Trouble in Bank Land IV

quote:

---

A radically different political realignment will begin to take shape in the world in the wake of the crisis. On the one hand, the capitalists will intensify their greed and violence in order to salvage their failed system.

On the other hand, tens and hundreds of millions of people will be compelled to struggle in ways they never imagined to defend their jobs, homes, health care and education, communities and the environment. They will resist the national and racial oppression that will deepen with the crisis.

Their practical experience in these struggles will have profound effects on social and political consciousness, laying the basis for challenges to the entire profit system — responsible not only for the present economic crisis but for endemic imperialist war, economic catastrophe and ecological suicide.

Although the future course of the financial collapse and its fallout cannot be predicted, it can be said with certainty that new conditions are being created to struggle for the only solution available to humanity — socialism.

There are positive, living examples today of countries that have successfully raised the banner of revolt against imperialist domination and charted a course toward societies founded on principles of social justice. There will be no foreclosures or starving pensioners in Cuba. The government of that country represents the interests of working people. Its socialized, planned economy is organized to meet human needs, not profits. These were the key elements that enabled Cuba to survive a virtual economic collapse brought on by the sudden rupture of trading ties with the Soviet Union in the 1990's.

Working people in Venezuela and Bolivia have also established governments that prioritize the needs of ordinary people over those of the wealthy bankers and industrialists. They are inspiring others in Latin America to follow suit.

Imperialism has been weakened by its financial catastrophe. This creates new opportunities and responsibilities for socialists and the broader labour movement in Canada and around the world. We must join in the growing struggles of working people, and in the process show that there is an alternative to the chaos and anarchy of capitalism.

---

[url=http://www.socialistvoice.ca/?p=339]Socialist Voice[/url]

quote:

---

The fact that we are confronted with the worst financial and economic crisis in the advanced capitalist world since the 1930s is an empirical fact that no informed individual at this point doubts. The failure to predict in the era of monopoly-finance capital and financialization has to do with a number of factors, including the psychology of all speculative booms throughout the history of the system. As Marx observed in Capital, "Business is always thoroughly sound, and the campaign in full swing, until the sudden intervention of the collapse" (Capital, vol. 3, chapter 30).

With respect to economic theory, one can point to the deficiencies of orthodox or neoclassical capitalist economics, which has no way of understanding these things within its fundamental model. Basically, it assumes a kind of non-relation between what it calls the "real economy" and the money or financial economy. The belief is that what goes on in the realm of credit/finance is meant to service the real economy, providing it with needed financing (and financial services generally). But beyond that what happens in this realm (the amassing of money claims to wealth) has no actual connection to the underlying economy, and operates by its own principles. Nor, for that matter, do orthodox economists normally deal with the real economy in any meaningful historical sense. The fact that finance was lifting the whole economy was of course known at some level, but the underlying stagnation tendencies in the latter, apparent since the 1970s, were conveniently ignored as long as profits kept on going up. [b]Part of the problem is that mainstream economics has long left behind its relatively rational stage (abandoning even Keynes) and adopted a whole series of inane doctrines such as monetarism, supply-side economics, rational expectations theory, new classical economics, etc. When this crisis hit, the dominant perspective of central bankers in the United States, led by Federal Reserve Board Chairman Ben Bernanke (an academic economist who had specialized in monetarist interpretations of the Great Depression), was that it was simply a problem of liquidity and that you could drop money from helicopters, if need be (a notion of Milton Friedman's, promoted by Bernanke, earning the latter the nickname "Helicopter Ben").[/b]

Needless to say, the sheer stupidity exhibited by a theory premised on assuming equilibrium within the context of an irrational system of competitive, unregulated, and indeed institutionalized greed is at all times hard to fathom. [b]Neoclassical economics has long ceased (at least in its theoretical assumptions) to be political economy, and its practitioners have therefore long dispatched any notion of class, power, etc. from their analysis, replacing these with largely meaningless abstractions.[/b] Indeed, this is so much the case that in business circles neoclassical economics is often viewed as useless in any real-world terms, including the making of money. [b]Nor do they grasp dialectical connections, having adopted timeless mechanical models. In contrast, the weaknesses of orthodox economics in all of these respects represent the strengths of Marxian political economy.[/b]

---

[url=http://mrzine.monthlyreview.org/foster161008.html]John Bellamy Foster[/url]

Yes, Lenin was a compassionate communist, he said so himself.

I think Bush I & II have more in common with Nicholas II, McKinley, Coolidge, and Hoover.

[ 20 October 2008: Message edited by: Fidel ]

What does that statement have to do with the words of mine that you quoted?

quote:

---

Originally posted by DrConway:
[b]

It has been conclusively proven that the Gulag did not start with Stalin.[/b]

---

It was better in the days of the Tsarist rule, when 25000 were worked to death building St Petersburg. Oh for the good old days when Russians were treated with dignity and respect. The U.S. White House has a quarter as many rooms as one of 30-some odd Tsarist era palaces. They threw lavish balls attended by European royalty that lasted days on end. Russian tsars were the richest of blue bloods. And millions lived in abject poverty, and were conscripted to fight bloody battles for real estate grabs against Nicholas' cousin in Germany. Breadlines were policed by tsarist security forces, and when hundreds of peasants marched to the palace where Nicholas was holed up to reveal to him their state of hunger and despair, they were ordered shot to death. It wasn't a perfect revolution by any means. They never are.

quote:

---

Originally posted by DrConway:
[b]

It has been conclusively proven that the Gulag did not start with Stalin.[/b]

---

While I think there is an important sentiment here, actually the "Chief Administration of Corrective Labor Camps and Colonies" (reduced in Russian to the Acronym GULAG, and later turned into a pure noun) was not founded until 1929, well after Lenin was dead. I also think that the foundation of GULAG marks an important distinction between the Leninist period and the Stalanist period, in that Soviet use of the state prison system changed from being a means to an end, into being an end in itself.

Prior to the establishment of GULAG Soviet repression of disidents and non-conformist largely served a direct political end, while GULAG actually changed the prison system into an important economic engine of the state. And end in itself, which needed fresh prisoners to work on mega-projects and developing the Siberian wilderness. People began to be arrested, not just for real or perceived insubordination but even on the basis of quotas that were used to fill the labour demands of what became an essential economic tool of the state.

The foundation of GULAG was the begining of the period of real unlicensed, inefficient, and often entirely gratuitous mass repression, as a system for employing cheap forced labour to industrialize the Soviet economy, while at the same time instilling mass fear in the entire population. No one knew if they might be arrested, and on what pretext.

Your point seems to be that Lenin also used the organs of the state to stamp out dissent. And I agree also that much of this was ujust. But the Gulag system was definitely an rethinking and expansion of the whole system of political repression enacted by the Cheka (NKVD) and the state prosecutors office, and the prison system itself that happened under Stalin's watch.

But I agree definitely the insitutional foundation, and the ideological justification used to enact these policies existed prior to Stalin, even the practice of using prisoners as labour, but given the times forced prison labour was not unusual and persists in most countries today, in some form or another. But GULAG was differnt than that.

Sorry to be a pedant.

[ 20 October 2008: Message edited by: Cueball ]

[url=http://www.globalresearch.ca/index.php?context=va&aid=10627]Pakistan facing bankruptcy as world financial crisis deepens[/url]

quote:

---

Wracked by political instability and hard hit by the global economic crisis, Pakistan is teetering on the brink of default. The country’s foreign reserves have dwindled to around $4.5 billion, equivalent to about six weeks of imports, foreign investors have fled the country in droves and the rupee has fallen sharply. The international credit rating agency, Standard & Poor’s, has downgraded Pakistan to a position superior only to the Seychelles, which has already defaulted. . .

---

Fidel has written quite a bit about the financial crisis over the last week or so. [url=http://www.granma.cu/ingles/2008/reflections-fidel-castro.html]Have a look if you are interested.[/url]

quote:

---

Originally posted by DrConway:
[b]Because you were trying to make excuses for Lenin...[/b]

---

???

When I said you have obviously never read Lenin, I was "making excuses" for Lenin?

I was making a remark about the foolishness of your statement that said Lenin was "wholly impervious to rational discussion of alternatives to his way of doing things". Anybody who says that obviously hasn't got a fucking clue about Lenin or his political writings.

Lenin needs no "excuses" on the subject of rational discussion of political alternatives. You do.

[url=http://casinocrash.org/?p=235#more-235]The global economic crisis: An historic opportunity for transformation[/url]

quote:

---

Taking advantage of the opportunity of so many people from movements gathering in Beijing during the [b]Asia-Europe People’s Forum[/b], the Transnational Institute and Focus on the Global South convened informal nightly meetings between 13 and 15 October 2008. We took stock of the meaning of the unfolding global economic crisis and the opportunity it presents for us to put into the public domain some of the inspiring and feasible alternatives many of us have been working on for decades. [b]This statement represents the collective outcome of our Beijing nights.[/b]

We, the initial signatories, mean this to be a contribution towards efforts to formulate [b]proposals around which our movements can organise as the basis for a radically different kind of political and economic order.[/b] Please sign on to this statement by adding your name in the comments section.

---

There are at present at least 109 comments appended to this action proposal.

quote:

---

Surely you have heard by now of the imminent socialist takeover of America, and if you find the prospect unlikely, ask yourself: How many socialists do you know who lost millions in the recent stock market crashes? Just as I thought—none—and that's not only because you don't know any socialists. The truth is that we, the Socialist International Conspiracy, not only saw this coming, we are the ones who made it happen.

---

[url=http://ehrenreich.blogs.com/barbaras_blog/2008/10/report-from-the-social... Ehrenreich reveals the plot. [/url]

[url=http://www.rabble.ca/politics.shtml?sh_itm=ce6ac737d5d932f7a1db123dddc75... markets fail[/url]

quote:

---

The main operating assumption of the neoliberal era is now everywhere in question. Proponents of markets have been arguing for nearly 30 years that the reason people reject the price mechanism as the best — indeed the only way — to allocate resources is because they did not understand properly how competitive market pricing actually work. Market critics were assumed to reject economic reality, while embracing delusions about democratic planning and public spending.

With chaos and panic pervading financial markets, and yesterdays heros such as central bank heads Allan Greenspan and David Dodge now struggling to keep their names from being associated with the scandals of collapsing securities markets, blocked credit mechanisms and economic distress, one thing should be clear: markets fail.

Critics of the markets are magic thesis got it right. The economic reference points for today are the works of economists Karl Polyani, John Maynard Keynes, Michael Kalecki, Joan Robinson or Hyman Minsky, along with Canadians Kari Levitt, Mel Watkins, Mario Seccareccia and Gilles Dostaler. The work of economists associated with corporate subsidized American and Canadian think tanks, inspired by Von Hayek and Friedman, notably, the American Enterprise and Fraser Institutes, was fatally flawed.

Microeconomics (the study of how prices are set in individual markets) was assumed by market proponents to be the foundation on which macroeconomics (the study of how national income is created) was based. For instance, unemployment occurred because individuals chose leisure ahead of work.

Following this assumption the great depression could be attributed to a sudden, worldwide, outbreak of laziness, as MIT economist Franco Modigliano famously retorted to Friedman. As the economy recedes, the Keynesian analysis of a failure of market demand to generate growing incomes, and employment is being hastily re-discovered, as governments rush to stimulate national economies though deficit spending.

---

RosaL, Thanks so much for that link to the Barbara Ehrenreich column.

The comments were almost as entertaining and revealing as the column itself. [url=http://ehrenreich.blogs.com/barbaras_blog/2008/10/report-from-the-social... one, for instance:[/url]

quote:

---

Nicely done. [img]smile.gif" border="0[/img] Maybe you can explain to me now in the midst of this banking meltdown that no one brings up the ancient history of the S&L crisis?

Ever since Bushy entered the presidential campaign 8 years ago, I've wondered how he managed to get the media and even his mother to never ever ever mention his brother Neil's name. And they NEVER mention the Savings and Loan Scandal of 1988 nor Neil's sweet Silverado Savings and Neil's several breaches of feduciary duty and conflicts of interest.

And except for the one mention of an extravagant AIG trip, I haven't seen any more reportage on the use of the funds taxpayers paid to bail out CEOs and save their Country Club memberships. But, maybe I'm not looking in the right places...

---

[url=http://www.nytimes.com/2008/10/29/opinion/29wed1.html]Loans? Did We Say We’d Do Loans?[/url]

quote:

---

According to Treasury Secretary Henry Paulson, the chief proponent of the big bank bailout, flooding the banks with taxpayers’ money was supposed to get them to start lending freely again. And that, in turn, was supposed to stabilize the markets and prevent the downturn from being worse than it otherwise would be.

It was not entirely clear from the start exactly how Mr. Paulson would ensure that things would go that way. Indeed, earlier this month, shortly after the bailout was enacted, The Times’s Mark Landler reported that Treasury officials also wanted to steer the bailout billions to banks that would use the money to buy up other banks.

Now, lo and behold, with $250 billion in bailout funds committed to dozens of large and regional banks, it turns out that many of the recipients of this investment from taxpayers are not all that interested in making loans. And it appears that Mr. Paulson is not so bothered by their reluctance. - part of Editorial in today's NYT

---

quote:

---

Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out.

The struggling Wall Street bank has set aside Ј7billion for salaries and 2008 year-end bonuses, it emerged yesterday.

Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than Ј3million.

The size of the pay pool comfortably dwarfs the Ј6.1billion lifeline which the U.S. government is throwing to Goldman as part of its Ј430billion bail-out.

---

[url=http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-.... Do you think this story will make cable news?[/url]

[url=http://www.globalresearch.ca/index.php?context=va&aid=10756]A New Bretton Woods[/url]
[b]Economies of scale[/b]

by [url=http://debtonation.org/]Anne Pettifor[/url]

quote:

---

To restore stability to the global financial system (and therefore to trade and the ecosystem) we need a "great transformation" to reverse the most pernicious elements of the failed "globalisation" experiment. Three pillars are vital to any new international architecture. They are:

• The taming of financial markets – through the re-introduction of capital controls; restraints in the growth of credit; and the establishment of a Keynesian international clearing agency;

• "Upsizing" the state – empowering governments to respond to democratic mandates by wresting power over decision-making from unaccountable financial markets, and restoring policy autonomy to elected governments;

• "Downsizing" the single global market – by introducing an international trading system based on the concept of "appropriate scale".

Since Nixon unilaterally dismantled Bretton Woods in 1971 and defaulted on the US government's commitment to meet its obligations in gold; and since the introduction of legislation to liberalise credit creation, financial markets have been liberated from social, political, and environmental constraints. As a result the world was turned upside down. The finance sector no longer acted as servant to the economy, but instead became its master. The tail wagged the dog. . .

A system of "appropriate scale" takes into account the environmental costs of trade. Free trade was given a free ride by the global environment. That is no longer sustainable. Governments must be free to pursue the trade policies most appropriate to their climate, economy, and stage of development. . .

"Such a [i]great transformation[/i] is vital if we are to end the dictatorship of haute finance and once more protect the interests of society as a whole, and the ecosystem."

---

Good article, and I'd bet Duncan Cameron would agree.

[ 31 October 2008: Message edited by: Fidel ]

[url=http://www.thenation.com/doc/20081117/klein]Naomi Klein:[/url]

quote:

---

By purchasing stakes in these institutions, Treasury is sending a signal to the market that they are a safe bet. Why safe? Because the government won't be able to afford to let them fail. [b]If these companies get themselves into trouble, investors can assume that the government will keep finding more cash, since allowing them to go down would mean losing its initial equity investments (just look at AIG). That tethering of the public interest to private companies is the real purpose of the bailout plan:[/b] Treasury Secretary Henry Paulson is handing all the companies that are admitted to the program--a number potentially in the thousands--an implicit Treasury Department guarantee. To skittish investors looking for safe places to park their money, these equity deals will be even more comforting than a Triple-A rating from Moody's.

Insurance like that is priceless. But for the banks, the best part is that the government is paying them--in some cases billions of dollars--to accept its seal of approval. For taxpayers, on the other hand, this entire plan is extremely risky, and may well cost significantly more than Paulson's original idea of buying up $700 billion in toxic debts. Now taxpayers aren't just on the hook for the debts but, arguably, for the fate of every corporation that sells them equity.

---

The capitalist ways of avoiding real socialism by having socialism for some - the rich and the super-rich - and not others is really remarkable. To paraphrase John Lennon, and not the other Lenin, we're still f***ing peasants as far as I can see.

[url=http://heartlandheretic.blogspot.com/2008/10/i-hope-that-we-are-up-for-w... Jig is Up[/url]
by Lynn Henderson

quote:

---

The present financial crisis is more fundamental and more sweeping than the 1929 crash and depression. It is the end of an era. The end of the so-called American Century. The demise of the world financial system which American capitalism set up at the famous Bretton Woods conference in 1944 following WWII. And there is no agreement on what will or can replace it.

For some 50 years now the American working class, or the media's preferred euphemism, the American middle class, has been the target of an intense class war in which real wages and income have been relentless reduced. This has been a one-sided class war with little effective resistance, especially from a hopelessly bureaucratized and conservatized trade union movement, which, in addition, has slavishly tied itself to one of the principle instruments of this class war, the Democratic political party. Everyone recognizes some of the more obvious results of this one-sided class war. An ever increasing concentration of wealth into the hands of a thin layer at the top -- CEO salaries that have gone from 40 times that of the average employee to 300 times.

[b]But there is an obvious contradiction here. Economists calculate that approximately 80 percent of the economy is driven by consumer spending. If real wages have been falling over the last 50 years, how has the economy, at least until recently, continued to expand and profits continue to grow?[/b] This was accomplished by a number of strategies designed to offset the effect of falling real wages on consumer spending.

[b]The first of these was the simple expedient of drastically increasing the total number of hours worked.[/b] Overtime was increased, leisure time was decreased. The single wage earner family was largely eliminated. No longer did one partner work while the other, usually the female, took on the demanding job of running the home and caring for the children. The "Leave It To Beaver" family of the 1950's disappeared from American society.

When this proved insufficient, family members were forced into a second and even a third part time job. Grandpa and grandma were moved into the basement apartment, and shuffled off to Walmart earning extra bucks as greeters to supplement their Social Security check….

[b]The next move was a massive expansion of consumer debt.[/b] The credit card industry was born. It was not so long ago that credit cards were mostly limited to business executives who did a lot of traveling. New federal legislation was put in place ending the ability of individual states to regulate credit cards and eliminating all usury laws which capped the maximum interest that could be charged. The nation was flooded with credit cards carrying 20 percent plus interest rates, a return previously only available to Mafia loan operations. The average American family now holds seven of these cards. The banks issuing these cards made record profits and consumer debt soared to record levels. But it did mask the effects of falling real wages and produced a significant if temporary boost in consumer spending.

[b]Paralleling the encouragement of ever more consumer debt was an even more risky policy, the massive and continuous expansion of government debt.[/b] We will address this crucial question in greater detail shortly but for now we can note that these record deficit budgets of necessity fueled inflationary pressures. One way these inflationary pressures expressed themselves was an [b]artificial rise in the dollar value of houses[/b] -- the so-called housing boom. For most middle class/working class families, their home, if they own one, is by far their biggest financial asset. As credit cards maxed out and the size of consumer credit card debt became unsupportable, another particularly dangerous financial gimmick was floated. [b]Consumers were encouraged, and driven by necessity, to take cash equity out of their inflated house value. Second mortgages, third mortgages, home equity loans, became the final desperate hope for keeping their heads above water -- for meeting expenses and paying down credit card debt that was killing them with 20% plus interest rates.[/b] New home buyers were lured into predatory sub-prime and adjustable rate mortgages with the assurance that housing prices would continue to raise indefinitely, allowing them to refinance and even cash out increased equity in the foreseeable future. And again it propped up consumer spending.

The banks made big bucks out of the credit card ploy but it was peanuts in comparison to what they were able to accomplish with the new mortgage schemes…. When the housing bubble burst, it triggered not just a crisis in the mortgage market but the collapse of a financial house of cards that had been building for decades.

Even more significantly, it exposed fatal flaws in the entire world financial system which had been in place for seventy years, ever since the famous Bretton Woods conference of 1944. [b]When the United States organized the Bretton Woods conference, the US was the largest creditor nation in the world; for all intents and purposes it was the only creditor nation in the world. Today it is the largest debtor nation in the world.[/b]

For decades the United States has run ever larger deficit budgets fueling an ever larger national debt….

The United States was able to pursue such a policy over an extended period of many decades because of the unique, privileged position of the dollar in the world economic system….

Prior to WWII, international trade and the settlement of international trade balances were accomplished primarily through the shifting of gold accounts. But by the end of WWII the United States ended up with all the gold, or most of it. A new basis for organizing international trade had to be found and found quickly. At the 1944 Bretton Woods conference it was agreed that the dollar would replace gold in its international trade function. That the dollar would be accepted as good as gold. That the dollar would become the reserve currency for the entire capitalist world. [b]This is how the U.S. dollar acquired its unique, privileged position. Or to use a term union members can appreciate it, acquired "super seniority".[/b] This arrangement made certain sense for the world capitalist economy, but only so long as the U.S. economy remained a strong, dominant, expanding economy with a strong financial balance sheet.

What do the continuous deficit budgets and the exploding federal government debt mean? It means this debt has to be funded; the government has to borrow money. It does this by selling U.S. treasury bonds which are government I.O.U.s. Today most of these U.S. treasuries are sold in the international market and held by such countries as Japan, the Middle East oil nations and especially China.

[b]The United States has become utterly dependent on continued international purchases of these treasuries and the regular roll-over of those already held.…[/b]

As the crisis unfolded, and the government bailout and infusion of funds began to take place, Treasury Secretary [b]Paulson suddenly and out-of-the-blue made a truly astounding demand that Congress immediately authorize 700 billion dollars to be dispensed by him, as he saw fit, with no congressional or judicial oversight.[/b]

Despite some claims to the contrary, he essentially got everything he demanded. What provoked such a move? David Rothkopf, an apparently well connected scholar at the Carnegie Endowment for International Peace, lets the cat out of the bag in a major article entitled [url=http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR200810... Was Big. This is Bigger.[/url] In the October 12 Washington Post he writes; "Reports from within the Treasury suggested that the U.S. government intervened in the financial sector, at least in part, in response to Chinese threats to reconsider their policy of buying U.S. debts unless Washington moved to stabilize the markets."

This signals the end for the U.S. dollar's status as world reserve currency -- the end of "super seniority" for the dollar. And national leaders throughout the world know it. They are demanding a new worldwide economic conference to deal with the crisis….

[b]It's all well and good to demand a new Bretton Woods but it ignores the fact that the utterly unique historical conditions allowing for the successful Bretton Woods conference of 1944 no longer exist nor are they reproducible.[/b] There was little in the way of negotiations between equals or even serious two way discussion at the 1944 Bretton Woods conference. A completely dominant and victorious U.S. capitalism dictated, and the rest of the capitalist world acceded. The usual laws of capitalist international competition were uniquely and temporarily in suspension.

That is certainly not the case in the world today. The European nations calling for a world conference can't even come up with a cooperative, coordinated response to the crisis among themselves….

"This is unprecedented, " said Simon Tilford, chief economist for the Center for European Reform. "It has exposed the limits of European integration and coordination when presented with a crisis of this magnitude."

[b]It's not unprecedented. It is merely confirmation of the basic law of capitalist competition, between firms and between capitalist nation states.[/b] In times of acute crisis, the law's application becomes particularly brutal, it becomes: "Every man for himself and the devil take the hindmost."

What does this all mean for the American middleclass/ working class? The enormous costs of the Wall Street and banking sector bailouts are unprecedented, with much more to come, including corporate bailouts.

Someone will have to pay, and without the aid of a dollar with "super seniority". How the pace of events plays out is hard to predict but we will certainly see a dramatic intensification of class warfare against the American middleclass/ working class. But it can no longer be a one-sided class war; they will have to resist; they will have no choice. They will not be able to just bare their breasts and accept the incoming rounds.

[b]They are not in an advantageous position to fight this war. The trade union movement will be of little help as it is presently constituted, and it will take time and a tough fight to change it. Unlike most of the major industrial nations America, has no socialist or labor party which in the heat of battle could be transformed into a fighting political instrument. Such a party would have to be built from scratch and in the face of deep existing illusions about the progressive nature of the Democratic Party.[/b] But the American capitalist elite are not in good shape either. The crisis has shaken them; there is a growing sense of panic and demoralization.

No one looks forward to this war. But the war will come. For everyone "The Jig is Up."

---

[ 08 November 2008: Message edited by: M. Spector ]

quote:

---

Originally posted by 500_Apples:
[b]The writer says this crash will be more sweeping than the 1929 crash because this represents the end for American capitalism. Why would that be more significant than the end of British capitalism?[/b]

---

You say "end for" American capitalism versus "end of" British capitalism. The difference is important. Henderson says it's the end of the dominance of American capitalism over the world financial system which it gained by virtue of Bretton Woods. It's not the end [b]of[/b] American capitalism or British capitalism.

quote:

---

Originally posted by 500_Apples:
[b]The writer says this crash will be more sweeping than the 1929 crash because this represents the end for American capitalism. Why would that be more significant than the end of British capitalism?

[ 08 November 2008: Message edited by: 500_Apples ][/b]

---

Britain, the previous bankrupted vicious empire, never really abided by free markets or practiced free trade either.

[ 08 November 2008: Message edited by: Fidel ]

quote:

---

Originally posted by 500_Apples:
[b]Britain stopped being dominant and a key event of that was 1929.

America will soon no longer be dominant and a key event of that will be this financial crisis.

Why would the latter evolution be more significant than the first one?[/b]

---

I'm not sure Lynn Henderson says it's more "significant" this time; but it's certainly different, and there is no obvious successor to the USA as financial hegemon of the capitalist world.

Henderson is writing from the perspective of an American who sees the end of the world financial system that was set up in 1944 and with it the end of American dominance of that system, and a period of intensified class warfare in the USA as a result.

Unlike the demise of British dominance, where the US was in a powerful position to take over and dictate to the world at Bretton Woods, this time there is no obvious dominant successor to assume hegemony. "The world will become multipolar" says the German finance minister. Another Bretton Woods-type agreement is not in the cards. The crisis will be deep and it will be prolonged.

The SPIEGEL article: What Happens When Countries Go Bankrupt is very alarming - Iceland, Ukraine, Hungary, Argentina, Poland, the Czech Republic, Romania, Turkey, and even Russia have filed or are on the verge of filing for bankruptcy. Following the histories of past of economic collapses, we will see huge hikes in the sex trade, child sex trade, and the drug trade in these countries. People will not only be homeless and hungry, but there will be massive human rights abuses against those who are most vulnerable. As I blog away, I feel most anxious to do something to change this reality. What campaigns and community organizing drives are already underway?