Author

Prerequisite Essays

The 2008 Economic Depression

Replacing Capitalism


      Capitalism has struck the deadly reef of corruption and is now sinking fast. But passengers of the American ship of state--already drowning in the murderous waters of loss of homes and jobs--are still believing politicians' reassurances that nothing's really happening.

      The lifeboats, courtesy of the Federal Reserve and the U.S. treasury, are "saving" big financial institutions: Bear Stearns, IndyMac, and a host of others to the tune of over a trillion dollars so far.

      In the biggest government intervention in the American economy since the Great Depression of the 1930s, the US Treasury Department is calling for American taxpayers to be the fall guy for over a trillion dollars of Wall Street's toxic debt that resulted from capitalist corruption and fraud. It's now clear for all to see that capitalism has totally collapsed.

      On 7/7/08 the Bush junta nationalized the two mortgage giants Fannie Mae and Freddie Mac to the tune of 300 billion in taxpayer dollars.

      Most Americans have become so brain-dead that they're not aware they've been thrown into the freezing waters by predatory capitalists.

"The failure is complete. A catastrophic 'war of choice' in Iraq. Economic recession at home. As the conservative era—launched with the election of Ronald Reagan in 1980—comes to its end, we are left with the ruins: Gilded Age inequality, record foreign debts and trade deficits, worst corporate crime wave since the Robber Barons and crippling public squalor in a country that is literally falling apart. Home values collapsing, wages declining and the cost of health care, tuitions, gas and food soaring. Katrina’s disgrace, Halliburton’s cronyism, Enron’s corruption, toxic toys, poisoned school lunches and casino banking. The list can go on."

Robert L. Borosage, Bill Scher, Eric Lotke, Making Sense, 2008,

Capitalist Inequality in the Prime Mortgage Scam

Workers lost $10 to $15 trilliion
in mortgage payments and value of homes
to banks and mortgage companies through fraud

(Click on image)

Some stupid bankers lost $10 to $15 trillion in fraudulent "mortgage instruments" they created


(Click on image)

Workers received
$300 "stimulus" check

Bankers received over a trillion dollars
(thus far and expanding daily)

      Economic collapse is one of the final stages of the cabal's overall policy of world devastation. Many of their earlier phases of contrived collapse have been largely unseen or ignored by most Americans. The final economic breakdown is now in its first stages with:

  • The failure and bankruptcy of financial institutions and businesses

  • The bursting of the housing bubble

  • Skyrocketing worker unemployment

  • $57 trillion debt caused by warprofiteering

  • Runaway inflation and skyrocketing oil and other commodities prices

    The collapse of the dollar

  • The disintegration of the global environment:
    "After centuries of global capitalist accumulation, the global environment is on the verge of collapse and there is no more ecological space for another major expansion of global capitalism. The choice is stark—either humanity will permit capitalism to destroy the environment and therefore the material basis of human civilization, or it will destroy capitalism first. The struggle for ecological sustainability must join forces with the struggles of the oppressed and exploited to rebuild the global economy on the basis of production for human needs in accordance with democratic and socialist principles."

      These are realities U.S. citizens are finding it difficult to turn a blind eye to, because many Americans are literally being thrown out on the street through foreclosure and eviction.

      What finally brought capitalism to the state of collapse was the adoption of fascist style capitalism. Capitalism's smash-up is visible to those with eyes to see, but most Americans have allowed themselves to be blinded by reactionary ideologies.

"Most panics are like summer storms. They come up abruptly, are erratically intense, then suddenly dissipate."

David A. Moss, economic historian at Harvard University


Capitalism's Collapse Into a Devastating System of Worker Exploitation

      From an earlier beneficial system of the use of human potential in productive enterprise, capitalism has devolved into a system of predatory oppression.

"Once upon a time the capitalist mode of production represented a great advance over all of the preceding ones, however problematical and indeed destructive this historical advance in the end turned out -- and had to turn out -- to be. By breaking the long prevailing but constraining direct link between human use and production, and replacing it with the commodity relation, capital opened up the dynamically unfolding possibilities of apparently irresistible expansion to which -- from the standpoint of the capital system and of its willing personifications -- there could be no conceivable limits.

"This self-contradictory inner determination of the system, which imposes the ruthless submission of human need to the alienating necessity of capital expansion, is what removes the possibility of overall rational control from this dynamic productive order. It brings with itself perilous and potentially catastrophic consequences in the longer run, transforming in due course a great positive power of earlier quite unimaginable economic development into a devastating negativity, in the total absence of the necessary reproductive restraint." 1

      As we've seen in previous essays, the devolution of vulture capitalism into a repressive system is inevitable, since the negative, destructive elements are systemic, not accidental. We can best see the fundamental defects in capitalism by reviewing the imbecilic fantasies on which it is based:

  • "The invisible hand of the market works for the good of all"

  • "Free trade is the only way to order international commerce"

  • "Capitalists should pay little or no tax because they are the engine of the economy"

  • "Unemployment and poverty are natural, inevitable afflictions in any economic system"

  • "The United States has the right to attack any nation which threatens the economic interests of its rulers"

  • "Economic efficiency is only possible under capitalism"

  • "All manufacturing, public utilities, and commodities should be privately owned"

  • "Capitalists ought to be able to make as much money as they can, no matter what the plight of the workers"

  • "All things are working together for the best in this best of all capitalist worlds"


Enough Is Too Much!

      During some eras, capitalism has operated on a somewhat economically equitable basis, providing wages sufficient for a reasonable way of life for workers, as in the post-World War II period. But, inevitably, the greed of capitalists consumes them and within a short time they're making over 800 times what workers are earning. That's an intolerable disparity!

      By any sane system of economic calculation, a highly trained executive would never make over one hundred times what an average worker would earn. By that calculation, predatory capitalism has been "broken" since about 1980.

     Capitalism produces huge earnings inequities--which they call "booms"--followed by depressions--when their corrupt practices lead to collapse of their entire system--as now. This somewhat concerns the cabal capitalists, because the working class is liable to rise up against capitalist oppression when their plight becomes intolerable. So the capitalists earlier allowed for some improvement in the lot of the workers--such as after World War II, as exemplified in the GI bill provision for education.

         
Capitalist Economic Depressions

Early Depression:      1837-1844

Long Depression:      1873–1893

Imperial Depression: 1893-1898

Great Depression:     1928-1939

Dot.com Depression: 1995-2001

Housing/Banking       2007-
Depression:

      But over the last century, the members of the cabal have become totally indifferent to human suffering and have no interest in justice or equality of opportunity in society. They're demonstrating that their corruption has no bounds; for example, the Bush junta denies that it must meet any standard of legal behavior and claims executive privilege whenever their criminal acts are challenged. And the impoverishment and utter destruction of workers likewise has no limits: the capitalists will continue to take taxpayer money to prop up their collapsed system.

"Every gun that is made, every warship launched, every rocket fired is, in a sense, a theft from those who hunger and are not fed, those who are cold and are not clothed."
Dwight D. Eisenhower, April 16, 1953


The Unacknowledged Economic Collapse

      Capitalists will never admit that their system has collapsed. So don't expect to see this headline in the Wall Street Journal or the New York Times:

Capitalists Acknowledge
Their System Has Collapsed!

      In the 1920s and 30s, the capitalists so destroyed the American economy through their criminally corrupt practices that they couldn't figure out how to restart their system. President Franklin D. Roosevelt saved capitalism from its own Robber-Baron excesses by instituting his New Deal policies, which included Social Security and various oversight features. The cabal has destroyed all the oversight features of the New Deal and are continually trying to loot Social Security through "privatization" (piratization).

      An international cabal had set up its own private banking system in 1913--the "Federal" Reserve System--to control the U.S. monetary system and following FDR's presidency they took total command of the American federal government. Unlike the FDR era during the Great Depression (1920s and 1930s) and the post-World War II era--when the cabal allowed some worker benefits--the current cabal has no use for American workers since the capitalists have taken their manufacturing to slave-labor havens such as China and India.

      Success for the capitalists is not measured in terms of whether workers are losing their homes, their jobs, their lives (in warprofiteering wars), or their Constitutional liberties; success is determined by whether their system--however rotten--continues to allow for windfall profits to oil companies, war materiel corporations, and all the other cabal business interests.

      Capitalists have added a new fascist twist to contemporary capitalism: profits are private, losses are public.

         

      They'll continue to dole out worker-taxpayer money to failed financial institutions for as long as possible, rather than admit that the whole capitalist superstructure has collapsed. If capitalism's breakdown becomes so overwhelming that they can no longer print enough money to save all the upcoming financial institution failures, they'll orchestrate a general collapse in which they can then buy failed businesses for pennies on the dollar and force workers into deeper destitution.


         
"Wall Street got drunk—that’s one reason I asked you to turn off your TV cameras. It got drunk, and now it has a hangover. The question is, how long will it sober up and not try to do all these fancy financial instruments?"

President George W. Bush, fundraiser speech, Houston, TX, 7/23/08

"Bush’s ignorant and cynical remark is an evasion of the central issue exposed by the Wall Street crisis: the colossal growth of economic parasitism and criminality in the workings of American capitalism." 2


What Workers Worldwide Must Do

      First, workers must awaken to the actual collapse of capitalism and ensure that they're not needlessly damaged by this catastrophe. For example, most workers are not attentive to what's happening to American and European banks: a great number are failing and many more will fail.

      When my wife and I recently went to our old bank to withdraw our money, we were the only people doing so, even though that very day articles in the local and national papers told about this bank's shares having taken a nose-dive, and the bank had been on an FDIC "endangered" list for a couple of days.

      Determine if your bank is in danger of going under and withdraw your savings and checking funds--and your safe deposit box contents--as soon as it's clear that it's unsafe. Don't hesitate, thinking that you'll wait for a week or two and see what happens. If you want a good reason for quick action, see what an ordeal IndyMac depositors had in securing their funds in July, 2008.

      Next, make sure you find a new bank that's as safe as possible. Use an online rating service such as bankrate.com to determine that the bank you're considering has a 1 or 2 rating (1 being the highest).

      Help alert others to the undeniable factuality of capitalism's collapse and do whatever you can to stop the criminal bailout of failed capitalism. Too many workers will allow themselves to be oblivious to this catastrophe, doing nothing about it, ignoring it or refusing to believe it even if it's brought to their attention.

      The destitution caused by a totally shattered, bankrupt capitalist "system," must motivate blue- and white-collar workers worldwide to gain increased critical consciousness and radicalized revolutionary determination. We must set about creating a new political-economic-cultural system for human fulfillment: a redistribution of wealth, democratization of the workplace, and federalized worker control over industry and finance, among other essential features.



"The only sure bulwark of continuing liberty is a government strong enough to protect the interests of the people, and a people strong enough and well enough informed to maintain its sovereign control over the government."

Franklin D. Roosevelt





Notes:

1 István Mészáros, "The Only Viable Economy," Monthly Review, April 2007

2 Source



Initiatives:

Stop the Mortgage Bailout



Updates and References:

  • 09/22/08: Back-to_Basics Investing

  • 09/17/08: Workers to Pay for Wall Street Collapse

  • 09/16/08: Further Collapse: Lehman Brothers, Merrill Lynch, and AIG

    Corruption Has Caused Collapse

    The Financialization of Capital and the Crisis

    The Demise of Neoliberalism

    Capitalist Crises

    2008: The Demise of Neoliberal Globalization

    Corporate Bailouts Through History

    All About Bailouts

    America a Third World Country

    Workers living in tent cities

    Rediscovering and Preserving Human Wealth