Ukraine and
a 'military solution' to the breakaway republics, knowing the
"...we had for a long time been trying to persuade
Berlin and Paris into telling Kiev to stop sabotaging the
implementation of the Minsk agreements that had been agreed upon
...with the participation of the Germans and the French and which
were subsequently approved by the UN Security Council...they did
their best to “whitewash” Kiev and justify its transparent desire
to disrupt the implementation of these agreements.
Mr Poroshenko is now claiming that when he signed the Minsk
agreements he was not really planning to implement them.
According to him, he wanted to buy time and to obtain Western
weapons in order to get back at us... Now, we can safely
assume that Berlin and Paris were covering up for
the Kiev regime as a way of supporting these actions..."
Sergey Lavrov 6 July
So here we are. The reckless shelling on civilians populations
intensified in recent days, NATO provided Ukraine with huge
quantities of urban warfare weapons, USA junked any prospect of a
security treaty with Russia, clearing the way for nukes on the
border. The trigger was pulled.
President of Russia Vladimir Putin: "We are
meeting in a complicated period as our Armed Forces are
conducting a special military operation in Ukraine and Donbass.
I would like to remind you that at the beginning, on the morning
of February 24, I publicly announced the reasons for and the
main goal of Russia’s actions.
It is to help our people in Donbass, who have been subjected
to real genocide for nearly eight years in the most
barbarous ways, that is, through blockade, large-scale punitive
operations, terrorist attacks and constant artillery raids.
Their only guilt was that they demanded basic human rights: to
live according to their forefathers’ laws and traditions, to
speak their native language, and to bring up their children as
During these years, the Kiev authorities have ignored and
sabotaged the implementation of the Minsk Package of Measures
for a peaceful settlement of the crisis and ultimately late
last year openly refused to implement it.
They also started to implement plans to join NATO. Moreover, the
Kiev authorities also announced their intention to have
nuclear weapons and delivery vehicles. This was a real threat.
With foreign technical support, the pro-Nazi Kiev regime
would have obtained weapons of mass destruction in the
foreseeable future and, of course, would have targeted them
Our numerous warnings that such developments posed
a direct threat to the security of Russia were
rejected with open and cynical arrogance by Ukraine
and its US and NATO patrons.
words, all our diplomatic efforts were fully in vain.We have been left with no peaceful alternative
to settle the problems that developed through no
fault of ours. In this situation, we were forced
to begin this special military operation.
of Russian forces against Kiev and other Ukrainian
cities is not connected with a desire to occupy that
country. This is not our goal, as I pointed out
openly in my statement on February 24.
...encouraged by the United States
and other Western countries, Ukraine was
purposefully preparing for a scenario
of force, a massacre
and an ethnic cleansing in Donbass.
A massive onslaught on Donbass and later
Crimea was just a matter of time. However, our
Armed Forces have shattered these plans."
Russia saw the black thunder clouds building ever larger. Russia
learned Ukraine was on the way to building it's own nuclear weapons,
with US help. Which direction would those weapons face?
Mindful of USA's detonation of nuclear weapons on civilian centers
in Japan, mindful of its untrustworthiness, mindful of the price the
USSR paid in appeasing Hitler, mindful that Hitler attacked without
declaring war, mindful that there could be no security unless
Ukraine was de-militarised and the Government de-nazified, Russia
had to act in it's self defense, and act fast.
Russia recognised the two Oblasts as Republics. It signed a mutual
security treaty. The new Republics asked Ukraine to remove their
military formations from their territory. Ukraine ignored them. The
Republics asked Russia for military assistance, as per their freshly
inked Treaty. Russia invaded Ukraine.
The objectives to free the territories of the two republics from
Ukrainian military are well under way.
The objective of pressuring Ukraine Government to hand over war
criminals and to agree not to allow military formations (Minsk 2,
clause 10) has yet to be achieved.
Mr. Biden has achieved his objective of the most sweeping embargoes
the world has ever seen. He has achieved the racist and xenophobic
demonisation of all Russians.
He has limited Russia's ability to do business.
He has struck a heavy hammer blow to the cost structure of European
businesses, and German businesses in particular.
"...the facts are as follows: that Western OSCE
participating States rendering military assistance to the
Ukrainian Government in any form are accomplices in Ukraine’s war
crimes against the civilian population of Donbas."
Konstantin Gavrilov, Head of the Delegation of the Russian
Federation to the Vienna Negotiations on Military Security and
Arms Control, June
He has made the western officials and citizens complicit in crimes
He has allowed armed neonazi groups in Europe - with German
He has voted in the UN against Russia's annual motion to
condemn xenophonia and nazism everywhere. Only 2 countries in the
world sank this low.
He has rudely destroyed diplomatic relations with Russia.
Most importantly of all, he has, with malice aforethought, caused
the death of at least 500 Russian soldiers, as well as tens of
thousands of decent Ukrainian soldiers. Deaths that he alone had the
power to avoid - simply by insisting Ukraine sign the Minsk 2 peace
He took from these people the greatest human right of all - the
right to life itself.
Peace in Eurasia was not in his economic plan for America.