It’s always interesting to try to figure out what the central bank is going to do next. Previously, under Joe Biden, they raised rates as inflation was rising. They thought it would lower demand, which was supposedly why the prices of commodities were above their value.
Well here we go with Jerome Powell again, who is under pressure from Donald Trump to lower interest rates. Trump has raised tariffs to most of the rest of the world, and the prices of products at the store are already starting to rise.
When the price of commodities rises, it is referred to as inflation. Yet Powell is under great pressure to lower rates, which is the exact opposite of what he did last time inflation was an issue.
Given the weak jobs report that came out last week, and the lowering of gross domestic product under Trump, signs point to efforts to bail out the companies again with low interest rates.
Trump wants the state to subsidize capitalist industry, by having a low or no interest rate at all. During the pandemic the rates were a percent or so. We remember when they were dumping the milk, yet it was record after record for the stock market numbers.
Why not, it worked for Don then? This time when Don got jobs numbers from the Bureau of Labor Statistics showing poor job growth, he fired the leader of the group, and installed a loyalist who helped write the Heritage Foundation’s project 2025. Now it is no longer providing monthly job statistics. Soon it may be like trying to get real numbers out of the press about profit, surplus value, the expenditures on labor as compared to the whole investment including the constant capital. It may become even more of a free masonry regarding the average rate of profit.
Which leaves one wondering just what these big investors go on when they invest in a company?
Perhaps they are privy to more than the Washington Post or Reuters. But without government data, how can they predict what the market is doing, especially the bond market? All we know is the BLS data Don banned is showing the economy is slowing down. That makes a rate cut likely.
But that is the exact opposite of what Don was trying to prove. He wanted the jobs numbers to reflect strength, which they did not. The clever bail out of free credit to bourgeois owned industry seems to be in order, the rates may fall.
Again we have to question Powell, whose raising of the interest rate under Biden occurred. We were told to keep inflation at 2% of GDP the interest rate, the cost of money, had to rise. Now we see inflation rising again, but this time in conjunction with the economy shedding jobs. What will he do?
He could keep the rates where they are, and let the next Central Bank chairman who will be appointed by Trump lower rates. He has to wait until May when Trump gets to appoint whoever he likes the post of Chairman.
Use of the state to prop up failing industry is common in capitalist Germany. In their case, the state buys stocks in the distressed companies, with no votes in decision making. They sell the shares after the company can again make a profit without the state assistance. It is an example of why nationalized companies do not always represent something radical, like socialism. The key here is the government pays for the shares, they do not simply appropriate them.
Trump’s bailout is coming; it will be here by May. Farm subsidies are already here, at 12 billion dollars for large farms. Among Trump’s ideas about the state one might find unusual is his tariffs. When you tack on a money amount to a sale, it just gets passed on to the next seller or buyer; it changes nothing to the buyer as he simply passes on the additional sum to the next seller. It is the consumer who pays ultimately for the tacked on cost, the tariff. That is why prices are rising at the store, the consumer is paying for the tariffs.
But here comes Trump with the tariff money he gained, which he considers surplus value. It’s the value of the product, which he obtained through taxing imports. He touts this as progress, a sign of his strength he can raise taxes at his discretion.
But in the end the taxes are paid for by the consumer, even if the buyer or seller simply passes on the cost to the next guy, with no real effect on the merchant.
Another clever use of the state, this time to bring in additional taxes by taxing imports. Trump has his billions from tariffs. But inflation is the result. Which puts Powell in an uncomfortable position; will he bend to a bailout, even though inflation is rising? Again, it is the exact opposite to what he put Biden through when he raised the interest rate due to inflation.
These bourgeois slight of hand games change nothing about the fact the taxes, profit , etc. all represent surplus value. The tariffs and taxes now have in common with profit; it is not a transparent process; with the statistics people compromised, no one will have any way of knowing the real numbers, perhaps until it’s too late.
Prepare for Trump’s big bailout, anything to keep those stock market numbers rising.
Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
8 15 2025
I edited this 9:23 2025. Powell’s rates fell a quarter percentage.point yesterday.
Ecological Era 