Wednesday, November 18, 2009

The United States of Amnesia

Americans have no sense of history, but we mark anniversaries anyway.

Last week, it was ten years since the Glass-Steagall Act was abolished. This anniversary, coming as it does as capitalism collapses, made a handy whipping boy, complete with villains, conveniently comprised of both flavors of the corporate parties. Democrats could point at Gramm and other Republicans in the Senate, Republicans at Clinton for signing it.

All agreed, however, that the Glass-Steagall Act had made capitalism work beautifully, and if we only re-passed it, all would be well again.

Talking head amnesia prevented them from remembering that they have spent months comparing this depression with the one in 1981, back when the Act was in effect.

And there is total amnesia concerning the saving and loans speculation in the 80s, complete with bank failures.

Far right commentators, however, go farther back in blame. Capitalism, they claim, worked well for all, back in the gold standard days. They blame all dysfunction on the Federal Reserve Act of 1913.

Did capitalism work without problems before 1913 or 1999? Even with google, it's hard to research this. Google "depressions, crashes, recessions" and you get the Big One, the 1930s, that was traumatic enough that very few Americans who lived through it have forgotten.

You have to google "panic" to get the 19th century depressions, which came in 1819, 1837, 1857, 1873, and 1893, and then 1907, long before the Federal Reserve or Glass-Steagall.

Here's the thing. You really can't understand how capitalism works unless you listen to
Karl Marx. This is why the ruling class has trained Americans to respond like Pavlov's dogs to any mention of the man.

Try it on yourself. I say "Marx". You say, "Failed!! Dictator!!! Millions killed!!!"

Really, however, Marx was a philosopher, writer and believer in the ability of humans to band together and make a better world. What people did with his writings after his death is not really his responsibility.

Here's Marx on the ability of the Glass-Steagall Act to regulate financial firms such as Goldman Sachs who were able to make billions on credit derivative speculation: (quoted in the Monthly Review),

" accumulation meets with difficulties in its employment, through a lack of spheres for investment, i.e., due to a surplus in the branches of production and an over-supply of loan capital, this plethora of loanable money-capital merely shows the limitations of capitalist production. The subsequent credit swindle proves that no real obstacle stands in the way of the employment of this surplus-capital."

Although it is difficult to read 19th prose, I think that his point is much more believable than the colloquial speaking talking heads desperately trying to convince us that all is well.

Capitalists will only operate when there is a profit to be made, and it is impossible to continue to expand in a closed system. Therefore it has to collapse every few decades. (Just like cancer stops when it kills its host).

Capitalists are not here to "give us jobs". We are here to make money for them, and when there is no money to be made in productive enterprises, they will turn to speculation until the bubble bursts. There is no law that will stop them.

People have starved before in the midst of plenty. As a matter of fact, people are starving now while others burn food in their cars.

Either we choose to use our wisdom and our capabilities to provide a modest standard of living for all, or we choose to let billions die to keep some wealthy.

Seems like an easy choice to me, but I'm not in control.


Anonymous said...

I just picked up A Short History of Financial Euphoria by John Kenneth Galbraith in the buck bin. He basically said the same thing. I especially liked the part where he said bankers were not any smarter than the regular person but they think they are cause people are always supplicating in front of them. Galbraith is the best of the economists, to my mind. Also, Marx said that religion was the opiate of the people because the only pain killer of the time was opium and religion helped people accept their lot.

wagelaborer said...

I like that about the bankers.

I believe that the religion of America is capitalism and corporations are worshiped like the gods of primitive people.

They sacrificed goats and virgins so that the gods would bring rain and good harvests, we sacrifice tax money, our health, and the environment, so that they may bestow jobs upon us.