A Better Bailout?
Curiously, both the progressive and conservative media-spheres are awash in criticism of the details of the government bailout plan. As each new program unfolds, debate continues about the "efficiency" or "justice"of the myriad proposals to spend the tax-payers 700 billion (and climbing) dollars, what will work? what is fair? what will send the right message? where is the moral hazard? what is still capitalism, what socialism? Are we nationalizing the banks or is the financial sector privitizing the government? blah blah.
I'm coming at this from a much different perspective than say, Naomi Klien or Van Jones or (obviously) Sean Hannity , in that I don't give a rats ass if the bailout works or doesn't. This is a distraction from the real issue. We should ALL be saying that we clearly see that crisis is integral to the structure of capitalism and we don't care if Maynard Keynes tries to fix it or Roosevelt or Stiglitz or Galbraith. It is time to admit, like any car owner knows, that another tune-up or brake job is just throwing good money after bad, it is time to say goodbye and send the beast to the junkyard. We are tired of crisis, we are sick of "creative destruction" just like we get sick of calling the tow truck to haul some old heap to the mechanics yet again.
Time for a new car. Why bailout Ford, GM, Chrysler, AIG, the lady down the block, Mainstreet, Wall Street, S and L's ,Dot Com's and on and on as though we are helpless bystanders watching some runaway machine, some Frankenstein or Fantasia like Groundhog Day nightmare. Why would we want to patch up yet again a system that causes so much pain and misery, that starves so many people and is so incredibly unjust? This is a rare "teachable moment".
All the material ingredients of production stand visibly presented: Need, resources, labor. Why are they suddenly unable to function ? Why can't labor be mobilized and resources utilized to satisfy need? Because of a uniquely capitalist syndrome. The insane "invisible hand" has temporarily dropped it's whip and cannot self flaggelate itself into action, in other words, the distinctively SOCIAL preconditions for their operation have been disrupted. Capitalism is demonstrated to be not some inexorable force of nature but a human construct designed to place one large group in the sevice of a much, much smaller group. As soon as labor stops selling itself as a commodity the whole ridiculous house of cards crumbles and we can begin to put everybody to work and satisfy everyones needs.
posted by troutsky @ 11:05 AM
21 comments
21 Comments:
It is natural for curiosity to lead to and learn from mistakes, it is the motivator of evolution. Somehow western civilization got a carte banche pass to ignore the "learning from" part and began trying to make nature accept bigger and bigger versions of the mistakes. I wonder who it could be? Ask the Church Lady.
I don't think we quite agree about the definition of "capitalism". Read this article and tell me if it describes the essence of what's unjust and unfair, but also INEVITABLE about capitalism.
If it doesn't describe capitalism for you, then we don't have any disagreements about it.
See this.
Sonia: What is most likely, is different than inevitable.
Capitalism has cycles to clear itself of excesses, leaving residual damage, somewhat like the cycle of the Earth's surface. The residual damage there is earthquakes.
sonia, I'm looking at an article about swimsuits. Yes? I suspect the point being that competition creates innovation, new technologies, etc.No argument there.
And no, it doesn't describe whats unfair ,unjust or inevitable about capitalism to me so I guess we agree? You sort of lost me.
My problem has to do with my labor being a commodity, with the alienation that so arises and the exploitation. Compassion is annihilated by market forces so that in a world of abundance, people starve and fight over resources.Basically not a swimsuit issue?
Ren, that is one wordy bugger.He just needed two words :general strike.(I'll try to get to part three tommorro but I'm not crazy about a "social wage" other than a brief transition phase.)
Troutsky
You know nothing about economics and even less about markets. You are best suited to matching with with fish and acting like a clown to the amusement
of your customers.
I am going to reduce my vocabulary to a level where a moron such as yourself might understand.
The problems in the US Auto industry start with bad labor contracts and an uneven playing field. Retiree health costs are a huge burden that is not faced by competitors.
The problem is poor business choices made decades ago. Capitalism rewards good choices and
punishes poor ones.
You may now return to watching Renegade Spleen killing phantom Kulaks in his commissar underoos.
Troutsky,
no, it doesn't describe whats unfair ,unjust or inevitable about capitalism to me so I guess we agree? You sort of lost me.
Let me explain: Capitalism is like that swimsuit. It's so expensive, it only allows rich people to compete. A better, but poor swimmer, who can't afford the suit, loses the competition.
If that's not unfair, I don't know what is.
That's why capitalism is hated. Because it's UNFAIR. Not because it is "a human construct designed to place one large group in the service of a much, much smaller group".
Slavery and (to a lesser extend) feudalism were "human construct designed to place one large group in the service of a much, much smaller group". Capitalism isn't. Capitalism would survive even if someone had exterminated every single worker. Machines and computers could replace 99% of their labor. Sure, the capitalist would have to clean his own garbage and wipe his own ass, but that's about it.
And when I say we don't have any disagreements about it, it means that what you call "capitalism", I call "slavery".
We agree it sucks.
Troutsky,
My problem has to do with my labor being a commodity, with the alienation that so arises and the exploitation. Compassion is annihilated by market forces so that in a world of abundance, people starve and fight over resources.
That's because under capitalism, your labor is almost worthless. Illegal immigrant can perform it better while complaining less, and a machine can perform it even better without complaining at all.
Under capitalism, nobody wants your labor. They want your investment. They want you to invent an even better machine to even more effectively eliminate manual labor. Under capitalism, your choice is to join or to die...
Beak, your own brilliance in economics never fails to astound.But were I ambitious enough to pick up the same 8th grade text you have memorized, I would not i would not find the answer to my question: why are you and Obama so stuck on such an absurd system? Why did the auto companies fail to read the signals, misinterpret their information, leading to the destruction of peoples lives? You could have answered, my brilliant friend,social Darwinism! yet you did not.
Sonia, I get it now,duh. But I disagree that "capitalism would survive if all the workers were exterminated". You can't extract surplus value from machines.You would be back to a barter system, probably very efficient, peaceful and lonely.No demand,no profit, no capital, purely fuedal with machines as serfs.Only when a human sells his labor does the capitalist system begin,very much a human construct.Slavery can augment accumulation of surplus value in a capitalist system but a system with only slaves and no wage labor would not be capitalism.But yes,sucky.
Actually, Troutsky I lowered the IQ level of the response so a simpleton
like yourself could comprehend the
basics. My education in this area includes post a few post graduate classes.
Obama is not one of mine. He is a communist well versed in the art of entryism. The Bolshevik media did an excellent job concealing his roots.Lets see a communist terrorist buddy, a communist sex
pervert mentor and a communist racist crack pot pastor.
He is attempting to hide and rewrite his history thus the crack
about sharing his toys.
Your friend Renegade Spleen is a neoslaver. The gulags and class genocide did not start with Stalin.
He fancies himself running a Marxist plantation guiding all the
unwashed masses.
Communism is a mix of genocide, slavery, insanity and stupidity.
You are merely the ignorant follower whose next independent thought will be his first.
Hugo needs you as the price of oil dips his grip on power will weaken.
At least Sonia is honest, Beak is just a moron
This is too funny. You all are ragging on capitalism and have accepted the premise that capitalism is the source and cause of the bailout and whatever attendant economic difficulty we're experiencing, when the problem is undeniably state interference and manipulation of the markets. In fact, what Paulson and Bernanke are doing now, only makes things worse.
Troutsky's frustration about labor not being able to meet need (which can hardly be demonstrated given the abundance of America), again, isn't because people are free to exchange with one another and other private actors, to the extent thee is any truth to his sentiment, it is precisely because government is in the game.
Stop relying on caricatures too and old strawmen like Smith's "invisible hand" we have accounted for why these systems work empirically, even with flawed Keynesian terms like elasticity of demand.
Sonia, any "unfairness" you see is also the result of government and it is usually a temporary condition, especially when government is not involved. What would be fair, after all, to sit on our ass and be served what we want? I'll take a Bently GT Continental please!
What could be more fair than free exchange?
I am frustrated by the bailout and that supposed classical liberals voted for it after calls to the capital switch board were shut down and were running 300 to 1 against the bailout. As Larry Gambone corrected me at Ren's what we are practicing is a form of state capitalism that falls just short of nationalization.
Stop focusing so much on what you think capitalism is and solving the source of Trout's frustration. In other words, what is the best mechanism to distribute scarce resources? The answer is price, but that is a lecture in and of itself. I'll hook y'all up some other time on that.
Beak: Beak uses words he doesn't understand. If Obama practiced entryism, that would mean he was an open Marxist. I support various parties as the PPP in Pakistan, the PSUV in Venezuela, NDP in Canada etc. That has nothing to do with entryism. The bottom line is Beakerkin doesn't know what entryism is about. I'm not interested in smartening you, only to point out you don't know what your talking about.
Anybody who says Obama is Marxist is a fool. In fantasy land the capitalist class's left foot, the Democratic Party allowed an actual Marxist to take power without any violence. When did the revolution happen? Sonia understands Obama, better than any conservative blogger I know.
Interesting blaming the auto crisis on union contracts, that have been divided into tiers seperating young from old workers, and weakening. You failed to explain why there is also a crisis in auto in france. Americans because of less cash, stopped buying the large cars the US was making.
When Obama gives GM and Chrysler the $$ they need for their merger, and the union will support it. They will shed crocodile tears for all the workers who will be turned away. Even last year the union supported the "save the industry" campaign, and sold out workers.
Troutsky: This crisis is worse than 1929. In 1929 the US was a creditor nation without the amounts of speculation we have today.
The Marijuana Marxist has spoken
He is starting a new TV series called the Unemployables.
Some Graemful Dead Classics said to
a woman who lived with Venezuelan
Indians.
"I hate missionaries because they tell people how to think and live"
This coming from a person who endorses herding people onto collectives at gunpoint and tossing
people into gulags is too funny.
He then lectured the same woman about the sanitary practices of people he never met but she lived amongst. Maybe Graeme was thinking
about his imaginary mescaline journeys to fantasy workers paradise.
Onto the Traitor who would be commisar
Renegade Spleen plays legalistic word games. Commies kill thousands
including targeting minority groups
such as Cossacks, Tartars, Poles and it is not Genocide. The term democide was invented to placate Marxist morons who have a history of word games.
Obama is indeed a Marxist either practicing Entryism or reverse entryism. His lifetime bio of communist connections is no accident.
Funny but your own words damn you.
Americans should not be supporting
any foreign political parties. In fact this is against the law. There
are laws prohibiting private citizens from engaging in their own
foreign policy.
The infiltration of the Democratic party started with fool Michael Harrington. Obama either used these
connections for power or is a plant.
These word games are familiar to the spleen who swears Ayers is not a Marxist. Has Rehnegade Spleen told Ayers himself. Renegade Spleen
also lives in a fantasy world where
he is a Jew. Communists have an actual history of exterminating Jews while playing on classical fantasies about Zionist cabals at show trials.
The Marxist retards need an explanation of the banking problems. I will reduce it to your low IQ levels.
Populist clowns playing games with the banking system guided by Marcusian victimology Marxism complained about banking practices.
Banks yielded to these threats and the unprecedented run up in housing prices and changed practices that worked for years. The disastrous results speak for themselves.
Public service by Beakerkin
In order to keep a job it generally
helps to put down the bong while working. Customers and peers do not
appreciate listening to stoner type
lingo.
I'm happy to try to respond to CBs argument ,at least he makes an effort to make sense.I am not formally educated ,but if this is what is being taught in post-graduate studies...
CB, perhaps you haven't yet noticed we entered a phase a long time ago (Reagan through Clinton-Bush) of increasingly radical neo-liberalism , and while they would love to try true liberalism (laisseze faire) even the most die hard ideologues(other than the Cato fringe) understand it is a fantasy, a flawed theoretical model that never has, wil or could work. Each time it is flirted with it leads to huge bubbles and crisis.Too many contradictions, Greenspan pointed one out to you a few weeks ago, to much hybridizing (Wall Street IS government).
Time for a new model, get a new book CB.Your particular form of anarchy has been forced on too many people by gunpoint, (Chile to Iraq) with predictably disastrous results. Give it up.It's over.Goodbye "free trade", goodbye "structural adjustments" ,goodbye Chicago School and Washington Consensus.
trout,
We almost have the basis for a conversation, I say that respectfully. I agree that it is not possible to enjoy laissez faire on this earth on a macro scale. The closest I've observed is pre-China takeover Hong Kong and Manhattan in the late 1890s and early 1900s.
I view things on a continuum. Collectivism, dictatorship and monarchy being on the left, laissez faire on the right. America is only about 35-45% capitalist (capitalism is only 75% of the ideal laissez faire) since FDR, who almost single handedly took America to its knees with regulation and taxation and the exercise of government influence, control and largesse.
I abhor the concept of a central bank but recognize that it exists, so when I speak of monetary policy, I do so with a Chicago school framework, because if you're going to be burdened with this system, theirs is the most cogent response to its existence. I am more philosophically aligned with the Austrian school and anarcho capitalism. So, I'm not a fan of Greenspan, nor of the job he did as Fed Chairman. He and Bernanke, now Paulson are the most fascist trio we've had since Woodrow Wilson.
But back to my continuum and our major point of disagreement. It seems you view the events leading up to this bailout as a function of uninhibited markets, I see it purely as a function of government interference in the markets. I know you have a larger issue with your belief that labor is exploited and that capital is misapplied, but in the context of what went wrong, you probably view that there was insufficient regulation and I believe that over regulation is one of the big culprits.
Government told the private markets how to lend money and that wasn't sufficient so they jumped in with both feet establishing underwriting criteria more to their liking at Fannie and Freddie. This not only destroyed the mortgage market but it destroyed the housing market (along with Greenspan's inflationary policies using 9/11 to justify it, also contributed).
Anecdotally, with regard to regulation, banks are and have been among the most heavily regulated industries in America. Insurance companies, by contrast are almost completely unregulated. With the exception of AIG which got into goofy side businesses that took it down (their core life insurance business is very strong) insurance companies are among the strongest companies on earth and dozens of banks are failing weekly.
I'd love to have an honest discussion on the best way to distribute scarce resources/meet the material need of a population. I think it is through the mechanism of prices, provided people are allowed to own the fruit of their effort and intellect. It is the most moral way and the most efficient way but perhaps we can start another conversation.
I'll get it started at my blog and if you'll be kind enough to join me, I'd be honored to discuss it with you, sans invective.
I’ve issued the invitation to trout but any of you may join in, provided that you keep it civil. I look forward to hearing from you trout!
http://financialmarketmeltdown.blogspot.com/
Thanks for the invite and I apologize for any invective on my part,my bad. I see that you are serious and will try to present my arguments rationally.
Well, Beak, maybe the auto industry did start it's decline with bad contracts. You're wrong , of course, but let that go.
One of the fundamental mistakes of American labor is to allow themselves to be fragmented and lose sight of more important goals like a decent universal health coverage that would get us out of this insanity of tying health insurance to employment.
But the deals were made primarily in a day when America was still the last economy standing after the war and labor damn well should have asked for their share.
They lost sight of the more important goal and it remains to be won.
And I know a lot about markets Beak. I can tell you where the best apples and strawberries are down at the Haymarket or the Medford Farmers Market.
I know my way around the produce.
Government told the private markets how to lend money?
When (and please, I really want to be civil, truly do not mention the Community Reinvestment Act)?
Did government force Countrywide to write 700,000 dollar no money down jumbos on a home that was clearly only worth 500,000 when seen by rent/own measures and real wage ratios?
Did they force Bear Stearns to leverage junk paper at 50 or 60 to 1?
These bobos did it to themselves. There were plenty of reserves to cover conventional mortgages under the CRA and it didn't matter because those mortgages perform very well.
This was a failure to put the choke collar on Kapital, pure and simple.
I have a recovery plan that will work. Take some of these smartest guys in the room, march them out to the curb with their hands zipped stripped, set up the cameras, kneel them down and then take out a few bats and start cracking skulls like melons.
That's effective regulation.
A bit rough Ducky, I think it best not to concentrate on individual guilt but look to system that promotes certain behaviors. We are all complicit to some degree, yes? Look at macro problem of over production, over accumulation, the essential crisis of capitalism. Join us at CBs (Beak, you should stay focused on Venezuelan refugees)
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