SCORCHED EARTH BANKSTER PLUNDER
AHEAD!
AHEAD!
TRUMP VOWS OB AMA’S CRONY CAPITALISM THE PLUNDER OF OBAMA’S BANKSTERS IS NOT OVER
……….. It’s just begun!!!
……….. It’s just begun!!!
“This amnesty for corporate bribery and criminality reveals the essence of the Trump administration’s scorched earth campaign against business regulations.”
“Under Obama, not a single leading banker was prosecuted for the
criminal activities that led to the biggest financial disaster and
deepest slump since the 1930s, destroying the jobs, life savings
and living standards of tens of millions of workers in the US and
around the world.”
criminal activities that led to the biggest financial disaster and
deepest slump since the 1930s, destroying the jobs, life savings
and living standards of tens of millions of workers in the US and
around the world.”
“Our entire crony capitalist system, Democrat and Republican alike,
has become a kleptocracy approaching par with third-world hell-holes. This
is the way a great country is raided by its elite.”
---- Karen McQuillan THEAMERICAN THINKER.com
TRUMP SIGNALS OBAMA’S CRONY
BANKSTERS THAT BETTER LOOTING IS UP
AHEAD.
BANKSTERS THAT BETTER LOOTING IS UP
AHEAD.
The chief motivating factor behind the rise on Wall Street is
the understanding that the incoming Trump administration
will not only carry out policies to benefit the financial elites,
but that responsibility for implementing this agenda will be
in the hands of some its foremost representatives.
the understanding that the incoming Trump administration
will not only carry out policies to benefit the financial elites,
but that responsibility for implementing this agenda will be
in the hands of some its foremost representatives.
"The economy
has thus come to resemble a giant vacuum cleaner in which the real wealth
produced by millions of workers is siphoned off to the semi-criminal and
criminal elements (so clearly established by their activities that led to the
financial crisis) who occupy the heights of society."
“The passing
grades on the Fed’s stress tests pave the way for banks to pay their largest
dividends in almost a decade,” the newspaper reported. “The hands-down winners
will be shareholders and bank executives, who could see their stock-based
compensation packages advance even further.”
Fed
stress test results unleash “party time” for US banks
By Nick Beams
8 July 2017
8 July 2017
Anyone
looking for conclusive evidence that the US financial system and more broadly
the entire economy is run of, by and for the ultra-wealthy need go no further
than the Federal Reserve decision to give all the major banks a pass on its
stress tests at the end of June.
In what one
financial analyst characterised as “party time,” the major banks responded by
handing out billions of dollars to their super-rich shareholders in the form of
dividends and other benefits.
The head of
Berkshire Hathaway, Warren Buffett, alone is expected to benefit to the tune of
$1.6 billion as a result of bank share purchases he made following the global financial
crisis in 2008–2009. With decades of experience in financial circles and
knowledge of how government operates, he bet that the authorities would rescue
the banks and payoff time would come.
As a result
of the Fed decision, the market value of US banks is estimated to have risen by
$40 billion, with the six largest banks increasing in value by $25 billion.
Stress tests
were introduced in 2011 in the wake of the financial crisis. They are supposed
to ensure that the banks have sufficient capital to meet adverse circumstances
and do not again require a bailout from public funds.
According to
the Fed’s calculations, the capital held by the largest American banks was
nearly 14 percent of assets, weighted by risk at the end of 2016—deemed
sufficient to meet any financial problems. But according to the New York
Times, alternative definitions of capital, in line with international,
rather than American, accounting standards, the capital ratio is only 6.3
percent.
“The passing
grades on the Fed’s stress tests pave the way for banks to pay their largest
dividends in almost a decade,” the newspaper reported. “The hands-down winners
will be shareholders and bank executives, who could see their stock-based
compensation packages advance even further.”
The amounts
run into scores of billions of dollars, which are going to be handed out via
dividends and stock buybacks to increase share valuations.
According to
one estimate, the six largest US banks—Bank of America, Citigroup, Goldman
Sachs, Morgan Stanley, JPMorgan Chase and Wells Fargo—are set to return to
shareholders between $95 billion and $97 billion over the next year. This is 50
percent more than they returned last year.
The inclusion
of Wells Fargo in the pass list is particularly striking. It was found guilty
last year of schemes that set out to defraud customers by collecting fees on
two million unauthorized accounts in order to boost its bottom line and balance
sheet. Now it has lifted its dividend on shares and announced an $11.5 billion
share buyback scheme.
Bank of
America said it would increase its dividend by 60 percent on each share and
unveiled a $12 billion share repurchase plan.
Goldman Sachs
CEO Lloyd Blankfein offered a measured, but obviously satisfied, response to
the Fed decision, saying his bank was “well positioned to continue to return
capital to shareholders while expanding our client franchise.” Blankfein once
famously remarked that in the finance industry he was doing “God’s work.”
BLOG: DURING OBAMA'S BANKSTER REGIME, JP MORGAN VIRTUALLY LIVED IN THE WHITE HOUSE AS DOES GOLDMAN SACHS IN THE TRUMP WHITE HOUSE.
At JPMorgan
Chase, the payout to shareholders will be $27 billion over the next year.
Citigroup, which almost went belly up in the financial crisis, will return
$18.9 billion to shareholders, an 82 percent increase on the year before.
The stress
tests, together with supposedly tighter regulations under the Dodd-Frank Act,
were introduced to give the impression that the government and financial
authorities were taking some action in response to the financial crisis, set
off by the dubious and, in some cases, outright criminal activities of the
banks.
But no one
was charged, let alone jailed and the only penalties have been fines that the
banks paid out of their profits as operating expenses. The Dodd-Frank measures
have largely proved to be toothless, presenting only a minor inconvenience.
Even these
measures are now set to be significantly watered down, if not scrapped
outright. Last month, US Treasury Secretary Steve Mnuchin said stress tests
should be performed only every second year and banks that maintained a
sufficient level of capital should be exempted altogether.
Capital Alpha
Partners analyst Ian Katz expressed the sentiments circulating in bank
boardroom and executive offices, but not usually voiced publicly. He said the
Fed decision was “payout party time.” Katz forecast more to come, declaring:
“The highly positive report card puts more wind at the backs of the Trump
administration and others who want to soften Dodd-Frank era regulations.”
One slightly
sour, but significant, note in the stress test assessment was the Fed’s
decision to give the Capital One Financial Group only conditional approval to
make payouts while it fixes “material weaknesses” in planning.
Capital One
derives most of its revenue from credit card operations and the Fed referred to
a “recent uptick in delinquency rates” in this financial area. This points to
deep and growing problems in the US economy as working families and young
people increasingly struggle to make ends meet under conditions of falling real
wages and the replacement of full-time jobs with low-paying, part-time and
casual positions.
Furthermore,
there is a causal connection between the cash-rich banks and the deepening
economic malaise of the working population.
In banking
and finance, it appears as if profit comes almost out of thin air, as money
begets still more money. But in the final analysis, all financial profits
represent a claim on the surplus value extracted from wage workers.
Consequently,
the period since the financial crisis has seen the development of two
interconnected processes. While the banks and finance capital have been
sustained and expanded by bailouts and the Fed’s provision of ultra-cheap
money, workers, and especially young people, have been subjected to ever-lower
wages and worsening working conditions.
At the same
time, social facilities have been slashed on the grounds that there is no
money.
The economy
has thus come to resemble a giant vacuum cleaner in which the real wealth
produced by millions of workers is siphoned off to the semi-criminal and
criminal elements (so clearly established by their activities that led to the
financial crisis) who occupy the heights of society.
Wikileaks exposes Obama’s bankster-infested
administration!
BARACK OBAMA …… the banksters’ RENT BOY!
“Citigroup’s recommendations came just
three days after then-
President George W. Bush signed into law the Troubled Asset
Relief Program, which allocated $700 billion in taxpayer money
to rescue the largest Wall Street banks. The single biggest
beneficiary was Citigroup, which was given $45 billion in cash
in the form of a government stock purchase, plus a $306 billion
government guarantee to back up its worthless mortgage-
related assets.”
President George W. Bush signed into law the Troubled Asset
Relief Program, which allocated $700 billion in taxpayer money
to rescue the largest Wall Street banks. The single biggest
beneficiary was Citigroup, which was given $45 billion in cash
in the form of a government stock purchase, plus a $306 billion
government guarantee to back up its worthless mortgage-
related assets.”
MUCH MORE HERE:
“As president, Obama not
only funneled trillions of dollars to the banks, he saw to it that not a
single leading Wall Street executive faced prosecution for the orgy of speculation and
swindling that led to the financial collapse and Great Recession, and
he personally intervened to block legislation capping executive pay at bailed-out
firms.”
“So
when Clinton was hobnobbing with
Goldman Sachs CEO Blankfein in 2013, while
investigations of wrongdoing by
Goldman and the other Wall Street banks were
still ongoing, she was consorting with a man
who belonged in prison.”
Goldman Sachs CEO Blankfein in 2013, while
investigations of wrongdoing by
Goldman and the other Wall Street banks were
still ongoing, she was consorting with a man
who belonged in prison.”
BARACK OBAMA , HIS CRIMINAL
BANKSTERS AND THE LA RAZA
BANKSTERS AND THE LA RAZA
MEXICAN DRUG CARTELS….
There’s more than one way to
destroy America’s white middle class!
HSBC laundered hundreds of
millions
and perhaps billions of dollars for drug
cartels responsible for the deaths of tens
of thousands of people over the past
two decades. The bank transferred at least
$881 million of known drug trafficking
proceeds, including money from the Sinaloa
Cartel in Mexico, which is known for
dismembering its victims and publicly
displaying their body parts.
and perhaps billions of dollars for drug
cartels responsible for the deaths of tens
of thousands of people over the past
two decades. The bank transferred at least
$881 million of known drug trafficking
proceeds, including money from the Sinaloa
Cartel in Mexico, which is known for
dismembering its victims and publicly
displaying their body parts.
CRONY
BANKSTER LOOTING OF AMERICA
THEIR GOLDEN AGE OF PLUNDER IS NOT OVER!
NO PRESIDENT IN HISTORY SUCKED IN MORE BRIBES FROM BANKSTERS
NOR INFESTED HIS ADMIN WITH BANKSTER CRONIES MORE THAN OBAMA!
And
while the Obama administration worked systematically
to bail out the banks and make the financial oligarchy richer
than ever, shielding the architects of the Great Recession
from criminal prosecution, it did impose fines for some of
the banks’ grossest swindles, including the sale of worthless
subprime mortgage-backed securities, the rigging of key
global interest rates such as the London Interbank Offered
Rate (Libor), drug money laundering, illegal home
foreclosures and other illicit activities.
to bail out the banks and make the financial oligarchy richer
than ever, shielding the architects of the Great Recession
from criminal prosecution, it did impose fines for some of
the banks’ grossest swindles, including the sale of worthless
subprime mortgage-backed securities, the rigging of key
global interest rates such as the London Interbank Offered
Rate (Libor), drug money laundering, illegal home
foreclosures and other illicit activities.
BILLARY,
HILLARY and the OBAMAS:
THEY FILLED THEIR BOTTOMLESS POCKETS WITH BRIBES AS THEY
UNLEASHED THEIR CRONY BANKSTERS, ASSAULTED OUR BORDERS AND HANDED THE AMERICAN
DREAM TO THE INVADING LA RAZA MEXICAN INVADERS AND HEROIN CARTELS
CAMPAIGN
TO DESTROY AMERICA and take a THIRD TERM FOR LIFE….
Barack
Obama’s 8 year sabotage of Homeland Security: His Crony Banksters, La Raza Drug
Cartels and MS-13 are right behind his sabotage of U.S. borders!
The American oligarchy, steeped in
criminality and parasitism, can produce only a government of war, social
reaction and repression. In its blind avarice, it is creating the conditions
for unprecedented social upheavals. It is hurtling toward its own revolutionary
demise at the hands of the working class.
KAINE AND CLINTON-OBAMA’S CRONY BANKSTERS…. Has
their golden age of looting America only gotten brighter?
"Between 2009 and 2011,
Kaine served as the head of the Democratic National Committee, the leadership
body of the Democratic Party. He is close to Wall Street, having recently
backed measures to deregulate banks."
WHY OBAMA’S CRONY BANKSTERS WANT MORE OBAMA-CLINTONOMICS
“Clinton
has also stepped up her efforts to woo billionaires
who have traditionally supported Republican campaigns on
the grounds that she will be a more effective “commander in
chief” and defender of the interests of Wall Street.”
who have traditionally supported Republican campaigns on
the grounds that she will be a more effective “commander in
chief” and defender of the interests of Wall Street.”
TRUMPERNOMICS: IMPLEMENTING
OBAMA-CLINTONIMCS
“CRIMINAL BANKSTERS WILL CONTINUE TO RULE
AMERICA!” Twitter Trumper
BUT WE KNOW WHERE THEY LIVE!
OBAMA-CLINTON-TRUMPERnomics: The
Massive Transfer of Wealth to the Super Rich Ratcheted up!
http://mexicanoccupation.blogspot.com/2017/04/the-goldman-sachs-regime-of-donald.html
http://mexicanoccupation.blogspot.com/2017/04/the-goldman-sachs-regime-of-donald.html
BARACK OBAMA PLANS A THIRD TERM: HIS CRONY BANKSTERS, LA RAZA, MUSLIMS
AND THOSE MUSLIM DICTATORSHIPS HE FUNDED ARE BEHIND HIM…. Along with George
Soros!
THE OBAMA COUP TO BE DICTATOR:
THE ARMY OF ILLEGALS TO BRING
AMERICA DOWN AND FORM THE OBAMA MUSLIM-STYLE DICTATORSHIP THAT WILL BE OPEN
BORDERS AND PRO LA RAZA FASCIST SUPREMACY.
Daniel Greenfield, the award-winning Shillman
Journalism Fellow at the Freedom Center, believes (OBAMA'S POLITICAL PARTY)
“OFA will be far more dangerous in the wild than the Clinton Foundation ever
was.”
“Barack
Obama and his henchmen would not have been emboldened in their ostensible
machinations to undermine an election and then a presidency if it were
not for the fecklessness of the Republican Party and the blind eye as
well as the
tacit support of the mainstream media.”
THE DEMOCRAT PARTY and the final collapse of AMERICA:
WALL STREET LOOTERS’ PROPAGANDA MACHINE TO KEEP LEGALS’ MOUTHS SHUT AND KEEP PAYING FOR THE BAILOUTS AND CORPORATE PLUNDERING OF AMERICA.
http://mexicanoccupation.blogspot.com/2017/02/the-crony-bankster-democrat-party.html
TRUMP
VOWS TO KEEP OBAMA’S CRONY BANKSTERS LOOTING
MNUCHIN:
THE FORECLOSURE MACHINE!
THE FORECLOSURE MACHINE!
The FDIC paid OneWest $1 billion,
which Stein said went to “billionaire investors … to cover the close
of foreclosing on working class, everyday American folks.”
“But the bank came under fire for its foreclosure practices as housing
advocacy groups accused it of being too quick to foreclose on struggling
homeowners. In 2011, dozens of demonstrators descended on Mnuchin's $26.5
million home in he wealthy Bel Air neighborhood to protest OneWest's eviction
tactics, according to the Los Angeles Times.”
TRUMPERnomics:
AFTER
OBAMA-CLINTONIMCS, THE LOOTING OF AMERICA BY THE RICH TO CONTINUE UNDER THEIR
OWN, DONALD TRUMP
TRUMP
FILLS THE “SWAMP” WITH CRONY BILLIONAIRES!
"Far
from Trump’s demagogic claims that he would 'drain the swamp,' the corrupt
nexus between Wall Street and Washington is tighter than ever."
OBAMA-CLINTONOMICS is now the new
TRUMPERnomics!
TRUMP VOWS TO SERVE THE RICH WITH
SUPER OBAMA-CLINTONIMCS!
There is a vast chasm between this empty populist rhetoric
and the personnel that Trump has selected to populate his government. The
speech followed a series of cabinet picks, including billionaire asset
strippers, Wall Street bankers, and dedicated opponents of
financial and corporate regulations, public education and Medicare and
Medicaid, to lead the Treasury, Commerce, Education and Health and Human
Services departments.
TRUMP
IMPOSES OBAMA-CLINTONOMICS: Cut Federal Pensions and Medicare to Cover Tax
Cuts For the Super Rich
"Trump
is not the initiator of this class war against working people. It has been
underway for decades, beginning in earnest with the election of
Ronald Reagan in 1980 and continuing under every
succeeding administration, including the eight-year tenures of
Democrats Bill Clinton and Barack Obama. The colossal redistribution of
wealth and income from the bottom to the top of American society reached
record proportions under Obama, whose legacy of falling
living standards and worsening economic crisis for tens of millions
of workers was a decisive factor in the victory of the fascistic demagogue
and con artist Trump."
THE DEMOCRAT PARTY:
HELL BENT ON FINISHING OFF THE AMERICAN WORKER!
"At one point she
hailed the “record profits” of the auto companies. She did not mention that
these profits came at the expense of the jobs, wages and retirement benefits of
thousands of auto workers, decimated under the terms of the auto bailout
organized by the Obama administration."
TRUMPERNOMICS FOR THE SUPER RICH
"Between 2002 and 2015 annual
earnings for the bottom 90 percent of Americans rose by
only 4.5 percent, while earnings for the top 1 percent grew by 22.7
percent, according to the
Economic Policy Institute. Under the Obama administration, more than 90
percent of
income gains since the so-called “recovery” began have gone to the top one percent."
income gains since the so-called “recovery” began have gone to the top one percent."
http://mexicanoccupation.blogspot.com/2016/11/comes-revolution-class-struggle-in-us.html
class-struggle-in-us.html
By Nick Beams
Global financial parasitism and the political strategy of the working class
By Nick Beams
10 July 2017
The statement authored by Joseph Kishore and David
North on behalf of the Political Committee of the Socialist Equality Party (US)
on June 13 (“Palace
coup or class struggle: The political crisis in Washington and the strategy of
the working class”) draws out the objective processes driving the class
struggle in the United States and the strategy which must be adopted and fought
for in the building of a mass socialist movement.
Their analysis is firmly grounded on a vitally
important conception advanced by Marx. He explained that the revolutionary role
of the working class was not determined by “what this or that proletarian, or
even the whole of the proletariat at the moment considers as its aim.
The question is what the proletariat is, and consequent upon that being,
it will be compelled to do. Its aim and historical action is irrevocably and
obviously demonstrated in its own life situation as well as in the whole
organisation of bourgeois society today.” [1]
In its elaboration of the necessary political
strategy of the American working class, the statement therefore outlines its
“life situation”:
There are many signs of growing social anger among
broad sections of the working class, for whom conditions of life are becoming
intolerable. The old phrases used in the past to describe life in the United
States—“the land of unlimited opportunity,” “the American Dream,” etc.—have
become meaningless because they bear no relation to reality. It is becoming
obvious to the great mass of working people that the existing society serves
exclusively the interests of those who are already very wealthy. Access to the
basic necessities of life, such as high-quality education, a safe environment,
decent housing, secure employment, adequate leisure time and affordable medical
care, is determined at birth—that is, by the class and economic status of the
family into which an individual is born.
Changing what has to be changed—that is, the
various ways in which the capitalist class and its defenders in every country
seek to promote the society over which they preside as the best of all possible
worlds—it is clear that the characterisation of the situation in the US applies
internationally.
The rising social anger to which the statement
points is likewise an international phenomenon, which is finding expression in
the observations of some of the more perceptive political commentators.
Writing last month, the European economics
commentator for the Financial Times, Wolfgang Munchau, pointed to the
surprise results of the Italian referendum last year, called by the now ousted
Prime Minister Matteo Renzi, the Brexit referendum called by the then-British
Prime Minister David Cameron, and the outcome of the British election of June
8—all of which took place in opposition to what opinion polls had indicated.
Even more extreme was the outcome in France, where
the electorate “managed to eradicate virtually the entire political
establishment in a short sequence of elections.”
“In all these counties,” he continued, “the global
financial crisis has become a historical turning point, caused by the effect of
crisis resolution on income distribution and on the quality of the public
sector.”
Reflecting a growing sense of bewilderment in
sections of the ruling classes confronted with rising opposition from below,
Munchau noted that the financial crisis had not only challenged long-held
beliefs about economic policy and financial regulation, but also “how we think
about politics.”
Previous economic and political models had broken
down and the financial crisis had turned what seemed to be an outwardly stable
political and financial environment into a “dynamical” system, the main
characteristic of which is “radical uncertainty.” He could offer no
prescription for the political establishment for which he speaks to resolve
this situation, advising that the best that could be done was to “muddle
through and keep your eyes wide open.”
But he had no doubt about some of the longer-term
implications of the crisis, concluding: “Once we accept that our globalised
world has characteristics of a dynamical system, many of our assumptions will
fall like dominoes, and so will the political parties that cling to them.”
A comment published in the Financial Times
of June 14 by Michael Power, a strategist with Investec Management, entitled
“Has Western-style democracy become too expensive for capitalism?” pointed to
some of the underlying economic trends fuelling rising social anger.
He cited the McKinsey report that found that almost
70 percent of households in the 25 most advanced economies, some 560 million
people, had seen their real incomes fall or remain flat since 2005, and that in
the US there had been a 12 percent decline in real median household income
since 2000.
According to Power: “The central reason why Western
democracy is in decline is that its capitalist bedfellow can no longer afford
the financial demands that full-blown democracy is placing upon it.”
The political demands of democracy were able to
cohabit with the economics of capitalism for a century because of the
redistribution of income via taxes and a social welfare system in what Power
called the subsidisation of those who fell behind.
“This persuaded those whose livelihoods required
subsidisation to support this marriage of convenience. The rise of populism
[the termed used by Power and many others for the social anger of the working
class], the deepening divide between generations and the growth of
anti-establishment political movements on both extremes of the political
spectrum suggest this grand bargain may be losing its attraction. This
cohabitation is threatened because the economic surpluses generated can no
longer cover the level of political demands for subsidisation.”
Power is unable to answer the obvious question
posed by his analysis: why is it that in the face of the enormous growth of the
productive forces resulting from the development of technology, the social
position of the working class is worsening?
We shall examine the reason for that in the course
of this comment. But Power does point to some of its consequences. He holds out
no prospect for any restoration of the “grand bargain” within the present
economic framework, noting that in the US growth rates have declined from 3.5
percent to 2 percent.
Moreover, he points out, citing the work of the
French economist Thomas Piketty, the economic rewards have flowed to the
upper-income layers—the top 1 percent. A mutation of this logic is reflected in
the “growing disenchantment of youth with this unequal arrangement, as most are
being progressively shut out of decent job opportunities that were open to
their parents’ generation.”
He continues: “The recent UK election—which saw the
electorate start to swing towards the hard left on the back of an energised
under-25s vote—and the fact that the youth of the US have made a socialist,
Bernie Sanders, America’s most popular politician, are indications of this
growing trend.”
The disquiet about the political consequences of
post-2008 capitalism extends to major economic institutions.
In its annual jobs report, published in June, the
Organisation for Economic Cooperation and Development (OECD) noted that while
the number of people employed in the developed world had surpassed pre-crisis
levels, there was a rising tide of social anger.
“While the Great Recession left deep scars in many
countries, the economic discontent also centres on the perception that deeper
international economic integration disadvantages many workers while offering
the lion’s share of the benefits to large corporations and a cosmopolitan
elite. The perception that the international economic system is ‘rigged’
clearly challenges the democratic legitimacy of current policies and needs to
be taken seriously.”
It noted that between 1995 and 2015 what it called
the middle-skill share of employment fell by 9.5 percentage points in the OECD
area, and that this trend had been aggravated by a cumulative loss in output
per capita since the 2008 crisis of around 50 percent.
The OECD, which has been notoriously in favour of
“free market” economic policies, even offered something by way of a
self-criticism. It was “important to assess whether labour market policy
choices—including those consistent with OECD policy advice—have inadvertently
contributed to a growth model that has not prevented a disproportionate share
of the gains from economic growth to benefit already high-income segments of
the population.”
However, reflecting the bankruptcy of the entire
framework of bourgeois policy-making, the OECD report offered no way out. It
said there had to be a focus on increasing skill level, as if oblivious to what
has taken place over the past decade and more. Tens of millions of young people
all over the world have sought to increase their qualifications and skill
levels at universities and colleges only to find that when they graduate there
are no positions available and they are saddled with massive student debts.
The descriptions of the deepening economic and
social crisis of capitalism and its political consequences put forward by
various bourgeois pundits and commentators point to the decisive role of the
2008 financial crisis. However, these descriptions are accompanied by the
delusion that its transformative effects can somehow be overcome if only some
kind of economic adjustment—usually nothing more than a call to governments to
take some heed of social distress—is carried out within the framework of the
capitalist system itself.
An altogether different conclusion arises—and this
is decisive for the development of the political strategy of the working
class—from a scientific analysis of the roots of the 2008 breakdown.
The immediate cause of the crisis was the criminal
and semi-criminal activities resulting from financialisation. At its core, financialisation,
the domination of the economy by banks, hedge funds, financial institutions and
financial markets, involves the accumulation of profit in ways very different
from the period in which the so-called “grand bargain” was struck.
In that period, profit accumulation arose in the
main from expanded investment in production, leading to increased economic
output and employment and an increase in wages and real living standards. That
is no longer the dominant form. It has been replaced by the accumulation of
vast wealth through financial operations.
It would, however, be the greatest mistake to think
that this parasitism and its dominance over the economy as a whole are the
result of the activities of some “evil serpent” that managed to slither into the
Garden of Eden of the “free market,” and that the process can be reversed if
only the serpent is scotched.
One of the most crucial advances made by Marx in
the science of political economy was to draw the distinction between surplus
value, extracted from the working class in the process of capitalist
production, and its various forms of appearance as revenue flowing to the
different property owners—as industrial profit, interest payments, rent and the
gains acquired by share trading and other financial operations.
Surplus value is the ultimate basis for the
expansion of capital. But it is divided up among the different property owners,
whether or not they are directly involved in its extraction.
Financial activity by hedge funds, financial
investors, speculators, bond market and currency traders, etc., involves the
accumulation of massive profits. But these activities do not involve the
extraction of surplus value. Rather, they are the way in which the holders of
money and other forms of property, including, most importantly today, the
owners of intellectual property in the high-tech and pharmaceutical industries,
appropriate surplus value created elsewhere.
This process, in which money seems to simply beget
money, is not somehow extraneous to the fundamental logic of capital itself—a
kind of “bad side” that develops in opposition to the “good side” of real
wealth-creation as such. It must always be remembered that the driving force of
capital is not the production of real wealth—increased output, providing rising
wages, jobs, social services, etc.—but the self-expansion of value in the form
of money.
Marx drew out that the process of capital
accumulation, the expansion of value, starts and finishes with money, its
“independent and palpable form,” and, consequently, “the production process
appears simply as an unavoidable middle term for the purpose of money making.”
And as Engels commented: “This explains why all
nations characterized by the capitalist mode of production are periodically
seized by fits of giddiness in which they try to accomplish the money-making
without the mediation of the production process.” [2]
Over the past three decades and more, starting in
the 1980s, rather than “fits of giddiness,” this form of accumulation has
increasingly taken a central role in profit accumulation, above all in the US,
but also in other major developed economies.
It was a period characterised by a series of
mounting financial storms—the US savings and loans scandal of the late 1980s,
the stock market crash of October 1987, the collapse of the Japanese stock
market bubble of 1990-91, the bond market sell-off of 1994, the Asian financial
crisis of 1997-98, the collapse of Long Term Capital Management in 1998
(prompting a rescue operation by the New York Federal Reserve Bank), the Enron
bankruptcy and the bursting of the high-tech stock market bubble in
2000-200—leading to the financial meltdown of 2008.
At every point, the response of the financial
authorities to these mounting storms was the same—to pump more money into the
financial system to enable the orgy of speculation to continue.
There was, however, a qualitative leap in this
process after September 2008. Now it was no longer a question of dealing with
the collapse of a particular firm or a crisis in one sector of the financial
markets, but preventing the collapse of the global financial system as a whole.
Rather than taking action to reverse the growth of
financial parasitism, government and financial authorities have raised it to
new heights by pumping ultra-cheap money into the financial system—the US
Federal Reserve alone has expanded its balance from $800 billion to $4.5
trillion, a more than five-fold increase, through the purchase of financial
assets since 2008.
The result has been the accumulation of wealth in
the upper echelons of society on a previously unimaginable scale, to the point
that eight billionaires now own and control more wealth than half of the
world’s population combined.
At the same time as providing trillions of dollars
to fuel wealth accumulation at the heights of society, governments, central
banks and financial authorities have been engaged in a ferocious and unending
assault on the social position of the working class.
These two processes—accumulation of fabulous wealth
at one pole and ever-worsening wages and social conditions at the other—are
organically connected. This is because however much capital tries to lift
itself into a kind of financial heaven where money simply begets money, it
cannot entirely escape its earthly roots and generates irresolvable
contradictions.
To the extent that finance—capital in its essential
form as money—turns to parasitism and away from productive investment, it is
involved in a process, so to speak, of sawing off the branch of the tree on
which it is sitting. Consequently, it actively intervenes and exercises its
domination over the economy as a whole to ensure that this does not take place.
While siphoning off surplus value in the form of financial wealth, it exerts a
tremendous pressure to ensure that the mass of surplus value in other areas of
the economy, on which it ultimately depends, is increased. This takes place in
two ways.
It strives, in the first instance, to ensure that
in every area of the economy the exploitation of the working class is
intensified through the lowering of real wages, the destruction of working
conditions, the introduction of new forms of labour contracts such as part-time
work and casualization, zero contracts, and so on.
But in and of themselves these measures are not
sufficient. At the same time, all the social conditions won by the working
class in previous struggles—the provision of health services, education, social
welfare measures, pensions, etc.—must also be eviscerated.
This is because these social facilities, which
formed a key component of the so-called “grand bargain,” are, in the final
analysis, a deduction from the mass of surplus value necessary for the
self-expansion of capital. This is why, in every country, whatever the
political colouration of the government of the day, the period since the 2008
financial crisis has seen an intensification of social attacks on the working
class.
An examination of the political economy of
parasitism, its essential logic and driving forces, underscores the necessity
set out in the SEP (US) statement for the unification of the struggles of the
working class in workplaces, communities, schools and colleges on a socialist
program aimed at the conquest of political power. In every area, whatever the
immediate form of social struggles, the working masses confront the same enemy.
Not a single economic, social, political or
environmental problem confronting working people in America and the mass of
humanity on a global scale can be resolved without the overthrow of the
capitalist profit system, the depredations of which reach down into every
corner and aspect of social and individual life.
And as the statement draws out, this struggle is,
by its very essence, international in scope, because the working class in every
country confronts the same powerful enemy—globally integrated and organised
capital. It can be overturned only by an even more powerful force, the global
working class, unified on the basis of an international socialist program.
To return to the point made by Marx cited at the
beginning of this comment, a coherent political strategy for the working class,
as outlined in the SEP statement, must be based not on the existing level of
consciousness—that will undergo vast shifts in the course of the social
struggles now unfolding and the even bigger explosions to come—but on its “life
situation,” determined by the “whole organisation of bourgeois society,” and
what it will be compelled to undertake.
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