Welcome!

An Analysis of Where We Are

June 26th, 2013
posted by

On the nature of the current American economic crisis

According to basic observations, the American economy is currently– and has been for some time– in a state of absolute crisis. And this despite all the natural resources the U.S. has been burning through, and a constantly growing stock of technologies. Here are a few data points that give a good sense of our current situation:

– 13% of American households have a net worth (assets minus liabilities) below 0.[1]
– Only about 20% of American households live in a home they own.[2]
– well over 20% of American households had incomes below the poverty line in 2010.[3]
– 1% of Americans experience homelessness in a given year.[4]
– 16% of Americans do not have health insurance.[5]
– 47.8 Million Americans (~15%) are enrolled in food stamps.[6] (and there are also many non-governmental food programs)
– Over 2/3 of American college students graduate with student loans, totaling over 1 trillion dollars (greater than total credit card debt, surpassed only by total mortgages).[7][8]
– over 1 million Americans filed bankruptcy in each of the last 5 years.[9]

These data show the utter impoverishment of the people, and their lack of access to the most essential services.
The most popular explanation for the economic problems of the 00’s is that there was a “bubble” (=overvaluation) in the housing market, which then had repercussions in the financial industry (since properties, mortgages, “packaged” mortgages, etc. are traded as financial “instruments,” and then the deals involving them are further insured). Blame is apportioned in varying degrees either to greedy bankers (“a few bad apples”) or to poor people choosing to live beyond their means. The solution then marketed to us is some mix of
– take a few bad people out of the banks;
– restrict a few banking practices;
– create stricter guidelines on who can get a mortgage.

But if you have payed attention so far, you’ve surely noticed that over-easy access to housing is certainly not one of this nation’s greatest problems. In fact, in general, this is a very shallow analysis that leads to no solution at all. We must ask ourselves questions like:
1) Why is housing so prohibitively expensive? (the median sale price in Feb 2013 was 246,800,[10] compared with a median household income of 52,762[11]) Why do prices not fall to an affordable level in the face of abundance (nationwide, 19 out of 130 Million housing units are unoccupied[12]) and decreased purchasing power?
2) Why are we as a society not taking dramatic action to ensure that our housing, food, health, and educational resources reach those in need?
3) Why are highly-educated people, suffering no privations, making so many socially hurtful selfish decisions? Why are these particular people in a position to make such important decisions?

Try to answer all these questions for yourself– I don’t want to overwhelm you, nor to make this essay too long.

Let us return to my general explanation for the crisis:
There has been an “over-accumulation of capital”– meaning rich entities (be they people, corporations, university endowment funds…) have extracted so many assets (money, land, intellectual property, machinery, debts, resources…) and concentrated it in so few hands, that they have nothing to do with it. Not only could they never consume billions of dollars, but they can not find good places to stick that money so that it grows at an acceptable rate for them (investments).

Not only do investments need to make a profit under capitalism, but they need to make an increasing profit year over year. But the number of good investments is more limited even as the concentration of wealth is greater: for less and less people have money to be squeezed out of them– theoretically the only true goal of most American corporations.

Yet this accumulated money must go somewhere, and it insists on finding a profit. Thus one major possibility is to bid up the value on various assets. Since other people also have to invest their money, you may buy a $100,000 house (or piece of jewelery, artwork, etc.) for $600,000, and a month later find someone willing to pay you $700,000 for it. (Incidentally, treating food, fuel, land, shelter, etc. as investments pushes up their price in a way that makes them unattainable for consumers). The value of an investment will appear to increase as long as others continue to buy into it. But throughout this process, no new value is being created. Eventually, more and more investors will begin to doubt in the value of what they are buying. As it becomes all just a game of false values, the opportunity and even necessity for fraud increases, and a series of collapses are inevitable.

These collapses also present the opportunity for one final way to wring some money out of the nearly-dry common woman. With various financial interests collapsing, there is a choice to either admit that the profits have been lost, or to take money from basic social service programs to make good on the money the financiers wanted. In the public discourse, this choice is presented as between “total collapse of the economy” or “austerity.” (Think how different this sounds than a choice between the “elimination of useless economic parasites” or the “looting of the national treasury”). Total collapse sounds like no choice at all– and anyway, the decision-makers have already been payed by the financiers– and so the already-thin public services are cut: insane people are released from unfunded institutions, medical benefits are decreased leaving people to die, schools are closed and teachers fired thus stuffing students into fewer classrooms with fewer teachers, and retirees’ pensions disappear leaving their families to scramble for ways to care for them.

Evidently, there are limits to how far this can be pushed– at some point the people will be too dry to wring any further. Historically, there has only been one example of a similar crisis of capitalism, the Great Depression. And the only way capitalism “got out of it” was via World War 2: destroying things, and then investing (and making money) in rebuilding. Luckily, we can imagine a better and more lasting escape!

If you are left baffled as to who could be making such poor decisions, and how they could have wound up in the position to be making them, please look forward to my forthcoming essay on that topic.

Footnotes

  1. http://www.epi.org/blog/inequality-exhibit-wal-mart-wealth-american/ []
  2. 67% of Americans “own” the house or apartment they live in ( http://www.census.gov/compendia/statab/2012/tables/12s0992.pdf ; http://quickfacts.census.gov/qfd/states/00000.html ); as of 2009, only 32% of those “owning” their homes actually owned them without a mortgage (http://www.census.gov/compendia/statab/2012/tables/12s0998.pdf). .67x .32 = .21. []
  3. http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf, page 8 []
  4. http://www.nationalhomeless.org/factsheets/How_Many.html []
  5. http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2010/highlights.html []
  6. http://www.fns.usda.gov/sites/default/files/datastatistics/Keydata%20December%202012%20%283-8-2013%29_0.pdf []
  7. http://projectonstudentdebt.org/files/pub/classof2008.pdf []
  8. http://www.federalreserve.gov/newsevents/testimony/vermilyea20130625a.htm []
  9. http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx ; http://www.abiworld.org/AM/AMTemplate.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=66471 []
  10. http://www.census.gov/construction/nrs/pdf/newressales.pdf []
  11. http://quickfacts.census.gov/qfd/states/00000.html []
  12. http://www.census.gov/compendia/statab/2012/tables/12s0982.pdf []

Syria, pt 2

June 16th, 2013
posted by

US aid, can only come along with bombings, foreign fighters, etc. In general, if there were a home-grown movement capable of ousting Assad, it would not benefit from US aid. For example, in the case of Afghanistan, it is clear that any association with foreigners who bomb wedding parties and patrol the skies with drones is harmful to aspirations for political power. [As a note, according to Stanford and NYU researchers, 1 out of every 50 death’s caused by a drone is a “terrorist” ,(the other 49 being civilians]

Even if making this Faustian pact some how works out, you have given up more than you gained. The real control of any movement lies with those who control the material functioning of the movement — if US arms are the key to the success of any rebels, and those arms are accepted and relied on, then in the end, those rebels do not have any real control of their movement. Even with arms already surreptitiously supplied, the rebels were incapable of victory, and hence the foreign fundamentalist fighters have been introduced as well. Even worse.

While the movement is too weak, the only choices in open conflict are defeat or usurpation and corruption by Imperial interests. Better not to fight directly at that time.

It was already a symptom of astroturfing that the Syrian “Arab Spring” turned into a civil war at all. US, Turkish, and Israeli intelligence must have had a hand in the choice to fight. See for example statements by former French Foreign Minister Dumas where he indicates something was in the works for a long time.

Thus the movement was forced to fight before it was ready, before everyday Syrians had a hope of winning power on their own, in their own name. This will set them back a long time.

I do not support the Assad regime. The Assad regime would murder me if I lived there and has certainly murdered numerous of my co-thinkers. My allegiance is to the exploited of Syria. It is only their own action which can lead to their liberation — as Marx said. At this point, they have gone for Assad, because they see what sort of a demon has been taken in to their house. Even NATO admits 70% of Syrians support Assad with 20% neutral and 10% supporting the rebels. In other words, at this point, according to NATO, Assad supporters outnumber rebel supporters 7:1.

Syria, pt 1

June 16th, 2013
posted by

Two years of fighting — and it seems the Syrian people now solidly back Assad over the rebels. The rebels were never a homogenous group, always having been an unstructured movement including elements organized by Turkish intelligence, American intelligence, and fundamentalist Muslim fighters, but at least at the outset there were some “normal” Syrians. However, at this point it seems the “normal” Syrians are in support of Assad, as the foreign and jihadi elements are now dominant among the rebels. The brutality of these forces has been made clear, eg execution for blasphemy, murder of pro-government religious figures, and sectarian killings of Shia, Christians, etc

Because of the solidification of public opinion against the rebels, Assad’s regime has begun to win the civil war. They have gained control of a number of towns. In fact, the insurgency appears close to defeat.

And yet, Obama & the Imperialist gang are now doubling down on the rebels. America had always supplied weapons and logistical support to certain rebel elements, now Obama is upping the ante to direct and open military support on the basis of supposed use of poison gas by Assad’s forces.

The Imperialist motives of the US are clear. Under the pretext of the “Arab spring” the US has taken the opportunity to try to recalibrate the region in its interests. Thus, rebellions in Libya and Syria, countries governed by regimes Washington always wanted to do away with, were militarily aided and pushed out of all proportion to their popular support, in order to oust the regime. At the same time, in countries like the repressive dictatorship monarchy Bahrain, a US ally, in which protesters were slaughtered, the US did not raise a peep. Neither did it in Saudi Arabia, Jordan, or any other similar country. In Egypt, the US remained funding and supporting Mubarak even as the police slaughtered hundreds in violent crackdowns. Only after Mubarak’s ouster by the people of Egypt, did the US change tack and declare Mubarak an unconsciounable dictator and establish ties with the Muslim Brotherhood, trying to co-opt the new regime, not caring whether it was reactionary or progressive.

In fact Obama’s actions have generally backed the more reactionary side. Libya and Syria were both, in the spectrum of Arab countries, relatively secular, redistributionist, and mindful of foreign economic exploitation. In Libya, NATO bombed and killed in order to support a shaky coalition of Islamic-jihadis, Libyan tribalists, and ready-made foreign cronies under the auspices of US-based think tanks. The country today is a wreck. In Syria, again it is, with some degree of variation, a cocktail of ethnic groups, fundamentalist-jihadis, and cronies who have been waiting in the wings in Turkey or the USA for a long time.

See for instance, Rafif Jouejati, who claims to play a leadership role in the Syrian rebellion (in reality this is not the case, as the rebels are largely locally autonomous and composed of groups that can’t work together). She is listed as one of the leaders of the astroturfed structure created by Washington to pretend to lead the rebels, and to put a good face on them. Joujeati lives in Washington DC and is head of a think tank called P3 Solutions. Her business also services clients including federal agencies, and corporations such as Microsoft, Dell, and Raytheon. Truly the salt of the Syrian earth.

Perhaps one could see it as ironic, that the US government spies on us all in the name of counter-terrorism, in true 1984 fashion, while at the same time, directly funding and arming fundamentalist forces who behead civilians as part of their jihadi quest. But there is no real joke there. It’s just the same geopolitical maneuvering the bourgeoisie always have and will do — that which puts Imperialist competition, resources, and ultimately profit, above all else.

Allow me to finish with excerpts from an interview given by Zbigniew Brzezinski, the “geostrategist” who was National Security Advisor of the Carter regime, now a Professor at Johns Hopkins:

Brzezinski: …According to the official version of history, CIA aid to the Mujahadeen began during 1980, that is to say, after the Soviet army invaded Afghanistan, 24 Dec 1979. But the reality, secretly guarded until now, is completely otherwise: Indeed, it was July 3, 1979 that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And that very day, I wrote a note to the president in which I explained to him that in my opinion this aid was going to induce a Soviet military intervention…

… Regret what? That secret operation was an excellent idea. It had the effect of drawing the Russians into the Afghan trap and you want me to regret it? The day that the Soviets officially crossed the border, I wrote to President Carter: We now have the opportunity of giving to the USSR its Vietnam war…

Q: And neither do you regret having… given arms and advice to future terrorists?

Brzezinski: What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the cold war?