6 pivotal class collective action moments in the US, second half of the Twentieth Century

…that led to the complete evisceration of the US working class’ capacity to contribute political leadership,[1] and thus stripped the US of capacity for public good, and stripped the nation from the state. This dismantling of US social and state capacity resulted in the triumph of charismatic-front direct capitalist rule in the US.

1)    No political party organized labour, or built working class collective action capacity across the US

By contrast, the Social Democratic Party (SAP) in Sweden methodically propelled itself to political hegemony by first and foremost working to build unions, a labour movement, and thus working-class leadership capacity in Sweden.[1]

In 1930s Minnesota, the Farmer-Labour party had similarly worked with organized and state management radicals to build worker collective action capacity, including with anti-racism programs, and power resources; but on altruistic behalf of anti-fascist solidarity, the national Democratic Party took over and dismantled the Farmer-Laborers in WWII.[2]

While this strategy eventually provided Humphrey, Mondale and Freeman the political force to oust the controlling Southern slaver Democrats from the Democrat Party–to the benefit of the Republicans, and so permitted liberals to use the Democrat Party to help leftists reduce some of the apartheid features of US society at the tail end of the financial regulation era, the victory was pyrrhic. The deregulation of finance was soon to undercut desegregation by restoring its traditional partners, inegalitarianism and Herrenvolk democracy, inequality and economic scarcity, and labor import substitution.

Why is this pivotal? Where the Swedish Social Democrats built working class cohesion and collective action capacity, and a strategic radical organized edge to “moderate,” state repression of communists shut down the working class’ capacity to organize, institutionalize, and coordinate external-internal (social movement-polity organization) strategy, preventing labor autonomy, cohesion & collective action capacity, and working class power resources development in the US.

In comparison, in Canada, during WWII when the Atlantic ruling class required labor cooperation but Canada did not have strong policing capacity, the state prioritized targeting and imprisoning (especially labor-organizing) communists, while developing legislation to channel wildcat strike labor eruptions under liberal, labor-policing, professional, bureaucratic unions.

Because policy tends to be shared and it is well known that significant resources were devoted to repressing communists in the Atlantic ruling class’ nation-states, evidence from Canada supports Kolin’s (2017) historical research conclusion, suggesting that under historical conditions more favorable to the establishment of labor power resources, the US shared and pursued the communist repression priority as the keystone in the Atlantic ruling class’ broader labor-repression strategy. Without communist organizers, the American working class could not build an effective inside-outside strategy capable of supporting labor political capacity to advance the public good.

Against the capitalist hegemony that only states and labor cause economic decline, no ideas, laws,[3] policies, or institutions capable of moderating and directing capital for the public good, could sustainably develop in the US capable of countering both regional and international, exclusive capitalist strategy. This has produced a US that is a global capitalist playground headquarters.

2)    Instead, professionalized policing targets, represses labor collective action capacity in the US

In addition to the communist repression priority as the keystone in its broader labor-repression strategy, the US and its capitalist class had built up and continued to amass strong, cyborg public and private policing capacity with which to repress labor and prevent the development of working-class power resources. The US was able to further minimize class compromise, minimizing the development of robust labor rights law and labor-policing unions. The combination of exclusive union representation, mandatory agency fees, no-strike clauses, and “Management Rights” TM were until 2018 the foundation of (the peculiar and now dismissed) American labor laws.

Bereft of an organized radical edge, professional organized labour, as structured by Anglo-American law, mainly served to police its own members, forbidding and punishing collective action and strikes.

In the latter 20th century, after the global capitalist mid-century demonstration of finance’s power (coordinating capital and enforcing inflation until US politicians submitted), Democrats as well as Republicans devoted their efforts to policing and cutting down vestigal unions and labour cohesion and communication capacity.[4]

Why is this pivotal? Deeply-crippled working classes made the US (and UK) a beacon for global capitalist investment support, the basis of the “Trickle Down” claim that exclusive elite liberty and rule can contribute to the larger “club society” (Therborn 2017) economic welfare.

Obviously, while the US (and UK) rose to global prominence on the backs of slavery, colonial genocide, and other forms of terror visited upon working class and smallholding peoples, there is a profound, venerable debate over the value of Herrenvolk democracy (Losurdo 2011), as it broadly cripples human development while attracting resources distributed to reinforce economic, political and social inequality and ecological entropy (climate crisis). At best, Herrenvolk democracy broadly fosters lotto-mentality dispositions that occasionally throw up anti-social, risk-affine fresh recruits to the benefit of ruling class reproduction, and, in the conservatized-liberal Hobbesian spirit, it manufactures exclusive, strong militarized state capacity, and in that sense, a protection racket worthy of Great Apes.

At its normal worst, Herrenvolk democracy facilitates socially-irrational growth by allowing unregulated finance to endlessly manufacture overlapping claims on the existing asset world as well as future, production and sales-backed wealth–overlapping claims that incentivize and organize societies to more and more belligerent, terrified, socially-irrational, ecologically-irrational expropriation and speculation–economic growth as cancer, when what is economically needed is the democratic redistribution of wealth.

3)    Anti-communist campaigns left a flaccid, rudderless, unsustainable liberalism[5]

Why is this pivotal? The US was incapable of sustainably governing global economy as a democratic country because (see Geoff Mann, 2017, In the long run we are all dead) liberal leadership only fleetingly, unseriously entertained the notion that capitalists need moderation, which requires strategic labor capacity and power resources. Communists would have been needed to maintain such a counter-hegemonic vision, to coordinate a robust, complex labor organization structure including both multiple levels of institutionalized, multi-dimensional power resources (in unions, union federations, and the state), sovereign leadership capacity, and agile disruption and collective action capacity.

While it arose with a spectacular democratic revolution, the US collapsed into a frail, senile liberalism requiring extensive conservative buttressing and a humiliating return to slavery ideology and institutions, which the media, the police institutions, the carceral institutions, the militaries, elite US academia, and the US judiciary and its conservative constitutional law supply to the global Nightwatchman state that has replaced the nation-state.

4)    1955-1963 the UK deregulated financial speculation, enabling currency speculation on the dollar.[6] The US state did not shut the deregulation down.

The UK deregulates finance, breaks US state-US capitalist alignment

Why is this pivotal? Because the US’s global job, per Bretton Woods & the Marshall Plan, was to direct capital into productive activities, economic growth. This required, inter alia, repressing global finance’s capacity to coordinate and direct capital. In this, Keynesian economic theory tentatively broke with the conservative economics tradition. Keynesianism in its boldest hour assumed distinctively that not just states, and not just labour, but capital can cause economic problems and crisis, especially since (per Smith 1776) it is not only concentrated power, but also privileged by the state (chartered, protected by law and police, and championed by imperial militaries) to be uniquely capable of exclusive class cohesion and collective-action capacity [7] — capitalist attributes that are standardly denied in agency-free, naturalizing, technocratic accounts of the neoliberalization era.

All the other countries stuck with the international plan for distributed growth. But Keynesians were elitists; ultimately, their fear and loathing of the working class crushed their innovative but wavering resolve to moderate capitalist power (Mann 2017). When the UK subverted financial regulation from 1955-63, partly in order to maintain global financial supremacy in London, it cut the US state’s alignment with US capital, and ended the US state’s capacity to manage capital at all.

While the US had supported the UK’s financial deregulation as a way of removing war expenditure pressure on the dollar, US capital was immediately organized into an inflation crisis campaign taking advantage of the US’s inflation-vulnerable “strength” at the center of global capitalism: The dollar as the currency of exchange, and the US’s expensive, divisive assumption of the imperial warfare task.

Although ceteris paribus, cheapening money can reduce money lending returns in favor of borrowers, ceteris was not paribus. After decades of state regulation of finance, state deregulation of finance allowed finance to gain the global system-regulating upperhand as the quantity of global money flowed into the banks, offsetting the decline of individual units of money, concentrating and coordinating capital.

Sponsored conservative economists were loosed to develop marketing narratives and policy intervention models again based on the Atlantic ruling class (Van Der Pijl 2012) belief that only states and labor hurt the economy (Blyth 2002). A fearful, chastened liberalism shrivelled and crawled back into the womb of conservatism.

5) In the early 1970s, after Nixon’s corporatist pricing board demonstrated that capital could stabilize prices, capitalists, coordinated by finance, refused to do it voluntarily.[8]

Boss Battle: You’ll have your inflation & you’ll eat it too

Despite emerging from and influenced by (assuming) an era of state semi-autonomy, Nixon was an ideological pro-capitalist. When cosmopolitan capital stopped cooperating with the US state, Nixon shrugged. Why is this pivotal? With no one identifying capitalists as the agent of inflation requiring state intervention, US capitalists collectively jacked up commodity prices as Saudi Arabia (Britain’s long time satellite.) led OPEC to jack up oil prices, creating a heightened inflation crisis and hysteria throughout the US. With the help of conservative economists as marketeers, capitalists maintained that this inflation was the sole fault of the US state and American labour, meaning that American labour would have to be completely repressed and the US state–the state’s institutionalizing, coordinating, legal and police coercion, and resource distribution capacity–would have to be completely captured by global capitalists.[9] Central banks were restored to capitalist class-action institutions embedded in every state, dedicated to repressing labour (Martin 2019 reviewing Kynaston 2017).

Liberalism and its Rule of Law ideal (“Judicial Activism,” it was then-derided by conservative jurists and comms pros) were left desanguinated corpses in the US, though the state’s institutions were still embedded with and surrounded by armies of liberal lawyers and bureaucrats. The next steps toward speculative-claims overlap and asset expropriation as growth would be the conservatization of those managerial forces into a comprador bourgeoisie and working class police force; the expansion of marketing, surveillance technology, and militarization; the denunionization and the demeaning of the US working class; and the expansion and attenuation of citizenship in the import substitution of a new, disrupted, dislocated, traumatized, incarcerated, and un-enfranchised labor force.

6) From Nixon on, US state efforts to use policy and institution building to mediate capitalist interests with societal interests (OSHA, the EPA, a Fed independent of Wall Street, state responsibility for directing new economic sector development, etc.) were killed or occupied directly by unfriendly capitalists.

Charismatic Reagan was propelled into the front of the Executive to host the Republican restoration of direct capitalist rule over US institutions.

The Dem Party’s only response, from the liberal repertoire, was to sell itself as a “Credible” organization that could more conveniently (than direct rule with charismatic fronts) be delegated the management of capitalist interests [10] –in other words, a , meritocratic rentier political class. From the conservative (Public Choice) repertoire, the Dems could extract rents for this convenience service and the reassuring, resonant professionalism they performed for international audiences in capitalist countries with semi-independent professional states and remnant liberal institutions. But the neoliberal Dems’ convenient, performative professionalism has offered no value-added for working class Americans–on the contrary, even contributing and managing policies to disorganize and police the American working class, and usually, precious little value-added for regional and global capitalists.

Why is this pivotal? Blanket-policed by their employers, professional unions, political parties, and the police, American labour rapidly realized that they had no collective action capacity and no institutional power, not even in the state. Further, culturally, intellectually, labour would only be conceptualized as an economic problem to be targeted.[11] Without any labour power resources in the US, US and global capitalists were liberated to absolutely, directly run the country (with the currency and the military) at the center of global capitalism.

If not permitted the full range of human collective capacity, American smallholders and working class people were allowed to work ethnic, racial, religious, and gender identity networks. They could align with the Credible Delegates Party or they could align with the Charismatic Direct Capitalist Rule Party. As time, repression, and inequality marched on, it became evident that it didn’t matter. Working class Americans and smallholders would get nothing—padded with crippling law and policing, economic disruption, precarious exploitation, debt, criminalization, incarceration, disenfranchisement, pollution, alienation, racialization, sexual assault, shame, and contempt. The US mass “consumer” class was being expropriated, and though many of the workers’ pensions were caught up in generationally gaming the class expropriation, unregulated finance was the ringmaster.

Charismatic Direct Capitalist Rule in the US

Trump, as a charismatic capitalist ruler, offers a wink, a little reality teevee strum und drang, a little business shock ‘n’ awe, a little commedia dell’arte to symbolically lighten the inescapable burdens carried by hundreds of millions of Americans, workers and their guards, managers, and owners. Along with impotent and often enslaved labour, they still have guarding, policing, and incarceration economic opportunities (Bowles & Jayadev 2005; M.A. Pidgeon & L.R. Wray, 2000; ); military national socialism (Mittelstadt 2015); declining access to beautiful public lands (Turkewitz 2019), lovely climates, city amenities (Florida 2019), and remnant infrastructure; and more, slightly higher- quality commodity goods than much of the world. It could be worse, and it’s palpably getting worse. When the shovels scrape too much rock, capitalists are turning on each other, and they’re taking everyone down with them.

[1] Blyth 2002, Chapter 4. From Blyth, Mark. 2002. Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century. Cambridge.

[2] Delton, Jennifer. Making Minnesota Liberal.

[3] Glasbeek 2017.

[4] Murakawa 2015, etc.

[5] Kolin, Andrew. 2017. Political economy of labour repression in the United States. Lexington Books.

[6] Schenk, Catherine R. 1998. “The Origins of the Eurodollar Market in London: 1955-1963.” Explorations in Economic History 35: 221-238.

[7] Per Smith 1776.

[8] Blyth 2002: 135-6

[9] Blyth 2002, Ch. 5;  Also, insert finance-coordinated capital assumption to modify central banking history narrative presented in Martin, Jamie. 2019. “A company of merchants: Review of Kynaston 2017.” London Review of Books 41(2): 35-37.

[10] Blyth 2002, Ch. 6.

[11] Blyth 2002.

[1] As observed in Gilens & Page 2014.

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Financial Economic Power = Political Stranglehold

The Crisis in the Eurozone
by James K. Galbraith
Salon.com

 “(T)he ECB refuses to solve the crisis at a stroke, which it could do by buying up the weak countries’ bonds and refinancing them. The argument against this is called “moral hazard,” buttressed by old-fashioned inflation fears, but the real issue is that to do so would admit loss of control by creditors over the central bank. Actions parallel to those taken by the Federal Reserve – nationalizing the entire commercial paper market, for instance – would repel the ECB, even though it does buy up sovereign bonds when it has to.

[MF: This is all a polite, econ-theoretical way of saying that the ECB is the tool of financial capital, not a manager of social or economic welfare.]

 So instead the zone has gone about creating a gigantic toxic CDO called the European Financial Stability Fund, which may shortly be turned into an even more gigantic toxic CDS (like AIG, they will call it “insurance”). This may defer panic at most for a little while.

 Technical solutions exist. The most-developed of these is the “Modest Proposal” of Yanis Varoufakis and Stuart Holland, widely backed by older political leaders in Europe. It would 1) convert the first 60 percent of GDP of every eurozone country’s debt to a common European bond, issued by the ECB; 2) recapitalize and Europeanize the banking system, breaking the hammerlock of national banks on national politicians; and 3) fund a New Deal-like program of investment projects through the European Investment Bank.

 Variant proposals include Kunibert Raffer’s call for a sovereign insolvency regime modeled on the U.S. municipal bankruptcy statute, Thomas Palley’s proposal for a new “government banker” and Jan Toporowski’s proposal for a tax on bank balance sheets to retire excess public debt.

 These are the best ideas and none of them will happen. Europe’s political classes exist these days in a vise forged by desperate bankers and angry voters, no less in Germany and France than in Greece or Italy. Discourse is sealed off from fresh ideas and political survival depends on kicking cans down roads so that the fact that this is a banking crisis does not have to be faced. The fate of the weak is at best incidental. Thus every meeting of finance ministers and prime ministers yields treacherous half-measures and legal evasions.

Political fragility also explains the fury in France and Germany when George Papandreou [the calmest man in Europe, by the way, having been born and raised in Minnesota] sought to cut the knot of his rebellious ministers, irresponsible opposition and angry public by putting the latest austerity package to a vote. God help the bankers! The move was fatal to Papandreou in short order, and Greece will now be turned over to a junta of creditors’ deputies if such can be found willing to take the job. It won’t be anyone who wants to continue to live in Greece afterward.

Greece and Ireland are being destroyed. Portugal and Spain are in limbo, and the crisis shifts to Italy – truly too big to fail – which is being put into an IMF-dictated receivership as I write. Meanwhile France struggles to delay the (inevitable) downgrade of its AAA rating by cutting every social and investment program.

If there were an easy exit from the Euro, Greece would be gone already. But Greece is not Argentina with soybeans and oil for the Chinese market, and legally exit from the Euro means leaving the European Union. It’s a choice only Germany can make. For the others, the choice is between cancer and heart attack, barring a transformation in Northern Europe that not even Socialist victories in the next round of French and German elections would bring.

[MF: Here, I would demur. This explains why Greece hasn’t exited so far. But at this point, why not choose exit? Everybody proper said, following orthodox theory, that exit wouldn’t work for Malaysia, Argentina, etc. as well. But it did. Considering the empirical evidence at this point in history, and adding to that game theory logic, I think exit is the only rational option now.]

So the cauldrons bubble. Debtor Europe is sliding toward social breakdown, financial panic and ultimately to emigration, once again, as the way out, for some. Yet – and here is another difference with the United States – people there have not entirely forgotten how to fight back. Marches, demonstrations, strikes and general strikes are on the rise. We are at the point where political structures offer no hope, and the baton stands to pass, quite soon, to the hand of resistance. It may not be capable of much – but we shall see.”

…..

There remains a popular or perhaps professional conservative economist’s insistence that the cause of economic crisis in Europe is immoral Greek consumer and political behaviour. That might be an opportune, EZ, resonant, discursive tactic if you’re a Greek with a meso-political axe to grind or a conservative economist clinging to the wire monkey mother of your dogma.

As someone who was hounded by bankers and real estate agents to buy a house in the US at the peak of the bubble (and of course I was! I was even given a whole book by the realtor explaining in simple terms that if I bought a home, I could be part of the Infinite Pyramid Scheme (TM) and someone would without fail buy that home from me for an even-more inflated price.), when I had just graduated from my PhD program with grotesque mounds of student debt, I know good and well that moralistic arguments about the consumer root of economic crises are full-on undiluted bullshit, toxic CDOs, if you will.

To still buy those toxic funds, you would have to be completely autistic; hallucinating nothingness in the face of mass marketing, highly-unequal social status and institutionally-flogged hegemony; utterly blind to the global quality of the economy; and abjectly deaf to the extreme variations in money-borrowing and -lending power. You would have to be a conservative economist, or the slave of some such defunct economist).

Debt + No Class Compromise > Delay > Asset Liquidation

If you get your rocks off by pursing your lips sourly and pointing fingers at more-or-less hapless pawns, here’s a link to Greg Palast’s observation of one of the proximate causes of Greek economic crisis. The conservatives had to borrow from financial capital in order to temporarily prop up the pretense that the financial capitalist’s order works, and the conservatives can operate it. The order, one of primitive accumulation, doesn’t, cannot work for most societies and people and environments. So what were conservatives supposed to do? Admit that, and lead the socialist revolution? THAT WAS NEVER GOING TO HAPPEN. Did I even have to caps-lock that? No. Conservatives’ only (pro-system) choice was debt-to-delay. So that is not a choice.

Now, should any working class person ever elect a liberal, let alone a conservative, to represent her in the political sphere? No. Absolutely not. Because that debt-to-delay non-choice is exactly what you get from them. Fetishizing the politicians’ systematic corruption is kind of perverse and creepy and stunted, given it’s about “catching” them doing what they are ideologically-constrained and coached to do.

Regardless of Keynesians’ belief that states can deficit spend, everyone believes in debt–or money liquidity, as it’s known when we’re not being manipulatively moralistic. It’s a fundamental part of economies, as well as pious, exploitative moral economies. Debt was the key to US military-economic dominance in the latter half of the 20th century, and this constrained everyone else’s options–especially in Europe, not to even mention how the financialization/debt model was sold, was saturation-marketed as the 1-Tru (TM) path to infinite economic expansion and happyness.

But of course the underlying problem is that actually-existing financialized capital is principally a tool for primitive accumulation–appropriating, concentrating and controlling value and exchange. In other words, debt-to-delay leads inexorably to wicked public and smallholder asset liquidation and a continuous and depleting debt-to-liquidation cycle, or else one helluva social fight to force garbage investors to take the losses on their garbage investments and to clean up their investment practices.

Our elites are very diligent at reminding us about the terms of their protection racket: that if investors are forced to be prudent, they will withhold liquidity and offload the costs onto the working class and the public. However, the traditional  threats have begun to mean nothing, because the primitive accumulation debt-to-liquidation cycle has resulted in withheld liquidity and economic crisis offloaded onto the working class and smallholders anyway. When there’s no class compromise, the hegemonic leverage wears down quickly, leaving bare brutality.

Unless we fight to reduce its power, we cannot escape capitalist primitive accumulation and our own over-determined economic dispossession and depletion. Yet we still have a wide range of commentators declaring TINA on austerity. There are alternatives. The alternatives simply do not support financial-military global monopoly capitalism.

Thus, faced with this impassible dilemma, (much like the 20% (a low) of Americans who still somehow believe that they will be in the top 1% of wealth accumulators) paid experts somehow still desperately pretend to believe that there is a universal, moral path to wealth accumulation in a fictitious 2-D world without power, and that little Greece, if they’d just been more moral, could have followed that yellow brick road, paved by the benevolent financial system devoted to unproductive accumulation and geo-political power moves undertaken by the financial capital centers of the US (US banks own over 10% of Greek risk), England, France and Germany in the west, and oil capitalists and China eastward. The level of political- economic and geopolitical naivete required to maintain this moral handwringing and within-Greece fingerpointing is flabberghasting at this point in history.

Within the context of global monopoly capitalism, nothing could have been done for the welfare of peripheral small economies (countries) like Greece. Financial-military capital has not been and is not aligned for this. That this mal-alignment destroys capital and undermines the Greek, European or global economy is not a problem to financial-military capital–especially not when the dollar as world reserve currency automatically secures such resolute US dependability for capital. (Which is why OWS is so important to disciplining global speculation.)

Someday, the capitalist lords and retainers claim, global monopoly capital may get in the mood or accidentally do something to benefit non-elites. You just never know. It’s happened (with some considerable drawbacks, including population explosion, scarcity and environmental catastrophe. But dammit some of us did get those nice SUVs for a while in some places.) In the face of their brutal solipsism and frigidity, the deity-bankers only ask for assurances that, as long as you or your politicians are worried about liquidity for your society’s survival (assuming of course that we’re not interested in bothering to establish a global network of rebellion), they are entitled to the wealth your society creates into the future. This is the blackmail of late monopoly capitalism. To really paraphrase Nixon all out of recognition, perhaps we all have Stockholm Syndrome now. You give your wealth. You get a steady supply of bloody fingers, etc. in the mailbox. It all ends when you open up the envelope to find your own bloody heart muscle wrapped in a tissue.

And for what? Regardless of what happens to the body, the economy or societies or the environment, as long as they get the wealth, financial capital wins. –Perhaps we go along with it because we think the capitalists are sexy (Thanks for the beer goggles, Frank Luntz!), because even all the militarized cops can’t follow all of us around in our daily rounds of assiduous obedience.

Virginia, Meet Financial Capital

This Guardian article shows one way (the divorce between compensation and performance) in which financial capital does not function according to conservative economic theory, with its ideologically-convenient ignorance of human reflexivity and power.

Any reporter worth his salt knows that following Goldman Sachs’ trail of hell-ooze is always worth his time. Greg Palast reports on how Goldman Sachs colluded with Greece’s (former) right-wing government to 1) create the image that conservatives can govern a democracy, which they patently cannot, and 2) screw the world economy and the majority of the people in that economy, for their own unchecked aggrandizement.

Palast, who is selling his book Vulture’s Picnic, deserves to be quoted at length on this overview of the conservative-nursemaided primitive accumulation of Greek wealth:

“In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece. Goldman took a huge loss on the trade. Is Goldman that stupid?

Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Why?

Goldman had cut a secret deal with the Greek government in power then. Their game: to conceal a massive budget deficit. Goldman’s fake loss was the Greek government’s fake gain. Goldman would get repayment of its “loss” from the government at loan-shark rates. The point is, through this crazy and costly legerdemain, Greece’s right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP. Cool.

Fraudulent but cool.

But flim-flam isn’t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.

When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman’s bats flew out.

 Investors went berserk, demanding monster interest rates to lend more money to roll over this debt. Greece’s panicked bondholders rushed to buy insurance against the nation going bankrupt. The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof. Who made a big pile selling the CDS insurance?

 Goldman. And those rotting bags of CDS’s sold by Goldman and others? Didn’t they know they were handing their customers gold-painted turds? That’s Goldman’s specialty.

 In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a “net short” position against these securities. That is, Goldman was betting their financial “products” would end up in the toilet. Goldman picked up another half a billion dollars on their “net short” scam.

But, instead of cuffing Goldman’s CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed. Blamed and soaked for the cost of it. The “spread” on Greek bonds (the term used for the risk premium paid on Greece’s corrupted debt) has now risen to — get ready for this––$14,000 per family per year.”

December 2011 update:

The rich mouth off, concerning what assholes they are. (Hint: MIGHTY assholes.)

Productivity for Profits: Killing Off Quality Jobs

One of the problems with overripe capitalism is that as it promotes increased productivity to enhance profits, it simply kills off both unskilled and quality jobs–obviously, without dispersing throughout society the benefits of the increased productivity (or you wouldn’t increase profits–concentrated wealth).

These charts from the US Aerospace Industries show one example of capital destroying high-skill, quality work (R&D science and engineering) as it has ramped up production and profits.

This finance-led profiteering strategy–putting productivity increases on steroids and hoarding the resulting concentration of wealth–eventually results in crisis, as capital smothers to death a huge portion of its consumption base, as well as desiccates labor’s skills, innovative capacity and even its social reproduction. Consequently, capital creates the conditions whereby its profiteering strategy is largely reduced to primitive accumulation.

Primitive accumulation doesn’t just ravage non-elite capacities and the environment, it stifles entrepreneurial rationality. In “A Generation of CEOs Who Don’t Know How to Raise (Employees’) Wages,” Dean Baker dryly comments on the puzzling complaint, heard occasionally on the NYTimes and from the Democrat leadership, that the economic problem in America today is that there is a skills shortage (!):

“CEOs apparently do not know how a business is supposed to respond to the inability to find qualified workers. According to standard economics, when businesses can’t fill job openings, they are supposed to offer higher wages. If these businesses offered higher wages, then they could lure away workers from their competitors. They may also be able to attract workers from other states or even other countries. If these CEOs raised wages high enough, then these workers would be willing to work for their companies.

However, they have not chosen to raise wages to the market clearing level for some reason and therefore can’t get the workers they want. Apparently, these CEOs do not know how to raise wages.

This is a problem that could be easily remedied. The government could offer short courses to CEOs and other top executives that would teach them how to raise wages and why this would be beneficial to their firms. These raise-waging instruction sessions should not be very expensive; even the thickest CEO could probably learn how to raise workers’ wages in a day or two. Most state and local governments could afford the cost, which should be easily repaid in stronger growth when employers learn how to address their skills shortage.

Companies should not have to forego expansion and workers should not have to be unemployed just because CEOs don’t how to raise wages.”