Speculators lavish lifestyles paid for with tax dollars

Here in California there are unprecedented attacks on public services and jobs. Education just had a $16 billion haircut. (see this blog, July 28th). Meanwhile, The Wall Street Journal reports today that nine banks that received $175 billion in taxpayer assistance in 2008 through the Troubled Asset Relief Program (TARP) paid out $33 billion in bonuses during the same period. They paid over one million dollars apiece to 5000 individuals.

The WSJ points out that these bonuses are one third the size of California's budget deficit. That money, our money, would save lives, educate children, keep people in productive (not speculative) work.

These bonuses were paid out despite the fact that the banks suffered losses in 2008 of almost $100 billion. In other words, as they lost revenue, their political colleagues in Washington stepped in and handed over our money.

This is just the tip of the iceberg of course. Business Week reports that municipalities and states that are starved for revenue are competing with each other for job creation. This is a very lucrative situation for the corporations as they blackmail different communities, threatening to pull operations out and move elsewhere unless they get financial help.

An insurance company might threaten to move its headquarters to another state unless it gets tax and other incentives from the community. It pits, as GM has done in the past, one community against the other as they offer all sorts of concessions to bring work in to their communities. Federal tax dollars that have been sent to states for relief is being used to give corporations tax incentives and bribes in order to keep them around.

This is what is called a dictatorship of capital.

The point is, we have raised many times on this blog the need for the nationalization of the banks and finance houses. Even within the framework of a capitalist economy this would be a step forward. But in the last analysis there is no solution to the sort of crisis that has engulfed the world economy bringing misery and death in its wake except for the public ownership under workers control and management of the dominant productive forces in society and of the banks and financial industry.

Francis Fukuyama writing in The Wall Street Journal (7-28-09) argues that Iran is a "...regime run by small circle of clerics and military officials who use elections to legitimate themselves."

Not a great deal of difference with the folks in Washington is there?