Doing Nothing is a Costly Business

It has been awhile since my last post. I've been ruminating on this topic for almost a week. Unfortunately, though I tried to prevent it, this piece is a bit rambling. Enjoy!

I have spent most of my time, recently, reading critiques of the current attempts by the United States to stem the hemorrhaging in its financial system. While the critiques take aim at the American actions specifically, it is easy to extrapolate the various authors' condemnation to all Western countries. Succinctly stated, the argument is as follows: The bailouts represent a reorganization of wealth - the greatest concentration of capital power in our lifetime. This got me thinking about our (the average folks) response to this amassing of the world's wealth into the hands of so few. So what are we doing while a few people reorganize the world's wealth? Nothing. And why is that? Because we don't know what's going on.

As one of my professors put it recently, "Capitalism is about choice, the choice to sell your labor for the highest price possible." We have bought in, hook, line and sinker, to this fallacy that Capitalism and Freedom go hand in hand. The choice that is supposedly at the heart of Capitalist system is illusory, Capitalism is inherently biased in favor of capital over labor (hence the name I suppose). You don't really "choose" to sell your labor, because you have to sell it. Anyone reading this knows that they cannot simply choose to withdraw their labor from the market as a negotiation tactic to illicit a better wage. The company will simply hire someone else willing to work for the salary being offered. On the other hand, the company can withdraw from the labor market whenever it is in their best interest to do so. You don't have to hold a PhD in Economics to know that when the economy is in trouble the first thing a company does is fire the workforce. Assembly line workers (those few remaining in the U.S.) and middle management alike get shunted aside to protect share price and the lifestyle of the corporation's executives. And this is no coincidence, it correlates perfectly to the decline in the percentage of American workers who are unionized. In the 1950's, that same decade when the top marginal tax rate in the U.S. was 91%, 35% of the American workforce was unionized. Today that number is down to 8%.

Meanwhile, since the 1970's the US (and in many ways the world) economy has become a marketplace of credit and speculation - the production of money for money's sake. Less and less has been manufactured in the United States and has thus become, increasingly, reliant on people consuming on credit. The top twenty percent of U.S. households control 84% of America's wealth and that wealth has to go somewhere; Capitalism relies on that surplus value to be reinvested. So the banking industry has created ever riskier investment opportunities like the CDOs and credit default swaps that ended up destroying the world economy.

The U.S. government has committed to spending $9.9 trillion dollars having expended $2.2 already. So where has most of this money gone? To people facing foreclosure on their homes? Nope. It's gone to the banks and lending institutions that were, "to big to fail". That's right, the American government, in a complete violation of Capitalism's own "free" market principles, just bailed out institutions that were an instrumental part of the economic meltdown while simultaneously ignoring the plight of the individual tax payer with whose money and in whose name the bailout was executed. This is a swindle of monumental proportions. You, your friends and family have lost their job, health insurance, retirement nest-egg, and possibly their house, and the bankers have walked away with bonuses and even greater strength.

The conservative drone bots which suck up the air on cable news and talk radio have incessantly bleated their message of Obama = Socialism (read: Totalitarianism). No need to worry Mr. Limbaugh, all is well on Wall Street, as Mr. Obama is either unable or (more likely) unwilling to apply the brakes to the unhinged locomotive of unrestricted Capitalism. However, as with almost all things, there is a bright side. We have an opportunity to challenge the exisitng power structure that has attempted to comoditize life itself with awesome and terrifying effiiciency. The first step is to accept that with an ever globalizing society, this is a world wide challenge like that of climate change or population control. Whether we like it or not, the American financial system was the engine of the world economy and has managed to shape the principles of the global economic system in its own image. That image is one of a pyschopath who shows a complete disregaurd for anything but profit. We have no choice but to, collectively, rehumanize our societies. This begins with more powerful communities and a stronger more unified labor force. A grassroots movement to reclaim the rights we have fought for and then neglected is all that separates us from becoming further trapped by the present system.

Stay tuned for the next, more organized, installment.
For the time being here are some resources:

The Corporation (a must see movie): http://www.thecorporation.com/
A brilliant economist makes his argument for the future: http://www.counterpunch.org/harvey03132009.html

O.M.