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Saturday, July 14, 2012
Capitalism is historically bankrupt. Another CEO goes down
Regulators were attempting to get Mr. Wasendorf to sign on to a new online system for verifying accounts and it was Mr. Wasendorf's resistance that led regulators to unearth a carefully planned fraud that had been going on for years. it seems MR. Wasendorf was doctoring accounts. It is the task of regulators to ensure that these coupon clippers don't steal from each other. Ripping of public treasuries and workers is OK, in fact, most theft is legal like the way the tax code is written, they simply pass legislation to make it such.
The 1% are very concerned about such activities, they recognize that they have to have some sort of order in their dealings with each other. The state allows these characters to basically self-regulate, just like they did with the deep water drilling rules, allowing the energy companies like BP and Exxon to write their own guidelines. The National Futures Trading Association that discovered this fraud is a "self-regulatory" agency acting under the auspices of the Commodity Futures Trading Commission (CFTC). Mr. Wasendorf (don't laugh) is on the NFA advisory committee that advises the regulator on "rules and policy measures" The CFTC consists of commissioners appointed by the president with consent of the US Senate. it is described as an "independent" body, but it has class content obviously in that the these appointees represent the interests of the 1%, in this instance, regulating their gambling activities as they profit from buying and selling the products of human Labor.
One of the reasons we have this war between the different factions of the 1%, those whose activities take place primarily in the established exchanges that regulate their dealings with each other and the private equity lords whose activity is less scrutinized and more covert, is that allowing unregulated activity can lead to financial shenanigans where the victims are the thieves themselves---not good. There is no "right to know" no "democracy" when it comes to the business decisions of private capital. If we find out about this fraud, the JP Morgan fraud, (another two billion or so) or the Libor fraud, it's because they cannot avoid making it public as it is theft between thieves. Even then, it won't be major news in the media for the masses.
It's OK to carry out all sorts of fraudulent and destructive activity against workers and consumers as long as it is of the legal type, the CFTC is there though to protect market users (certainly not most workers) and the public (which public is the issue here) from "fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option market."
When such cases like this one comes to light it we can be sure that, apart from being outside the realm of "legal" fraud, it is the tip of the iceberg of what the 1% considers illegal. I don't feel sorry for Wasendorf whose entire life has been spent in wasteful and parasitic activities that suck the life blood out of human society as opposed to contributing to its welfare. But looking at the big picture, he is also a victim of a system that promotes such activity. He feels bad, " I have committed fraud" he writes, "For this reason I feel constant and intense guilt. I am very remorseful that my greatest transgressions have been to my fellow man. Through a scheme of using false bank statements I have been able to embezzle millions of dollars from customer accounts at Peregrine Financial Group Inc. The forgeries started nearly twenty years ago and have gone undetected until now."
The only reason they went undetected until now is the intensity of the anger and hatred of this industry and shift in consciousness with regard to capitalism and its merits that exists in the aftermath of the Great Recession. This has forced the thieves to tighten things up a little. But capitalism cannot regulate itself. We see throughout the world, day in day out, examples of capitalism's inability to do that. People starve amid plenty, they lack shelter despite the resources present to provide it; they die of diseases long ago cured because it is not profitable to allocate capital to the social infrastructure projects that improve public health, water, electricity, sewage.
We can look in the history books and read of all the laws, restrictions, regulations, they impose to curb the excesses and savagery of the market from Roosevelt's war on the trusts to the environmental restrictions on capital. This doesn't mean that such regulations are completely useless, we should support them but with the understanding that they will always break them, always find a way round them. If we stop them selling harmful products here in the US, they'll find a nice dictatorship that will allow them to poison its subjects. US corporations profit handily from conditions in the former colonial world that can only be described as horrific. I recall some time ago a comment from an environmental activist who said that not one major piece of environmental degradation has been halted by the activity of environmental activists, dedicated as they may be.
Capital abhors obstacles. It has to be free to go where it wants when it wants. Capitalism will never regulate itself, never make itself human friendly. The private ownership of the wealth of society and the means of producing it will always be hostile to the natural world that is there only to be exploited. This small example is like a grain of sand on the beach when it comes to the level of waste and inefficiency of this economic system that we call the free market. It is a system that has reached its limits, it cannot take humanity forward.
I don't feel sorry for Russell Wasendorf, but the end of capitalism and the introduction of a world federation of democratic socialist states can provide a better life even for him and his children, one in which we can all be productive and start on the road to genuine freedom collectively producing the necessities of life in harmony with the natural world.