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So Much for Letting the Free Market Rule
Hear that humming sound? That's the printing presses at the United States Treasury running 24 hours a day, seven days a week, churning out an ocean of green paper to bail out the billionaire bankers, brokers and assorted brigands who are responsible for the economic disaster that's befallen us.
They're busy running off $3.7 trillion in bailout money for those who don't deserve it. It's a Happy Thanksgiving and a Merry Christmas to the very pirates whose greed got us, and them, in all the trouble.
Isn't capitalism grand?
We're daily treated to the spectacle of the fading remnants of a Republican administration working 24/7 to dump the tax money of hard-working Americans into the leaky coffers of the robber barons.
These are the same Republicans who've been telling us for eight years that we needed to get government out of the business of big business. Let the market decide, they crowed; it's more efficient. Get rid of all those pesky federal regulators, by hook or by crook, and everything will come up roses.
Well, the market decided. It decided that the whole thing was a Ponzi scheme, worth about as much as a three-legged mule. It decided that those who'd cooked up all these derivatives based on bundles of bad mortgages were broke. Likewise for all the poor suckers worldwide who'd bought those bundles of joy.
Suddenly all those free market barons are pushing and shoving to get into the line for a government handout - the corporate equivalent of food stamps and welfare checks.
We're treated to the spectacle of a treasury secretary, Henry Paulson, whose statements and declarations are no longer operative by the time they leave his lips.
With nearly two months to go before Barack Obama is sworn in as president of the United States, the man he'll replace, George W. Bush, has virtually disappeared. Not that this is necessarily a bad thing.
But it begs the question: Who IS running the railroad?
The stock market reacts positively to even an off-hand remark by Mr. Obama, and it's positively giddy when he does something like name those he plans to appoint to run the economy.
Suddenly we discover that rock-solid Citibank is awash in red ink and needs rescuing from its own miserable management, and we dump a fresh load of printed green paper - $300 billion, a good dollop _ in food stamps on them.
And who can forget the spectacle of the men who've run the Big Three automakers into the ground boarding their private jets and zooming to Washington, D.C., to get in the corporate welfare line.
What happened to letting the market decide?
Now at the urging of Mr. Obama, Henny Penny Paulson announces a fresh printing of $800 billion worth of green paper to provide a bit of relief for the folks down near the bottom of this feeding frenzy. This money will rescue folks who are about to lose their homes, they say, and create millions of new jobs working on the nation's dilapidated roads and bridges.
Who's next? We're bailing out the big banks, so how about the little banks? What about the big banks that hand out credit cards like lollipops and suddenly wonder how all those unemployed people are going to pay back the money they've borrowed with their plastic?
What we have here is capitalism without consequences; a free market whose downside can't be tolerated.
Inside the space of 60 days, we've witnessed a conservative solution to the meltdown - adding a third more, nearly $4 trillion, to the national debt in corporate welfare.
One day when the burden of that debt comes home to roost, when it takes a wheelbarrow full of printed green paper to buy a Happy Meal at McDonald's, ordinary Americans are going to wonder how free enterprise and the American way of life permitted so many incompetent, corrupt, thieving robber barons to rise to the top, take their companies to the bottom and be richly rewarded for that.
Those ordinary Americans may even have time, standing in the bread lines, to ponder how the good old rock-ribbed Republicans, the stand-on-your-own-two-feet conservatives that we elected and re-elected, led them down the path to ruin.
To quote the illustrious Pogo: We have met the enemy and he is us.
26 Comments so far
Show Allwhat we need now is discussion of alternatives to the 'free' market anti-system. true, there is considerable discussion of a return to a regulated 'free' market. but this won't work:
it's too late. there's nothing left to regulate. and by the time we
revive the 'system,' -- in the words of Keynes -- 'we'll all be dead.'
the idea of a regulated 'free' market has been tried numerous times
in this and other countries and always such 'free' markets end up
with the destruction of the regulations by those with the money and
power to buy the politicians.
a curious omission so far in even places like commondreams is discussion of socialist alternatives. what the hell, we've been living under socialism for the owning classes, for the 'takers.' maybe it would work also for the rest of us, for the owned, for the 'makers.'
At this point we've merely hit a nasty patch on the capitalism road. There is zero chance of dumping capitalism and 100% chance of more regulation. This has been a learning experience and most will remember (some better than others) for a generation or so. If things are far worse one year from now, then major change might occur.
I look forward to that major change. We haven't even seen what bad is.
Rickster
Greg R sez: "There is zero chance of dumping capitalism and 100% chance of more regulation."
***
Cool to hear about that regulation. Please fire a message back here when Obama and the congress combine to produce ONE actual enforceable regulation on ANY (private) industry. I'll be the blue guy in the corner holding his breath.
Thank you, Kioro, you are completely right. "'free' markets end up with the destruction of the regulations by those with the money and power to buy the politicians." The history of capitalism is a death spiral of wealth and power. As the rich get richer they can buy enough political power to make themselves richer still, which gives them more power and more wealth and so on; until the working classes become so poor and indebted that they can no longer keep buying and we have a depression. Each depression yields new regulations, but the rich always gain enough power to wiggle out of them, and start the cycle once again.
The most famous proponent of these "long wave economic cycles" was Nikolai Kondratiev (or Kondratieff), a Soviet economist who wrote in the 1920's and who was executed in one of Stalin's gulags for his pains. (Google "kondratiev, cycle" to find 44,000 sites)
In the US we have had depressions in the 1870's (when the Republican - Dixiecrat coalition pulled Reconstruction troops out of the South so they could suppress general strikes in the North) in the 1930's, and now (unless Obama addresses the problem of economic inequality, with, among other things, the restoration of a serious graduated income tax).
To escape these dreary cycles we need a radical redistribution of both wealth and power into the hands of everyday people, you and me. You could call this redistribution socialism, but it should not be a repetition of 20th century state socialism, which should really be called state capitalism, since it gives capital to the state rather than to the people.
My preference is an economy of democratic cooperatives in which workers and community members ELECT their bosses or, in smaller units, run their affairs directly and communally. The most famous system of democratic cooperatives in the world is "Mondragon" in the Basque region of Spain; over 40,000 workers in 150 different enterprises, including a bank which finances expansion. And in Venezuela the government is training people to function in co-ops, which have expanded exponentially.
We need to talk about cooperative systems and,equally important, we need to relearn the art of cooperation. Those who cannot cooperate will be dominated. That is as much a rule of nature as the law of gravity.
Telling is kloro's plea, "what we need now is discussion of alternatives to the 'free' market anti-system." A brief passage through Barnes & Noble or Borders Philosophy or Sociology sections is informative. Books by Karl Marx and '50s and '60s left wing sociologists are reappearing on the shelves. Indicated is the left is back in fashion, but more importantly NEW LEFT WING THOUGHT HAS NOT APPEARED IN THE LAST 40 YEARS! Yes, there is John Rawls' A Theory of Justice, but that's it. Obsession with "math and science" since the moon landing and neo-mercantilist turn in main-stream academic economics since the late '60s has eviscerated the humanities and social sciences, other than economics. Telling is the Nobel Committee considering no American writers because American writers are too parochial. Devoid of originality, popular film resuscitates old television series. Two things choked off the humanities and other social sciences. First, the public obsession for specialized job training instead of generalized education. Second, policy makers intentionally or unintentionally eliminating competitors to market economics. Alternatives were perceived dangerous because market economics is truth. Posing alternatives might lead the public into error. Thus, failing as all human institutions do, we are left bereft of alternatives.
Fortunately, unlike so many problems, there is a solution: Get campaign "contributions" and all (bribery) money funneled to politicians completely out of politics. The only people who will oppose that are the people who benefit from the status quo.
What this country needs is balance. Equal parts capitalism, and socialism. And both with equal parts of regulations and transparency. It's pure idiocy that we go through all this upheavel when one or the other party tears up what the other party did while they were in office. We'll never get anywhere.
What kloro says about how we've been living under socialism for the owning classes, for the 'takers' is so true. We need to develop our language skills so we can call a spade a spade.
Well spokem Wilmoor--the technical name for this is "mixed economy" and it was the feature of the US from the late 40's through the mid 70's(and is sill predominate in much of Europe today). It's chief features include:
A progressive income tax that includes capital gains as "income".
A strict regulatory structure designed to protect the vulnerable from the strong that might exploit them.
Using government spending as a stimulus for an otherwise sluggish economy and making sure that he who is paying has the dominant say in how and where the monies being spent for the economy (in other words "our" funds) are distributed.
Poet
More than stopping the flow of money to politicians is a change of culture of delusional power. To really consider the paradigm of the thinking of the "power elite" is one of a narcissism so self referential as to reflect the mind of an unweaned child in the experience body of an adult with armaments.
Creativity is twisted into manipulation, mirroring of reasoning, absence of functional empathy and unwillingness to "share toys" and destroy what cannot be had. In other words it is an incapacity to "be", spun out of the lives of others (hidden and kept out of view). The gift of indigenous resistence is only beginning to be articulated. Like Ecuador's president simply saying that if the US wants renewal of a military base - of course- as long as the US identifies a place for an Ecudorian base in the US. Got Reciprocity ??
The paranoia among the "elite" panders to the media controlled paranoia of those classes caught in the misinformation middle and generates violence against people who are simply saying no to genocide, removal of resources of such an extent that residents of a country cannot even live.
Calls for regionalization of economies rather than the transnational export/import model of mega resource manipulation is where we are moving - its the only way to stabilize the planet.
Captialism for the poor while socialism for the rich seems to be what is happening :(.
Capitalism for the poor? I don't understand that part. I understand the socialism for the rich part though.
By the way, I posted a few questions in response to one of your replies where you talked about your husband being Afghan. You had an interesting background and I thought that maybe you could help us out there figure out how you got there. Here's the article where I posted the reply:
http://www.commondreams.org/headline/2008/11/29
You might have noticed that I edited my response there if you had read it earlier since I misunderstood you until I came across some more posts of yours.
Jason Jordan
Sandpoint, Idaho
Re: Capitalism for the poor
"Market discipline for the rest of us" is how Chomsky has frequently described it.
The author seems to have forgotten that it was a democratically controlled congress that rallied around the white house to pass the bailout bill.
Republicans seem to have gotten us into a nasty mess and the democrats went right along with them in an attempt to solve it.
Maybe a few of those congress people had investments in some of those lending institutions? Ya think? Maybe?
We've all been bent over a stump. Again! We couldn't believe that GW would do such a thing as lie to us for reasons of greed all those years ago when he wanted to kill Saddam and save us from WMDs. Now no one wants to believe that greed wasn't the motivating factor in bailing out all those millionaires. Or are they billionaires? Whatever. Fact is, congress got moving fast when the market went downhill and it sure as hell wasn't to cut me a check so I could pay my mortgage.
And it continues. More bailouts. More money.
How about that market? Huge selloffs of stocks and bonds and whatever. If they were sold, then someone had to buy them. I know it wasn't me buying up all those bargain priced stocks. And now the markets are showing signs of recovery. Hmmm.
I think we've just witnessed a massive shift of wealth up toward the upper classes. Anyone agree?
Those people are completely out of control! And most of "us" are too busy watching Sunday Night Football or playing video games or whatever and tomorrow we'll be consuming like hell and working at jobs that support that huge overinflated money making machine for the rich.
Stop consuming now! Don't drive more just cause gas is cheap. Don't start buying gas guzzlers again just cause gas is cheap.
Cut back and be frugal. Find ways to entertain yourselves that don't cost lots of money. Read a used book. Share a book. Go for a hike. Grow some vegetables.
We're in for a rough ride. Don't let them convince you that things are going to be just fine. They are not! The real economy is just beginning to fail and it's gonna be bad. Protect yourselves from the greed monsters that are gonna try to take your homes and anything else you have.
tHE AUTHOR is quite correct in focusing PRECISELY on the republicans for THEY and their so-called "free market" ideology that brooks NO opposition whatsoever - that have basically ENTRAPPED entire segments of US society, economics, and politics and culture so that those - among the democrats or any other small party -- that have any ideas that even so MUCH as suggest that "free market capitalism" is DANGEROUS and UNHEALTHY , is then "mccarthyized" ...... threatened with the STIGMA of being "unamerican".
it is CONSERVATISM itself that is the culprit, it doesn't matter if it's democratic party "republican light" or full fledged "far right" conservative republican economics and policies....
so long as they hew to the dogma of "unfettered capitalist free market" (note: it is not , after all, REALLY a "free market" as advertized, since a true "free market" at its best ought to be the SAME as "FAIR" market, in which LABOR which is the TRUE creator of "capital" and from there "money capital" would be able to DICTATE its value TO "money capital" rather than the way capitalism as practiced by the USA above all , in which "money capital" DICTATES TO human labor what is the value of HUMAN LABOR which is the TRUE capital).
-- and so long as the USA hews to that -- it will NOT avoid its eventual slide from its years of prosperity. the only thing that REALLY is left is whether the rest of the world will FIRST also suffer MORE of the consequences of this dictatorial system practiced by the US "free market" ideology - BEFORE - decades from now -- it is ABANDONED altogether for what ought to be a socialist economy that brings back LABOR's true value and power to also "dictate" ITS "market value" against "money capital".
and of course beyond that -- we don't know what the future really has to be..since probably even socialism is only a step forward for a more equitable, fair, and STABLE world economy through the DISCREDITING of accumulation of UNDESERVED wealth by the few at the expense of the many.
it is really AS SIMPLE as that.
and HUMANS already know it, instinctively...but the SYSTEMS that produce such disastrous results -- capitalism --
first has to demonstrate everyhere, again and again and again -- just how STUPID it really is.
this is like a body - become so cancerous - that it begins to eat ITSELF.
that's what capitalism was BOUND to come to anyway....even as it enjoyed "triumphs over socialism"....which of course are just propaganda by the VERY SAME PEOPLE who most benefited FROM capitalism - entrapping everyone else in the system - so that everyone else can't see "any other alternative" because they are FORCED to function WITHIN the same system that ROBS all of us of our true VALUES and WORTHS as human beings.
but then -- that is really capitalism's -- and its main adherents' REAL genius....a genius of "marketing" and OPPORTUNISM at every turn of DISASTERS that CAPITALISM itself creates.
it's in its very DNA.
I'll bet I'm not the only one who quit reading your post due to the EXCESSIVE use of caps.
A direct democracy can be capitalistic or socialistic depending on what the people decide, not on representative's whims, political advantages, or personal gain.
American business chicanery is like an insect species constantly bombarded by different kinds of insecticides until eventually none have any effect at all. And like a hurricane of locusts, it will eventually be completely unopposed and devour everything then, finally, itself.
Wait a minute. Was there ever really a "free" market or was this just the illusion of a "free" market? And isn't the term "free" market really an oxymoron just like the "war on terror" phrase or even "free trade" ?
Jason Jordan
Sandpoint, Idaho
http://en.wikipedia.org/wiki/Free_market
Galloway sez: "We're daily treated to the spectacle of the fading remnants of a Republican administration working 24/7 to dump the tax money of hard-working Americans into the leaky coffers of the robber barons."
***
With all due respect, that money's been gone for some time. Your kids' future earnings departed more recently. They're currently fleecing your grandkids.
Sorry, but calling our state-corporate capitalist system a "free market" is just Republican Newspeak. It is no better for their opponents to use this as an excuse to rank on the "free market". The dishonest misidentification of statism with freedom ("slavery is freedom") should be exposed, not adopted. laurenceberk is quite right to point to workers cooperatives -- these are truly free-market institutions.
--
Dan Clore
Smygo: News & Views for Anarchists & Activists:
http://groups.yahoo.com/group/smygo
Eyrie of the Arch-Anarch:
http://www.nolanchart.com/author341.html
Listen To the Sound of Money
Hush just listen to the sound of money
Flush just listen to the sound of money
The market is just purging
soon it will be surging
The market was just chilling
soon it will be filling
so...
Chill us out..the marks
austerity needs the needy
riches need the greedy
for money needs to rule
the markets only fool
to think......
I was a tool
Hush just listen to the sound of money
Cha ching
the change is in the can
change we can be believe in.
"Hear that humming sound? That's the printing presses at the United States Treasury running 24 hours a day, seven days a week, "
Actually this is done by selling bonds to *willing* buyers. Yes it's a fiat currency, just like every other one in the world.
"We're daily treated to the spectacle of the fading remnants of a Republican administration working 24/7 to dump the tax money of hard-working Americans into the leaky coffers of the robber barons."
The bailout bills have provisions to raise the funds through the sale of bonds.
ddcrat
ddcrat
Sorry for the previous post. This is my first comment.
Why are we bailing out any corporations? Why aren't we buying them out? For instance, GM shares were less than $3 the last I heard. Instead of giving a loan, why aren't we buying 8 billion shares? Would this give the people of the United States a controlling interest? If so:
There could be an under-secretary of commerce appointed by the president to oversee our investment i.e. Under-Secretary for the Auto Industry. He would make less than the secretary of commerce as would all other corporate officers. No one working for the corporation would receive pay benefits or other perks not allowed to federal employees. Everyone working for the corporation would receive pay and benefits commensurate with federal employees.
I can hear cries of Socialism and other Cold War epithets trying to equate military dictatorships with our democracy. However, we have already crossed the Socialism line with the bailouts of the financial institutions which produce nothing. I hear cries that this will stifle creativity. Yet U.S. automakers have yet to create a fuel efficient car that is affordable to consumers. I hear cries that this would inevitably fail as did the Soviet Union because government is inefficient and the market is efficient. Really? If the market is so efficient, why is it on bended knee begging for public money.
For the greatest good to the greatest number, I will bet on democratic government over the unregulated market every time.
ddcrat