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Without USD hegemony, American daily incomes would fall 27-57% (hexbear.net)

submitted 6 months ago by Greenleaf@hexbear.net to c/chapotraphouse@hexbear.net

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Thought this was an interesting analysis, though I think it needs to be taken with a bit of a grain of salt (I think it’s power is what is qualitatively describes rather than precise numbers, and I think the author might even agree with me).

I’m always on the lookout to see it quantified how much the average American benefits from imperialism. My guy says if the US was unable to exert hegemony, the US would experience at least what Russia experienced in the 90s. These numbers align with that; and this is only talking about dollar hegemony and not, for example, the US using military pressure, sanctions, or other methods for extracting cheaper resources and goods from the global south.

That said, I’m not sure you can just run a regression and get your answer. I don’t see how you can isolate the US losing dollar hegemony without it then creating an uncountable number of secondary effects. All this stuff is deeply interconnected. But that said, I think this does a good job of highlighted at least in a qualitative sense just how much Americans benefit from dollar hegemony, and how losing that would be huge problem for the US economy.

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[-] PolandIsAStateOfMind@lemmygrad.ml 57 points 6 months ago

I’m always on the lookout to see it quantified how much the average American benefits from imperialism.

And half of them still live from paycheck to paycheck.

[-] Xx_Aru_xX@hexbear.net 34 points 6 months ago

The best economic system amen

[-] Hestia@hexbear.net 22 points 6 months ago

But we got McDolans and Kurgerbing

[-] DragonBallZinn@hexbear.net 5 points 6 months ago

FWIW, I'm sure a lot of it will be canceled out when its accounted for all the imperialism Americans explicitly ask for themselves to be subjected to (or at least the old people want done to the young people).

[-] Mokey@hexbear.net 40 points 6 months ago

That money is stolen by middle men and scammers anyway i never see it, if us hegemony was gone and we had a rational economy would i really notice the money?

[-] CarmineCatboy2@hexbear.net 27 points 6 months ago* (last edited 6 months ago)

Yes. Because in short consumer price inflation is like a novel thing for the american population, whereas it's the ever normal in the global south. Of course the capitalist class makes the most of the USD hegemony, but there's a certain panem et circenses policy where the US can just subsidize gas, energy and food costs to no impact to it's financial credibility. The US government could do the same with health care and education, it just chooses not to.

In a way since you live in the core of the imperial core you remain an exploited worker, but there are extra layers of exploitation elsewhere. That's why people can go live in your country, get paid less than the legal wage, and still send remittances home.

[-] panned_cakes@hexbear.net 5 points 6 months ago

all of these costs are absolutely dwarfed by the medical, legal, rent, and debt expenses americans pay, I don't really get why discussion like this is happening in the context of average income figures?? in a country with such extreme inequality

[-] CarmineCatboy2@hexbear.net 3 points 6 months ago* (last edited 6 months ago)

I also have to pay rent, a health plan, education fees, numerous taxes and so on but if you convert my costs to dollars they'll seem like a pittance to you. Moreover, inflation in education and healthcare are something that exploded in the last generation. Nobody is disputing that, as a matter of policy, financialization lead to the american state deciding to exploit its population more and more.

The point is that not every benefit from USD hegemony has been taken from the workers. At least not yet. For one, since the US doesn't have to actually pay for its imports every other administration can campaign on cutting taxes. Sure, you might say that most of those tax cuts go to the rich. Well, here in the global south we have to acquire dollars to pay our commitments, otherwise our credit rates and currencies collapse. Meaning that every administration has to raise taxes, primarily on the poor.

At the end of the day the question is: if USD hegemony goes away, who's going to pay for that shortfall? Will it be the elites, who spent the last 40 days reproducing themselves by creating new ways to financially exploit the population? Will it be the MIC? Or will it be workers via consumption tax hikes and the further privatization of social security? It would have to be a combination of all three and more, but we know who's going to get the short end of that stick.

[-] panned_cakes@hexbear.net 2 points 6 months ago

There's a pretty specific subset of workers which I point to as being part of the labor artistocracy it's less than 10% of the US population (military, tech workers on the high end, insurance, finance workers, lots and lots of people) but I can tell from the way this whole discussion is framed in this thread it will just go around in circles talking about how US homeless people technically are better off than in the periphery. I'm sure that's true, but it doesn't bring us any closer to analyzing how the labor aristocracy has contracted and which part of the population still gets to take a small cut of these industries that collect global monopoly rents.

[-] CarmineCatboy2@hexbear.net 2 points 6 months ago* (last edited 6 months ago)

talking about how US homeless people technically are better off than in the periphery. I'm sure that's true

You shouldn't be because that's an absurd statement.

The point is that the rent-paying barista in the US is better off than the rent-paying barista in Bolívia because they simply have more purchasing power by virtue of, among other things, USD hegemony. Likewise, whereas the overexploited farm worker in the US is paid enough of a pittance where they can still send remittances home, in Brazil you'll find actual slaves here and there.

The american could be even better off, but that would require a political process for investment in public services, which happened elsewhere in the wealthy world and generally not in the post-80s US. Part of the reason why this struggle could never get off the ground is because the US government just didn't have to fund itself. It didn't have to think in terms of industrial and fiscal policy, or in terms of rising incomes. The world subsidized the american population's balance of payments and some small crumbs made it to the base, enough at least to pacify them. As such living standards can still decrease a lot in the United States if even the mildest forms of redistribution aren't enacted.

[-] panned_cakes@hexbear.net 2 points 6 months ago

I like how I have two mentions rn, one person calling the guy I'm posting a patsoc, and the other person telling me baristas are the labor aristocracy. yarly Migrant workers are also forced to live many persons to a house or rely on unstable living situations from employers who hold them hostage and don't let them get a car (remember the infamous Jia Tolentino debacle where it turned out her parents were holding underpaid Filipino teachers hostage practically to fill No Child Left Behind quotas?) in order to circumvent the massive rents issue. American workers who don't forgo basic needs and have to rely on minimum wage can't start a family. I'm not saying there isn't an immense privilege for many in being born in the US it's just not as cut and dry as unequal exchange makes it out to be without accounting for debts and rents and other expenses from that lack of social services. There is a demarcation between workers who passively benefit from being in the US to reap the benefits of cheaper treats from the same people who make them indentured wage slaves, and those who are working at industries which can still collect on being at the top of the global value chain.

I don't know why you stop at homeless people considering they can spend they spare dollars further at the gas station as long as suppliers decide not to make bread cost $7.99 at the place they have access to

[-] CarmineCatboy2@hexbear.net 1 points 6 months ago

and the other person telling me baristas are the labor aristocracy.

I'm sorry, what?

I don't know why you stop at homeless people

I don't.

[-] panned_cakes@hexbear.net 2 points 6 months ago* (last edited 6 months ago)

Okay well you told me it was an absurd statement to depict homelessness in the imperial core as being easier than in the periphery using this logic, so feel free to tell me how I led myself astray or idk just write me off as a loon

[-] CarmineCatboy2@hexbear.net 2 points 6 months ago* (last edited 6 months ago)

Because you're talking about homeless people. The discussion there isn't about how much a worker is being exploited or the purchasing power of currency. It's about wether the country has safety nets at all and how brutal the police is. Not to mention weather conditions.

[-] panned_cakes@hexbear.net 3 points 6 months ago* (last edited 6 months ago)

At the risk of pissing you off by stating the obvious, you can have a job, exert the purchasing power of USD, and still be homeless in the USA

[-] CarmineCatboy2@hexbear.net 2 points 6 months ago

Now what do you think happens outside the USA?

[-] panned_cakes@hexbear.net 2 points 6 months ago

In general peripheral countries experience official homelessness rates at least ten times higher than the United States.

[-] CarmineCatboy2@hexbear.net 2 points 6 months ago

Yep.

[-] panned_cakes@hexbear.net 1 points 6 months ago

Upper percentile workers in these industries have benefits coming directly from their employer (making them blase about universal healthcare), have enough money to be comfortable and can still drown everything out with consumption and isolation for them and any family they want, a retirement package that gives them the imaginary class position of being an investor, and their mortage gives them the imaginary class position of being a real estate magnate. I think it's pretty easy to notice how people like this treat those in a real precarious positon more shittily even though they should have solidarity with their issues and they often have this hostile pride about working in labor aristocracy industries especially military that makes them take out all workplace issues on other people to avoid blaming the job. Buy into weird management cults like Amazon, that's really stuff you've go to have a reason to buy into. Nobody doing catering there believes that shit. But get onto the higher end of tech workers and all kinds of marketing and other indecipherable positions, they start to. Company liquor cabinet is too open.

[-] CarmineCatboy2@hexbear.net 1 points 6 months ago

Here's the thing, the labor aristocracy is global. The labor aristocrat can always just move to an anglo country and make many times what they'd make in the Global South or Europe. That's what brain drain is all about. Which is why I never even mentioned them. What I compared are the conditions of service industry and farm workers, and how global financial policy alters their status.

When you add the labor aristocracy to the equation you have what can be considered an inflection point. The indentured servant in a large american city has to compete with the labor aristocrats for amenities - housing, services, and so on. The indentured servant in, say, Rio de Janeiro has to pay rent to live in a favela just so they have the opportunity to clean the a middle class house.

People struggle everywhere, especially people at the bottom of the rung. But there's a real appreciable decline in US living standards due to deindustrialization and financialization. The only ones safe from that decline are capitalists, high value workers, capitalist family members, and the real estate gentry. Those all benefit from american fiscal policy and the USD. What we are saying is that's only the tip of the iceberg if USD hegemony disappears and the US government actually starts having to pay its bills. It's like in France. Revolutionary conditions arrived when hunger knocked on the doors of rural aristocrats, the lower clergy and even the tax paying bourgeois.

[-] panned_cakes@hexbear.net 1 points 6 months ago

I agree the labor aristocracy is global, and you're right, you never mentioned the labor aristocracy, it was the question of whether US workers would stand to lose from unipolarity collapsing. It's definitely going to disrupt a lot of industries to lose access to specific cheap resources, undercosted aluminum, things like that, and those costs are going to be send down the ladder immediately, but it's not like the global system has been rigged to the benefit of US workers, but rather financial institutions in the global north. My reasoning is that the US labor aristocracy is going to contract even further as a result of the loss of these intl monopolies, being opened up to competition in semiconductor design, pharmaceuticals,even finances lol I think someone was posting about their town freaking about a Chinese company sponsoring their basketball team.

[-] CarmineCatboy2@hexbear.net 1 points 6 months ago

No, the global economy was not rigged to the benefit of US workers. It was rigged to the benefit of the US economy. Let's go with a concrete example. When the argentinean currency collapses it's not the homeless grocer who stops eating. It's almost everyone. If the USD collapsed, then anyone whose networth is mostly based on owning a house suddenly sees that disappear. Even if US elites - for the past 40 years - have chosen to financialize and nickle and dime the workers to their last credit card, you still have a situation where inflation and economic stimulus can lead to workers gaining some bargaining power. When you print trillions of your currency and you don't have the USD hegemony, workers have less than no bargaining power. They are more than desperate to make rent. They become the targets of ecofascists.

[-] panned_cakes@hexbear.net 1 points 6 months ago

They become the targets of ecofascists.

Go on, this is getting fun and speculative.

[-] CarmineCatboy2@hexbear.net 2 points 6 months ago

Well, the cold machine of capital has no use for what it deems to be unproductive populations. Those groups are to be policed. With climate collapse you have strains of thought who tend towards the idea that 'humans are the real plague', which serves to mask the reality that when the cookie crumbles and billions die they won't be billions who live in the Champs Elysee or Martha's Vineyard. Ecofascists outright see death as the solution to industrialized climate change.

What happens instead when the 'pie' shrinks in a militarized police state? The same thing that's happened for the past 40 years. People are blamed for their choices, told to learn to code, told to seek services that haven't been provided since before Reagan became a vegetable. Except that with the loss of the USD what was once the slow boil of financialization becomes a steep cliff. People who had otherwise been well off suddenly find out that their house isn't worth much and neither is their assets or their money. Taxes go up to meet investor expectations as bond yields rise. Interest rates must be kept high at all times, because the country no longer has an aura of unbroken credibility. In short, Argentinification where every solution possible to the economic woes of the country takes so long to take effect that by the time the next president is in power everything is worse.

The United States has all the capital in the world to steer that ship away from the rocks. It has chosen not to for 40 years because there's simply too much money in exploiting reserve currency status. Now they are threatening that status by sanctioning countries that are too big to ignore. Soon they might even sanction China, but Brazil, India, Russia and so on are all sanctioned already. What happens when the only people recycling dollars and sending their profits to the US are moribund in Japan and the EU?

[-] panned_cakes@hexbear.net 2 points 6 months ago

What happens when the only people recycling dollars and sending their profits to the US are moribund in Japan and the EU?

Samir Amin translucent, superimposed over these words, laughing

Definitely a different kind of speculation than I get into, but my speculation is always an afterthought as I'm catching up on history anyways. I'll reply later if I can staple my ideas together after work.

[-] panned_cakes@hexbear.net 1 points 6 months ago

I'm not trying to distort the actual situation, it is just that the aforementioned divide between workers who passively benefit from being in the US to reap the benefits of cheaper treats from the same people who make them indentured wage slaves, and those who are working at industries which can still collect on being at the top of the global value chain -that's what helps determine where organizing is actually going to be effective. This is for instance why the tech or cybersecurity union isn't going to do anything even if they took off but the service worker unions have been exploding.

[-] HamManBad@hexbear.net 8 points 6 months ago

I think the problem comes if the US loses the hegemony but keeps the middle men, there's going to be a lot of suffering it's probably going to get channeled into fascism. "Those people" (take your pick) will be blamed for national decline, instead of correctly identifying capitalism and imperial blowback as the cause

[-] FuckyWucky@hexbear.net 27 points 6 months ago* (last edited 6 months ago)

It depends on how quick the shock is. If America plans around and mobilizes domestic resources then it would be able to arrest some of that decline.

But the American political class right now appears to be allergic to any state lead central planning.

Would it be just a loss of fancy treats? Living standards and incomes aren't completely correlated. Cuba has excellent Healthcare but low income. US has meh healthcare for a country that "Rich" but there is also medical debt.

What really fucked up Russia in the 90s was not just a shift from socialism but also how quickly and to the extent it was done. It's called shock therapy for a reason. China also saw higher than usual inflation during 90s with its own economic reforms but nothing like Russian hyperinflation.

Another question would be why would say China quickly stop sending goods to the US when such a sudden shock would fuck up China too. U.S. is only able to obtain Chinese goods because China is willing to give away its own instead of using it for local consumption (though this has been changing since the last decade).

Sure, there is more coercion with other developing countries as you mentioned with sanctions and of course, countries with low productive forces requiring dollars inorder to develop.

I think the dollar would face a slow decline over decades with countries wanting to trade in other currencies. But does for example China want Yuan to replace the dollar?

[-] rio@hexbear.net 17 points 6 months ago

But does for example China want Yuan to replace the dollar?

They seem to be pursuing a path where the Yuan is used for trade and account settlement with not much interest in being a reserve currency, or at most as one reserve currency in a multipolar reserve system.

There are in fact downsides to being a reserve currency since the demand for dollars means that dollars themselves are an export item for the US in the form of government bonds, and on top of issuing bonds the demand for dollars also requires a trade deficit which hurts local production, especially manufacturing and depresses wages in export-oriented industries.

Also since the US grows less quickly than the global economy overall, the demand for dollars internationally relative to the size of the US economy is growing, meaning that the trade deficits must keep getting bigger, meaning that export oriented industries become increasingly hobbled.

Now the benefit of course is that it’s a license to print money. The US government is able to run staggering budget deficits and this is actually good for the US economy because it reduces the burden of the trade deficit by supply the world dollars that way instead, and while it’s awful for export-driven industry such as manufacturing and manufacturing workers, it’s a positive for service & knowledge workers since they get a lifestyle boost from cheap imports.

China doesn’t seem interested in having to “satisfy demand for yuan” by running a trade deficit because that would hurt Chinese manufacturing and industry, but they also don’t want to be funding the US budget by needing to buy USD to use for their own international trade settlements, so they’re pursuing a path of bilateral and sometimes regional agreements where settlements are done using local currencies directly instead of USD.

Basically they don’t really want to be a reserve currency, or only a small one perhaps to enable some deficit spending without trashing the balance of trade.

[-] FuckyWucky@hexbear.net 7 points 6 months ago* (last edited 6 months ago)

I don't think US budget deficits is the big issue, it is high sure and wasted on unproductive shit with all the military spending but you should be looking at current account deficit instead, which is the world's highest.

Having control over the reserve currency mainly gives you the privilege to import much more than you would able to otherwise since other countries are "willing" to take your reserve currency for goods.

Not all countries can a surplus or a deficit at once. It's why Germans complaining about lazy Greeks during debt crisis was ridiculous. The Greeks were only buying German goods because Germans were willing to sell it to them. And because Germany was strangling domestic workers who wouldn't be able to buy the goods they made themselves.

China right now has a trade surplus. So, I don't really know how much advantage it would give them to have their own currency be "wanted" outside other than bypassing sanctions and soft power. Eg. Recently India wanted to buy crude from Russia but of course, sanctions. They could have an Rupee-Ruble arrangement but that would result in one side (Russia) accumulating too many Rupees which it doesn't need.

So, Russia asked India to provide Yuan instead. Since Russia can then use Yuan to buy from China. But of course, India wouldn't want that.

[-] CarmineCatboy2@hexbear.net 6 points 6 months ago

That's the difference between having the Yuan be a trading currency or a reserve currency. From what I understand, creating bilateral agreements allows China and it's trading partners to de-risk from the american political system. But allowing the Yuan to become a reserve currency, which is then speculated upon overseas, would give China currency hegemony. Yes, the Chinese could then use that metaphorical gold mine to invest productively. But all the incentives the US had to export their industries overseas would still be there. If the USD hegemony can be understood as a resource curse, then an Yuan hegemony can be as disruptive to the chinese political system as it was to the post war american political system.

[-] MNByChoice@midwest.social 18 points 6 months ago* (last edited 6 months ago)

The conditions necessary for the USA to lose dollar hegemony would themselves lead to massive shocks, or be the result of massive shocks. There is a lot of inertia in doing things the same way only because we have been doing them that way.

It is an interesting point.