In the aftermath of the near total collapse of capitalism the theoreticians of capital struggled to find the appropriate lifeline. Trillions of taxpayer dollars have been spent and/or pledged to save the so-called free market economy from extinction. Alongside this, came threats of regulation, of curbing the excesses, of mandating that the banks increase their capital cushions in order to avoid a repeat of the crisis.
Housing has been already been nationalized in the US in the sense that the US government is the major shareholder. The US governement underwites nine out of ten mortgages according to the Wall Street Journal.* It nationalized the worlds largest insurance company, AIG and is now a major shareholder in GMAC, the moneylending arm of GM which it also has a significant chunk of. Lawrence Summers warns us that the system that they worship so proudly is going to need more help in the coming months.
In order to do this, the politicians of the two capitalist parties in Congress have raised the nations debt ceiling and with the Fannie and Freddie bailout have "lifted the ceiling on the volume of mortgages they can buy for their portfolios with the taxpayers credit card." **(my added emphasis)
As they use "our" credit card freely, stocks have skyrocketed. The Dow Jones is up 20% for the year, Ford Motor Co stocks have quadrupled and American Express stocks doubled; why not, public money is doing the job of propping up the economic system, not "private:" capital. Gannet, the mass media conglomerate that brings us all the lies, its stock has risen 88%---they're all Keynsians now although infrastructure spending is not the form this new Keynsianism takes for sure.
Already an asset bubble is on the horizon. Along with getting guarantees of cash from us brought to them on our behalf by their politicians, they have increased profits not through traditional growth but by massive cost cutting. So we prop them up and they slash our living standards.
And what of all the regulation and curbing of the excesses that led to the crisis? The Wall Street Journal is relieved, "The fear that Congress would rush regulate finance....has evaporated" it writes. And it explains why, "The sorely needed financial redo has been diluted by financial interests targeting provisions that would squeeze profits....."
In the early stages the Nationalization of the banks by the capitalist state was a possibility. In Britain, the government nationalized Northern Rock and threatened to take all banks under government ownership if they continued to refuse to lend. Completely opposed to such meddling in the private sector in normal times, the capitalist state has no problem taking in to government control non profitable vital industries--let the taxpayer pay. As Marx pointed out, "The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie." The modern state stepped in to rescue capitalism from the abyss but it cannot go to far; profits cannot be sacrificed in the last analysis and the representatives of the financial sector, the owners of the stuff that lubricates the economy and that is used to purchase human labor power, will ensure that any serious threat to their right to do what they want with their capital is eliminated.
Like wars, financial crisis, speculation and ultimately overproduction and the crisis we are experiencing now are inherent to the system. Capitalism is driven to war and it is driven to overproduce and experience the crisis we see all around us.
Capitalist crises cannot be regulated out of existence.
The nationalization of the banks under democratic workers control and management is the only permanent solution to the crisis that we are seeing now and that will likely continue for years to come, accompanied by increased wars and poverty. We produce the wealth, we should own it, allocate it and determine the conditions under which it is created; we must control the Labor process.
We cannot make capitalism nice; this is utopian. What is not is that we can build a world federation of democratic socialist states based on a rational, planned economic structure.
* After The Bailouts 12-28-09
** Economy's Rescue Only Half Done WSJ, 12-31-09
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