"When the capital development of a country is the byproduct of the operations of a casino, the job is likely to be ill done."
—John Maynard Keynes
"Don't be seduced into thinking that that which does not make a profit is without value."
"Yes, I know. Another world is possible. But when are we going to start building it?"
(Swans - March 8, 2010) FINANCIAL NEWS: You have to give credit to Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation (FDIC). She exhibited a lot of chutzpah when she presented her latest Quarterly Banking Profile related to the fourth quarter of 2009. If you read the summary you'll be glad to learn that commercial banks and savings institutions had an aggregate profit of $914 million, which she presented as "a $38.7 billion improvement from the $37.8 billion net loss the industry sustained in the fourth quarter of 2008." Ah those lies, damned lies... Of course, it was an improvement, but the 4th quarter 2008 saw the worst losses by the banking industry in decades and this improvement is essentially the result of the $780 billion bailout known as the TARP. However, don't you think it would be more honest to compare this $914 million quarterly profit to historical norms, which are hovering around $35 billion quarterly profits? Here again, the way you present the stats makes all the difference, but it's an intellectually fraudulent process.
THE REALITY? Only half of the institutions reported an "improvement" while one-third reported losses. Translation into simple-speak: The number of institutions on the FDIC's "Problem List" (institutions with a high risk of failure) went from 552 as of September 30, 2009, to 702 at the end of December. Talk about improvement! Now, factor in the losses of one-third of all the institutions covered by the FDIC (over 8,000) and soon enough we could face some 2,000 "problematic" banks. Note also that "the total assets of 'problem' institutions increased during the quarter from $345.9 billion to $402.8 billion." And what's the balance of the Deposit Insurance Fund? A mere $21 billion...in the red! Meanwhile, banks keep failing -- 26 as of March 5. (The FDIC predicts that more banks will fail this year than last year, which totaled 140.) And, of course, you have noticed that the Treasury began without much fanfare a supplementary financing of a weekly $25 billion for eight weeks in order to pump up the Fed balance sheet, which has been dangerously weakened by its close to $1.250 trillion purchase of rotten mortgage-backed securities in order to support the real estate market. Here are $200 billion of your future tax dollars at work, folks!
I SUPPOSE THAT when people begin connecting the dots we'll witness more pitchforks in the streets of Americana. Once you understand that the financial institutions took your cash (or loans), creating monkey money over and over again in the process of betting the bank on shoddy investments in order to maximize short term profits, executive compensation and bonuses, then having to be bailed out by the government (your money) when the bets went south, then instead of lending to you guys (who by the way should not borrow) have been hoarding the cash or lending it to the Fed, so that the Fed could finance the rot (yours included) as your savings (for those few of you who still have some) keep dwindling (combination of interest rates near zero and inflation), and that the Treasury dances with all of them (banks and Fed)...and all those people go through the revolving doors and keep raking in staggering salaries and bonuses... Then, indeed, one can imagine the coming of serious social unrest -- especially if a double-dip recession knocks on the door and more folks are thrown out of their jobs or their houses.
THE PREDICAMENT, at least as I see it, is that the pitchforks have turned into colts and machine guns and their holders tend to be a quasi-lobotomized crowd that aggregates around a motley crew of growing congregations such as the militias, the supporters of Pétain-like Ron Paul, Palinista creationists, teary-eyed Beckista racists, and other Tea Baggers whose advocated cure would be far worse than the disease they allegedly combat. (I say "allegedly" because I sense that somehow they ultimately are being manipulated by the Citadel...that it is a moronic movement adroitly scripted by powerful corporate forces.) The other side has been in disarray for so long that the remaining few find solace in internecine feuds, a sad phenomenon that is quite comprehensible since their wider ranks have been ruthlessly decimated for most of the 20th century, and eventually so demonized, discredited, and mostly ignored, that they are no longer a part of the political conversation (at least for now) and are therefore left to themselves, talking to each other with much ideological disagreement (who's more royalist than the king or Marxist than Marx himself), though they mostly agree on the steps that ought to be taken to reach a more just and equal society (and world, for those who think beyond borders). By and large, all agree that we need to put people (and for the more enlightened, the Other) before greed. Yet some of them feel that an alliance with the quasi-lobotomized crowds should be considered, worked for, and welcomed, because these crowds are either isolationists (hence presumably antiwar and anti-imperialism) or in sync with the mutual hatred of the order that be. In other words, once again, red meets brown...
SOMEHOW, I FEEL a bit of uneasiness at such a prospect because if history is a prelude, such alliances have always taken a tragic turn for leftists. I clearly recall Behrouz, my Iranian friend who was a committed Marxist (he gave me the nine volumes of the French edition of Marx's Capital published in 1973 by the Editions Sociales, printed in what was then East Germany) and working on his Ph.D. in economics. Behrouz did get his diploma all right, but then he rushed back to Tehran to join the mass movements that would ultimately topple the Shah. When I suggested that an alliance with the mullahs led by Grand Ayatollah Ruhollah Khomeini might not be a prudent move, that the desired revolution might turn into a reactionary one, he simply said, as so many before and after him (remember Germany in the 1930s?) have: "The enemies of my enemies are my friends." Well, the Shah was defeated, and then we all know what happened to the Iranian Left. It was literally crushed by the former "friends," and to my lasting sorrow Behrouz became a casualty of that unhealthy alliance turned sour. As an aside, that's one more reason I don't take gently pseudo Marxists who rush to the defense of Mahmoud Ahmadinejad and his kooks in theocratic Iran under the pretext that he is an anti-imperialist and anti-capitalist, which he certainly is not -- strange bedfellows with frozen brain cells.
GOING TO BED with that big soup kitchen known as the Tea Partiers and other dolts of the Libertarian right because they suddenly have discovered how evil government is in all its forms -- federal, state, local, how opposed they are to the "porkulus" (the $787 billion economic stimulus), how viscerally they loath taxes, and perhaps for a sprinkling of them how they allegedly are antiwar and anti-Empire, is not my favorite idea of spending a good night's sleep. Take the poster child of the Tea Partiers, Keli Carender, 30, of Seattle Washington, who apparently was the first "activist" that organized a Tea Party in February 2009. Ms. Carender, a modern day Dagny Taggart, rails against any health care reform and any government spending or control of the economy. She wants to see the Fed and the IRS abolished and a return to the Constitution as devised by the Founding Fathers, those great proponents and defenders of freedom! In other words, a young Ron Paul in a skirt. (Don't you wonder where Ms. Carender and her pals were when Mr. Bush launched two unfounded and unfunded wars, passed a huge new Medicare program, also unfunded, all the while cutting taxes to the wealthiest of the wealthy, thus raking up huge deficits? "Deficits don't matter," famously said Dick Cheney...)
WHEN ASKED how she would "cut the deficit without cutting Medicaid and Medicare," Ms. Carender answers, "Let's see. Some days I'm very Randian. I feel like there shouldn't be any of those programs, that it should all be charitable organizations. Sometimes I think, well, maybe it really should be just state, and there should be no federal part in it at all. I bounce around in my solutions to the problem." ("A Young and Unlikely Activist Who Arrived at the Tea Party Early," by Kate Zernike, The New York Times, February 28, 2010.) Charitable organizations... Is there a mention of them in Atlas Shrugged, the Libertarian bible? Does she really believe in the generosity bequeathed by the Founding Fathers?
HERE IS AN EXAMPLE of a charitable organization, The New York Times Neediest Cases Fund: In the 2009-2010 season the fund raised $6,280,242, or more than 10 percent less than in 2008-2009 ($6,964,031). And look how our leading innovators at Citibank and Goldman Sachs -- you know, the creators of these great financial innovations that have to date cost over $7 trillion -- generously contributed to the fund: $157,963.26. (How many billions of dollars in bonuses did our generous innovators receive during that same period?!?) According to the paper of record, "In the 98 years that the Neediest Cases Fund has operated, it has taken a total of $182,196,757 from 1,085,957 gifts, ranging from a few dollars to pledges of $100,000" -- which surely would have taken care of New Yorkers under Medicaid or Medicare!!! And, of course, Ms. Carinder must be advocating for a tax cut across the board (well, no, since she wants to get rid of the IRS altogether), like Senator Kyle or one of his Republican acolytes asked President Obama (you know, the crypto fascist/socialist/communist non-white guy in the White House): Mr. President, will you consider a tax cut across the board like President Kennedy did in the early 1960s? Instead of ducking the question Obama should have simply answered: "Yes, certainly, once you reinstate the marginal rate to the level it was when President Kennedy cut taxes," adding with a smile, "I'm sure you can refresh my memory. Was it 91 or 92 percent for incomes over $400,000, the equivalent of about $3 million today?" (Ironically, Secretary of State Hillary Clinton recently told the Pakistani government to raise taxes on "the very well off" to improve education and heath care. Meanwhile, the five largest US health insurance companies made a profit of over $12 billion in 2009... I mean, you have to laugh!)
ENTER THE STATES. Sure, leave it to the states to pay for social services -- though I do perceive a slight contradiction here. If you loathe all government why is it that you call on state governments to take over the obligations of the federal government? Oh, just a tiny failing in the logic of the Tea Partiers... Here is the news, however: Nationwide, state tax revenues have declined by 4.1 percent in the 4th quarter of 2009. And how do states respond when faced with budgetary shortfalls and the incapacity to borrow due to their latent insolvency? They cut social services, Ms. Carender. That's what they do. In California, the 8th or 9th largest economy in the world, 19,000 pink slips have been mailed to social workers, and 40,000 students have been turned away from California State Universities with 20,000 more expected in the fall. Here is what Governor Schwarzenegger said in his January State of the State address: "The priorities have become out of whack over the years. I mean, think about it. Thirty years ago, 10 percent of the general fund went to higher education, and only 3 percent went to prisons. Today, almost 11 percent goes to prisons and only seven-and-a-half percent goes to higher education." I'm sure Ms. Carender is a law-and-order kind of gal. It costs between $50 and $100,000 a year to host an inmate in the state's prison archipelago. One petty chief in Yolo County near Sacramento, caught stealing a $3.99 bag of Tillamook shredded cheese, was sentenced to almost 8 years in prison. He was lucky. The judge was "lenient." The prosecutors had asked for a life sentence because the bum was a recidivist, heretofore a threat to society. Put two and two together. A $3.99 chief locked in at $50K a year and a nurse's or a teacher's job lost. Where are the priorities? Where do Ms. Carender and her cohorts stand?
TACTICAL ALLIANCES are the equivalent of a death wish, like my Iranian friend found out to his life's demise. Yes, in his case, the greater enemy was defeated but the other deadly one turned out to be just that: deadly. I'll keep arguing forcefully: Do not ever ally yourself with people who ultimately want your demise. It's as simple as that. Compromise is valid so long as it leads toward a wider common cause, not a narrow one. Yet, I am aware of very-respected people that disagree with my stand. One of them is an esteemed comrade, who has much more experience in activism than I do, and calls for "organizing alternatives" that encompass alliances with antiwar and anti-imperialist members of the loose left-right coalition. Imagine getting into bed with Keli Carender or Justin Raimondo (no sex included, sorry Justin and Keli), Ron Paul, Lew Rockwell, et al. because some of them present themselves as anti-warriors. Just imagine... Serious people I respect deeply want to go to bed with a class foe that will eventually turn on them, under the premise that the left is so much in disarray that it should take a few chances here and there. The dilemma flies over my head. To be fair, the discussion on "organizing alternatives" took place at a conference in D.C., "Across the Political Spectrum Against War and Militarism," in which some 30 attendees explored ways to rekindle the alliance that took place in the 1960s between isolationists of the Old Right and what was then the New Left in opposition to the Vietnam War. People like Doug Bandow (Cato Institute), David Henderson (Hoover Institution), Sam Smith (The Progressive Review), William Lind (Free Congress Foundation), Jesse Walker (Reason), Kevin Zeese and Michael McPhearson (Veterans for Peace), Robert Dreyfuss, Katrina vanden Heuvel, and William Greider (The Nation), the ubiquitous Ralph Nader, and other personalities belonging to what Senator Byrd calls the "loyal opposition," which can apply to both left and right -- not a particularly system-threatening crowd. It looks like it was quite an amicable gathering.
APPARENTLY, Nader suggested that when the country is in armed conflict the sons and daughters of US representatives and senators ought to be drafted...as though these sons and daughters should bear the responsibility of their parents' votes -- a bizarre concept, no? Now what would be truly amusing is to see the interaction between a Paulista like Raimondo, Cato's Bandow, and Reason's Walker, who keep fighting tooth and nail to claim the mantel of true paleoconservatism, as they strategize the form and substance of the antiwar movement. That would be hilarious. More seriously, I've long doubted the import of antiwar movement(s) to stop this country from waging war or to end a war, any war. I've long agreed with my late friend, Philip Greenspan, that the Vietnam War ended when the financial burden became too great and the troops began to rebel and increasingly refused to keep on fighting. The millions who protested in 2002 and 2003 against the upcoming US invasion and occupation of Iraq had no effect whatsoever on the outcome. I'll go one step further: The USA was born out of war and has been engaged in military conflicts ever since, almost year after year. Take a look at the report published on January 27, 2010, by the Congressional Research Office, "Instances of Use of United States Armed Forces Abroad, 1798-2009," (PDF) written by Richard F. Grimmett and posted on the Web site of the Federation of American Scientists by Steven Aftergood, the invaluable author of Secrecy News. "This report," writes Grimmett, "lists hundreds of instances in which the United States has used its armed forces abroad in situations of military conflict or potential conflict or for other than normal peacetime purposes." Hundreds! This country has never really been at peace. So, what's the use for an antiwar movement? This time around, the wars will end when they can no longer be financially sustained and/or the troops will begin to once again refuse to keep fighting -- and that time will come, as the Congressional Budget Office projects that the current proposed budget will add almost $10 trillion to the national debt over the next decade.
WHAT'S DESPERATELY called for is a fundamental change in our priorities and values, not an antiwar movement based on unsavory and potentially dangerous alliances. We need a Peace Movement, an Against-All-Wars movement, that is not focused on just the absence of military conflicts but encompasses all forms of wars waged against the natural realm and the most impoverished masses here and abroad -- a movement not bent on trying to prevent destruction and mayhem, but to build an altogether different system based on wellness for all.
BACK TO THE RECESSIONARY reality we are facing: "Between 1992 and 2007, notes an analysis of new IRS data by Pulitzer Prize-winning journalist David Cay Johnston, the bottom 90 percent of Americans saw their incomes inch up by 13 percent, in 2009 dollars. Incomes for the top 400, over the same years, soared 399 percent." The top 400 taxpayers brought home an average of $344.8 million in 2007, 31 percent more than in 2006, and they paid only 16.6 percent in income tax. The annual CEO direct compensation of major corporations was $10.5 million in 2009, compared to $7.4 million in the UK and Italy, $6.3 million in Germany, $5.5 mil in Spain, $4.5 mil in France, and $3.3 mil in the Nordic countries (Source: Too Much). Finally, for today, here is another tidbit gleaned from the news: Remember Fritz Henderson, the president and CEO of GM who was ousted last December after a short eight months on the job? Well, he's been hired back by GM, this time as a consultant on international operations. He got a contract to work 20 hours a month for the trivial monthly compensation of $59,000 -- that's $708,000 a year, or a modest fee of $2,950 an hour!
QUESTION: Who are the true radicals, these fucking blood-soaked leeches or the humanists who keep advocating for a fairer, more just, more equitable, more humane world with a custodian attitude toward the natural realm?
. . . . .
C'est la vie...
And so it goes...
La vie, friends, is a cheap commodity, but worth maintaining when one can.the life line won't hurt you much, but it'll make a heck of a difference for Swans.
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