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TechnoratiAmerica Needs a Period of Pain
Recessions Vital Part of Capitalist System
The shoes Iraqi journalist Muntader al-Zaidi threw at George W. Bush had more courage and truth in them than all of America's fawning media. Al-Zaidi reminded the world that Bush, Dick Cheney and their helpers have the blood of hundreds of thousands of Iraqis on their hands -- perhaps as many as one million.
In New York, fabled investment guru Bernie Madoff is accused of bilking clients of an astounding $50 billion while well-fed federal watchdogs snoozed.
Thanks to Madoff and Wall Street bandits, tens of millions of people have lost their life savings and retirement funds, and the world financial system is on the rocks.
Wall Street's big money con men, hedge fund Houdinis, and casino capitalists made a staggering $33.3 US billion in bonuses in 2007 alone by shady financial engineering and hawking fraudulent securities. Yet they have so far escaped prosecution. They get to keep their swag and $30-million South Hampton beach houses.
Worse is coming. Chrysler and Ford will shut plants in January. GM is next. In spite of the $13.4-billion auto industry bailout announced by President Bush last Friday, many plants may never reopen. As this column has long said, the U.S. auto industry closely resembles the old Soviet Union: Economically declining, bereft of new ideas, producing unwanted products, run by dimwitted careerist bureaucrats.
America produces the wrong cars, and far too many. The bloated auto industry must downsize. It has been selling cars only thanks to the steroid of cheap, easy credit -- in effect, almost giving them away. Now that the drug is largely cut off, sales have nosedived.
The U.S. economy has been running almost entirely on credit for a decade.
The U.S. national debt is twice America's net worth. Government and business encouraged a reckless credit binge to which the nation became addicted.
SAVINGS
Manufacturing fell to only 12% of GDP. Finance -- the shuffling of paper -- became America's leading industry. Americans saved nothing and had to borrow $1.2 trillion from China and Japan to keep the orgy of consumerism going.
Washington's response was panic, then flooding the economy with freshly printed money in hope something positive would happen. Japan made precisely the same gamble when its bubble economy collapsed in the early 1990s. Today, Japan has one of the world's highest deficits and its economy remains dead in the water.
The U.S. economy must be weaned off credit addiction. Pumping billions and billions of dollars into the economy is like mainlining more drugs to a sick junkie.
The economy needs a period of cold turkey in which remaining credit bubbles, bad debt and financial distortions are purged. This is called recession, and it's a vital part of the capitalist free market cycle.
Without a period of pain, we can't restore economic health or sanity.
But panicky American politicians plan to spend $8.5 trillion to stave off this necessary, beneficial recession. Their misguided efforts risk igniting a future firestorm of inflation that will be far more dangerous and painful than any recession.
HYPERINFLATION
That is why the European Central Bank, with vivid memories of the terrifying 1920s hyperinflation in Germany when a loaf of bread cost 80 million marks, has resisted deep interest rate cuts and printing money.
The Fed's recent slashing of U.S. interest rates to zero is a sign of utter desperation and an act of folly. Once investors realize that Europe, Canada and Asia are far safer investments than the U.S., watch for the U.S. dollar to nosedive -- as it should.
The remedy for America's economic ills is not more money but patience.
Americans must relearn the old verity that one must save for purchases and rainy days; that gambling with your home is idiotic; that there is no substitute for hard work or manufacturing; and that it's always very risky to trust politicians or financial "professionals" with your money.
57 Comments so far
Show AllThe word 'fairness' comes to mind, probably because it says so much, and is in such short supply these days.
The problem is that with the inordinate concern for ourselves, there is no room for concern about the poor, struggling, or homeless, lest it somehow reflects back to oneself--when we fear we may be homeless and hungry ourselves. And do you also notice that those who tell us to 'sacrifice' are the least willing to sacrifice themselves?
"And do you also notice that those who tell us to 'sacrifice' are the least willing to sacrifice themselves?"
A point well made!
Yo, OleManRiver, nicely put. But I think my problem with this column is its same old insistence that the economy can be cured, but at the pace which capital allows. WE may as well wait for the return of the Mammoth. In fact, given the drifts of snow I see when I look out the window here in Seattle, the return of the mammoth is more likely.
With all the problems of the world I cannot believe that I have actually sat here and read teddy's rants---all of them.
It seems he has had a brush with Marxism and the idea of the surplus value of labor, but what about the socialist views of Henry Ford, who recognized---as Senator Richard Shelby today evidently fails of---that in order to sell his Model T there needed to be people who could afford to buy them.
A huge problem today goes to the fact that to a large extent at least in the so-called advanced societies, the surplus value of labor has been replaced by the surplus value of machines and computers. The globe is awash in excess capacity in the production of goods and services. Probably around half of the "work" of the employed population in the United States is essentially make-work and thus ultimately destructive and useless. Take the "work" of bureaucrats in the private health insurance industry (please!). This is part of the parasitic nature of capitalism.
Nor is capitalism about "efficiencies" except at the microeconomic level. The United States was built on raping a continent left nearly pristine by the Amerindians, whom we killed off to extract the massive resources they left behind. By comparison at an ecological level they were far, far more efficient.
It has occurred to me that economics changed with the invention of the steam engine. Scarcity as the fundamental basis of economics disappeared. So should have the "labor theory of value." Since that invention "labor" ceased to be merely the work of animals whether human or camel. The global equation changed.
Thus, for my own part, especially in my old age, I have absolutely no interest in "full employment." What I want is a redistribution of the wealth and a redistribution of time. I want more time for myself and less for Bernie Madoff. Or more "time" for Madoff, not to put too fine a point on it.
What has value in your life? It is NOT "employment" as such. Nor is it freedom from employment. Is it something in between? Some mercy we grant one another on a daily basis?
-30-
Henry Ford was a fascist.
the problem with this spending thing on bailouts is that they are being "spent" on the very people and institutions that CAUSED the mess..instead they should be DIRECTLY spent ON people -- THROUGH MANDATES OF HIGHER WAGES...if necessary by financing the rise in wages.
after all --if the fedbank is tasked with the power to PRINT MONEY at WILL -- why should it be "wasted" (where it has NO REAL VALUE ANYWAY) on things that have proven to be PURE PHANTOM VALUES such as those "profites" claimed by banks and companies?
PEOPLE are the TRUE WEALTH of an economy ..if WORTHLESS PAPER is to be printed at will in order to give an APPEARANCE of VALUE and "liquidity" which BY ITSELF does NOT possess real value but is ONLY A MEANS of exchanging VALUES;
it FOLLOWS that SINCE PEOPLE and their LABOR are the TRUE VALUES of an economy's "wealth creation" it is PEOPLE to whom THAT MAKE BELIEVE WEALTH of "liquidity" (the transaction instrument called money) should go TO!
and everyone's happy!
but then -- the rulers and designers and administrators of the US ECONOMY are not only exploitative but equally STUPID in their supposed "sophistication".
the bottom line:
THEY ARE ALL STUPID!
IMO - so long as the dogma that societies can only best be ordered and function under the PARAMOUNT idea of "competition" -- like social darwinists of capitalism say is akin to the "natural world" (but where they are ALSO WRONG as often as not but just PICK and CHOOSE the ":competition" part of the natural world to promote in social order) --
there can be no true socialist society -- which IMO is better AND ULTIMATELY more EFFICIENT (if efficiency is the main contention by some) - than capitalism.
one can put it another way:
if in the brief periods in history of modern , or developed or codified SOCIALISM have failed - or shown inefficiences - it is NOT because of the NATURE of COOPERATION which socialism PROMOTES - but because it is stacked AGAINST a global system of capitalism and ITS even MORE gross inefficiences AND EVEN LARGER disastrous consequences to ENTIRE nations due to the workings of a PRIVILEGED FEW in a FEW capitalist/pure or imperialist societies.
it is working WITHIN a global structure that is DESTRUCTIVE and therefore is fighting against very powerful forces whose DOGMA is "competition" TO THE DEATH. and THAT is capitalism.
if anything -- there were ALREADY socialist ideas long ago>
the COLLECTIVE mentality of the ancient chinese IS one...and that is why, terrible as many phases of their communist phase have been - as a REACTION to WESTERN IMPERIALISM ARISING OUT OF THE INEEFFICIENT capitalism (which prompted the imperialisms as the NEXT phase of capitalism DUE to the IMPENDING COLLAPSE of capitalism IN the "source" nations -- england, USA, Germany, France, etc. IF they did NOT hasten to COVER UP that collapse SOME MORE by LAND conquest - since they were exhausting their monetary "value" system and must ACQUIRE REAL value such as LANDS and CHEAP LABOR outside their borders) - china finds the "inefficiencies" of socialism much more KIN to ITS own ancient mentality :
the COLLECTIVE "WE" OVER the hyper -individualist "ME".
but CAN anyone REALLY claim that the ordinary FAMILY or individual in CHINA over the centuries is ANY LESS individual THAN an "american?" IN a capitalist society?
of course NOT -- that would be arrogant beyond laughability and just reflective of ONE point of view - the western one and CERTAINLY IGNORANT and used to make judgments about social viabilities of systems.
this is one reason why chinese leaders - whatever one may say about THEM - and the communist party , believe it, despite its authoritarian character - but the US govvernment is NO LESS SO as a FRONT for ITS authoritarian CORPORATIONS -- the communist party is MORE AFRAID of ITS population - its so-called "collective" citizens that the western hyper individualists of capitalism look down ON THAN the US government and its corporations are AFRAID of the US citizens who are themselvers NOTHING but a COLLECTIVE of ONLOOKERS ALLOWED merely to "participate" in a FAKE democratic process that is FAR from "efficient" where it comes to "distributing" wealth among them.
EFFICIENCY? exactly HOW efficient WAS the US system - both its corporate and government institutions in SAVING NEW ORLEANS from a long-predicted typhoon that EXPOSED to the entire world a THIRD WORLD COUNTRY right in the BELLY of america? !!!
if anything -- the ONLY "efficiency" that has been displayed is how the longtime residents , being mostly poor, black, hispanic, etc....have been DISPLACED and IN THEIR place -- FANCY NEW HOTELS and COMMUNITIES for the lords of capitalism!
JUST LIKE the "efficiency" of private corporations buying up beach fronts and other lands in indonesia AFTER the TSUNAMI hit - and ordinary people were dispossessed until TODAY of their ancient livelihoods.
so -- what is SO efficient about capitalism there?
it is efficient in DELIVERING "reforms" the way Milton Friedman proposes -- to DEVALUE people SOME MORE - in the aftermath or midst of MANMADE or NATURAL DISASTERS.
THAT:"S what capitalism is VERY efficient about.
being in the USA and "western capitalist" nations and THEN take from that the idea or impression of greater "efficiency" for the SAKE of looking FOR efficiency -- does NOT take into account that THESE "efficiencies" within these societies ARE GOTTEN at the EXPENSE of EFFICIENTLY
DESTROYING other societies! and that they are actually like "islands of prosperity and efficiency" within themselves in a GLOBAL OCEAN of INEFFICIENCIES that IT spreads outwards - in order to SECURE ITS own ":efficiencies".
it's the nature of capitalism.
"wealth creation" by means of wealth destruction elsewhere.
or:
ONE family -- VERY wealth -- on the backs of hundreds of thousands of workers MUCH poorer to make THEM wealthy.
it's very basic. i don't understand why THAT is difficult to comprehend and how it is fostered as the BIG LIE to support the ideas about how 'efficient' the "private sector" is in everything capitalism espouses.
if anything capitalism "efficiently" DESTROYES SMALL BUSINESSES, by SWALLOWING them up and rendering them UNABLE to compete with conglomerates and corporations.
just ask your neighbhorhood family butcher how HE can compete with supermarkets financed by banks and investors...and tell us how "efficient" capitalism IS in creating WIDESPREAD WEALTH.
and THEN talk about how EFFICIENTLY the USA IMPERIAL project has "efficientlY" created WEALTH that benefits ALL or most of the population of SOUTH AMERICA for DECADES....or asia 0r africa....or southeast asia -- or by extension of its global reach imposed by the western imperialists -- how this material "efficiency" has meant ANYTHING to the stomachs of people who are sacrificed in the altar of PROFIT .
and then maybe people can claim that capitalism is "efficient" ..in a GOOD WAY.
the fact is -- it is NOT and what 'efficiency' IT HAS is MUCH MORE LIMITED than the claims say.....in comparison with the efficiency of capitalism to RESULT IN WARS and DEATH and DESTRUCTION of wealth and nations and people.
i should also add that : in saying capitalist "prosperity" and "efficiency" exists like "islands of prosperity" surrounded and supported by oceans of poverty (comparably -- as in haiti, nicaragua, mexico, "surrounding the usa") - or mostly poorly paid americans "surrounding the rich corporations") -
is already demonstrated again and again by the vast , unjustifiable gaps in wealth and the power to share that wealth IN the USA itself. AFTER ALL -- its foreign policies of 'gathering as much resources of the world unto ourselves at the EXPENSE OF OTHERS' (General Smedley Butler) -
is only an EXTENSION of what is IN FACT the CENTRAL PILLAR of american capitalism WITHIN ITSELF.
while the USA is more wealth and prosperous as a nation compared to THOSE it exploits --
IN ITSELF is a structure that is the GERM and ESSENCE of that relationship of the USA and capitalist systems to the REST of the "surrounding" world. ...in which -- under capitalism -- the MAJORITY is made to SERVE the "prosperity" of the FEW.
it is as OBVIOUS as understanding that the atom is a mirror of much larger manifestations of itself .
What could be more painful than the period of pain most Americans have suffered the LAST EIGHT YEARS!
Just wait, sonny. You'll see.
Einstein, I am afraid you are right, but would hope you are wrong. Good answer!
Beat me to it. Thanks!
"The remedy for America's economic ills is not more money but patience."
But "patience" will not buy food, pay rent and utilities, nor pay for urgently needed medicine and other medical expenses.
If we had a national health care system covering all Americans, and if welfare had not been virtually destroyed by the neoliberal Bill Clinton, millions of fewer Americans would have to suffer in the next few years.
And if our Empire didn't "need" to fight two wars of aggression (plus "secret" wars in Pakistan and Somalia), maintain 760 military bases in 130 countries, and outspend all other nations combined on "defense", we would have some funds to help our most vulnerable citizens avoid the "period of pain" the no-doubt comfortable Mr. Margolis so magnanimously prescibes for us.
History teaches that a recession for the well-off is always a depression for the working and poor classes. As with Hurricane Katrina (and Disaster Capitalism in general), many people will not merely endure a "period of pain"; they will DIE. Of course, as always, the ruling elite may be "inconvenienced", but will not suffer any real pain.
Eric Margolis you arrogant fool, you capitalist tool. Obviously YOU have never had to decide between paying the rent or buying medicine for a sick child. Tens of millions in this country alone have been living with your described "pain" now for decades, not to mention billions the world over under the crushing boot of "free market capitalism". For the love of your non-existent "GOD" open your damn eyes and try a little honesty, try to lose a little of your putrid denial.
advocate December 21st, 2008 9:48 pm: "Capitalism is simply an economic system that allows those that have to live off the labors of those that don't have."
BINGO! Capital is not money. Capital is bricks and mortar, machinery, extracted or grown raw materials. Not one iota of capital could exist without LABOR. It is LABOR that creates capital. The "capitalist" is simply a brute exploiter who wants to treat LABOR itself as nothing more than one more brick, one more machine, one more HUMAN RESOURCE. Maybe its time for LABOR to wrest capital from the hands of the "capitalist".
-- ekaton aka d.k.shaw
EXACTLy EXACTLy EXACTLY!!!
thank you for putting it down so clearly !
Yes, Mr. Margolis is a defender of capitalism. But he is absolutely correct to point out that many people have been living beyond their means and don't know what it means to save for anything. Yes, some can't, but many more can. Too many get into debt for wants, not needs. And like it or not, we are in debt and you can't borrow your way out. We should be having serious conversations about how to slash the military budget. How about this, we can't afford Afghanistan.
And speaking of capitalists, the banksters have had their hooks into us since the beginning. Read about Alexander Hamilton.
cassandra...as I understand the history of these developments, such as americans "living beyond their means" :
the foundations were LONG AGO laid.
to be specific -- they really began as the so-called and much touted "american way" ever since the USA emerged the main superpower after world war 2, largely free of the actual physical devastation of the wars.
but what the USA DID was -- in the aftermath of the COLLAPSE of the british empire --having been bled dry BY ITS expansion and its FINAL demise with that last gasp of going to war against germany - WHILE trying to hold ON to India and south america, and southeast asiancolonies -- it went COMPLETELY BANKRUPT - but which the WAR ONLY HASTENED its collapse which was ALREADY in effect since decades ago DUE to its OWN monetary policies ...which the USA learned FROM ...and which the USA - using the "BRETTON-WOODS" programme right after world war 2 - basically STRONGARMED england into GIVING UP its "pound sterling" power as the world's main currency...and IN EFFECT allowed the USA to impose dollar hegemony upon the globe -- which was an instrument of FORCING other economies and regions to "go through the US DOLLAR" in their global transactions and peg the value of their economies by the dollar .
THIS in turn ALLOWED the USA to print money at well as "payment" for ITS accruing debts over the decades without ACTUALLY paying them -- by ensuring that : since the DOLLAR was the world currency, especially "freed" of any last requirements to have a gold backing or actual productivity and value backing to prove its worth as "sovereign credit able to pay its sovereign debts" - other countries would then HAVE to HAVE dollar RESERVES -- the famous "dollar reserves" which - because the US economy REALLY was INDEBTED for its "growth" TO those countries by DEVALUING THEIR economies through devaluation of their currencies - and through its indebtedness backed up by LESS than the dollar value was claimed to be by the FEDBANK (that is: 1 dollar equals so and so sterling, mark, peso, etc. according to DOLLAR to DOLLAR US bank to bank borrowing overnight ) the countries that were holding dollar reserves from their SAVINGS - were ACTUALLY LOSING MONEY JUST by holding the dollar EVEN IF they were - in effect - FORCED to HOLD dollar reserves - SINCE the USA
GRANTED UNTO ITSELF the EXEMPTION - unlike all other countries -- to PAY ITS FOREIGN DEBTS in THEIR currencies but ONLY THROUGH the dollar -- by printing it at will! even if it had NO backup but MORE DEBT to THOSE countries that were FORCED to trade in and hold dollar reserves.
it has been one long, grand LARCENY imposed by the US government on other countries, in reality ...backed up , OF COURSE , by military power (also of course bought and paid for by the SAME dollar hegemony it put in place in the aftermath and CHAOS resulting from world war 2.
in EFFECT -- THAT was the first GLOBAL application of Milton Friedman's "SHOCK CAPITALISM" ! where the USA "reformed" the global financial structure to become FOUNDED ON the dollar hegemony .
clever isn't it?
but ITS RESULT has been, apart from ALLOWING americans to "BORROW" for their prosperity over the decades (and this precedes the 1990's or even the past 8 years, as i have been saying) --
also actually devaluing the dollar itself , despite the effort to keep a "strong dollar".
but the main point i am making is that the FOUNDATION of this INDEBTEDNESS to "create and maintain prosperity" has been founded a long time ago. -- and promoted of course as "the american way".
there IS a reason why the CREDIT CARD system IS a US symbol.
since it is actuallY NOT about CREDIT -- having "REAL value to back up what is REALLY
DEBT!
it is just usinig INDEBTEDNESS with the ability to PAY ITS DIVIDENDS on time as the "value" and "asset" and "credit worthiness" of a us consumer or -- its larger counterpart - its businesses or banks or -...........the US government and economy.
but behind it all is SOVEREIGN DEBT - NOT sovereign CREDIT.
in reality -- the USA economy has been a FACADE of "wealth" and 'credit' when in fact it is inherently an empire that has been built ON DEBT through US DOLLAR MANIPULATION towards world financial hegemony.
THAT is how americans have gotten away with maintaining a "prosperous country"
there is a reason why some analysts - when putting all global numbers together -- count the USA as having the LIABILITY of
at least 55 TRILLION DOLLARS -- ALL OF IT DEBT.
which is MANY MORE TIMES the actual VALUE of the US economy.
so -- it's NOT JUST the american ordinary people "unable to control themselves" -- they HAVE been COERCED to BECOME "part of the american dream" until they wake up they were HOODWINKED by their own government, corporations, banks, federal bank, and their OWN treasury!
we're all affected by this, we know that.
Thank you for stating it so clearly.
and Hamilton indeed fostered the firming up of the institutions and dogmas towards capitalism. that is true.
capitalism teaches that it is NATURAL that "competition" should cull people like cattle. but that is actually an aberrant thinking . it is structurally imposed by bankers, financiers, "capitalists" who have accumulated "capital" by using AGGREGATE LABOR to collect their revenues and THEN using it to hold titles (aided and abetted by the legal system of course that is backed up by agreed upon law and order forces) - to land, means of production, and arbitrage (control) of wages - always explained as the "natural necessity for profit" or ELSE they collapse and the economy collapses.
in reality - there is NO NEED for Unemployment. it should be the national policies of all governments to
1) make EVER RISING WAGES as the NORM -- as the foundation of citizens' prosperity in order to be able to DICTATE which productions are necessary or not according to THEIR power to be consumers or users using their high wages.
and that means OWNERSHIP of companies by the citizens through national management and which lowers the incentive for the ABERRANT individuals to USE "profit" as a "natural and necessary and DESIRABLE" motive for society to accept "competition" as its normative principle, RATHER than to have citizens COOPERATE by having the high wages all across the spectrum which NO LONGER NECESSITATES the NEED for "competing" for the "rare" opportunities that are offered by capitalism ("if you work very hard").
2) along with that -- FULL EMPLOYMENT policies are necessary , taking national policies to ensure that ONLY INDUSTRIES that are necessary and fit the needs of citizenry (is there a need for fancy BILLBOARDS spouting people to consume coca cola? - is there a need for fancy cottages where the owner buys up entire beachheads to the exclusion of one million other inhabitants in THAT area for his exclusive use? and which displaces THOSE inhabitants from being fishermen, or having cottage industries of their own ?
but capitalism ensures that BOTH of these are suppressed:
CAPITALISM FEARS two things more than any:
FULL EMPLOYMENT and HIGH WAGES. period.
if enlightened governments ENFORCE these through the RIGHT policies and focus , philosophically, AWAY frm the "wisdom of the market" and its accompanying need for "competition" towards COOPERATION -- with as much power as capitalism has ENFORCED its evils -- capitalism will DIE a sudden death. becauwe people WILL see --
HIGH WAGES and FULL EMPLOYMENT are NOT impossible - nor even close to being a "utopia".
in fact -- they are SO PRACTICABLE and THE MOST STABLE kind of social organization, if people only began to understand and accept them (and REALIZE they have been hoodwinked FROM realizing this) -- that Capitalism uses ALL ITS OWER to ENSURE they are NOT even placed on the table as the TRUE NATURAL ORDER of things .
FULL EMPLOYMENT with EVER RISING WAGES - is the bane and greatest fear of capitalism.
for with these capitalism and its dogma of "competition" becomes COMPLETELY IRRELEVANT...for there would NO NEED , nor even a universal TOLERANCE of being "Wealthy" -- by the few individuals and families at the expense of others....for WEALTH is really , by definition, the ABSENCE of IT in the lives of others.
a forest that is RICH in life is called "rich and wealthy" when one sees that next to it is a DESERT, devoid of life.
the same with WEALTH.
a wealthy person is wealthy -- ONLY by means of DENYING resources to others who are POOR in comparison. this is called "surplus of wealth" .
HIGH WAGES for ALL -- regardless of what job or function -- makes "wealth" IRRELEVANT because there arrives a WEALTH of SURPLUS for all.
and in that system -- capitalism CAN NOT THRIVE.
because EVERYONE is wealthy! through simple removal of notions that people ahve to 'compete' in order to be wealthy or in order to survive. they don't
there is actually more food than people can eat. but MALDISTRIBUTION ensures this is not applied.
there is actually more WORK than people can DO -- but capitalism ensures this is NOT applied
and the result is constant DOWNWARD pressure on wages, UPWARD valuing of UNNECESSARY and USELESS capital (which by the way comes anyway from government PRINTING WORTHLESS paper that is made "worthy" and "precious" ONLY because it is given to CAPITALISTS rather than used as WAGE INCReASING value directly --and that's why the banks wanted that MONEY from the bailout so THEY can "dole out" the value to wages downwards by threatening their usual threats - and all down the line in the businesses , etc.) .
if anything -- 1 percent UNemployment ANYWHERE should be considered THE crises ...not the 6 percent and over that is tolerated by capitalists to ensure their "viability".
remove that -- and capitalism's "livelihood" disappears altogether.
The most pain always falls on those who had the least to do with creating the situation. Those who profited from wars and Ponzi schemes are cushioned by their millions.
Joe
This is very true, Joe. This whole situation is a Ponzi scheme and has been from the start.
However, wittingly or not, we've all played our part. Maybe 40 or 50 years ago, when we were flush with victory and jobs and high expectations, we could believe that the system works for all and will go on forever, but have we not seen enough since then to see that this system is unfair and unsustainable?
This system never could last, and we are now seeing the further devolution of something that is unsustainable. In this vein, the author of this article is correct: We will all feel pain. It's not fair, but it is necessary, or at the very least, inevitable. So, fair or not, we're in for a fall.
My point is this - knowing what we know, we have a clear choice: 1. Go along with this game, this scheme, either as participants or paralyzed witnesses, or 2. Be active participants in living sustainably and in doing so, working for a sustainable alternative to what is.
"All Nature's difference keeps all Nature's peace." Alexander Pope
It's probably fucking easy for Eric too spout on about economic pain when he probably doesn't have to worry about feeling any of it himself! They say a recession is when your buddy gets laid off but a Depression is when you get laid off. I wish guys like Eric would just STFU already , those of us living the pain don''t fucking need to be lectured by guys like Eric about it like it's some theory , it's NOT.
Perhaps a little less graphic expression would help make your point better.
jclientelle:Joe,yes. I was bothered by the author's line about "hard work". Howard Zinn makes a point in his book, autobio, "You Can't Be Neutral on a Moving Train",2003 edition, Boston:Beacon Press (has fab introduction)that his parents worked very hard and remained poor. The book is a kind of handbook for making social change, from one person's life. I like the book very much.
The Swiss haven't had a boom and bust economy for 150 yrs BB (before Bush) thanks to their direct democracy. They have a great healthcare and educational system, few immigration problems, no war in over 150 years despite being surrounded by warring nations, no drug war and no drug problems, etc. and etc. in spite of having few natural resources. We could learn a lot from the Swiss:
http://www.ronaldholland.com/swissdirectdemocracy.htm
Primary lesson: Save a lot of money by not spending on war and big weapons systems. Swiss Army knives and lightly armed militias do the trick. That leaves lots of banking revenue for social spending. It is an incredibly prosperous looking and expensive place. Even the cows and goats are clean and decorated and look like they stepped out of a Heidi book.
But the ways there are cold and inflexible... They will call the police on neighbors for any little violation like a quiet party. They will insist on following documentation procedures to the letter before returning money and property to holocaust survivors who no longer have the original documents for obvious reasons. They are not welcoming to immigrants, even fellow Europeans. The movie Bread and Chocolate describes this in a very funny way.
I like their lack of militarism, but prefer our diversity and humor.
Joe
jclientelle:Joe:when I was in Switzerland a little more than 4 decades ago, a tourist, I said, (and amazingly my former spouse remembered it recently), "If there's a good view, someone will put up a hotel blocking it.". He'd been there within recent years, and for some reason we exchanged letters, and he said it was still true. As an artist, I am a big fan of the small size Swiss Army knife, with a scissor in it! How cool.
ezeflyer
"We could learn a lot from the Swiss:"
Would that include allowing practically no one to emigrate there unless you are at minimum a millionaire or have a vitally need skill. Don't try and go there illegally either. By the way, the Swiss are a small population with a homogeneous population and society. Nor do we have their geography.
For most of their history the Swiss exported one thing, fighting men. Once hired, they fought to the death.
But I wouldn't mind having those things they have. We just can't get them the way the Swiss did.
Switzerland also has a growing racist (think national socialist) problem with their government, or at least a major political party. I'll stay away from there.
Writing as a former "gast arbeiter" in Suisse, the Swiss are not as pure as they try to portray themselves. During the Late Middle Ages, they were Europe's most famous mercenaries (the Pope's Swiss Guard is a leftover of this). In modern times, their economy has been financed by being the safe haven of the world's dirty money. Also, 25% of their workforce are foreigners, they have second highest rate of intravenous drug use and HIV in Europe, and one of the highest rates of their citizens living abroad. Your rosy picture you paint is simply not on.
www.wunderman-comics.com
Granted that tax havens are not the most morally sound, but lacking natural resources, the Swiss people have managed quite well without dictatorships of any kind. One can only imagine how direct democracy would work in resource rich countries.
The rate of drug use in countries where drugs are legal will be understandably higher than in those countries where drugs are illegal if only because drug users will flock to the former where they will not be persecuted. Were drugs legal everywhere, that would not be the case. What you neglected to mention is that because of drug legalization, drug crime is almost nonexistent in Switzerland.
Please forgive these Americans; they tend to romanticize views of the outside world which is one reason politicians can BS them over and over.
The other reasons for their gullibility is that they are stupid idiots.
hoytdouglas
I thought your comment was fairly ignorant and obviously made without much knowledge, however, I can't for the life of me see why it was flagged.
Having lived in America all my life, I have observed a lot more Americans who think the world stops at our borders. They buy the "America is the best country in the world" line without a second thought. Where is this "tendency" to romanticize the outside world?
Only a small minority actually bother to examine the features of other nations and try to learn something. Maybe some of us are naive and optimistic, but your "stupid idiots" comment is just plain nasty and a waste of space. What positive purpose are you serving?
Madoff was not the only 'Ponzi' scam. Our 'lie based' government is one.
The Project For The New American Century will be a Period of Pain.
Despite the many individually accurate & astute remarks in this article, the overall perspective seems heartless & loathsome, because it fails to distinguish between the financial & political elites who are responsible for the recent calamities, & their victims.
Everything Margolis says about "Wall Street's big money con men, hedge fund Houdinis" is true, for example. Yet the cure, he suggests, is simply that everyone ("America" as a whole) should undergo a period of pain. He counsels "patience," writing, "The economy needs a period of cold turkey in which remaining credit bubbles, bad debt and financial distortions are purged. This is called recession, and it's a vital part of the capitalist free market cycle."
Margolis is not questioning capitalism, nor is he distinguishing between the social class that caused the disasters, & the class on whose backs the burden of the recession will mainly be placed. Everyone should just suffer and go "cold turkey." In his view, all Americans -- rich& poor alike -- must relearn such basic verities as "one must save for purchases and rainy days," etc.
Here's an alternative suggestion: Let's expropriate from all the Wall St con men the billions they stole from the public. Prosecute & jail these thieves -- the very people who control Congress. And have government act to ease the suffering of those who will lose homes, jobs, & medical care; rather than blowing more trillions of public money to save the f*cking bankers & to continue the military insanity.
There's no reason to accept the dictates of capitalism. There's no such thing as a God-given natural "capitalist free market cycle" that necessitates periodic purges where everyone -- robbers as well as the robbed -- must go cold turkey and suffer. An economy that's planned to meet the legitimate needs of the population is not the same as an economy organized mainly to provide maximized profits to banks & war-profiteers.
Right the fuck on!! As I like to say, Where is Madame Defarge when we need her? Off with "their" heads!!
Sioux Rose
DAVE B: Very wise and well-stated, particularly the concluding statement. Any way to email this to the Obama people?
I agree with this assessment of Margolis' assessment...no pun intended.
he gives capitalism a PASS, merely explaining it as the classic explanation given by capitalists of a "cyclical crisis" out of which -- as they always explain later - capitalism "rights itself".
but that is not the point in all these supposed "cyclical crises". because they each lead to greater and greater gaps in wealth and broader and deeper crises each time.
if the world recession decades ago - another capitalist result - brought about the world wars (twice) - horrific as they were - they were STILL limited mainly in the western theatres as well as those allied in the axis powers and their colonized nations as well as .
BUT CRISES have been going on continuously for DECADES in theatres that have suffered the brunt of expanding capitalist imperialisms -- this time built around the "free movement of capital" -- such as in the continuing strength of cooperative tyrannous governments in the middle east, africa, and in many decades in south america, as well as in asian countries subjected to western capitalist imperialism.
the wars in these regions may be more "localized" compared to the "grand theatre" of all of europe of most of asia subjected to the 2nd world war -- but the CRISES have NEVER REALLY STOPPED -- not even abated -- but actually WORSENED and NOT just through "overt" wars between nations (such as "good america and allies against" "bad germany " etc.)... but have appeared in MORE ways than just outright , frontal war making....such as in famines due to SYSTEMIC mal-distribution of wealth, resources, land, labor future, etc...ALL OF IT DICTATED by capitalism.
CAPITALISM ITSELF is a CRISES -- but those in prosperous places are MORE the exception FROM it than the RESULT of its "Success".
in reality -- CRISIS IS capitalism's central, underlying tenet and characteristic and effect...but made so - generally so that it becomes a "natural" way of doing things where outright all out war between nations are just the most dramatic expressions.
but in reality -- every YEAR that capitalism functions IS a crisis year as it swallows up more and more people and then spits them out for its next feeding.
the collapse of the AUTO industry, for example , forced concessions forom the labor union - but it is not about the UAW "costing TOO MUCH" as an important REASON for the collapse of the auto industry and its non-viability (aside from making cars that the workers have no part in making decisions about as to whether they will sell or are sustainable) -- rather it is about Forcing LABOR -- (not just labor UNIONS) but forcing LABOR to "become more competitive" as the bush requirements for bailout says -- so that it DEPRESSES WAGES ALL ACROSS the field ....
not JUST in the auto industry but other industries , not JUST in the USA -- but throughout the globe.
and what does THIS MEAN?
capitalism says:
IN ORDER FOR BUSINESS and way of life to survive -- something has to GIVE -- and that MEANS;
LABOR .
so this is STILL part of the crises that IS capitalism. which is in reality a WAR AGAINST LABOR. period.
REMOVE that -- and capitalism ceases to function ALONG with its ARTIFICIALLY INDUCED crises!
COMMENT:
HEY EVERYBODY, READ THE ABOVE PIECE FROM TEDDY AND THE ONE BELOW ALSO BY TEDDY. What Teddy has to say is far more important than the Margolis article. More important, in fact, than most of what you'll find on this or any other site.
thank you Advocate. my views are actually just from what I LEARN from reading all your own many perceptive comments and observations and what else I learn from trying to inform myself online in my readings. it just seems to me that certain things stand out when we try to put together so many strands of information and positions...and to me, over the years, it seems true that this is the true, central nature of what capitalism , its history, where it inevitably HAS led and continues to lead.
it boils down to a power , money class waging war, intentionally or by the nature of its position, against the the part - the major part - of civilization that is ALWAYS the source of wealth-making - PEOPLE.
capitalism IS a war AGAINST people. and all wars , foreign, even those "pre-emptive" or "corrective" wars are the RESULT of wars against labor force - to continually DEPRESS their value in favor of what is called "capital" which takes its importance and value FROM THE SURPLUS WEALTH that aggregate labor produces and THEN turns it around (by legal means, etc.) AGAINST labor itself from having taken control of the "value giving" through its power (unearned and unjustified) to DICTATE what is the value of a laborer's work.
we see this in its deepest and most elevated essence through SINGLE INDIVIDUALS given the "value" of 60 BILLION dollars worth - or a billion dollars in earnings per year - to do ":the job of " "making important decisions -
stacked up against the DEVALUED aggregate of MILLIONS of laborers underneath. and THAT person or groups are the capitalists who espouse this and impose this, protected and abetted by the SYSTEM that enhances it...but which, in fact, is an ARTIFICAL CONSTRUCT of "competition" to "become valuable" (as laborers) -- which is what capitalism IS.
i don't know how these things will end out. but it's frightening what it is doing to all of us.
Very good comment. I hope you are not advocating socialism as a solution.
I lived under a sociallist system and it is inefficient and lead to stagnation
and there is corruption too.
I advocate something like Rosvelt new deal with stringent regulations for
the financial system and corporations with laws that protect the working
class and unions and a very progressive taxation system that will not only distribute the wealth but also encourage innovation and hard work.
commoner3
I hope you are not advocating capitalism. I've lived in a capitalist system and the public was addicted to useless shopping. The government worried about continuing to build automobiles while they were polluting the planet and the manufacturing capacity could have been used to make more useful things. In capitalism there was a shortage of nursing and health care professionals, yet, despite many bright candidates, there weren't enough institutions to train them. The manufacturers of military hardware became addicted to money from the government and found need to keep everyone scared of one enemy or the other.
So please don't say you're advocating THAT!!!
In my humble opinion, it is wrong to be fanatic about any system whether
it is socialism or capatilism or what have you. Picking of each system the good and discarding the bad should be the objective.
As a starter I say a national universal healthcare system is a required.
Naionalizing the Federal reserve bank and the rest of the banking system
and replacing it with a national bank owned by people is required.
Secure pensions and adequate safety net is required.
Reasonably sized corporations ans businesses are allowed but with tough regulations
with strong anti-trust anti-monoply laws are in place etc ..etc.. etc and so on.
It is a long list but I hope you get the picture.
i MIGHT be or AM advocating socialism...but one which HOPEFULLY learns to have removed or excised or minimized the traps . after all - DOES NOT capitalism show ITS GROSS INEFFICIENCIES?
the matter about "inefficiency" that is also a matter of viewpoint or experience, as you say.
socialism or what it was CLAIMED to be under the soviet union was clearly grossly inefficient in many important functions -- but WHY? - why NOT in education (having produced some of the most well-educated populations) - but MORE in PRODUCE? why is the health care of CUBA more EFFICIENT than the Numeroustimes more EXPENSIVE and THEREFORE also LESS efficient one of the USA?
since WHEN did the BANKING system IN the USA become the paragon of "efficiency" when we now see that that has been DECADES, nay -- even CENTURIES of a BIG LIE hiding GROSS INEFFICIENCIES in the sharing of WEALTH? and is efficient ONLY where it comes to distributing it "redistributing" - more properly -- UPWARDS and AWAY from the general population?
does "efficiency" mean to MATCH that "prosperity" that the USA capitalist system has claimed to be the INVENTOR of?
it is one thing to say - and it's true,likely -- that socialistm is NOT as "efficient" -- but EFFICIENCY is a matter of -- TOWARDS WHAT?. and what are the PRINCIPLES behind it?
There are innumerable possible socialist systems just as there are innumerable possible capitalist systems (each new SEC rule, each tax change, creates a different version of capitalism). I liken the development of a successful socialist system to engineering a complex machine to successfully perform some task, such as developing a type of heavier-than-air aircraft. There were several technical hurdles that had to be solved before heavier-than-air aircraft could become possible and even more before they could become practical, and there were many who argued that overcoming those hurdles were impossible and the balloon or the zeppelin (like the capitalist model) were the best types of aircraft possible, even with their serious limitations. The failure of a few, or even a great number, of models that can be identified as belonging to a general type (such as socialist) does not "prove" that no such model of that general type, properly engineered, could never succeed. So the arguments against socialism have never been serious formal arguments, but have merely been composed of propaganda by interested parties in opposition.
commoner3 wrote to DaveBronstein:
I hope you are not advocating socialism as a solution.
COMMENT:
DaveBronstein, unlike commoner3, I would be pleased if you did advocate socialism. Some of the reasons are below.
Medicare for all: many people are already covered so why not more? unless you like giving your money to insurance companies investors or doing without medical care and possibly suffering much and dying years earlier than you might.
City/county-owned, metro bus and light rail companies (some already are) is socialism. City & county-owned people's utility companies (some already are) also socialism.
Government-owned-only prisons, military and mail service worked quite well, those that have been given over to private investors, not so much.
Federally-owned railways could be the most cost and energy-efficient way of moving people and goods across the country but the Feds chose to subside their sponsors, the energy companies, by subsidizing the petrol-guzzling airlines and the petrol-guzzling trucks and other motor vehicles with land-destroying highways.
Give the people's airways (the commons) back to the people that were taken from the people and given to the rich bastards who produce propaganda as "news"; produce a flood of murder, violence, torture and "acceptable" violations of the constitution as prime entertainment, and brainwash the populace with advertising for consumer goods that are responsible for most of the environment-destroying pollution.
Take back the mining "rights" that are ruining the lands and polluting the waters. Francis S. Peabody isn't around anymore but the mountain-destroying, land-devastating, forest-trashing, stream-killing coal company he founded is. The bs that private enterprise produces creative incentive and jobs certainly doesn't apply to brainless strip-mining. To those that think coal is bad: ban its use. To those that think coal is the solution: let the people profit instead of the multi-millionaire (billionaire) whale size human leeches.
And add to the above government owned savings and lending institutions. Instead of the rich bastards getting rich gambling our money and our homes then running off with our money and our homes, let the people's government make the bushels of money to spend on the needs of the people - levees along the Gulf Coast come to mind.
Make Social Security into a livable retirement plan for all that can't be lost or taken away by the thieving CEOs, and use that money to repair the crumbling infrastructure. We already have socialism for the elderly, the disabled, and the billionaires, why not for the rest us? But, again, make it livable.
As noted above, the US already has socialism that works very well for some. But the wealthiest elites in the US, who run the country, have given away businesses, and land, and forest, and minerals, and water, and the air we breathe - all Commons - to an elite few who then use the commons to exploit the people from which they were taken.
To the sick, the homeless limping on hurting feet and those shivering on the streets, and to those who will and those who have already died from exposure or poor nutrition, or lack of medical care, and to the elderly living on cat food so they can afford their meds or going without, those whose only recourse to toothache is to have teeth pulled, socialism might look pretty good. Such as these wouldn't go without meds, medical care, dentistry, teeth, or eyeglasses, let alone go without food and shelter in socialist Cuba.
Dear reader, experiencing a sudden knee jerk rage now are ya?
Of course, US citizens have been taught by the capitalists to hate socialism and to especially hate Cuba, which may explain the boiling rage of any who might be reading this.
You can't get rich exploiting the labors of others when ownership is socialized, which is why capitalists hate it - they might have to actually work for a living.
Capitalism is simply an economic system that allows those that have to live off the labors of those that don't have.
Those that champion capitalism, are ignorant of its history or don't understand its history, or keep believing that despite being tried over and over that somehow capitalism is going to turn out fair and good this time –defining such "thinkers" as insane.
However, often those that champion capitalism already are, or hope to be, or are day-dreaming about leeching off the labors of others as capitalists themselves –which makes them no better than pinworms up the butt.
I did not say that I am against universal healthcare and secure pensions and and adequate social safety net. I support all that 100%.
I am for family farms and against big agri-business.
I am also for nationalizing the banking system and having a single
national bank owned by the people. Also in short I am against over-biggness in any
corporation and for very strong antitrust and anti-monopy laws.
I am on the fence about nationalizing oil and gas. I am not sure.
But leave to the people the freedom to start businesses and own something and
get ahead in the world.
EXACTLY !!
i wish i could state it as clearly as that!
additionally -- even granting the dictatorship of castro , even granting what HE and his fellow authorities considered as necessary to maintain their independence FROM the "giant up north" - it CAN"T be denied that cuba , a small country, has suffered MOST of its poverties and "inefficiencies" NOT because of socialist programs such as in health care, education, etc....BUT BECAUSE of the IRRATIONAL US POLICIES of "containment" and economic blockade AND BLACKMAILING OTHER countries into NOT trading with cuba.
that is the Characteristic of a BULLY and is tantamount to the USA , especially under clinton and madeleine albright "blockading" IRAQ because saddam hussein was a bad man -- but NOT REALLY because he was a bad man but because "the bad man hussein TURNED HIS BACK ON HIS FORMER SPONSORS - the USA"!!
so which one is REALLy more evil here? and which ONE really is the one that CAN"T abide "competition" in a FAIR manner? it is NOT cuba, it is NOT castro, it was NOT hussein or middle east oil magnates - it is the COUNTRY that has claimed
COMPETITION to be ITS dogma! and worked hard to SUPPRESS competition everywhere in order to become the world's hegemon.
if people understand more fully DOLLAR HEGEMONY
they will understand the HISTORY of how capitalism, USA Imperialist style came around to DICTATE to the world what it has NOT EARNED nor has ANY right to DO!
and therefore have NO RIGHT to point to other "systems" for their "inefficiencies" since ITS own inefficiencies were BOUND TO SHOW UP and get EXPOSED -- IF it ever WAS prevented from HIDING THEM through its dollar hegemony that allowed it to MASK its GREAT INDEBTEDNESS towards other nations IT has exploited for ITS "prosperity and efficiency" of CAPITALISM. !
and people...just WATCH the incoming obama administration:
THE REAL REASON that obama chose SUMMERS and GEITHNER to man his economic team : treasury secretary and federal chairman -- is
because THEY have good relations with the chinese and had lived there in asia . BUT THE PURPOSE is to continue to "support" the chinese CURRENT policy of CONTINUING TO PEG THE CHINESE YUAN to the DOLLAR.
u know WHY?>
because it continues to ENSLAVE the chinese monetary system TO the dollar -- and by THAT ALLOWED the US dollar to maintain its world hegemony which IN TURN allowed the dollar to "have value" beyond the TRUE VALUE of the US economy based on its TRUE productivity and population BY DEVALUING other economies through their "dollar=pegged currencies" and THEREFORE MAKING THOSE COUNTRIES PAY for the USA's OWN indebtedness TO THEM over the past several DECADES!
SHOULD the chinese DECIDE once and for all NOT TO BE AFRAID of RAISING the wages and LABOR value dictates of their populations EVEN at the MOMENTARY price of SLOWING DOWN their growth -- but for the long-term purpose of ENRICYHING their citizens through INTERNAL DOMESTIC CONSUMPTIOn of the goods they produce TOO CHEAPLY for the USA and the globe --
the dollar is FINISHED ! and the US EMPIRE is FINISHED.
just watch.
the reason geithner and summers are SOON going to china is to implore the chinese leadership to continue to be "stable partners" (not without threats) - by continuing to peg their YUAN to the dollar and thus "maintain" the viability of the dollar as the main world currency.
but -- if MY suspicions are correct - once the chinese realize that the long-term effects are that they will NEVER get out of "enslavement" to the dollar that way -- and only end up "supporting" the USA and other full capitalist countries by continuing to cheapen their labor and being TOO dependent on export through THAT monetary policy of ":cheapening labor" (which IS a US dicate to the globe) --
THEIR longterm plans will shift ....and it won't matter what the USA wants or wishes. they WILL end up DETACHING the YUAN from the dollar as they see it is more DESTRUCTIVE of their economy THAN the other way around.
in the end -- the 5,000 year old chinese civilization will act on the SAME thing it has always done : PRESERVE ITSELF against ANY and ALL foreign imperialisms...
and when it does -- the USA is FINISHED as the global hegemon, beginning with the destruction of ITS money power.
and that , imo, will beceom official when the chinese eventually tell the USA treasury and fedbank -- the remark one of its leaders RECENTLY said:
"WE WILL NEVER ADOPT the WESTERN SYSTEM OF THINKING".
and THAT - after ALL -- is WHY they have remained the longest-continuing civilization on earth! and TO THEM -- the US empire - capitalism blah, blah, blah, --
is a MERE MOMENT in the course of history!
hahahaha.
Good comment. It was consistent with an article I read not too long ago by the economist Henry Liu in the Asia Times.
The economy needs a period of cold turkey in which remaining credit bubbles, bad debt and financial distortions are purged. This is called recession, and it's a vital part of the capitalist free market cycle.
Is this even remotely possible?
Yes and no.
In a normal situation this is what would be done. There would be a recession.
But now the banks have bet so heavily on prosperity that they would collapse in a recession. So the Fed is inflating the currency like you wouldn't believe. The idea is that the collapsing dollar will force savers to buy real property like autos and real estate to avoid deterioration of the value of their money. Will it work? Maybe. Maybe not.
Whatever happens, it isn't going to be good.
“No State shall make any Thing but
Gold and Silver Coin a tender in Payment of Debts”
Article 1 Section 10 of the United States Constitution,
"The U.S. economy must be weaned off credit addiction."
Even the best addiction recovery programs only average a 30% success rate. The rest, well, there's a reason all addictions are chronic relapsing disorders.
Meanwhile, consumer spending accounts for 70% of our economy. And there is no Plan B if, say, even 30% of us grow up and start living within our means and stop buying tons of useless crap. Hell, when consumer spending only "grows" by 1%, the NYT headline is: "Low Spending Is Taking A Toll On The Economy." (May 1, 2008.)
Imagine the headline if spending decreased by 30%...
30% ... i like it. What, indeed, if spending decreased by 30%? Guess somebody'd have to come up with a Plan B pronto. Maybe we should have one already in our back pocket - like Friedman and the free market Chicago boys did, only this time without the arrogant fundamentalist notion that you can plug in a "perfect system" so you don't need an educated public to ensure it stays in service to HUMAN values. That's a good project for some of you smarties - I'd be happy to assist.