https://socialistaction.org/2020/03/21/throwback-from-2008-the-bailout-a-close-up-look-at-the-u-s-ruling-class-in-action/
From 2008 and relevant again today! The Bailout: A close-up look at the
U.S. ruling class in action
Socialist Action / 3 days ago
Here we reprint a Socialist Action analysis of the 2008 Wall Street
bailout. Today, once again, the U.S. ruling class is desperately trying
to prop up its crisis-ridden capitalist system. We are already seeing
the same “socialism for the rich” that this article pointed to the last
time, as trillions of dollars are put into the pockets of Wall Street at
an instant, while the working class is deprived of healthcare, shelter,
and food and forced to work in deadly infection-threatening conditions
as capitalists try to turn a profit by whatever means necessary.
By JEFF MACKLER
Originally published September 26, 2008
One day in late September 2008, the top representatives of the tiny
hereditary US ruling class, the trillionaires who really run the country
and own and control its banks, insurance companies and major
corporations, cloistered in a very private locale, most likely in
Washington, to figure out how to deal with what everyone today
understands is the most catastrophic financial meltdown since the Great
Depression of 1929.
No one knows who was present. There will be no official transcription of
the discussion released until most if not all of the participants are
long gone. When decisions are taken concerning the robbing of American
workers to an extent unprecedented in the nation’s history, mum’s the word.
But everyone knows who was not present. No member of the U.S. Senate or
House of Representatives – even of their Finance Committees – was there.
President Bush was not. Neither were presidential candidates Obama and
McCain. Indeed, none of these “representatives” of “our” government were
consulted. This was a ruling class affair. The stakes were too high to
allow mere hirelings to decide anything of substance. And the substance
concerned nothing less than the future of American, if not world,
capitalism.
When the decisions were made, the Congress and President were properly
briefed and duly instructed to set about the task of engineering a
spectacular Potemkin village public debate designed to convince a wary
public that the two-and-a-half page proposal they received to grant at
least $700 billion to their ruling class masters was best for the
country. With the stage dramatically set for the show, Democrats and
Republicans, both accepting the fundamental premises of the bailout,
stammered and stuttered about how or whether to grant working people a
dime’s worth of relief or to slap the wrists of bankers who gave
themselves millions and billions in bonuses. They appeared before
microphones to tell the world that agreement had been reached, adding
without specification that provisions were made to help some foreclosure
victims and limit future CEO compensation.
But the deed was done. Treasury Secretary Henry Paulson was granted
unprecedented power to purchase virtually worthless securities, bonds,
and other financial instruments. Whatever junk the ruling rich had for
sale will now be purchased by Czar Paulson at a price that will only
bring smiles to the corporate elite, who couldn’t sell it to anyone at
any price.
It has now became clear that $700 billion was an initial figure only.
Perhaps the final amount this time around will be $1.2 trillion. Indeed,
the fake nationalizations the week before of Fannie and Freddie to the
tune of $200 billion, the bailout/purchase of Bear Stearns, and the $75
billion to AIG, the nation’s largest and failed insurer, will add
hundreds of billions to the package.
The congressional plebes who will approve the final package next week,
protests duly registered and “compromises” made on both sides of the
aisle, always do as they are told, as they did when they twice granted
the ruling elite trillion dollar tax breaks under the first Bush regime
and an equal amount under Clinton. It was Clinton, remember, who the New
York Times called “the best friend corporate America ever had.” His last
tax break/bailout amounted to $1.3 trillion, while his social service
and welfare cuts exceeded the combined totals of the previous three
Republican Administrations. There is only bipartisanship when it comes
to figures of this magnitude, squabbles aside.
It is critical to repeat here what has been systematically denied by the
ruling rich and their corporate media. The source of the present crisis
does not lie in the failure of bad mortgages, or bad banking practices,
or hyperspeculation, sheer stupidity or even capitalist greed. It lies
in the undeniable fact that American capitalism is no longer king in the
world marketplace. In the face of a merciless competition where the most
sophisticated and technologically advanced corporations everywhere are
pitted against each other for ever-shrinking markets, average profit
rates have been on the decline for decades everywhere.
The world’s once-greatest corporations, like GM, now stand in line at
Washington’s “socialism for the rich” trough for their own bailouts. GM,
Ford, Chrysler, and virtually every other major corporation cannot
effectively compete on the world marketplace.
Three or four decades ago, investment in the sector of the US economy
that produces commodities for the US and world marketplaces, was some
85% of available capital. Today it has fallen to less than 50%. The laws
of the system compel today’s robber barons to seek the most profitable
investments. These are less and less in US industry.
Last year the ongoing “financialization of capital” process reached a
peak with more than half of GDP resulting from speculative investments
in the stock market, real estate and in a myriad of bank-driven
pyramid-type schemes that created the fictitious values that are now
evaporating.
Nor are the problems of the US economy due to “bad” decisions by US
automakers or other companies, but instead can be traced to the
inevitable functioning of an economic system with cyclical booms and
busts, and the constant rise and fall of companies and nations subject
to the interactions of a falling rate of profit, overproduction and
underconsumption.
The titans of industry and their government have not been asleep at the
wheel. They made every effort to remain profitable. They cut wages,
eliminated pensions and healthcare for millions, transferred a million
jobs a year to low-wage countries and employed immigrant workers to work
for starvation wages in order to drive down the wage levels of the
entire working class. The result has been a yearly trillion dollar
transfer of wealth from us to them, from workers to the “struggling”
ruling class elite who can’t beat the ever-present, ever-threatening
international competition. Of course capitalists in every other nation
face the same dilemma. They subject their working classes to the same
horrors for the same reasons.
There is no way out for the ruling class other than on our backs. The US
is the world’s largest debtor. The official debt is almost $10 trillion.
Add in unsecured obligations to Social Security, Medicare and related
mandated programs, already looted to the extreme, and the figure rises
to 55, perhaps 65, trillion dollars of debt, and growing another
trillion each year.
A huge proportion of US debt is held by banks in Europe and Asia. They
loan the US money in return for access to the US market. But foreign
banks and nations find themselves holding increasing amounts of
ever-declining US dollars.
The US bailout architects asked their “friends” abroad to help fund the
most recent bailout. Several of their chief spokespersons responded
publicly with a resounding “No!” on September 25 in speeches to the UN
General Assembly. They are caught between two equally catastrophic
choices: bail out the US with additional purchases of bonds whose value
falls in proportion to their confidence in the US economy, or suffer the
consequences of the collapse of what is still the world’s largest market.
American workers have no interest in supporting bailouts for their
bosses. To turn an old phrase, “What’s good for GM is bad for American
workers.” The same is true for Wall Street trillionaires.
To begin to reverse the crisis, we must demand the nationalization of
the entire banking system under workers’ control. Open the capitalists’
books so we can determine what has been stolen, hidden and/or squandered
at our expense! Worker’s control of the banks, the energy industry and
transportation! For the election of committees of workers to run these
industries – workers who represent the millions whose pensions have been
eliminated or are on the line, and whose jobs and healthcare have been
disappeared. No to mortgage foreclosures! Restore and guarantee all
pensions! For a real Social Security system that pays for quality
healthcare and a quality lifestyle for all! Reduce present mortgage
payments in proportion to the capitalist-caused decline in value! Bring
all the troops home now from everywhere and spend the trillions for war
on rebuilding the nation’s inner cities, schools and hospitals. One
hundred percent tax on the war industries! Take the profit out of war
and mass murder! Jobs for all at top union wages! Reduce the workday to
30 hours with no cut in pay to provide jobs for all!
To open a fight for all of the above, and more, the unions and allied
organizations should convene an Emergency Congress of Labor to plan the
concerted national fightback that can effectively challenge and reverse
capitalism’s deepening assault on our jobs, well-being and very lives.
Integral to the organization and success of this Congress is the full
participation of the nation’s immigrant workers with whom unity and
solidarity is essential for victory.
Break with the twin parties of capital! Organize the unorganized! For a
Labor Party based on a fighting union movement and all the oppressed and
exploited!
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March 21, 2020 in Uncategorized.
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Neil deGrasse Tyson
“God is an ever-receding pocket of scientific ignorance.”
― Neil DeGrasse Tyson