Death Rattles of a Criminal Class
by Glen Ford / September 25th, 2008
The world of finance has accumulated a gigantic mass of fictitious capital that does very little to improve the human condition and the preservation of the environment. – from “
Mad Finance Must Not Rule Us,” an open letter from former German Chancellor Helmut Schmidt, five former European prime ministers, two former presidents of the European Commission, and five former economics or finance ministers, published in
Le Monde (Paris), May 21, 2008.
The same corporate forces that brought us one gargantuan financial bubble after another, each more destructive than the last, also surround the United States in a semi-sealed information bubble, impervious to facts that are inconsistent with the corporate narrative. Thus, few Americans outside the marginalized Left were even vaguely aware of what Europe’s most distinguished social democratic politicians were shouting at the top of their lungs: a huge bubble of “fictitious capital” in the form of “derivatives” and other complex instruments “notionally” valued at $500 to $750 trillion menaced the world — and especially the US — economy. Schmidt and his colleagues warned that the West must not succumb to “rule” by this Mad — fictitious! — Capital, which “represents 15 times the gross domestic product (GDP) of all countries” - for, “when everything is for sale, social cohesion disintegrates and the system collapses.”
Just four months later, the “fictitious capital” bubble has definitively burst, the system collapsed, but corporate henchmen brazenly bum-rush the populace into accepting direct and absolute “rule” by the corporate El Cid, Henry Paulson, Secretary of the Treasury and former warlord of the Wall Street marauder, Goldman Sachs. The sheer brutality and arrogance of Paulson’s grasp for powers unfettered by any Earthly Entity - powers greater than “even the president enjoys,” said one shocked economist - mimics the bank robber’s deployment of instantaneous terror to demoralize and cow customers and tellers. “Down on the floor! Shut up! Give me all the money!” No time or presence of mind to do anything but accept the inevitable.
The criminals relentlessly press their advantage, aided by the enveloping information bubble that has rendered Americans wholly unprepared for their Night of the Living Dead, in which the denizens of deceased corporations rise from the rubble of their socially destructive rampage to put the bite on the still-living and infect the entire society with their stinking morbidity.
There is no organized opposition within the two business parties to the Wall Street Extortionists; no alternative proposition that refuses to accept the centrality — the absolute indispensability — of the “banksters” to the resuscitation of a “system” they have already killed and eaten. Instead, the Democrats and Republicans want to give the bandits $700 billion to try to blow their balloon up again, wipe off the guts and gore, and emerge from the dead. Then they’ll extort $300 billion more.
In the process, the business parties will kill off what’s left of the productive part of the US economy. The only sane course is for the public sector to embrace its de facto stewardship of productive society, as the only big economic engine still running — a captaincy already bought and paid for in the bailouts already undertaken.
Under no circumstances should the public attempt to re-inflate the housing bubble, although no feasible efforts should be spared to alleviate the misery inflicted on home buyers (and renters) by the predators of Wall Street, now (and hopefully forever) deceased.
Menaces to Society
Wall Street, meaning finance capital, is currently dead in the sense that it is incapable of organizing non-fictitious money in ways that can even sustain itself, much less promote productive economic value and growth. Its incessant bubble making is a symptom of finance capital’s terminal state. No longer capable of meeting investor demands for ever-increasing rates of return in anything remotely resembling productive ways, the Lords of Capital conspire (yes, every board meeting is a conspiracy) to artificially raise the “value” of…anything! (Remember Helmut Schmidt’s admonition, that “when everything is for sale, social cohesion disintegrates and the system collapses.”) In manipulating land and housing prices ever upward, the banksters multiplied the price of property almost by fiat, reaping huge benefits while inflicting society with grotesque housing affordability problems and spiraling debt. Then the banksters bundled mortgages and all kinds of other debts as money, to feed the mega-bubble that grew to “15 times the gross domestic product (GDP) of all countries [$750 trillion, compared to the Global Domestic Product of only $50 trillion],” as Schmidt reported.
It is important to understand that the Mother of All Bubbles is comprised of a universe of derivatives and other trickster finance exotica. Subprime mortgages, although a big problem in the US, can only represent a small fraction of a bubble-construct so galactic in notional size it dwarfs the value of the puny efforts of every living human being to supply actual goods and services to the planet. The US subprime crisis provided an early warning of the much larger bubble’s existence — a global menace that compelled Schmidt and his fellow social democrats to sound the alarm. But US banksters and their political servants persist in leading the public to believe that the crisis is largely limited to mortgages, and can be overcome on that discreet scale and ground. It’s a lie. The financial crisis became acute when capital institutions stopped buying each other’s exotic instruments, whatever was bundled inside.
It is “notional” (or fictitious) money as a general category of curse, not just bundled bad mortgages, that choked the system. And a measly one trillion Federal Reserve dollars can do nothing but disappear when deployed against the humongous $500-$750 trillion dollar Mama Bubble. The bankster’s criminal enterprise will still be dead — that is, incapable of acting as an engine of productive growth — but the U.S. public sector will have, as Barack Obama put it, Tuesday, “shot its last bullet.” At that point, the country will have difficulty saving itself, while the bankers will have spent a cool trillion in ways designed to serve themselves in their next lives.
Nature of the Beast
John McCain and Barack Obama now rage in much the same words about Wall Street “greed” and “corruption” as the fountains of failure — as if the core imperatives of the investment banking system did not dictate executive behavior.
Finance capital’s refusal to invest in productive, socially useful enterprise is rooted in the corporate capitalist necessity to realize ever-increasing rates of return. Ultimately, they must be bribed by the public sector to engage in any useful project. As parasites that produce nothing, they (quite logically) attempt to suck up and absorb every public dollar in sight, while constantly working to weaken the public sector’s ability to perform its legitimate functions.
Why, then, should anyone be surprised when Goldman Sachs alumnus Henry Paulson demands the last drop of blood — the “last (trillion dollar) bullet” — from the American public, and dares to attach dictatorial terms to his acceptance of the money? It is the nature of the bankster beast to manipulate political and market conditions to achieve unfair advantage - and the nature of the multinational corporation to be devoid of national loyalties.
If We The People must bet our futures on schemes to revive productive economic activity, then let us bet on our collective selves, rather than on the thieving bankers who are, in any case, no more useful to society at this juncture than an unburied body. With the Federal Reserve now the lender and investor of last resort, progressives should welcome the people’s technical ownership of mechanisms for growth, and fight to make The Fed responsive in fact to the development needs of the larger society. As Green Party presidential candidate
Cynthia McKinney has declared:
This means that the people are becoming the owners of the primary instruments of U.S. capital and finance. This now means that the people have a say in how these instruments are to be used and what their priorities ought to be. The people should now have more say in how their tax dollars are spent and what the priorities of government and the public sector must be. We the people must now set our demands to ensure and promote the public good.
In place of the of the self-serving bankers’ moribund capital formation mechanisms, why not “seize the time,” as McKinney urges, to push for a public mega-development corporation, funded in amounts rivaling that which the banksters are attempting to steal. “The Federal Reserve should operate in the interests of the U.S. taxpayer and not the interests of the private, international bankers that it currently represents,” said the former Georgia congresswoman. “This, of course means that the Federal Reserve…must undergo a fundamental ownership and mission change.”
Let us break, fully and finally, with the rule of “Mad Finance and Fictitious Capital.”
