The economic crisis: Whose fault is it, and how can it be overcome? (Reactualising Marxism)
Aleksandr Buzgalin and Andrey Kolganov -professors in the Economics Faculty at Moscow State University, leaders of Russian Social Movement “Alternatives”
The period at the end of 2008 and the beginning of 2009 was notable for a whole range of developments. Two of them, however, seem to the authors to have been not only closely interconnected, but also of symbolic importance: a genuinely profound economic crisis broke out, and along with it, sharply increased interest came to be shown in the works of Marx.
The wolf appears on the scene: the crisis and its origins, or why the world has started to take account of Capital
Over many years, various Marxists spoke of the crisis of capitalism at such length that the great majority of analysts ceased to take them seriously. The situation thus recalled the old story of the shepherd boy who continually cried “Wolf! Wolf!”even though there was no wolf there. But one day, the wolf actually appeared….
Meanwhile serious Marxists, unlike the party-political propagandists of the Soviet era, began talking of the threat of a world financial crisis and of the possibility of its turning into a world economic crisis only relatively recently, around the turn of the century. This was the point at which it became obvious that the gap between fictitious financial capital on one hand, and human capacities and the requirements of material goods production on the other, had reached dangerous dimensions.
Drawing out the lessons in 2004 of an analysis of the fictitious, “virtual” capital of the twenty-first century, the authors of the present text thus concluded that “the crisis of the world financial system that is entirely probable in the near future might act as the detonator for a series of global cataclysms.” In another text, devoted to an analysis of the macroeconomic dynamic in our country, the conclusions was also drawn that in these circumstances, “growing economic difficulties” would become inevitable around 2008-2010. This would also be the result of the persistence in Russia of the state-oligarchic capitalism that had been established since the turn of the century. With the financial, raw materials and energy-based oligarchic groups still dominant, there had been an effective refusal to prioritize the development of the social sectors and to invest in the development of human beings. The present authors were not alone in making this forecast. Unfortunately, it has come true. The “wolf” has appeared on the scene. The world crisis has become a reality.
The Austerity Hoax
By Betsy Bowman, Ph.D. , President and Research Associate of the Center for Global Justice
View the video at https://vimeo.com/65101765
The call for austerity – long imposed in the third world – the Global South — through structural adjustment programs implemented by the International Monetary Fund and the World Bank– is now being heard in the first world – in Europe, the US and Canada, Australia, Japan and elsewhere. Austerity for the Global North is nothing less than a structural adjustment program for us. Read more...
The Global Tribute System
by Betsy Bowman
The three interlocking crises looming over the planet – the ecological, the economic and the political — like Edgar Allen Poe’s pendulum inexorably come closer every day.
If the focus of the entire world immediately turned to building renewable energy grids and renewable fuels, we would still not be able to stave off all the climate change that is happening. We might be able to stave off the worst.
If we put everyone involved in the financial collapse in jail and expropriated their ill-gotten gains, there would still be millions of people unemployed and millions whose homes have been foreclosed. There are billions of marginalized, unemployed desperate people around the world who risk slaughter if they bring attention to their plight.
If our elected representatives complied with the wishes of the voters rather than the corporations, the ethos of disgust, discouragement and despair would still infect the body politic.
Regardless, we try. In what follows, I explain clearly and concisely what has happened in the U.S. and the global economy over the last 65 years and why we are facing austerity. We are facing austerity because the top 1% — the international financial capitalist elite around the world – runs most of the governments, the international organizations, the international financial organizations and they want the rest of the world to continue paying tribute – giving their surplus – to them. This is the natural evolution of capitalism. Like in the game Monopoly, one player ends up owning everything. But, there is an alternative. The alternative is to make all banking and credit facilities public and force the current cast of banksters to take their losses. But first we need to understand how we got here. I explain for the non-economist how we have gotten to our present collapsing standard of living and the further enrichment of the top 1%.
By standard of living I don’t mean per capita GDP (gross domestic product) and the amount of consumption we can arrogate to ourselves. I mean our deteriorating eco-system, our war-ravaged and violence-plagued societies, our miserable lives of fear, insecurity, oppression and exploitation, our collapsing hopes for collective fulfillment of human potential. This global problem is the result of conscious, government policies; it was designed and orchestrated. It was not an accident.
Only just under half a century ago, under the administration of Lyndon B. Johnson in the 1960s, the government sponsored a “war on poverty.” The national ethos was one of helping others, believing in the intrinsic equality of all humans and using government fiscal policy to compensate those not born to luxury so they could earn a good education and fulfill their own potential. This is humanity’s heritage from the Enlightenment of the 18th Century. Liberty, equality and brotherhood for all. The modern project of actually realizing this human heritage has been attacked many times, but never so viciously and successfully as now. Today’s ethos is a return to the ethos of monarchies. We are no longer citizens of a republic, but we are subjects of corporations and the oligarchy that controls everything. This profound change was designed and orchestrated. It was not an accident.
“Whose Freedom, Whose Democracy?”
Oct. 29, 2008
1.What is wrong with this picture?
The notions of freedom and democracy that have been deeply tied to capitalism have enjoyed enormous historical force up to now. The identification of democracy with free trade and unregulated capitalism has been touted for so long that we are only now realizing that that identification is over, finished. The current crisis definitively delegitimates this coupling.
Consider the image of freedom and democracy in Adam Smith’s famous claim that if all who enter a free, unregulated market pursue only their own individual good, the general or social good of all others will also thereby be served, as if by the action of “an unseen hand.” The faith here is that simply by pursuing my self-interest in a free market, the needed goods will sooner or later get into the needy hands. We need not plan such a result. In fact, doing so could be harmful. In societies where need satisfactions are got primarily via markets, we are duty-bound to pursue our own good without regard to others. This is because for one thing others can be trusted to pursue their own interest, and for another if everyone does that all will prosper.
Lifted of this burden of care for others, aren’t we now finally free? And isn’t a political arrangement that preserves this market freedom — periodic, equal, isolated voting of abstractly equal citizens in societies that allow class divisions — the very model of democracy?
We are told that democracy = freedom = free trade = capitalism. This has been our epoch’s mantra up to now. We all want freedom and democracy. Therefore we must want capitalism.
Financialization and the Economic Crisis
"I've found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers... If that's true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis."
--Nouriel Roubini (Feb. 1, 2009)
Since last fall, I've been trying to figure out how did so much debt pile up? We don ‘t have a liquidity crisis but rather a debt crisis. There is so much more debt than underlying value, the situation is unsustainable.
After all, debt has some connection to the real economy. Debt is used for financing investment; consequently, there is some correlation between the amount of debt and productive accumulation, the building or development of something – a factory, farm, service — that will make something that can be sold. Financing production-driven accumulation – when value is added by something being made by human beings – this is a healthy use of debt. But when accumulation is driven by debt rather than production, ultimately there is a crisis. Debt does not create new value; only human labor does. It is important to keep in mind that all of these debt instruments have created nothing – not a single pencil, paperclip, or pair of socks.
Neoliberal Globalization: Expropriation from Above
Expropriation: removing property from an owner. from Investopedia.com
In March of 2004, I made my first public presentation here at the Biblioteca Publica of SMA on globalization. Over the intervening 5 years, I have made many more. And by now, almost two years into the Great Economic Collapse of the early 21st Century, we can evaluate the successes and failures of neoliberal globalization, or the Washington Consensus. Over the last 30 years, promulgated by Wall St., business and governments elites world wide, and international financial institutions, its two pillars are deregulation and privatization. Legitimized by the ideology that “free trade” would benefit everyone, these policies were imposed world-wide, except in the US.
The recipes were uniform. The following 4 sets of policies could improve any country’s economy. Specific benefits would result, it was claimed. Fifteen years later what is the reality? And since NAFTA was the model for subsequent efforts at corporate globalization generally, what is the reality in Mexico? Let’s look more closely.
Bailouts for Bankers, Austerity for the People
by Bowman, Yarish & Lynch
When the US financial system collapsed in 2008 in a speculative frenzy by the biggest banks, they were bailed out at taxpayer expense. Now the 1% is richer than ever while the people are asked to accept austerity as social programs are slashed, union rights are gutted, and elections are being bought. Read More...
The End of the American Dream
by Cliff DuRand
If you work hard, no matter how humble your origin you can rise in society to something better in the way of material well being, economic security, a settled life and social prestige. Read More...
Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America
by Charles H. Ferguson (Crown Business, 2012)
Reviewed by Betsy Bowman
Charles Ferguson’s Oscar winning documentary film “Inside Job” came out in 2011. Why write a book on the same topic? Because, as Ferguson says on p. 1 of his new book, “Three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail. And that’s wrong." Read More...
The End of the Economic Crisis?
by Cliff Durand, July 18, 2012
Text of Talk
We are all acutely aware that the US faced a financial crisis in the fall of 2008 as the housing bubble burst and that this ushered in a general economic recession. That recession was officially declared to have ended in 2009 as profits soared. (1) But it was admitted this is a jobless recovery. In its public pronouncements the White House emphasizes every improvement in economic indicators. Some commentators view the recession as another cyclical downturn that the country will recover from in due time as it always has done in the past. Others see it as a more structural problem that will not resolve itself and requires more basic changes. I am of the latter school of thought, but think it might even be a systemic crisis.
The conventional view of capitalism sees it as a system in a steady state of economic growth through the accumulation of wealth, although there are occasional, cyclical interruptions to growth. I want to suggest an opposite view that has been articulated by David Harvey, a leading social theorist. In his book The Enigma of Capital and the Crises of Capitalism [Oxford University Press, 2010], he argues that crisis is the normal state of capitalism and that periodically fixes are found that stabilize the system and enable growth to continue. But this growth then sets the stage for the next crisis, which will require a new fix.
Reflections on the financial crisis and over accumulation
October 14, 2008
One of the striking things about the bailout is that public opinion has been running heavily against it. During the House leadership discussion Congressional mail was as much as 100 to 1 against any bailout. This unheard of rejection was based on two sentiments: anger that those who had created the financial mess would be rewarded and total distrust of what the Administration was telling them (“you lied before to get us into Iraq and we are not going to be suckered again.”) But there is also the reality that we live in an economic system that works only when the rich are able to get richer and if they fall on hard times, then we have to pay the price to help them out in order to get the system functioning again. In effect, we are all being held hostage. That is the reality of capitalism.
Like many of you, I’ve been trying to figure out what is the deeper cause behind this financial crisis and the larger economic crisis that is likely to follow. The conclusion I’ve come to may seem counterintuitive at first blush: the problem is, there’s too much money! I don’t mean the average American has too much money –so many don’t have enough to pay their mortgage, fill their gas tank, buy groceries, send the kids to college. We don’t have enough money. It’s the wealthy capitalists who have too much money. They have so much that there is a problem finding places to invest it profitably –as capitalists, that is what they seek to do: invest money in order to make more money, to accumulate more capital.
We are All Bankers Now
October 29, 2008
How many of you are citizens of the U.S.? Congratulations. You are now part owners of the largest banks in the U.S. That’s right, collectively we are now bankers thanks to the $700 billion we taxpayers gave to the Treasury Department for the bailout. But before you get too excited I should point out that we won’t have any say in how our banks are run. Because President Bush and Secretary Paulson made sure we are only passive investors. That is, private financial investors will decide what to do with our money and use it to make themselves even richer. Public money is being used for private enrichment.
But it doesn’t have to be that way. As owners we ought to have a say in how our money is used. We ought to be able to use it to benefit the public by promoting social projects. We could use it to give relief to the millions of distressed homeowners. We could use it to finance projects like green energy, infrastructure development, college loans –whatever we the people decide best promotes the common good. This crisis could become an opportunity to expand the scope of democracy in our country. We claim to believe in democracy, don’t we?
Globalization and Economic Crisis
February 4, 2009
Corporate capitalism has morphed into a global stage that leaps beyond traditional national bounds. That is what is popularly called ‘globalization.’ For the last three decades transnational corporations, backed by U.S. administrations, have sought to open up markets throughout the Third World and gain access to its low wage labor and other resources. Under the banner of “free trade”, they have promoted NAFTA-like agreements not only with Mexico but also many other countries in Latin America and elsewhere around the globe. This has also been the focus of the World Trade Organization that governs much of the world’s trade.
Under this globalization project national economies have been opened up to foreign investment and redirected from producing for their own people toward exporting to the First World. With this, traditional patterns of livelihood have been transformed. For example, here in Mexico small scale campesino agriculture is being replaced by agribusiness for export. Instead of producing for need, the land is being used to produce commodities for sale. And rather than the land being cultivated by its owners, it is worked by wage laborers who have sold their labor as a commodity.
E.g. Los Rodriguez area.
As globalization has marched on, it seems everything is being turned into a commodity –to the benefit of a few and at the expense of the many. Corporate capitalism seeks to bring within its orbit all productive activities worldwide and commodify all products –in other words, we are seeing the development of capitalism as a universal integrated system under neo-liberal principles.
End of an Era?
panel discussion January 28, 2009
featuring Rick Welland, environmentalist, Cliff DuRand and Betsy Bowman, Research Associates of the Center for Global Justice. To view entire discussion go to http://vimeo.com/3007304 The text of the DuRand-Bowman presentation follows:
A prophetic warning from Thomas Jefferson: “If the American people ever allow the banks to control the issuance of their currency . . . the banks and corporations that will grow up around them will deprive the people of all property, until their children wake up homeless.”
The Presidential election of 2008 combined with the unfolding financial and economic crisis, the exhaustion of military imperialism abroad, and the looming energy/climate crisis combine to mark a clear turning point in the present as history. The rejection of the politics of fear in favor of a politics of hope opens new possibilities of social development. The election of the nation’s first African American President is also a powerful expansion of what America is. It does not end racism nor the continuing effects of racism on many of those at the bottom of our society. It is a measure not so much of how far people of color have come, but of how far whites have come.
But it is not just this historic election that makes for an end of an era. What makes this the end of an era is the convergence of a number of interacting factors. Among them are two unwinnable wars, the economic crisis, a chronic health care crisis, and potentially devastating climate change. Each by itself would be significant. Taken together they signify the need for and the possibility of fundamental change.
Take the energy/climate crisis that is mounting. Since the industrial revolution in Europe and North America, the burning of fossil fuels has led to a warming of the earth’s climate, as Al Gore has so convincingly shown in “An Inconvenient Truth.” Now as additional countries industrialize, the release of greenhouse gases is accelerating. The spread of industrial farming adds further to the problem as we approach a tipping point where climate change becomes irreversible. At the same time, we are reaching peak oil. With that the present industrial and transportation system becomes unsustainable. Without new energy sources industry, agribusiness, suburbia, and global trade will become increasingly costly.
We have already seen oil wars as states strive to control access to this dwindling supply of black gold, the key not only to economic wealth, but also geopolitical power and financial dominance. The question becomes how much blood and treasure will be sacrificed to maintain this? The neo-cons in the Bush administration knew no bounds and ended up over reaching in their imperial ambitions.
But imperial reach has been a feature of U.S. foreign and economic policy at least since the end of WWII, and even longer in Latin America. There has long been a bi-partisan consensus that the U.S. has a special leadership role in the world and that this means protecting, supporting and advancing what is called “the national interest”, but usually amounts to the interests of corporations. Policy debates have centered on how best to accomplish this, not on whether it should do it at all.
The Bush administration has laid U.S. imperialism bare to our view. But now that it is discredited, will it be rejected, or will it only be reformed, replacing military hard power with diplomatic soft power? Or can we consider an alternative where democratic international institutions protect all and allow no nation to dominate or exploit another? And is this possible as long as the global injustice of a world divided between rich nations and poor nations endures?
Review of Kevin Phillips´ Bad Money: Reckless Finance, Failed Politics & The Global Crisis of American Capitalism
Click here. The text of the Comments are:
Financialization of capitalism by Cliff DuRand
The Perfect Storm by Betsy Bowman
Apple's Low Wage Path to America's Future
by Jeff Faux
With the introduction of iPhone 5, Apple Inc. is now the world’s richest company, valued at over $625 billion. Given its momentum, the firm in another year or so could be worth a trillion dollars.
It is more than just another mega-company. Apple is the poster-child for the claim that, despite its present troubles, America is destined to prosper in this de-regulated global economy. With our inventive genius and entrepreneurial culture, goes the argument, we Americans will climb up the global job ladder, designing and making tomorrow’s products while those less endowed will occupy the lower rungs, doing the routine manufacturing of yesterday’s innovations. Read More...
Is This the Big One?
April 14, 2008
For more than a decade, we Americans have been living on an economic San Andreas fault–a foundation of fracturing competitiveness covered by unsustainable consumer spending with money borrowed from foreigners. A financial earthquake was inevitable. We don’t know how high on the recession Richter scale the current crisis will take us, but it increasingly looks like, as they say in San Francisco, “The Big One.”
Since the last Big One, the Great Depression of the 1930s, we have had eleven small to medium recessions, lasting an average of ten months. The most severe–two back-to-back downturns that began in 1979–drove price increases and the unemployment rate to double digits.
We’re not at those levels yet. But the structural supports underneath our shop-till-we-drop economy are considerably weaker. For starters, we have a historic depression in the housing market. Americans’ total mortgage debt now exceeds their home equity, for the first time since 1945. Housing prices have dropped 10 percent since last spring, followed by record foreclosures. Most economists expect them to drop at least another 10 percent, which could leave more than 14 million households–at least 16 percent of the total–better off if they just walked away from their homes. Prices could go even lower.
The Elites Are Unanimous
by Jeff Faux
Calls for a bipartisan “Grand Bargain” on taxes and spending for the next decade ring out daily, if not hourly, from the politicians and pundits who dominate our political media. But the national discourse is silent on the tacit agreement both parties have already made on the future that lies ahead for the majority of working Americans: a dramatic drop in their living standards.
The United States can no longer satisfy the three great dreams that have driven most of its domestic politics since the end of World War II: the multinational corporate class’s dream of limitless profits; the military-industrial complex’s dream of global hegemony; and the dream of the people for rising incomes and expanding opportunities. One out of three? Certainly. Two out of three? Maybe. All three? No.
So far, Corporate America gets priority boarding in the economic lifeboat – with the safest seats reserved for Wall Street. Four years after the crash, the financial sector remains heavily subsidized with cheap federal loans that it uses to buy higher yielding bonds, speculate in exotic IOUs and pay outrageous salaries to those at the top. Larger than ever, they are more than ever “too big to fail.” As a result, Wall Street continues to divert the nation’s capital away from investment in sustainable high-quality jobs in America.
Next in line is the Pentagon and its vast network of corporate contractors, members of Congress with military facilities in their districts and media propagandists for the empire. The administration, along with some libertarian Republicans, insists that military spending will not be spared in the coming era of austerity, and has proposed modest cuts over the next decade. At the same time, virtually all of Washington supports the policies that require huge defense budgets, i.e., remaining in the Middle East, expanding in Latin America and containing China in its own neighborhood. The threatened across-the-board cuts in federal spending that become automatic if a long- term budget deal is not made by December will almost certainly be finessed in order to protect the military budget.
All of which leaves the American middle class on a badly listing, although not yet sinking, economic ship. Even before the financial crash, real wages for the typical American worker had been stagnant for 30 years as a result of: 1) trade and investment deregulation that shoved American workers into a brutally competitive global labor market for which they were unprepared; 2) the relentless war on unions that began with the election of Ronald Reagan in 1980; and 3) more recently, the erosion of the social safety net for low wage workers and the unemployed.
The Ultimate Bear Market
house of cards: a tale of hubris and wretched excess
on wall street by william d. cohan, Doubleday, 468 pages, $27.95
“We all fucked up,” says alan Schwartz in the final paragraph of House of Cards. “Government. Rating agencies. Wall Street. Commercial Banks. Regulators. Investors. Everybody.
”Schwartz was the last chief executive officer of Bear Stearns, which, when it collapsed in March 2008, became the first of the financial-market dominos that ultimately toppled the U.S. and world economies. His generous sharing of culpability is a bit like the sly confession of the serial murderer who implicates his parents, his teachers, and the police for their failure to keep him from killing. Still, he has a point; there are multiple fingerprints at the scene of this crime.
House of Cards is not the complete picture of the bursting of Wall Street’s credit bubble. Other books will give you a clearer understanding of swaps and derivatives (Charles Morris’ The Trillion Dollar Meltdown), policy bungling (Dean Baker’s Plunder and Blunder), and the nitty-gritty of life on the trading floor (Frank Partnoy’s F.I.A.S.C.O.). But William Cohan fits an important piece into the mosaic: a portrait of the personalities turned loose on the country when we deregulated finance.
Bear Stearns was one of Wall Street’s most highly leveraged promoters of mortgaged-backed securities. By investing a dollar of its own money for every $33 or more worth of stock it bought and sold and borrowing short-term for the rest, top managers and big investors became filthy rich as the market soared. Fortune magazine named Bear Stearns the most admired securities firm in 2002 and 2004 (Bear came in second in 2003). In January 2007, a share of the company’s stock hit $172.69, four times its book value.
Possibilities for Change
by Jeff Faux, Marge Allen, Ben Ptashnik
So we have a new President and an opportunity for new beginnings. Barack Obama's campaign promised us change we can believe in. In the face of today's unfolding economic, health and environmental crises, the changes we need are sweeping. What will the new administration be able to accomplish? How can we press for changes we believe in?
These will be the questions discussed by a Center for Global Justice panel on January 21 at 10:30am in Sala Quetzal. The all-star panel will consist of Jeff Faux, Marge Allen, and environmentalist Ben Ptashnik. Economist Jeff Faux was a founder of the prestigious Economic Policy Institute in Washington, D.C. Marge Allen was for years a union lobbyist. And Ben Ptashnik was a former state senator in Vermont and now a promoter of solar energy in San Miguel. Read More...
The Economic Recovery is an Illusion: The Bank for International Settlements (BIS) Warns of Future Crises
by Andrew Gavin Marshall
War is Peace, Freedom is Slavery, Ignorance is Strength, and Debt is Recovery
In light of the ever-present and unyieldingly persistent exclamations of ‘an end’ to the recession, a ‘solution’ to the crisis, and a ‘recovery’ of the economy; we must remember that we are being told this by the very same people and institutions which told us, in years past, that there was ‘nothing to worry about,’ that ‘the fundamentals are fine,’ and that there was ‘no danger’ of an economic crisis.
Why do we continue to believe the same people that have, in both statements and choices, been nothing but wrong? Who should we believe and turn to for more accurate information and analysis? Perhaps a useful source would be those at the epicenter of the crisis, in the heart of the shadowy world of central banking, at the global banking regulator, and the “most prestigious financial institution in the world,” which accurately predicted the crisis thus far: The Bank for International Settlements (BIS). This would be a good place to start.
The economic crisis is anything but over, the “solutions” have been akin to putting a band-aid on an amputated arm. The Bank for International Settlements (BIS), the central bank to the world’s central banks, has warned and continues to warn against such misplaced hopes. Read More...
The Causes of the Current Financial Crisis
In the current financial crisis, there are three major factors that can be used to map the trajectory of what is happening:
1- the rise in land and real estate prices, which is not
unrelated to IMF and World Bank policies of privatization of land
around the world, as a condition for corporate domination;
2- the government’s adoption of an ideology of non-responsibility
for its citizens
3- the decline of the dollar internationally because it
depends on the financialization of oil, and oil is subject to
The second two contextualize the first. And all three express facets of the internal contradictions in corporate globalization,which is the situation in which this crisis is unfolding. Let us look at these in reverse order.
The salient fact about the dollar is that it has been, up to now, the currency of stability (the currency of account) for multinational corporate operations. Previous to the end of the Vietnam War, the dollar was backed by gold in Fort Knox. This gold reserve was drained during the late 1960s due to enormous US military spending, as well as oil importation. This outflow of dollars flooded international money markets and foreign bank reserves. These foreign banks then sought to exchange those dollars for gold (under the Bretton Woods treaty). By 1971, that drain threatening to deplete the gold reserve beyond the level required by law to support the domestic currency.
When the dollar came off the gold standard in 1973 the multinational corporations (MNCs) went into crisis. A stable international currency is their bloodstream; it is what enables them to coordinate their operations in different countries. To restabilize it, the dollar was placed on an oil standard through Kuwait in 1979. Kuwait amassed international dollars, invested them in industrial enterprises, and guaranteed their value through its own oil reserves. The 1991 war on Iraq was in reality a move to take control of Kuwait, a strategy that had been unfeasible while the USSR provided an international balance of power…
Loyola University Chicago
September 24, 2008
Washington can act with breathtaking urgency when the right people want something done. In this case, the people are the Wall Street Titans, who are scared witless at the prospect of their enormous implosion. Congress quickly agreed to enact a gargantuan bailour, with more to come, to calm the anxieties and halt the deflation of the Wall Street giants. Put aside partisan bickering, no time for hearings, no need to think through the deeper implications. We haven't seen "bipartisan cooperaiton" like this since Washington decided to invade Iraq.
So wrote William Greider in The Nation last month [August 18/25]. But a week ago it looked as if there weren’t going to be any more bailouts. Secretary of the Treasury Henry Paulson refused to intervene to save the ailing investment bank, Lehman Brothers, which promptly declared bankruptcy–and sent the Dow plummeting. Credit markets began to freeze up. Paulson and Federal Reserve Chairman Ben Bernanke reconsidered. On Monday Paulson proposed a $700 billion rescue plan for the U.S. financial system–a plan involving more money than any single government program in history, more money even than we’ve spent thus far on the Iraq debacle–and he wants it approved right away, within the week, before Congress adjourns to prepare for the election.
One can’t but think of Naomi Klein’s “Shock Doctrine”–the propensity of neoliberals to push through their radical-restructuring programs when the recipients are too stunned by cataclysmic events (military coup in Chile, collapse of the Soviet Union, shock and awe in Iraq, Hurricane Katrina, etc.) to realize what’s happening…
What to do When the Bailout Fails
By David Schweickart
July 2009 Tikkun Magazine
Dear President Obama,
We have never met, although we are neighbors of sorts. I live a couple of blocks from your Hyde Park home. We vote at the same polling place, Beulah Shoesmith Elementary School.
My daughter Karen has met you. She took two classes from you when she was in law school at the University of Chicago. My granddaughter Lauryn has met you, too-although she doesn’t remember the occasion. Karen brought her to class one day, shortly after her birth. Karen and Lauryn both attended your inauguration, ticketless but with much enthusiasm. I wasn’t there, but I share their enthusiasm.
Which is why I am writing you this letter. You have somehow, against all odds, become president. You are in position to do things that few others on this planet are in position to do.
This is not a letter you’ll want to show to your economic advisers anytime soon, certainly not to Paul Volcker or Robert Rubin or Larry Summers. They would find it crazy and/or hopelessly utopian, probably both. But if the policies they propose are implemented yet fail-as I fear they will-you might want to think about some of the things I’ll be saying here. I’m proposing, if you will, a backup plan.
2015 The end of American Dream
By Cliff DuRand
The continuation of the economic crisis of 2008 up to the present has driven home a social trend that has been evident since the late 1970s, viz. the decline of what is usually called “the middle class” and the accompanying American Dream.
The American Dream is the belief that if you work hard, if you are blessed with at least a modicum of ability, and have a little luck, you can succeed. That is, you can rise in society no matter how humble your origin to something better in the way of material well being, economic security, a settled life and social prestige. It is the dream of upward mobility for oneself, or at least, for one’s children. Read More...