26 December 2008
In the essay by Stanley Aronowitz ‘Facing the economic crisis’, we read the following summation,
“Progressives have advanced hope that Obama will usher in a ‘new’ New Deal. But the New Deal of yesteryear was never intended to pull the United States out of the depression. While it did employ more than a million workers in government projects, even considering that these might have produced three times or 3 million jobs, as late as 1940, unemployment hovered at about 20% of the labour force. What the New Deal accomplished went well beyond its relatively modest economic impact; more important was its ideological and political force.
“In contrast to Herbert Hoover and the first New Deal’s focus on stimulating economic activity by pouring capital into business corporations, controlling prices and wages in order to foster profits and limiting its direct aid to the unemployed to feeding the hungry, the so-called ‘second’ New Deal put money in the pockets of the jobless through public works and service programs, promised to save small farms from foreclosure through government purchases of crops and paying farmers to retire part of their growing capacity in a land bank. But it was the farmers themselves who, through direct action and mass organizing, sometimes prevented evictions, created cooperative enterprises to oppose the big processing corporations and, even before the depression became official, created their own political vehicles.
“And, after the mass industrial strikes of 1933 and 1934 conducted without a legal framework for union recognition, in 1935 the National Labor Relations Act guaranteed workers the right to organize unions of their own choosing, established a procedure for official union recognition and collective bargaining, and outlawed company unions and competitive unionism within the same bargaining unit. In short, the second New Deal was a consequence of a popular upsurge, not only the brainchild of FDR and his advisors. It remains an open question as to whether the organizations at the base of the Obama administration will match, let alone exceed, the achievements of the New Deal. There is little or no prospect that, within the current framework of neoliberal, market capitalism, the deepening economic crisis can be significantly reversed. Will the Left urge direct action to address the crisis, open a dialogue about its capitalist roots and propose possible radical solutions?” — ‘Facing the economic crisis’, Stanley Aronowitz [emph. added Ed]
Dream on folks, with union membership at an all-time low and a barely existent left, the prospects for some kind of comparable action look exceedingly dim. Yet without collective action there is little we can do about the crisis of capital that confronts us. We are doomed to be swept along by forces over which we have no control, let alone the ‘masters of the universe’. At best, they take care of their own, hence the trillions of dollars spent bailing out the bankers.
It should surely be apparent now that the ‘neo-liberal’ counter-revolution has taken us back to a time before the New Deal! Indeed, the current situation is directly comparable to the situation that preceded the Crash of ‘29 in that, without organized working class actions we are powerless to avert this disaster.
Erasing the past
Aside from the objective of rolling back working class gains, the other major objective of the neo-liberal counter-revolution—with the able assistance of the corporate/state media—was to erase all memory of the past. Thatcher’s infamous statement, ‘there is no such thing as society’ sums up the ideological objective that came hot on the heels of the first, major post-WWII crisis of capital, triggered by the so-called oil crisis of 1971-73.
In part, the neo-liberal counter-revolution was a response to the failure of socialism to offer a viable alternative and also the humiliating defeat in Vietnam but above all else, it was once more, the over-accumulation of capital and the falling rate of profit that prompted the capitalist counter-revolution.
And what do we have to show for it? A life of perpetual debt to capital and some cheap consumer baubles courtesy the sweatshops of the planet and now the icing on the cake, the destabilization of the climate.
“China, some economists say, lulled American consumers, and their leaders, into complacency about their spendthrift ways.” — ‘Dollar Shift: Chinese Pockets Filled as Americans’ Emptied’, New York Times, 26 December, 2008
American pockets emptied? Yes, working people’s pockets emptied, right into the pockets of the already rich! It’s amazing how the corporate press rewrites reality as the headline above so amply demonstrates. The 1970s heralded the great shift to cheap labour markets; first from the unionized states of the north and eastern United States, to the non-unionized south and then even further south, Mexico and Central America and then onwards and southwards to Asia, ending up in the sweatshop to end all sweatshops, China.
But the corporate media would have us believe that it’s all our fault, that is to say, working people and of course, those ‘inscrutable’ Chinese. Damn, the audacity of it! But without memory, without our history to inform and guide us, the outcome was inevitable and of course, the corporate media are directly responsible as they continue to be by lying about the causes of this latest and worst crisis.
Yet between the 1970s and the present, the biggest shift of wealth ever, from working people to the filthy rich 1 percent, took place.
“The net worth of the 358 richest people in the world was then [in the the 1990s] to be found to be ‘equal to the combined income of the poorest 45 per cent of the world’s population — 2.3 billion people.’ The world’s 200 richest people ‘more than doubled their net worth in the four years to 1998, to more than $1 trillion,’ so that ‘the assets of the world’s top three billionaires were more than the combined GNP of all least developed countries and their 600 million people.’ These trends have accelerated, albeit unevenly. The share of the national income taken by the top 1 per cent of income earners in the US more than doubled between 1980 and 2000 while that of the top 0.1 per cent more than tripled. ‘The income of the 99th percentile rose 87 percent’ between 1972 and 2001 while that of ‘the 99.9th percentile rose 497 percent.’ In 1985 the combined wealth of the Forbes 400 richest people in the US ‘was $238 billion’ with ‘an average net worth of $600 million,’ adjusted for inflation. By 2005, their average net worth was $2.8 billion and their collective assets amounted to $1.13 trillion—more than the gross domestic product of Canada.’” — Introduction to ‘The Limits of Capital’, David Harvey, Verso edition, 2006, p. xi
Been there, done that!
The New York Times omits one vital fact, namely that it was US and other Western corporations that shifted their production to China and for one simple reason, to maintain the rate of profit. But finally, even this didn’t help, in actuality it precipitated the current crisis by creating a vast surplus of production which coupled to depressing real wages in the consuming economies, led to the shift to speculation and the outrageously misnamed ‘wealth creation’ by the gangsters and pirates of capital that is the end product of a cycle that first kicked in centuries ago.
“The first time as tragedy…Hegel, and the second time as farce… And Madoff, splendid in his continuation of the revenge on the goyim, in true Old Testament tradition, manages to evade and help others to evade losses because they are deductible. He stymies all by pleading guilty. Brilliant!! Oh usury and its formidable structure! Ponzi, bullshit!” — Patricia Murphy-Robinson
Madof reveals the true bankruptcy of capitalism, for he is not an exception, instead he is the personification of capital without constraints. It is inconceivable that he acted alone, that others were not implicated in his gigantic pyramid scheme.
“For the amount of money and number of accounts, it’s practically impossible that he was doing this alone,” said Busson, whose $11.5 billion fund of hedge funds had about $230 million invested with Madoff. “What’s mind-boggling is the amount of assets and the amount of time he was doing it.
“I knew the SEC was all over this shop. As a broker-dealer, you file quarterly statements,” he said. “The main reason we got comfort is that it was SEC-regulated, and it was doing 10 percent of the volume on the New York Stock Exchange and Nasdaq.””
— ‘Madoff Scheme Was ‘Impossible’ to Do Alone, Says EIM’s Busson’, 16 December, 2008, Bloomberg.com
Yes, since at least 1992. How did he get away with it over such a long period of time and nobody, nobody, spotted it? The Ponzi scheme started back in the days of Clinton and the de-regulation of the financial sector by the Clinton posse (who are it seems, firmly back in the driver’s seat, but then maybe that was the deal, ‘allowing’ Obama to win the presidential nomination. It’s just like Medvedev and Putin!).
Madof should have gotten out while the going was good but greed is a drug and Madof had one hell of a monkey on his back, a 50 billion dollar monkey by sound of it. Now that’s such a gigantic monkey that’s it’s meaningless. The whole thing, it’s getting seriously out of hand.
It’s sobering to think that a really small number of like-minded individuals in such key positions, manipulate not only vast fortunes but more importantly, are doing things that directly affect the livelihoods of millions of people, in fact entire economies. What we are witnessing are identical predations to those made by the Robber Barons of the late 19th, early 20th centuries, the Rockefellars and the Railway Barons.
However, before get carried away with outrage at the activities of Madoff and others of his ilk, remember he merely operates within a system deliberately formulated to be exploited in this manner.
The only real triumph of capital (and a short-lived one at that) is the total erasure of the past as it was really lived, hence the objective is first to rediscover where we come from and to (re)learn and never again forget the lessons of the past. This is why essays such as Aronowitz’s and David Harvey’s books are so vital to us.
It is also a sad indictment of a left that has allowed us to forget the past, worse, it even participated in the erasure of its own history by distancing itself from our heritage, a legacy of struggle and our achievements that it seems we must once more go through. Such is the role of anti-communism, which is why I’m proud to call myself a communist and to honour my folks’s generation and those who came before them, notwithstanding the fuck-ups we have made.