Inflation and Profits

The World Health Organization declared that the Covid emergency ended in mid-2023. Since then, the 500 Standard and Poor's companies (the benchmarks of US capitalism) have enjoyed a steady and significant increase in earnings growth. This remarkable growth persisted quarter after quarter, culminating in “more than 440 S&P 500 companies reporting second-quarter earnings so far [and] 86% have beaten analysts’ estimates, according to FactSet data” as reported in The Wall Street Journal. The WSJ further adds: “Companies are reporting earnings that are around 29% higher than those estimates, on track for a record earnings surprise in data going back to 2008.” [my italics]

So, US capitalism’s leading insider mouthpiece is surprised at the rising profit margins of the system’s leading monopoly corporations.

“These earnings are ridiculous,” said Phil Blancato, chief market strategist at Osaic. “These profit margins are incredible.” 

Yes, they are. These outlandish profits are both ridiculous and incredible. 

The WSJ author, Shradha Dinesh speculates that the mystery may lie in “skyrocketing energy prices from the Iran war.” Alternately, “AI remains a primary driver of profits across the other leading sectors.” 

But the boost from the Iran war cannot account for the earlier steep climb in earnings growth, nor can the AI investment-driven boom, which really became a major factor only in 2025. 

Even more striking than the profit explosion is the widely reported and worsening so-called “affordability crisis.” Inflationary tides have ripped through the customary standard of living of millions of US workers. Since 2021, in order to meet a wave of insidious price increases, workers have reset their purchasing regimen, borrowed from savings or lending institutions, or gone without. 

Interestingly, the pundits and political operatives have either failed to notice the relationship between rising prices and exploding profits or chosen to simply ignore it. In fact, they are connected. The coronavirus epidemic attacked economic activity as well as killing millions. With earnings (profits) depressed, the US government provided $4.65 trillion in relief funds, resulting in a massive increase (and restoration) in S&P earnings in 2021 and unleashing crushing price increases in 2021 and 2022, as corporations exploited the profitability “crisis.” Both painful inflation and profit growth continued unabated for the next four years.

The lessons of the early years of Marxist thought are often forgotten, even by Marxists. Marx went to great lengths to warn against fetishizing social relations, especially economic relations. Economists of every stripe see inflation (and deflation) as a malady of an otherwise functional economy. They separate it from the logic of capitalism, from its incidence as a completely rational development of capitalism under specific conditions. Instead of recognizing inflation as a variant of the social relation between workers as consumers and employers as price setters, they insist that inflation is a separate phenomenon requiring a theory of inflation. Inflation-- in this view-- exists as an interloper on the regular course of a capitalist economy. This view is especially appealing to social democrats who hope to manage capitalism. 

Lost in this fetishizing of inflation is the assuredly obvious fact that inflation is the work of some of the subjects of social relations. It is the CEOs, COOs, boards of directors, and owners of corporations and businesses that choose to raise prices. They do not make their decisions to keep up with their costs, to benefit the consumer, to appease their critics, or because God directs them. They make the decision in order to accumulate more capital. 

That is why a shock like the oil crisis of the early 1970s or the pandemic of the early 2020s generates inflation. The opportunity to press price increases is not lost on the bourgeoisie. And they will pursue this competitive race until it fails to yield profit growth. 

Some may dismiss this account of crisis-sparked inflation as a psychological explanation, an explanation based upon the contingent avarice or self-regard of capitalists. Far from it. Chronic inflation, as experienced in the 1970s and today, is best understood as a social phenomenon: the predictable response of a social class that seizes every opportunity to increase the rate of accumulation. In a capitalist society, shocks like pandemics, wars, and other catastrophes provide the trigger for aggressive and persistent price increases. Increases will continue until they negatively impact profits.

I have been frequently advocating this view of sticky, persistent inflation based on price-gouging since November of 2021, when mainstream economists were shrugging off inflation as a temporary result of supply chain disruptions. 

I noted nearly five years ago:

In a revealing article, The Wall Street Journal exposes the real cause of escalating inflation. Inflation Helps Boost Profit Margins: Companies seize rare opportunity to increase prices and outrun their own rising costs [print edition] tells that “[n]early two out of three of the biggest U.S. publicly traded companies have reported fatter profit margins so far this year than they did over the same stretch of 2019… Nearly 100 of these giants have booked profit margins-- the share of each dollar of sales a company can pocket-- that are at least 50% above 2019 levels” [my emphasis]. The authors note: “Executives are seizing a once-in-a-generation opportunity to raise prices…”

They continue today to exploit this “once-in-a-generation opportunity,” creating a vicious human catastrophe that politicians only now-- after five years-- label an “affordability crisis.” They didn’t want to address it then, and they don’t want to acknowledge it now.

While economists search for a theory of inflation that will enable leaders to tame inflation, to manage the crisis that ensues, workers should recognize that the problem and its solution come from deep in the very logic of the capitalist system. They must understand that it is an axiom that capitalists will always exploit every opportunity to accumulate additional capital at the expense of the worker/consumer. The only way to eliminate that possibility is to eliminate capitalism.

Greg Godels

zzsblogml@gmail.com

The Decline of Trumpism and the Crisis of Capitalism

The chaotic Trump reign over US politics is showing critical signs of weakening on many fronts: Trumponomics is failing: Trumpian immigration policy has stirred a powerful backlash; Teflon Trump has been tarnished by his clumsy, slippery handling of the Epstein scandal; his foreign-policy contradictions and outrages have confused both international friends and foes alike; and his violation of his “end to endless wars” campaign has caused a break with some of his most ardent supporters.

It is easy to forget that this Trump regime has been in power for only a little more than a year, while enjoying a majority in both the House and the Senate, as well as a favorable majority in the Supreme Court. In such a short time, he and his cohorts have managed to do extraordinary damage.

Unlike in his first term, where Trump included some of the Republican Party old guard, the new administration was outfitted with hard-core MAGA-- a cabal that proved to be craven sycophants, unhinged racists and nationalists, and intellectual reactionaries.

Whatever traction Trump may have gotten with those angry with two-party betrayal, his already shattered promises are reflected in his falling poll numbers. With the mid-term elections coming, significant numbers within his coalition are questioning his policies or distancing themselves from his positions despite his brazen threats to destroy them politically for their heresy.

It would be more than misleading to credit the decline of Trumpism to the resistance, the Democrats, or the broad left. For sure, there have been remarkable centers of mass struggle against Trump’s policies, most notably, the impressive Minneapolis resistance to ICE that successfully organized tens of thousands into a powerful force driving the Trump forces into an embarrassing retreat. Those hoping to reverse the Trump onslaught would do well to study the Minnesota phenomenon rather than deferring to Democratic Party leadership.

The labor unions-- potentially a formidable adversary to Trumpism-- are paralyzed by a leadership afraid to defy their members who might support Trump. They are willing to close their eyes to MAGA’s clearly anti-union program in order to maintain the internal tranquility of business unionism. As support for Trumpism declines with working people, careerist union leaders remain on the sidelines. When union organizers and leaders have stood up in the past, they have made the difference between surrendering to reaction or defending the interests of working people. The left-led CIO unions of the thirties were the bulwarks of the resistance to the far-right “answers” to the Great Depression.

Similarly, the Democratic Party has demonstrated both its inability and unwillingness to defeat the Trump steamroller. Trump’s reelection itself proves that the Democratic Party has failed to create a program that will deliver voters from the fears and anxieties that animate Trump support. Tolerating-- if not welcoming-- the admission of billionaires, war mongers, spies, hucksters, and careerists into their inner circle, Democratic Party leaders are counting on Republican failure and Epstein-sleaze to propel them back to power, instead of developing a popular agenda. 

Recent local and by-elections have shown a hunger among Democratic Party voters for progressive, populist candidates of the Sanders/Mamdani ilk, but party functionaries have sought to cultivate ex-military, CIA, FBI hawks with corporate-friendly agendas to fill their electoral slates. The Democratic Party has evolved into a massive fund-raising machine more than willing to wait its turn in the two-party back-and-forth. Candidates of substance have no place in the strategic vision of their bankrupt leaders.

The Democratic Party response to the ongoing war against Iran (and the recent invasion of Venezuela) evidences its cynical, corrupted posture. Sensing a vulnerability with Trump’s naked aggression, they attack the Republicans-- not on moral or humanitarian grounds-- but on procedure! The slaughter of the innocent victims of Israeli and US bombs is passed on uncritically, but the failure to consult Congress counts as a grievous sin!

This is a party that long left its New Deal image in the rear-view mirror.

But because of the deeply entrenched two-party system, expressions of popular struggle, of resistance, of progressive change too often feel it necessary to tether to a corrupted Democratic Party.

Especially after the shock and awe of massive deindustrialization and a devastating economic crisis, many mistakenly envisioned Trump’s takeover of the Republican Party as a possible break from the indifference of the elites leading both parties. Trump presented himself as such, trading on desperate hope and the desire for change, just as his Democratic Party predecessor stirred a wave of optimism based on vague promises. With economic inequality-- the benchmark for all kinds of inequality-- relentlessly advancing, Trump’s empty promise of restoring manufacturing jobs nonetheless resonated with the disenchanted.

He promoted the idea that a heavy dose of sanctions, tariffs, and other forms of arm-twisting would secure for the citizens a bounty of wealth that had been cheated from them, stolen from them, or given away by the treacherous Democrats. This let’s-make-a-deal economic policy was the basis for the delusion that billions of lost wealth would be recovered for the public good. 

Couple these fantasies with a regressive tax policy to appease the hard-headed corporate bosses, and you have the essence of Trump’s economic plan.

Meanwhile, the serious problems of stagnation and inflation carried over from the Biden administration remain unattended.

Like the Democrats, Trump had no immigration policy that balanced guaranteeing labor-market stability with humanitarian concerns. Instead, he chose to not only expel all undocumented immigrants, but to also whip up hysterical waves of xenophobia, much of it rabidly racist. Unleashing a Gestapo-like ICE on communities and cities played poorly in even the corporate media, costing him dearly in support.

The Epstein scandal-- unlike other exposures of ruling-class libertinism and debauchery-- will not go away because both the Democrats and Republicans will not let it go away. Both parties are thoroughly devoted to throwing slime on their opponents, since both parties own prominent friends of Epstein. However, the Epstein affair has done serious and costly damage to Trump because he already exhibits extraordinary vulgarity, he has clumsily mishandled suspicions of his involvement, and his attorney general has botched the investigation. 

Despite running on a nationalist platform disclaiming foreign entanglements, Trump has been baited by the neo-conservative, Marco Rubio wing of MAGA to embrace regime change. After the Venezuela invasion, the kidnapping of Nicolás Maduro Moros and Cilia Adela Flores de Maduro, and the government’s subsequent capitulation, Trump grew “dizzy” with his perceived success. The Wall Street Journal has dubbed his novel regime-change strategy as “decapitate and delegate.” Now Israeli Prime Minister Netanyahu has wooed Trump into applying the strategy to Iran, launching a joint war that threatens to escalate into a regional war with profound implications for the global economy.

Trumpism’s decline comes at a time of the deepening crisis of capitalism. Since the devastating economic crash of 2007-2009, the world economy has failed to recover fully from financial stress, stagnation, and inflation. 

Under the management of political and central bank leaders, rapidly rising inequality, deteriorating standards of living, social stress, and widely expressed dissatisfaction afflict all the advanced capitalist countries. The most dramatic mass expression of this rising discontent is the growing rejection of centrist political parties—parties that have shared rule in most countries for many generations of voters. Trumpism and other, European and Asian, right-wing populist parties and movements reflect this bitter discontent with conventional governance.

Some of the so-called lower-middle or higher-middle-income capitalist or capitalist-accommodating countries have high growth rates that-- in spite of great inequality-- have generated growing middle strata and relative political stability. Insofar as they enjoy high growth from the migration of capital and industrial production to their economies, they also sustain high rates of labor exploitation along with modestly rising living standards. Their ruling classes have traded extreme labor exploitation for a competitive advantage against the advanced capitalist countries. 

Of course, the poorest countries remain tragically stunted from the legacy of European colonialism, denied any but the grimmest future in the capitalist economy.  

Competition between the advanced capitalist countries, rivalry with the emerging economies, and the desperate conflict between the have-nots for a place in the imperialist system constitute a global tinder box. 

Headlines understandably report US-Israeli aggression in the Middle East (now engaging nearly all of the countries in the region) or US brazen meddling in the Americas. 

Less acknowledged are the wars, conflicts, and civil wars stoked and conducted in nearly every region: Russia-Ukraine, Pakistan-Afghanistan, China-India, Ethiopia-Eritrea, Rwanda-DRCongo, Sudan, Thailand-Cambodia, Sahel, Myanmar, China-Taiwan, China-Japan, China-Philippines, Haiti, Colombia, are part of a list that grows almost weekly. Millions of lives have been affected by, even sacrificed to national ambitions to acquire markets, to attain resources, or to secure advantage over others directly or indirectly.

While the US remains the biggest capitalist bully in the imperialist system, it is simplistic and misleading to assume that its action is the only global expression of capital’s ruination upon the world’s people. Nor should it be forgotten that capital oppresses and immiserates the people of the US as well. It is an entire system in dysfunction.

As more and more people recognize that the current system and its managers are failing us, they will necessarily look for a more radical alternative. It should be apparent that recycling the same leaders, the same ideas, the same parties will simply not do. 

Yet there are those who insist that bringing down Trump or his global counterparts is enough. They see Trumpism and right-wing populism as a plague that visits the world periodically and must be collectively turned back to restore some kind of normalcy. They conjure an idyllic past that Trump and his ilk disturbed. This is the fantasy of privileged elites who have not felt the sting of inequality, insecurity, and misery persistently and increasingly inflicted by capital on many millions and for many generations.

To escape the trap of nostalgia for a decadent past and to avoid the return of right-wing snake charmers, socialism must be pressed on the people’s agenda. Socialism must not be pushed down the road as an ideal, as a far-off destination. The fact that polls show a popular acceptance of socialism, even a preference-- especially with the young-- for socialism, should demand its serious advocacy. 

The future can be brighter.

Greg Godels

zzsblogml@gmail.com

Stagflation: Stagnation, Inflation, and Beyond

Since my prediction in April of 2007 of an impending economic crash, I've vowed not to risk my unblemished record with any further predictions. But a simple thing that I learned from the run-up to that catastrophe was when the “little people” -- the “every man and every-woman” -- found their way into stock market speculation, trouble was looming. Early in 2007, I recall acquaintances then announcing that they were day-traders, bragging that they were making more money buying and selling on their devices than from their regular job. 

The Wall Street Journal headlined in early October that More Working-Class Americans Than Ever Are in the Stock Market. “Among Americans with incomes between $30,000 and $80,000, 54% now have taxable investment accounts. Half of these investments have entered the market in the last five years according to…Commonwealth and the BlackRock Foundation.” 

A red flag.

And also, I learned that when the investment commentariat-- not the media cheerleaders-- sound the alarm, Marxists should listen. It’s a curious thing that academic Marxist economists, who frequently claim to foresee future crises in broad terms of overproduction and rate of profit, seldom cite the views of those solely driven by money-making realities. The Wall Street Journal, hedge fund managers, investor consultants, and others of the pursuing-alpha herd are good sources of alarm for market volatility as opposed to the capitalism-boosters of The New York Times and The Washington Post.

When a few weeks pass with the front page of The Wall Street Journal warning Credit Markets Are Hot, But Froth Is Worry and OpenAI’s For-Profit Restructuring Draws Pushback, Rattling Executives and Persistent Inflation, Soft Jobs Data Pull Fed in Two Directions and Shutdown Starting To Exact Its Toll on Business and Volatility Returns To Haunt Stock Market, it might be time to sit up and take notice.

When financial sites like QTR’s Fringe Finance-- not one to mince words-- announces Sh*t is Breaking… And it’s Going To Get Worse or when Reuters Morning Bid coins the jingle Bubble, bubble toil and trouble or when Wolf Street raises the alarm that Corporate Profits in Nonfinancial Industries Plunge by Most Ever in $, amid Massive Downward Revisions, it might be just the moment to question the health of the US economy.

More red flags.

The truth is that the US economy is strapped with two intractable, life-sucking issues.

First, the post-2007-2009 economic crisis has never been resolved. The US has foisted the damage onto its partners, subsidized sick and floundering corporations, run up enormous debts through monetary pump-priming schemes, fostered new armament production through escalating global confrontations, and sold investors on shaky, over-hyped “innovations.” That same concerted effort to overcome the deflationary tendency spawned by the financial collapse overshot the mark, generating a powerful inflationary trend. 

As I’ve argued emphatically since 2021-- contrary to the punditry-- inflation is rarely, if ever, a momentary, episodic development. It does not go away with policy tinkering or rebalancing. Once prices begin to rise, businesses and corporations try to catch up or get ahead. The floodgates of profit-taking and profit-preservation will not be easily closed. For those who fashionably love to borrow Marx’s concept of commodity fetishism, the conventional thinking on inflation fetishizes price rises, hiding the fact that inflation is the result of human decisions and human (capitalist) interests. And when capitalists see an opportunity to raise prices, they seize it.

Compounding the last four years of persistent inflation is stagnation in the non-financial economy. Economic growth-- apart from the stock market, the pocketbooks of the very rich, and the bloated military budget-- is slow and slowing. In November of 2021, I reminded readers of the dangerous return of 1970s “stagflation” in an article aptly entitled When Have We Seen This Before?. Of course, the dilemma is that government efforts to invigorate the stalling economy will only further increase inflation.

Second, the economy is currently in the hands of a helmsman without a compass. President Trump’s economic policies are decidedly a departure from the conventional reliance on the Federal Reserve as a somewhat independent arbiter and navigator of economic policy, from the reliance on and guidance from Bureau of Labor Statistics and Commerce Department data, from some self-preserving restraint of corporate and financial excess, and from muting obscenely deep and unrestrained graft and corruption. Trumpism is elite enrichment on steroids, the public be damned. Reportedly, Communist Party of China Chairman Xi believes that Trump is not ideological, but “transactional.” That would well summarize his economic program.

Whether Trump’s approach is politically sustainable is one question. Whether it will add confusion and misdirection to escaping stagflation is not in question. It will make things worse.

What are the markers, suggesting economic hardship and a rocky road ahead?

• Inflation shows no sign of a letup, still well above the consensus goal. While Trump has “declared” it defeated, consumers are even more alarmed than the numbers suggest, with grocery store prices a particularly sensitive arena for shoppers. The full weight of Trump’s tariffs has yet to spread through the economy, promising even further price elevation.

• Hiring is falling off; businesses are hiring fewer people. Though limited hiring has not yet resulted in a dramatic change in unemployment, it foretells an increase in those jobless.

• Real average hourly earnings growth is tepid, growing .7% from August 2024 to August 2025. Median household incomes remained largely unchanged last year, adjusted for inflation. When higher incomes are extracted, the numbers for most households are in decline.

• Outlandish financial schemes are back and collapsing, especially around the used-car market. As in 2007-2009, irrational, super-exploitive lending patterns have generated unserviceable debt with lower-income consumers. Car-loan delinquencies have reached 5.1%, a level approaching that of the earlier financial crisis.

• While stocks appear to be booming, their price-to-earnings ratio-- a traditional measure of overvaluation recently hit 22.5, one of the highest readings in the last forty years.

• Investor fear of market volatility is reflected in the great demand for the safety of gold, a commodity hitting its all-time high in price. Other signs of the turn toward safety are emerging. 

• The driver of stock-market growth is almost entirely artificial intelligence (AI) and its data centers. With immediate investment in AI estimated in hundreds of billions of dollars (as much as three-quarters of a trillion globally), little return on investment has materialized. OpenAI is expected to return only $13 billion this year. Morgan Stanley calculates that the entire industry only sold $45 billion in products last year. Many see a bubble much like the fiber-optic mania of 2000.

• Bank failures have prompted JP Morgan Chase’s top dog, Jamie Dimon, to quip “When you see one cockroach, there are probably more”.

• Private, direct credit-- a growing factor in finance-- has a default rate of over 8%, the highest ever.

• Class divisions are intensifying. Annual wage and salary growth for the bottom third of households through August of this year was lower than any year since 2016. At the same time, growth for the top third grew four times faster than that of the lower third. For the first time, consumer spending by the top 10% of earners was nearly half of total consumption.

• The Black unemployment rate went from 6.1% last August to 7.5% this August, a harbinger of employment trends: last hired, first fired.

• Recent college graduates are experiencing one of the highest unemployment rates of the last decade, another harbinger of a weak labor market.

• More children are claimed to suffer from some food inadequacy than at any time in nearly a decade; the US Department of Agriculture estimated the number at 13.8 million in its 2023 report. The Census Bureau similarly reports that nearly ten million children live in poverty, the most since 2018. The Trump Administration has halted the USDA survey of hunger in the US.

The high interest rates established to contain inflation are predictably slowing real, material economic activity and large consumer purchases for the majority. Four years of rising interest rates have made debt service a growing burden, as well as making the refinancing of debt costly. 

Economic royalty and their courtiers are publicly downplaying the growing inflation in a desperate effort to convince the Federal Reserve to lower interest rates and stimulate tepid economic activity. Should the Federal Reserve comply, inflation will undoubtedly accelerate to the great harm of most working people. Historically, stagflation ends with a deep recession, like the painful Reagan recession of 1981-1982. 

Many in ruling-class circles believe that a new wave of innovation will rescue the sluggish, fragile economy with the exploitation of Artificial Intelligence. They foresee a new age of high productivity and growth. 

However, research by JP Morgan Chase economists has failed to find a significant connection yet between the use of AI and industrial productivity. So far, it has boosted stock market values enormously, without showing a concurrent return on investment.

James Meek, writing in the October 9, 2025 issue of The London Review of Books, may well have captured where AI has taken us and how far it has to go:

Leaving aside the known problems…-- their massive energy use, their ability in malign human hands to create convincing fake versions of people and events, their exploitation without compensation of human creative work, their baffling promise to investors that they will make money by taking the jobs of the very people who are expected to subscribe to them, their acquired biases, their difficulty in telling the difference between finding things out and making things up, their de-intellectualizing of learning by doing students’ assignments for them, and their emerging tendency to reinforce whatever delusions or anxieties their mentally fragile users already carry-- leaving aside all this, the deep limitations of generative AI make it hard to see it as anything but a dead end if AGI is the goal.

Faith that AI is more than a possibly malign novelty is based on confidence that the tech oligarchs have a vision of our future that benefits us all.

Not likely.

Is economic reckoning on the horizon?

Greg Godels

zzsblogml@gmail.com

Two-Party Duplicity

And yet there never was a more widespread feeling in England than now, that the old parties are doomed, that the old shibboleths have become meaningless, that the old watchwords are exploded, that the old panaceas will not act any longer… But in England, where the industrial and agricultural working-class forms the immense majority of the people, democracy means the dominion of the working-class, neither more nor less… Yet the English working-class allows the landlord, capitalist, and retail trading classes, with their tail of lawyers, newspaper writers, etc., to take care of its interests. No wonder reforms in the interest of the workman come so slowly and in such miserable dribbles. The workpeople of England have but to will, and they are the masters to carry every reform, social and political, which their situation requires. Then why not make that effort? Frederich Engels, A Working-Men’s Party, July 23, 1881

In the middle of July, the House of Representatives considered amendment 114 to H.R. 580 that would reduce US military aid to Israel by $500 million, the amount designated for Israeli missile defense. Sponsored by Representative Marjorie Taylor Greene, the amendment offered a rare opportunity for our national leaders to show a modest objection to Israel’s genocidal foreign policy or, as in the case of Greene, to voice opposition to an unnecessary subsidy from a debt-ridden country to a country with universal healthcare and subsidized education-- the lack of which account for two of the biggest factors in personal debt in the US. 

Though only a gesture, a yes-vote on the amendment would have brought great attention to the ongoing brutal genocide in Gaza, to the nuclear-weapon-backed bully daily slaughtering starving Gazans as though it were a sport. It would have slowed the flow of US dollars supporting Israeli violence.

A yes-vote would have shown some actual principle behind the hollow slogan of “Make America Great Again” espoused by so many who neither really care about the US people nor have any idea where its greatness would lie. 

But the amendment received only six votes, and few “news” purveyors even bothered to report it. 

Some will heap praise on the four Democrats and two Republicans, citing their courage and independence.

But that profoundly misunderstands the moment.

It is wrong to offer accolades to those who are simply doing what they should do. The fact that there are so few supporting the amendment is less an expression of the moral worth of the six than a measure of the depravity of the many. We expect our representatives to do that which is morally correct. Gratitude is reserved for those who exceed their duty, not those who simply do what any decent person should do. 

Voting no-- as did 422 House members-- is a despicable, scurrilous act. Voting to give the Israeli government even a dollar for its death-dealing enterprise deserves our utter scorn. 

It is important to fully grasp what it means for nearly the entire legislative body of a country to back the genocide of another people, a people virtually defenseless for over eighteen months.

It would be easy, but cynical to see the House vote as reflecting their constituents or their apathy. A recent Gallup poll shows that only 32 percent of US respondents approve of Israel’s actions in Gaza, a substantial decrease since the beginning of Israel’s systematic killing of Gazan civilians. Therefore, the House vote is far from a reflection of the sentiments of all US citizens. 

Instead, it is a result of the corruption of US politics, specifically the two-party system. AIPAC-- the leading lobbying group for Israel’s interests in the US-- distributed $29,078,901 to 335 House members last year, according to Open Secrets. Other Israeli interest-groups contributed to House members, as did US apocalyptic fundamentalists that identify with Israel’s supposed Biblical role. 

Of course, it is not only the issue of Palestine’s right to exist that is shaped by the wholesale purchase of the two-party system. Publicly-run national healthcare, free of insurance companies-- overwhelmingly popular with the people-- never gets a serious legislative debate because of the influence of the profit-sodden insurance industry and Big Pharma. And the unpopular wars and massive defense spending keep coming, thanks to the effective, generous lobbying of the military-industrial behemoth.

My Italian-born grandmother often repeated a saying meant to explain crass opportunism and shamelessness: “Sei come Bertoldo, che mostra il culo per un soldo” (Bertoldo, shows his ass for a penny). Over fifty years of following the Democratic Party has taught me the real meaning of the insult.

Besides our morally corrupt representatives, the US mainstream media has historically thrown its support behind Israeli policies, almost without exception. Only alternative media and a profound distrust of the capitalist “news” outlets nourish opposition to official support for genocide.

What is truly remarkable, given the long standing “bipartisan” toadying to Israel and the high and growing costs of dissent in the US, is the noble actions by students and activists in the US who risk careers, arrests, and even deportation to show that everyone is not bought and sold in political life. 

The old Nixonian notion of a silent majority in the US has been turned on its head. Today, it is not an alleged conservative trend that exists beneath the political life shaped by elites, but a latent pacifism, egalitarianism, and class partisanship smoldering beneath the surface of ruling-class politics (a part of which has defected to right populism out of impatience and frustration). 

That sentiment is ill-represented by the broken, bankrupt two-party system. 

Neither major US political party captures this undercurrent. But this fault is especially true of the Democratic Party that traditionally claimed to be a home for more progressive policy. A mid-July poll conducted by The Wall Street Journal shows how distant the Democratic Party is from the people. Sixty-three percent of those surveyed have an unfavorable view of the Democratic Party-- the highest number since the poll was initiated in 1990.

Where the Republican Party broke into negative net favorability in 2005, the Democrats sank into negative territory in 2016 and today stand 20 points below the Republicans, who, nonetheless, also remain out of favor. 

The WSJ article captures well both the decline of the two-party system and the collapse of the Democratic Party in the face of Trumpism:

On the whole, voters disapprove of the president’s handling of the economy, inflation, tariffs and foreign policy. And yet in each case, the new Journal poll found, voters nonetheless say they trust Republicans rather than Democrats to handle those same issues in Congress. 

In some cases, the disparities are striking. Disapproval of Trump’s handling of inflation outweighs approval by 11 points, and yet the GOP is trusted more than Democrats to handle inflation by 10 points. By 17 points, voters disapprove rather than approve of Trump’s handling of tariffs, and yet Republicans are trusted more than Democrats on the issue by 7 points.

By any rational standard, one would have to conclude that voters are dissatisfied with both parties, but view the current Democratic Party as beyond hope. They may disapprove of Trump, but find nothing suggesting an alternative with the Democrats.

The WSJ article quotes Democratic Party pollster, John Anzalone: “The Democratic brand is so bad that they don’t have the credibility to be a critic of Trump or the Republican Party… Until they reconnect with real voters and working people on who they’re for and what their economic message is, they’re going to have problems.”

The hope that they will reconnect flies in the face of years, even decades of tailing the Republican Party, locating their platform slightly left of the Republicans, a place that Party leaders felt confident would hold labor, African-Americans, women, and other groups in the Party’s clutches. 

Meanwhile, the Democrats were vigorously pursuing the suburbanites and bedroom communities with lifestyle politics. Democrats gave the people answers to micro-aggressions when they were desperately looking for help with economic macro-aggressions.

Many loyal Democrats and earnest liberals are pressing the Party’s watchdogs to read the polls and repent, citing recent studies that show that working-class voters are hungering for an active social justice agenda. The Democratic Party left represented by DSA and Jacobin hope to rescue the Democratic Party from its leaders by underscoring the recent Mamdani primary victory as well as polling that shows that working people want what Mamdani offers and much more-- better pay, better benefits, cheaper prices, affordable housing, health care, etc.

But experience teaches that the Clintons, Obamas, Pelosis, Schumers, Jeffries, and Bookers are determined to steer the Democratic Party ship on the course dictated by its billionaire donors. They are perfectly happy allowing Sanders and Ocasio-Cortez to paint the ship with left-wing slogans, provided that they don’t threaten to abandon the ship.

However, there is good news and cause for hope.

A mid-May poll conducted by the ultraright Cato Institute and YouGov found that-- with 18 to 29-year-olds-- socialism is quite popular and-- to their shock-- Communism has substantial support as well. Despite years of indoctrination, the Cato fellows were hysterical to discover that 62 percent of these youngsters had a favorable view of socialism and even 34 percent had a favorable view of Communism. After all the years, the money, and the effort in painting Marx, Engels, and especially Lenin as agents of Satan, the kids still don’t get it! One can only hope that more of their elders will show the same independence and escape the clutches of the capitalist propaganda mill.

But there is more good news, coming from the UK! 

In a bold move, Jeremy Corbyn and Zara Sultana have announced the founding of a new party to the left of the Labour Party. The Labour Party-- since its brief flirtation with left social democracy after World War II-- has been drifting, even rushing, rightward. In many ways, like the Democrats, it has postured as the home of liberal and reformist ideas. And like the Democrats, it will not depart from business friendliness, minimal social advance, and an imperialist foreign policy today. Any deviance from conformity has been met with strict discipline and ostracization.

Former popular leaders of Labour-- counterparts to Sanders and Ocasio-Cortez in the US Democratic Party-- have signaled that they have had enough by announcing the creation of a new, left party on Thursday, July 24. In first-weekend polling, Corbyn and Sultana’s no-name party drew 15% of the respondents, roughly the same share as the in-power Labour Party polls.

On the following Monday, Morning Star commented enthusiastically: 

Four hundred thousand and counting. Sign-ups to be part of founding the new party initiated by Jeremy Corbyn and Zarah Sultana already surpass the membership of any existing political party in Britain.

While the appetite for a left alternative to Labour has long been clear, even supporters of the project cannot have expected a response on this scale…

[The] …rejection of the post-Thatcher political settlement is in reality a rejection of the consequences of the right’s policies — privatisation, deregulation and deindustrialisation — since these have been pursued by both governing parties since the 1980s…

[T]his is a very encouraging beginning. The march of authoritarianism and racism across this country, the disgusting consensus behind complicity in Israeli genocide and the attempt to keep public ownership and wealth redistribution off the table can all be challenged by the emergence of a left movement on this scale. No socialist can close their eyes to that.

Of course, we have to temper our optimism by acknowledging the tremendous challenges ahead. We saw how the auspicious start of the German alternative left party organized by Sahra Wagenknecht in 2024 faltered after remarkable early success. Nonetheless, the new German party, while failing to maintain its momentum, succeeded in shifting politics leftward and restoring confidence in a class-based agenda.

In the Corbyn/Sultana party, many see even greater opportunity to escape the stale politics of social austerity and military aggression. The initiative has already rocked the UK political system.

Greg Godels

zzsblogml@gmail.com 

What’s Next?

There is a growing sense among many that we may be on the verge of a new world order or-- to be more accurate-- at the end of an old one. Opinion polls show very low confidence in the familiar institutions of governance and high uncertainty about the economy. Voters are rejecting traditional centrists parties, with new alternative parties and movements growing in popularity. There is little or no popular consensus on the path forward and an abiding sense that matters are, in general, going badly.

The global economy is variously afflicted with inflation, stagnation, or both, and growing insecurity. Political leaders are rigidly defending the old consensus or unsuccessfully advancing “new” wrinkles on the old that go nowhere. Inequality of wealth, income, power, and outcomes grow dramatically.

Few are satisfied that we can continue in the old way, but even fewer know of a way forward.

So, it should come with little surprise that intellectuals have taken on the daunting task of describing where we are and where we might be going.

Within the broad left, two characterizations of the current “international order” have been popularized: a policy, “neoliberalism” and a process, “globalization.” Much nonsense has been written and spoken about both. As the terms grew in popularity and usage, their meaning became fuzzier and fuzzier.

There have been useful accounts of neoliberalism that place it both in an historical context and within the evolution of modern capitalism (see my discussion of Gary Gerstle’s book, The Rise and Fall of the Neoliberal Order). Gerstle, notably, gives a credible account of neoliberalism’s origins in the late 1970s and strong reasons for its fragility today.

Similarly, Branko Milanović has offered a credible account of globalization in an article that I recently reviewed. However, he dates it from 1989, when, in fact, the expansion of trade has been consistent from the establishment of the post-war global trade architecture, with qualitative leaps coming from the 1978 “opening” to China, the 1991 demise of the European socialist states, and again with China’s entry into the WTO, but followed more recently by globalization’s wane after the Great Recession of 2007-09. 

It is important not to confuse the two: neoliberalism is a political initiative that gained traction from the failings of New Deal Keynesian policy and became policy with the establishment of centrist consensus and its subscription by mainstream political parties, spreading throughout the world as dogma; globalization is an expansive process accelerated with new technologies and the migration of capital to new and expanded labor markets. While they overlap in many ways, they are different phenomena.

An even more recent participant in this discussion is Perry Anderson, writing in The London Review of Books. Contra Gerstle, Anderson sees a still-resilient neoliberalism locked in a political struggle with populism-- “The political deadlock between the two is not over: how long it will last is anyone’s guess.” 

Within the various fora of left-wing intellectuals, Anderson is a well-known, important, but controversial figure. His writing, his editorship of New Left Review, and his hand in Verso books placed him in the center of UK left intellectual life-- independent of Communist and socialist parties-- in a role similar to that played by Monthly Review in the US. Wherever Marxism rose in fashion in student and professorial circles, Anderson’s influence could be found.

The publication of Domenico Losurdo’s book, Western Marxism, in 2017 (2024 in English) placed Perry Anderson at the center of Losurdo’s critique of Euro-American trends, a critique generating much attention with the anti-imperialist left. There was certainly some merit to Losurdo’s charge that some of the “Marxism” exercised in Europe and the US was stained by Eurocentrism. Certainly, Losurdo was on to something. 

Anderson’s leftism was decidedly hostile to, real-existing-socialism-- both East and West-- and the various Communist Parties. He opted, instead, for some pure vision of socialism, a version that Marx would have scoffed at as utopian. Moreover, Anderson encouraged a left scholasticism that took young activists further and further from changing the world and more and more toward an academic career.

But the failings of the Western left lie less in any “geographical” disposition, but more centrally in the virus of anti-Communism and the disillusionment after the demise of the USSR. Gary Gerstle-- no friend of Communism-- captures it:

The collapse of communism… shrank the imaginative and ideological space in which opposition to capitalist thought and practices might incubate, and impelled those who remained leftists to redefine their radicalism in alternative terms, which turned out to be those that capitalist systems could more, rather than less, easily manage. This was the moment when neoliberalism in the United States went from being a political movement to a political order.

Ironically, Anderson concedes as much:

[Behind] neoliberalism’s apparent immunity to disgrace-- lay the disappearance of any significant political movement calling robustly either for the abolition or the radical transformation of capitalism. By the turn of the century, socialism in both of its historical variants, revolutionary and reformist, had been swept clear of the stage in the Atlantic zone.

But notice the difference. Gerstle-- the liberal-- identifies the socialist left as in retreat from socialism, with not a little suggestion that the “redefinition” was based on opportunism. There really was an alternative, despite what elites wanted us to believe.

Anderson-- the Western Marxist intellectual-- describes the retreat in the passive voice, as though there was no agency in the retreat, merely a “disappearance.” Who or what caused the “disappearance”? Who or what swept socialism clear from the stage? Did it fall from the sky?

There are no regrets of the setbacks to the socialist world. There is no remorse over the sponsorship of student rebellion over worker actions. There is no reflection on the dalliance with the renegades, malcontents, and dreamers on the margins of the left. 

Anderson writes of “the widely differing set of revolts… united in their rejection of the international regime in place in the West since the 1980s.” “What they oppose,” he asserts “is not capitalism as such, but the current socio-economic version of it, neoliberalism.” And what was the role of New Left Review in taking socialism off the table? 

Like so much of the academic left, Anderson and his colleagues were fully compliant with the post-war Western intellectual catechism: ABC – “Anything But Communism.” 

Not surprisingly, Anderson sees a bleak future: either a continuing neoliberal nightmare or an ineffective populism, possibly offering worse outcomes.

In the last few weeks, the discussion of the next international order further develops with an intervention by Professor Jeffrey D. Sachs, an establishment figure who has taken the rare enlightened position on Ukraine and Palestine. In Giving Birth to the New International Order, Sachs argues that:

The multipolar world will be born when the geopolitical weight of Asia, Africa, and Latin America matches their rising economic weight.  This needed shift in geopolitics has been delayed as the US and Europe cling to outdated prerogatives built into international institutions and to their outdated mindsets. 

Sachs endorses a view widespread on the left, a utopian view that a diverse and multi-interested group of states organized around diverse and often contradictory grievances against the reigning US-centered international order-- the BRICS alliance-- can produce “a new multilateral order that can keep the peace and the path to sustainable development.”

Almost instantly, Sachs article was met with a critical response from Dr. Asoka Bandarage, who challenges the BRICS commitment to social justice for the smaller, weaker, less powerful nations:

Unfortunately, BRICS appears to be replicating the same patterns of domination and subordination in its relations with smaller nations that characterize traditional imperial powers. Whether the world is unipolar or multipolar, the continuation of a dominant global economic and financial system based on competitive technological and capitalist growth and environmental, social and cultural destruction will fundamentally not change the world and the disastrous trajectory we are on.

Through her intimate knowledge of Indian-Sri Lankan relations, Bandarage shows how decidedly unequal power relations function even with the BRICS founders, questioning: “...would this truly represent a move towards a ‘New International Order,’ or would it simply be a mutation of the existing paradigm of domination and subordination and geopolitical weight being equated with economic weight, i.e., ‘might is right’?”

A welcome voice joins the conversation with the April 16 issue of the Morning Star. Andrew Murray-- Marxist trade union and anti-war leader-- affirms that “[t]his is a moment of transition, so we should hold firmly in our heads that the destination is not foreordained.”

Indeed.

Murray, like the others, sees neoliberalism as the current order: “a prolonged assault on working-class institutions, on the social wage and on the sovereignty of the countries of the global South, with the state receding from some of the obligations it had assumed after 1945-- the maintenance of full employment for example.” 

Unlike the others, he sees 2008 as the apogee of neoliberalism’s ascendance: 

Neoliberalism met its own Waterloo in the crash of 2008. The stagnation in living standards since has been paralleled by an intellectual stagnation of the ruling classes, unable to easily preserve the old systemic assumptions yet equally incapable of transitioning to new ones.

Murray reminds us that the previous transitions always included the socialist options, noting a fascinating quote from former French socialist president François Mitterrand-- frustrated by difficulties around the Programme commun of the Communists and Socialists-- reportedly saying “in economics there are two solutions-- either you are a Leninist or you won’t change anything.”

Until Murray’s contribution, no one even hints at a Leninist solution.

The leading oppositional candidate for a “solution” today is right populism. And we must take note of Murray’s warning: “Previous transitions have been accompanied by war, or at least violent social convulsions.”

If elites continue to cling to neoliberal dogma, “that hands the initiative to the Trumps, Le Pens and Weidels who embrace a lot of Hayek and a little of Hitler, a rhetorical dash of Roosevelt and nothing of Lenin,” concludes Murray.

Conclusion 

The growing sense that neoliberalism is a spent force, both popularly and in practice, leads to the question: “What comes next?”

Ruling circles offer only two choices:

1. Clinging to a nearly 50-year consensus of deregulation, privatization, public/private partnership (socialism for the capitalists), dismantling of social safety nets, austerity, growing inequality, and money-democracy.

2. A right-populism that postures as anti-establishment, but maintains existing unequal relations of power and wealth, employs bully-democracy, while dismantling the institutions and organizations of their opposition, and scattering their forces.

Neither choice challenges the socio-economic system that spawned both options: capitalism. Neither option serves the interest of the people.

The liberal Gerstle, the social democrat Milanović, the academic Marxist Anderson, and the multipolarista Sachs offer us a return to a disastrous neoliberalism or blind faith and hope in a yet-to-be-discovered solution. 

Only Murray offers an approach with historical antecedents and the prospect of a sharp break with capitalist malignancy.

We must remember that those who have been swayed toward right-wing populism were despairing for better alternatives. Blaming their votes when they are offered no real choice is arrogant foolishness. Better we find a real alternative.

Without another alternative emerging, the neo-nationalism of right populism-- expressed today as tariffs, sanctions, barriers (protectionism)-- will inevitably lead to war.

The only answer to an obscenely inhuman capitalism hell bent on a catastrophic path is the “Lenin” answer: socialism.

Greg Godels

zzsblogml@gmail.com