"Just five years ago any one who disagreed with "American Policy" on ANY issue was considered a "terrorist or terrorist sympathizer". All of the sudden, Bush bashing is in vogue! Shit, people have been frightened out of their WITS to disagree with religious fundamentalists! Suddenly, it's OK. But those of us who have been doing it all along are still considered nuts!
"Fukk em all! I hope they blow their selves up real good! Literally. At least there is nutritional value in roasted nuts. Baked shit is, well, it's just baked shit!"
Capitalism has failed. Period.
The present crisis is a damning indictment of capitalism. Those who preached the virtues of the free market had to swallow their words and were forced to turn to the state – namely tax-payers’ money – to bail them out. All those apologists of capitalism who said profits were a reward for risk-taking were silent as the state stepped into rescue the system from collapse. They had no money for welfare or health, but when needed, they had plenty of money to bail-out Wall Street. “It [the US government] has begun a programme of economic interventionism more typical of socialist governments in moments of utopian zeal”, commented an article in the FT. It is certainly the most extensive peacetime of government intervention in the economy since the Great Depression, which shows how dangerous the crisis has become for capitalism.The western corporate institutions had written down $500bn-odd of credit assets in the past year. They have been forced to right-off billions of paper wealth. They also raised between $200bn and $360bn new capital to plug their depreciating assets. But they are trapped in a vicious circle, as they are unable to estimate their real losses as more and more houses are repossessed and property prices continue to collapse.
The proposed bail-out by the US government is said to be around 700bn to begin with. [emphasis mine] They are talking about buying bad debt in order to remove them from the company’s books. Something similar was done in the Savings and Loans crisis of two decades ago. However, this time, the sums are truly staggering, which will have to be picked up by the American tax payer. The plan is to create a ‘bad bank’ to take possession of all the toxic assets in the financial system. However, placing in effect bad debts in a deep freeze, will leave a massive burden over the US economy for years to come. In reality, the US government head by George Bush is promising to nationalise all the bad debts.
The failed policy of individual fire-fighting of failed companies has given way to “a comprehensive approach to relieving the stresses on our financial institutions and markets”, to quote Paulson. But what happens if this fails too? The contradictions are immense. The chaos in the financial sector is spilling over into the other sectors of the economy. The Detroit-based car industry, for instance, has itself lobbied the government for $25bn in loans and loan guarantees to allow it to function. The construction industry is already in a slump. In America and elsewhere unemployment has jumped. We are at the beginning of a new world recession which can be far deeper than anything we have witnessed in the post-war period. It is this that terrifies the strategists of capital. A new slump will mean drastic cuts in living standards and political turmoil worldwide.
As one senior Wall Street banker commented: “The crisis is far from over, the government action will buy banks some time but they will have to act decisively otherwise they will find themselves in an even worse situation in a few months’ time.” This is correct as throwing billions of dollars at the credit markets will not resolve the underlying problems. In fact, it was the excess credit that fuelled the artificial boom and all the excesses that have accompanied it – giving rise to the present crisis, the greatest credit bubble in history.
People are having to rethink their views about capitalism. There has been a shift in the public mood everywhere, a realisation that something big has gone wrong. There is anger with the bankers. There is a growing questioning. As one newspaper commented: “Social historians will record this week as one when unhappy shoppers began discussing the potential collapse of western capitalism in the same breath as butter prices.”
In a Waitrose supermarket car park in Harborne, Birmingham, Kate Organ, 53, a freelance arts manager, described her mood as “wretched and disempowered”. She expected here income, currently at £30,000 a year, to dwindle. She said: “When I was at University, the Workers’ Revolutionary Party harangued me that capitalism would collapse. Now I know what they were on about.”
In fact, we have absolutely no way of calculating exactly how much this largest welfare program of all time will end up costing. And naturally, this welfare program is specifically for the rich. And this is while 98% of the world goes homeless, hungry, and without medical care.
OK. I'm nuts. But there is plenty of shit out there.
