The Eye of the Storm: Between Market Collapses

Reading between the lines of the TARP (more commonly known as the Wall Street bailout), one discovers a far more frightening story. By design, the TARP is not a mechanism designed to provide long-term economic solutions; it is a short-term initiative designed to provide a fleeting economic ‘shot-in-the-arm.’ It is designed to temporarily prop-up failing institutions which will either inevitably collapse or attain only a measure of their previous solvency.

If the TARP were a long-term solution, it would begin by addressing systemic economic conditions that have been eroding the economy for decades now:

• It would have proposed immediate withdrawal from NAFTA, which has been downwardly pressuring wages and exporting jobs for over a decade.
• It would have repealed Taft-Hartley, the anti-union, anti-labor cornerstone of corporate exploitation of American labor, which has also been exerting downward pressure on American wages.
• It would have advocated for a living wage, legislating a significant increase in the federal minimum wage.
• It would have created a neo-New Deal works initiative, creating jobs in public works and infrastructure renewal until they recovered enough to accommodate these workers.

By returning jobs to American soil and increasing worker wage earning, the mortgage crisis would begin to resolve itself, creating long-term capital infusions to American banks.

But again, the TARP is not a long-term solution, nor is it designed for poor- and middle-class Americans. In my estimation, it is designed to mitigate the damage to executive stock portfolios due to the banking industry being blind-sided by the current economic crisis, and thus unable to preempt the damage by executives cashing in their stock options beforehand.

After all, House Chairman of the Financial Services Committee, Barney Frank, had this to say in July about the leading mortgage entities at the heart of the current crisis, Fannie Mae and Freddie Mac: "Fannie and Freddie are fundamentally sound. They are not in danger of going under…Their prospects for the future are very solid.” On July 1st, Fannie’s stock was valued at 19.59 a share. It currently trades at .51 a share.

Secretary of the Treasury, Henry Paulson, said on May 16th of this year, “Looking forward, I expect that financial markets will be driven less by the recent turmoil and more by broader economic conditions and, specifically, by the recovery of the housing sector.” On September 23rd, Paulson’s outlook abruptly changed; he said, "We must [enact a program quickly] in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families' financial well-being, the viability of businesses, both small and large, and the very health of our economy."

Ben Bernanke, Chairman of the Federal Reserve, claimed the following in February of this year: “I expect there will be some failures. I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.”

These disconnected, delusional appraisals of the American economy lulled stockholders into complacency, including corporate executives. The Boston Globe reports that “A survey of the paper losses suffered by 175 chief executives of American companies shows that they lost a total of 52.3 billion through Oct. 27, when the stock market hit lows that were tested this week.” These CEOs didn’t see the economic crisis coming and were unable to get their portfolios out of harm’s reach before the economic train-wreck obliterated their stock value.

So, what do all these financial pieces of the puzzle mean? Let’s put the pieces together…

• Corporate executives lost billions of dollars in stock options due to lack of warning by leading economic figures.
• The TARP is meant to prop the markets back up temporarily, initiating a brief recovery in the stock market.
• Corporate executives will be able to cash-in their stock portfolios during this brief window of economic recovery.
• Being divested of billions of dollars by executives and managers cashing in their stocks, corporations stock values will bottom out, wiping out investors, retirement funds, etc…
• A full-blown market panic ensues, and the stock market begins a sell-off that makes the Wall Street meltdown of 2008 look like a pyjama party.

Corporate executives recoup their losses, cash-in their stocks, and run. American citizens get bent over thrice: financing the recovery of the stock market via TARP, watching corporate executives cut-and-run while their own savings and retirements go down the proverbial toilet, and then being overrun by the tsunami of lay-offs, foreclosures, and economic strain that becomes the fallout of the Great Stock Market Collapse of 2009/2010.

Revolutionarily yours,
Thommunist (c)

The Last Great Discrimination

While social movements have fought for equal rights based on the wholeness of one’s person over narrow-minded reductions of individuals to a seemingly inferior aspect (i.e. black. woman, etc…), capitalism not only fosters reducing an individual to a singular aspect of their being—capital worth—but encourages it. This social classism results in discrimination of the capital-poor, who lack access to proper health care, well-funded schools, higher education, and safe neighborhoods.

This capitalist reduction of individual-as-person to person-as-capital bearer fosters social bigotry; for example, we think nothing of the everyday semantic valuation or devaluation of people-in-general to people-as-bearers-of capital, resulting in simplistic, narrow-minded dysphemisms which create implied stratification: the capital poor as poor-in-general, the capital sufficient as the middle class, and the capital-excessive as upper class.

Capitalist classism is the last socially acceptable discrimination, fostered from cradle to grave. To deny minorities health-care, education, and civil rights due to one aspect of their being--skin color--would result in nothing less than a modern day Civil War. Yet, that is exactly what we do to the capital-poor everyday, and not so much as an eye is batted in their direction by Washington.

This Last, Great Discrimination must fall, and it will only fall when the oppressed awaken from their slumber and take back Washington from the oppressors--the corporate, capitalist class that politicians of all levels work for.

Revolutionarily yours,
Thommunist

Taxation without Representation: Winner-Takes-All Politics

The American political process is akin to a MVA patient rolling through the doors at the local ER; it’s broken in so many places that it’s hard to know where to start in addressing the issues. And it shows: the Democratic Congress currently has approximately a 10% public approval rating, and the President’s has been hovering somewhere within the 20s.

Why are Americans so dissatisfied with our politicians? Because we are offered the same unpalatable 2-party flavors of political ice-cream: corporate flavor with red sprinkles, corporate flavor with blue sprinkles. Because we are not allowed to withhold consent in elections: there is no ballot option to withhold consent from one/either candidate.

Where do we begin to reform such a political train-wreck? An excellent way to start is by implementing a system of proportional representation over our current winner-takes-all election system.

The winner-takes-all electoral system of this country disadvantages the vast majority of Americans. Because votes are dependent upon media exposure, and media exposure requires massive financing, the winner-takes-all system vastly favors the most financed, most connected, most establishment candidates. Grass-roots candidates, who are overwhelmingly outspent, have effectively no chance to win, no matter how experienced, educated, or sincere they are. Furthermore, many "rights" that we enjoy today were at one time minority opinions: for example, abolition of slavery and women's suffrage. Government tended to disenfranchise, rathen than enfranchise these groups; it tended to obstruct their constitutional rights, rather than facilitate them. That's the nature of disproportional representation.

For a large minority--and sometimes the majority--the winner-takes-all system is nothing more than veiled 'taxation without representation.'

However, in a proportional representation system, no vote is unheard, no voice is ignored. For example, say there are 10 House seats available in a particular state. Let's say that 46% of the residents of that state voted Democrat, 44% Republican, and 10% Green Party. Instead of the current system, which would ignore the majority (54%) of the voters of that state by electing the winner(s)-take(s)-all, a proportional representational system would allot 5 seats to the Democrats, 4 to the Republicans, and 1 to the Greens. All residents are represented; all residents have a voice.

Like the abolitionist and women’s suffrage movements, we must start small. We must work to enact local/statewide ballot reforms. State-by-state, voters can take back their rights by breaking the ballot-box-duopoly.

Revolutionarily yours,
Thommunist

Will the Real PAC Please Stand UP?

Holy campaign finance reform! A crisis grips corporate America. Boards of directors at corporations everywhere find their hard-money, political donations greatly slimmed-down by Federal Election Commission PAC guidelines. What to do? Who to call? This looks like a job for not-so-Slim-Shady, who bursts into the boardroom rapping,

'Cause I'm 527, yes I'm the real committee
All you other contributors are just imitating
So won't the real PAC please stand up
please stand up, please stand up?'

PACs (Political Action Committees) are groups set up to support political candidates. Due to their direct advocacy, the scope of their donations have been limited and regulated by the Federal Election Commission. Since these committees are limited by a $5000 donation cap per candidate, PACs are limited in their ability to sway elections.

However, a group that avoids using “'magic' words that expressly advocate someone's election or defeat” (Public Citizen), and avoids direct contributions to political campaigns can remain outside the supervision of the FEC, and can raise unlimited amounts of corporate cash to buy elections. These alter-egos of the federally limited PACs, 527 groups, are massively invested in swaying elections, from “Get Out the Vote” efforts to media advertising (i.e. SEIU video ad).

On January 20th, 2009, the Chief Justice will likely begin Inauguration Day proceedings by asking: “So will the real corporately elected candidate please stand up, please stand up, please stand up?”

Revolutionarily yours,
Thommunist

Nader's Interview on PBS

Snubbed by ABC, NBC, FOX News, and CNN since he announced his campaign for presidency on February 24th of this year, 3rd-party candidate Ralph Nader finally gets a major newscast, presidential campaign interview--albeit only 10 minutes of airtime, less than 3 weeks from the general election. An across the board, corporate blackout.

Check out the transcript of his interview here. To hear his indictment of the Secretary of the Treachery--err, Treasury, Henry Paulson, click here.

Revolutionarily yours,
Thommunist

The Death of Democracy

My problem with this Wall Street bail out bill is that it has stolen the very heart of democracy. Abraham Lincoln defined democracy as: "the government of the people, by the people, for the people." Democracy, as a political philosophy, has long been debatable in this country. At best, we've only had a representative democracy, not a pure democracy, and as long as political candidates are allowed to accept donations from powerful corporations to fuel their campaigns, to what extent they truly represent the American people is question-able. But this decision to bail out Wall Street calls our broken democracy into further question.

Capitalism is the economic philosophy that drives the West. I'm not a proponent of free market capitalism, but I find it superior to what we have now: corporate welfare. Those who support free market capitalism argue that it encourages competition and innovation. In a capitalist society, any individual should have the potential to reach the top, through competitive means. This doesn't mean that every individual will reach the top. Most won't. But competition drives the market. Jim Bob's local hardware store might sell quality tools, but if Toolmart opens a store down the street and sells the same or similar products for less because they're larger and their tools are mass-produced, Jim Bob's may find themselves out of business. They can't compete.

Those who support capitalism argue that there are inherent checks and balances within the system. Risk-taking is necessary, but the riskier the business practice, the likelier the business is to fail. Extreme risk-taking is, therefore, naturally limited. Of those who take extreme risks, a few may succeed, but the majority will not. The self-limiting aspects of capitalism have been rendered impotent by the government's decision to bail out those corporations who have taken extreme risks, and who consequently failed as a result. What kind of a message does this send to large corporations? What kind of message does it send to small businesses? If you're a big enough corporation, regardless of how reckless and irresponsible your are, you're immune to failure. And if you're a small business, there is no fair competition, because while the government doesn't give a shit about you (because your monetary contributions are meager), it has the back of large corporations.

The fundamentals of capitalism have been completely ignored. Small business owners are allowed to fail. Individuals and families can struggle and file bankruptcy if they make poor decisions, but large corporations are immune from the consequences. Free market capitalism is dead, and now we have a corporate welfare system, where the tax payers must support the greedy, irresponsible risk-takers on Wall Street. Americans spoke out against this bill nationwide, but did the government listen? Democracy is dead as well.

At this point, we basically have an oligarchy in America. This country is not run by the president, congress, or the senate. It's run by the corporate elite who pull the strings. Bush is a glaring example. He is as dumb as a rock, a total buffoon. Everyone can see it. He doesn't even pretend to have a clue. He's simply the mouthpiece for the corporations he works for. The same is true for both McCain and Obama. Obama targets liberal-minded and lower to middle class Americans with his speeches, but I see no sincerity in him. He plays within the system. He says whatever he has to to get as many people as possible to join him. Out of one side of his mouth, he acknowledges that corporate funding for political campaigning needs to stop, yet he accepts corporate funds just like McCain.

There's a reason why the election comes down to two parties; it's because both are controlled by Corporate America. Why are there no other serious candidates running for president? It's not because nobody else is interested. It's because nobody else can raise the kind of money needed to campaign along side them. Why are independent candidates like Ralph Nader kept out of the debates? He's anti-corporation, so he receives no corporate funding. He also can't get much air time because the news media is also owned by corporations. In a true representative democracy, shouldn't every presidential candidate be given a fair chance to argue his/her position?

Our government has strayed so far from the ideals upon which this country's constitution was built. It's not a democracy "of the people, by the people, and for the people." It's an oligarchy of wealthy rulers who use the media and charismatic candidates to keep people deluded. In my opinion, the American political and economic systems are total crap as they function today. I want to see a return to democratic ideals and socialization of wealth for the people. That's not going to happen by supporting either of these presidential cronies.

Naddia

The New World Order: Crony Capitalism

Germany, England, France, and the United States setting aside their ideological, cultural, and political differences and unifying on a common policy? Is this some sort of Hollywood-depicted utopia or opium-induced delusion? Unfortunately, no. If you don't believe me, check it out for yourself: (BBC) or (CNN).

This hardly fictional, hardly utopian, global financial bailout was nothing more than a trans-Atlantic debutante's ball for the One who wields true political power—Capitalism.

Capitalism is the underlying foundation for these societies; the functioning of every social institution—from government, to church, to business—is founded upon a necessity of capital. A functional government, church, business, or any other social institution requires capital to fund its initiatives, programs, and policies. Capital thus precedes policy—and indeed trumps it when they collide in conflict, as we have seen from this unprecedented European/American cooperation.

Capitalism is thus the true, singular power in our contemporary, global society; like society, capitalism is fluid and ever-changing, as we have seen from recent economic events. When the highly-evolved capitalist golem--the corporation--begin to implode under the strain of its fundamental flaw—greed—its fight-or-flight mechanism kicked in and it fled to the shelter of mutually dependent social institution—government. Capitalism needed government to save it from itself, and these governments were wholly dependent upon capital. To avoid mutual annihilation, these entities co-evolved in a new ‘organism,’ state-sponsored capitalism, or more precisely, corporate socialism.

The free-market and laissez-fair have died. Like an abominable phoenix, corporate socialism arose from the ruins on Wall Street.

Revolutionarily yours,
Thommunist