Extremist economic vision lacks specific current alternatives for the far right Lee Jae-myung ‘AI-based labor reduction, tax-free’
The Nation pointed out that the extremist economic vision is creating an extreme right-wing system, and a specific democratic alternative that fits the current situation is needed.
Lee Jae-myung, who followed the Trump regime's 'stock preference', announced on the 3rd a new economic system of "no taxes, shortened work hours, equal opportunity through AI investment" following the 'eat-and-sell' and 'well-being' extreme economics.
The Nation, which diagnosed the rapid rise of the far right in Germany, stated on the 28th of last month under the title <Anti-fascist economic policy must be adopted to defeat the far right> that <Opposition to the status quo should not be monopolized by the right-wing extremist vision of parties such as the Alternative for Germany (AfD)>.
In an analysis that the rise of the right wing in Germany is the result of an election of a failed economic paradigm, it diagnosed that “Germany entered an economic recession, and the economic crisis ultimately brought down the government.” It is far more important for civil society, trade unions and progressives inside and outside parliament to confront market fundamentalism, the Nation said.
Alternatively, it is essential to “provide clear policy solutions” that can imagine a better future for anti-fascist economic policy to counter the rise of the far-right AfD, at least by blocking the most draconian austerity measures, such as the VAT hike, and achieving small but concrete policy victories, such as a rent freeze.
The collapse of the German coalition government was brought about by a loss of confidence in the government, a heated debate on immigration, falling real wages in recent years and the ongoing economic crisis, and discontent with the economic situation has strengthened the far-right AfD, and as the economic pie begins to shrink, conflicts over how to divide it have intensified, resulting in the rise of the far right. The Nation found that 37% of AfD voters and 18% of right-wing CDU/CSU voters rated their country’s economic situation as bad.
Voters of the left-wing and left-liberal parties were significantly less concerned about their own economic situation.
Even more serious was the finding that 85% of voters of the far-right Alternative for Germany (AfD) thought that the situation in Germany was unfair.
Moreover, 96% of AfD voters and 90% of CDU/CSU voters rated the overall economic situation as bad, a figure that was much higher than that of other parties.
The far-right AfD succeeded in positioning itself as an alternative to the status quo for those who feared the economic situation, and despite its program being a typical example of the far-right’s signature “bottom-up redistribution” structure, ordinary people supported the far right. This political message confirms the political structure in which the worse the economic situation and prospects of people, the easier it is for the right to exploit their discontent for their own purposes.
The current international situation is further aggravating this. The European, American and German federal elections have been showing this trend for months, and opinion polls have been pointing to this trend for years.
The AfD has made its first gains in the elections, with 15% of the vote. This seems to be the result of the energy price shock in the fall of 2022.
The German Institute for Labor Economics (IZA) published a report in June last year titled “Can Price Controls Be Optimal? The Economics of Energy Shocks in Germany (IZA DP No. 17043) states that "the energy crisis in 2022 will result in a one-year GDP loss of 4%, similar to the short-term production losses during the COVID-19 crisis in 2020 and the global financial crisis in 2008" and that "during the 2022 energy crisis, inflation rates rose sharply and real wages fell more than in any previous year in post-war Germany".
The report goes on to state that "while the German government handled the immediate response to the energy shock well, it waited too long to introduce energy price breaks in 2022 and failed to respond decisively to the heightened economic uncertainty, which coincided with a sharp increase in the approval ratings of the far-right AfD party in the summer of 2022".
Regarding the recession, the report stated that “Germany’s energy price brakes were an effective price stabilization policy for households, but they failed to adequately protect the industrial base, increasing the possibility that the German economy would continue to stagnate,” and that “price controls are socially optimal whenever self-fulfilling expectations in the aftermath of an energy shock create endogenous price uncertainty,” and presented a “price control” economic system as an alternative.
The second gas price surge of over 20% in the fall of 2022 indicated a crisis as the price shock intensified and the government reconsidered passing on the crisis costs to citizens through a gas surcharge. The Nation also revealed that the victory of the right-wing Trump regime in the US presidential election last November was the same path.
The Nation dated December 13th, 2018, under the title <What was the biggest factor in Kamala Harris's defeat?> and the subtitle <Blame the cost of living crisis>, diagnosed the progressive Democratic Party's crushing defeat and the conservative hardliner Trump's landslide victory as a 'misjudgment' of economic diagnosis, saying, "According to repeated opinion polls conducted ahead of the November 5th election, Americans are worried about the cost of living, but many economists and experts shook their heads in disbelief and blamed it on the "vibecession."
The Nation said, “The lack of empathy for the suffering of top-earning economists, their reluctance to step down from the world of elegant models and aggregate figures and try to understand the situation on the ground, ultimately complicit in Donald Trump’s victory,” and “For many, favorable economic data and a booming stock market provided an illusion that the reality of exorbitant food prices, skyrocketing rents, exorbitant health care costs, and skyrocketing interest rates was real.”
A recent survey of far-right AfD voters in Germany found that three-quarters were worried about the “key role of inflation” in making it difficult to pay bills, maintain a standard of living, or worry about money in retirement, and this has led to the consolidation of the far-right party.
Since Fordism, the ideology of American capitalism’s heyday, capitalist societies in the Northern Hemisphere, where production has been broken down into increasingly simple and repetitive tasks, have been based on a fundamental social contract that has grown into a mutual structure of working hard and being paid enough to buy the necessities of life.
When people continue to work hard but the prices of basic necessities soar, workers feel betrayed, and their frustration is exacerbated when “the stock market hits record highs and corporate profits soar.”
The closer one is to the far right, the more they are obsessed with political goals and propaganda through “stock indexes.” The New York Times reported on the 1st, “The stock market was one of Trump’s favorite topics. <Not so recently> Under the title <During his first term, President Trump regularly took credit for the stock market's boom, citing the surge in stock prices as a measure of his presidency, and after his election victory in November, he pointed to the market's rise as a sign of optimism>, the article reported, <But President Trump has been relatively silent on stocks since taking office in January, even after the S&P 500 hit a record high on February 19.
The S&P 500 has fallen nearly every day since, and is lower than it was on January 20, when President Trump took office>. Democratic Party leader Lee Jae-myung mentioned the “KOSPI index of 5,000” in his presidential campaign pledge, and announced at the Supreme Council on the 17th that “if the Democratic Party takes power, the KOSPI index will hit the 3,000s without any special changes.”
On November 10th of last year, at the Supreme Council, Lee directly linked the election of Trump, who is centered on his own country and puts “America First,” to his message of “Eat-and-livelihood issues.”
On that day, Lee said, “The world situation is so unstable and the future is uncertain, so I think that wherever you go in the world, people’s attention is focused on the ‘Eat-and-livelihood issue (Eat-and-livelihood issues)’,” and “Our diplomacy must shift from the previous partisan and value-centered biased diplomacy to a practical approach that thoroughly focuses on the interests of the people and the country,” announcing the change in the political ideology system of “Eat-and-livelihood issues” and “Good-living issues.”
In his speech at the National Assembly on the 10th of last month, Lee declared “Good-living issues” as his vision for the next administration. presented.
On the 2nd, Representative Lee stated in his recommendation for ‘Innovative Growth’ that “In the new civilization era (omitted) human desires are directed toward ‘value’ rather than ‘function’” and “‘Yes, that’s the right way to live!’ A life that elicits exclamations is ‘Jalsanimation’”.
Representative Lee explained Jalsanimation as “a shift in focus from a ‘function’-centered life that quenches hunger with cheap and filling food to a ‘value’-centered life that inspires emotion with meals that satisfy both the mind and body.”
In the exit polls for the US presidential election, 46% of respondents said that the situation was worse than in 2020, and only 20% gave the same answer about 2020 compared to 4 years ago and 2016.
This was already a Trump victory and a Democratic defeat on election day.
In another opinion poll, 9 out of 10 voters said they were worried about the cost of groceries, and 8 out of 10 said they were worried about the cost of medical care, housing, and gas. said.
In another poll, voters from households earning more than $100,000 supported Kamala Harris (Democrat), while voters from households earning less than $100,000 favored Trump (Republican).
The Nation said, "Many American workers felt that the Democrats had abandoned them because of their own pocketbook struggles, and they ended up voting for Trump."
The Nation said, "What is needed is an anti-fascist economic policy, an economic policy that can provide solutions to socioeconomic decline and ease people's fears about the future." "As a first step toward a concrete and democratic alternative to the current situation, we need policies that stabilize essential prices, from food to energy to rent, and policies that raise wages."
This is especially true "in the short term, but also in the future," and "Spain and Mexico show that this is not only necessary, but also feasible."
The right-wing government in Germany is likely to make this worse.
The Nation said that under Chancellor Merz, prices could rise even further and that a higher value-added tax could be introduced to offset the cost of the planned wide-ranging tax cuts for the wealthiest, adding that "Merz did not rule this out before the election and is pursuing it, which could lead to another energy price shock in the coming years."
Germany's centre-left government collapsed, giving a landslide victory to market fundamentalist conservatives and right-wing parties in the country.
The new chancellor candidate Friedrich Merz, a former head of private equity firm BlackRock, led the Christian Democratic Union (CDU/CSU) party with 28.5% of the vote, while the far-right Alternative for Germany (AfD) party led by former Goldman Sachs banker Alice Weidel won 20.8%. What started as a 'progressive coalition' of the Social Democratic Party, Green Party, and Freedom Party in Germany ended in failure.
The 'Nation' cited two major turning points as "the energy crisis that hit in the aftermath of the war in Ukraine in 2022" and "free market dogmatism delayed the response to price surges."
On the 3rd, Representative Lee said, "Shouldn't we invest in artificial intelligence (AI) now? If some of it is held by the national fund or the state and some of the productivity generated from it is shared equally among all citizens, then we don't necessarily have to collect taxes."
Representative Lee continued, "If a company like Nvidia were created, wouldn't a society come where 70% is held by the private sector and 30% is shared by all citizens without necessarily having to rely on taxes?"
He said, "Working hours can be shortened (with AI). And they should be shortened. (Work) is the source of meaning in life, so we shouldn't approach it only in terms of efficiency. Everyone should share the opportunity," and announced 'stock investment attraction propaganda' as an 'abstract' policy.
At a New Year’s press conference at the National Assembly on January 23, the representative stated, “We must change our constitution to a society where the people trust and invest in innovative companies, and a society where the capital market has greater investment appeal than real estate,” and “Advancing and activating the stock market is the easiest way to make the people rich.”
In countries other than the U.S., most of the economically weak were attracted to capital, and through ‘redistribution from the bottom up’ and the Korean stock market, which is more sensitive to dollar fluctuations, the Trump administration used the stock market as a means to maintain a hard-line conservative regime with dollar dominance, and Korea’s hard-line conservative regime further strengthened its ‘capital concentration structure.’
The S&P 500 index was sluggish for the two years before Trump’s first term. In 2017, the stock and bond markets struggled in the aftermath of the domestic energy crisis as debt-ridden oil companies began to go bankrupt, and the Federal Reserve attempted to stimulate the economy by lowering interest rates by about 4 percentage points from the current level, and when Trump came to power, he announced a tax cut and promoted a growth-friendly agenda, which led to a stock market boom. stimulated.
Trump wrote on social media in July 2017, "The stock market is at an all-time high."
On the other hand, the stock market in the second half of 2024 under Trump's second term has already soared and valuations have reached all-time highs.
The NYT predicted that <the S&P 500 index rose more than 20% in two consecutive years in 2023 and 2024, the first time since 1996> and <this means that it may be more difficult to reach new heights under Trump's second term, especially as large technology stocks, the engine of the recent rally, begin to falter> and predicted a failure to further boost stocks.
The size of the giant companies driving the artificial intelligence boom under Trump's second term has grown so much that even small fluctuations in individual stock prices can move the entire S&P 500 index, maximizing the volatility of the stock market.
The NYT reported that <these stocks, known as the Magnificent Seven, are currently “They account for about a third of the entire index by value,” he said. “The reason these stocks are helping to lift the rest of the market as they rise is that they have acted as anchors that have weighed on the market as prices have fallen, and this is exposed to the risk of a backlash.” “As competition among AI pioneers intensifies, some of these key names have already lost their luster, with Nvidia, which makes chips for AI companies, down nearly 10% since Trump took office.
Of the 11 sectors in the S&P 500, technology stocks are one of only two to have declined so far this year.” The move underscores the challenge facing President Trump, who has engineered a bull market, and the Lee Jae-myung regime, which has copied him, if Big Tech continues to decline.
The New York Times reported on the 2nd that <President Trump said at a conference in Miami on February 19, the day the S&P 500 index hit a record high, "I think the stock market is going to be good."> and <In his speech, he exaggerated the gains the Dow Jones Industrial Average has made since the election, saying that it rose less than 7%, but that it "went up 10%." The S&P 500 index rose 6.25% from the election until February 19, but only rose 3% since November 5.> Investors are becoming more anxious.
In a recent survey of fund managers conducted by Bank of America (BOA), nearly 90% of respondents answered that stocks are overvalued. The CBOE Skew Index, which measures how much investors are prepared for a selloff by tracking options market transactions that could cushion a plunge in the S&P 500 Index, hit a record high of “more selloffs” on February 18, the day before the index hit a new all-time high.
The New York Times warned against the AI hype, saying, “Many people are wary of the uncertain direction of the market due to the trade war, Fed interest rates, etc.”Regarding the CBOE Skew Index’s record high, “This suggests that investors are nervous about the market crashing soon, and this may be why the market is no longer the barometer of success that Trump once claimed.”
Representative Lee Jae-myung said, “The war in Ukraine is also a drone war, so why are hundreds of thousands of young men spending their time in the military, sitting in barracks like that?” and “In the end, everything will be drones, robots, and unmanned, so we need to AI-ize our national defense. It will also be a new opportunity for the defense industry,” foreshadowing a shift in the Trump administration’s military buildup system.