All Those Surveillance Cameras Watching Y O U & Krugman Doesn't Have to Apologize

As the news of all those cameras mounted all over downtown Greensboro (to track "freedom marchers" perhaps?) gets wide publicity, you might like to consider what this means for your personal freedom. And yes, no one likes the idea of the bad guys not being monitored. (Emphasis marks added - Ed.)

Big Brother Britain has more CCTV cameras than China Britain has one and a half times as many surveillance cameras as communist China, despite having a fraction of its population, shocking figures revealed yesterday.

There are 4.2 million closed circuit TV cameras here, one per every 14 people. But in police state China, which has a population of 1.3 billion, there are just 2.75 million cameras, the equivalent of one for every 472,000 of its citizens.

Simon Davies from pressure group Privacy International said the astonishing statistic highlighted Britain's 'worrying obsession' with surveillance.

'Britain has established itself as the model state that the Chinese authorities would love to have,' he said.

'As far as surveillance goes, Britain has created the blueprint for the 21st century non-democratic regime.

'It was not intended but it has certainly been the consequence.'

It is estimated that Britain has 20 per cent of cameras globally and that each person in the country is caught on camera an average of 300 times daily.

The Chinese Government revealed the number of cameras it has as it announced plans to expand CCTV surveillance. It began widespread installation of cameras in 2003 to bolster its system of extreme state control which hails back to the dark days of Chairman Mao Zedong’s Cultural Revolution.

Read more here. The government also deploys millions of security personnel, which include uniformed, official security guards who work along side police, patrolling the streets and others who bug phones, scour the internet for sensitive material and block international TV news bulletins.

Read more here.

Paul Krugman is a Nobel Prize-winning economist who has existed within the mainstream media for many years and written about events with honor and integrity as he actually reports the economics news as it exists and not as the Rupert Murdochs/Aerospace defense companies who rule this country's news reporting may wish. You might like to read this whole essay before moving on with your day. It's worth your while and if you have five minutes, give it a moment.

I'd like to mention that during the "pulling the plug on Grandma" argument by the rightwingnuts, I kept waiting for someone with a modicum of intelligence to mention that the current insurance-clerk-run healthcare system pulls the plug on Grandmas every day. No such luck (yet). And that "deer-in-the-headlights" quality of response which we came to know and love on Al Gore and John Kerry? Still working. (Click on the link to read it at the New York Times site with the accompanying ads.) (Emphasis marks added - Ed.)

Republican Death Trip

By PAUL KRUGMAN

August 13, 2009 Go to Columnist Page » Blog: The Conscience of a Liberal

“I am in this race because I don’t want to see us spend the next year re-fighting the Washington battles of the 1990s. I don’t want to pit Blue America against Red America; I want to lead a United States of America.” So declared Barack Obama in November 2007, making the case that Democrats should nominate him, rather than one of his rivals, because he could free the nation from the bitter partisanship of the past.

Some of us were skeptical. A couple of months after Mr. Obama gave that speech, I warned that his vision of a “different kind of politics” was a vain hope, that any Democrat who made it to the White House would face “an unending procession of wild charges and fake scandals, dutifully given credence by major media organizations that somehow can’t bring themselves to declare the accusations unequivocally false.”

So, how’s it going?

Sure enough, President Obama is now facing the same kind of opposition that President Bill Clinton had to deal with: an enraged right that denies the legitimacy of his presidency, that eagerly seizes on every wild rumor manufactured by the right-wing media complex.

This opposition cannot be appeased. Some pundits claim that Mr. Obama has polarized the country by following too liberal an agenda. But the truth is that the attacks on the president have no relationship to anything he is actually doing or proposing.

Right now, the charge that’s gaining the most traction is the claim that health care reform will create “death panels” (in Sarah Palin’s words) that will shuffle the elderly and others off to an early grave. It’s a complete fabrication, of course. The provision requiring that Medicare pay for voluntary end-of-life counseling was introduced by Senator Johnny Isakson, Republican — yes, Republican — of Georgia, who says that it’s “nuts” to claim that it has anything to do with euthanasia.

And not long ago, some of the most enthusiastic peddlers of the euthanasia smear, including Newt Gingrich, the former speaker of the House, and Mrs. Palin herself, were all for “advance directives” for medical care in the event that you are incapacitated or comatose. That’s exactly what was being proposed — and has now, in the face of all the hysteria, been dropped from the bill.

Yet the smear continues to spread. And as the example of Mr. Gingrich shows, it’s not a fringe phenomenon: Senior G.O.P. figures, including so-called moderates, have endorsed the lie.

Senator Chuck Grassley, Republican of Iowa, is one of these supposed moderates. I’m not sure where his centrist reputation comes from — he did, after all, compare critics of the Bush tax cuts to Hitler. But in any case, his role in the health care debate has been flat-out despicable.

Last week, Mr. Grassley claimed that his colleague Ted Kennedy’s brain tumor wouldn’t have been treated properly in other countries because they prefer to “spend money on people who can contribute more to the economy.” This week, he told an audience that “you have every right to fear,” that we “should not have a government-run plan to decide when to pull the plug on grandma.”

Again, that’s what a supposedly centrist Republican, a member of the Gang of Six trying to devise a bipartisan health plan, sounds like.

So much, then, for Mr. Obama’s dream of moving beyond divisive politics. The truth is that the factors that made politics so ugly in the Clinton years — the paranoia of a significant minority of Americans and the cynical willingness of leading Republicans to cater to that paranoia — are as strong as ever. In fact, the situation may be even worse than it was in the 1990s because the collapse of the Bush administration has left the G.O.P. with no real leaders other than Rush Limbaugh.

The question now is how Mr. Obama will deal with the death of his postpartisan dream.

So far, at least, the Obama administration’s response to the outpouring of hate on the right has had a deer-in-the-headlights quality. It’s as if officials still can’t wrap their minds around the fact that things like this can happen to people who aren’t named Clinton, as if they keep expecting the nonsense to just go away.

What, then, should Mr. Obama do? It would certainly help if he gave clearer and more concise explanations of his health care plan. To be fair, he’s gotten much better at that over the past couple of weeks.

What’s still missing, however, is a sense of passion and outrage — passion for the goal of ensuring that every American gets the health care he or she needs, outrage at the lies and fear-mongering that are being used to block that goal.

So can Mr. Obama, who can be so eloquent when delivering a message of uplift, rise to the challenge of unreasoning, unappeasable opposition? Only time will tell.

And time is running out. Suzan _______________________

Epic Crimes Committed in Your Name (Bank of No America You've Ever Known)

First off, from Vanity Fair, where it disturbs me to see this type of serious article on an uninteresting but well-recompensed fool, we learn that:

(Rush)’d become, second only to the fortunes of the new president, the biggest political story going, one loved equally by right and left. By the right because he so infuriated the left, and by the left because he so discomfited Republican moderates. He was the perfect political lightning rod, polarizing but entertaining too. The most elemental fact about the Limbaugh career might be that, outside of seriously corrupt dictatorships, nobody has made as much money from politics as Rush Limbaugh. Since this Top 40 D.J. and local talker in Sacramento went national, in 1988, as a right-wing voice, he has made hundreds of millions of dollars in salary, bonuses, participation in advertising revenue, and the sale of his show to the Sam Zell–controlled Jacor radio production company (Zell, a real-estate entrepreneur, now controls the Chicago Tribune), which was then sold to Clear Channel. His new contract, signed last summer, is worth a reported $400 million over eight years. There are, too, his newsletter, his paid Internet site with its voluminous traffic, his blockbuster best-sellers, his speaking fees, his half-dozen cars, including a Maybach 57S, his Gulfstream G550, and his Palm Beach estate with five houses. Rush’s business plan seriously impacts on the future of the Republican Party. Indeed, the extraordinary thing Rush has done, something arguably never before accomplished in the history of the co-dependent relationship of media and politics, is manage to keep his media day job while assuming something rather close to direct political power. Every other entertainer who has discovered a political mission—from Ronald Reagan to Sonny Bono to Al Franken—has had to quit show business and run for office. Not Rush. Rather, one hand ably washes the other.

Which is not a tribute to anything concerning his importance or his ability to sell himself and his sordid wares to the ignorant of this world, but a knock on what passes for knowledgeable conversation today to the glow-worm TV-ites of Knownothingism political sensibility. Speaking of Knownothingism which is about to be cured (again, although to what eventual good is yet to be known), Matt Renner tells us that (and if this doesn't make the public begin to collect names and addresses then nothing will - and I still LURVE Dennis the Giant Killer!):

Anger over the bonuses at A.I.G. blew back onto members of the Obama administration as it was revealed that Treasury Secretary Tim Geithner and others had been aware of the bonus payments but failed to halt them and did not express "outrage," until the bonus checks were already cashed. Further revelations of backroom dealings and million-dollar bonuses threaten to make any kind of assistance to financial institutions politically impossible for Congress. A larger and potentially far more explosive powder keg of bonus payments - this time to top executives at now defunct Merrill Lynch & Co. Inc. - may be about to blow. Ongoing investigations at the New York attorney general's office and at the office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) into this previously revealed, but mostly ignored, story may add new details about who in the Bush administration, in the financial sector and at the Federal Reserve knew about these much larger bonuses and the suspicious circumstances surrounding them. In its last days as an independent company, Merrill gave performance-based bonuses exclusively to employees earning $300,000 a year or more and holding a rank of vice president or higher, according to their financial statements. $3.62 billion was handed out to these executives - a sum equal to 36.2 percent of the $10 billion in taxpayer funds that were allocated to Merrill as part of the Troubled Asset Relief Program (TARP) before the bonuses were paid. The company had been failing as a result of misadventures in the now infamous mortgaged-backed securities market which began crumbling with the decline of home values as the bubble burst. The performance bonuses were determined by Merrill's compensation committee on December 8, 2008, before Merrill revealed that it lost $15 billion in the final three months of 2008, unusual timing according to court documents filed by New York Attorney General Andrew Cuomo in an ongoing suit against Merrill's former CEO. In prior years, Merrill paid performance bonuses of this type after the end of the year, in January or February of the next year. Congressman Dennis Kucinich (D-Ohio), the chairman of the House Domestic Policy Subcommittee under the Oversight and Government Reform Committee, signaled interest in investigating the bonus payments in a letter to Federal Reserve Chairman Ben Bernanke and Neel Kashkari, an interim Bush hold-over at the Treasury Department, who has been in charge of the TARP program since the beginning. The letter states that Merrill was not in "a sustainable financial position to award such bonuses without the considerable amount of US taxpayer funds ... TARP funds therefore could have had a decisive effect in funding the bonuses ..." The letter pointed out that the bonuses at Merrill "were not locked in by preexisting contract and were performance bonuses, as opposed to retention bonuses." During the A.I.G. bonus scandal, it was pointed out that the A.I.G. bonuses were locked in by contract and were thus more difficult to revoke. The A.I.G. bonuses were also structured as "retention bonuses," or money to keep people who were essential to the company's wind-down operation. While A.I.G.'s excuses fell short for critics, Merrill doesn't even seem to be able to make the same argument. Kucinich requested "all documents" relating to communications between the Federal Reserve, Treasury department and Bank of America. Bank of America bought what was left of Merrill after a shotgun marriage was arranged by Bernanke and then Treasury Chairman Henry Paulson. Bank of America CEO Ken Lewis also received a letter of inquiry from Kucinich. The questionable timing and the amounts of these bonuses were not revealed to Bank of America shareholders when they voted to acquire Merrill. These facts raise questions about what government officials knew about the bonuses and when they knew it, according to Kucinich's letter. "If ordinary [Bank of America] shareholders were ignorant of the details of the Merrill bonus arrangement, was the US government as well?" the letter asked, after pointing out that the US government owned 800,000 shares of preferred stock in Bank of America and federal officials met with both banks on a regular basis. The letter said that Paulson and Bernanke met with Lewis in mid December 2008 on several occasions to keep Bank of America on board in the deal to buy Merrill. Bank of America subsequently received an additional $20 billion (for a total of $45 billion) in government funds and a $118 billion guarantee against potential losses in risky investments - a huge pillar of support from the government. It is yet to be established by any investigation whether executives at Merrill and Bank of America looted while the company crumbled at the expense of taxpayers and shareholders.

As the "audit will not be released before the Obama administration's new bank rescue plan goes into effect. . . the plan would use billions more taxpayer dollars to back private capital from the financial sector and buy risky mortgages from the drowning banks." Pitchforks anyone? (H/t to Ornery Bastard and many others for the suggestion.) I guess it's pretty clear by now why the financial restructuring has not been done by Paul Krugman, Joe Stiglitz or Dean Baker (to mention a few of the stellar but really non-candidates previously available to the Obamaniacs). And no, we can't entertain comforting dreams anymore - it's over (we're over - kaput - out of there) - except for the shouting. As someone else said so wisely "Lynch Merrill!" Finally (and you should read the whole essay), our best insider friend, John Pilger, is spot on about the "Fake Faith and Epic Crimes" being committed in our names. We should commit ourselves anew to the cause of U.S. legal responsibility for its actions. (Emphasis marks the spot - Ed.)

These are extraordinary times. With the United States and Britain on the verge of bankruptcy and committing to an endless colonial war, pressure is building for their crimes to be prosecuted at a tribunal similar to that which tried the Nazis at Nuremberg. This defined rapacious invasion as "the supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole." International law would be mere farce, said the chief US chief prosecutor at Nuremberg, Supreme Court justice Robert Jackson, "if, in future, we do not apply its principles to ourselves." That is now happening. Spain, Germany, Belgium, France and Britain have long had "universal jurisdiction" statutes, which allow their national courts to pursue and prosecute prima facie war criminals. What has changed is an unspoken rule never to use international law against "ourselves," or "our" allies or clients. In 1998, Spain, supported by France, Switzerland and Belgium, indicted the Chilean dictator Augusto Pinochet, client and executioner of the West, and sought his extradition from Britain, where he happened to be at the time. Had he been sent for trial he almost certainly would have implicated at least one British prime minister and two US presidents in crimes against humanity. Home Secretary Jack Straw let him escape back to Chile. The Pinochet case was the ignition. On 19 January last, the George Washington University law professor Jonathan Turley compared the status of George W. Bush with that of Pinochet. "Outside [the United States] there is not the ambiguity about what to do about a war crime," he said. "So if you try to travel, most people abroad are going to view you not as ‘former President George Bush’ [but] as a current war criminal." For this reason, Bush’s former defence secretary Donald Rumsfeld, who demanded an invasion of Iraq in 2001 and personally approved torture techniques in Iraq and at Guantanamo Bay, no longer travels. Rumsfeld has twice been indicted for war crimes in Germany. On 26 January, the UN Special Rapporteur on Torture, Manfred Nowak, said, "We have clear evidence that Mr. Rumsfeld knew what he was doing but nevertheless he ordered torture." The Spanish high court is currently investigating a former Israeli defence minister and six other top Israeli officials for their role in the killing of civilians, mostly children, in Gaza. Henry Kissinger, who was largely responsible for bombing to death 600,000 peasants in Cambodia in 1969-73, is wanted for questioning in France, Chile and Argentina. Yet, on 8 February, as if demonstrating the continuity of American power, President Barack Obama’s national security adviser, James Jones, said, "I take my daily orders from Dr. Kissinger." Like them, Tony Blair may soon be a fugitive. The International Criminal Court, to which Britain is a signatory, has received a record number of petitions related to Blair’s wars. Spain’s celebrated Judge Baltasar Garzon, who indicted Pinochet and the leaders of the Argentinian military junta, has called for George W. Bush, Blair and former Spanish prime minister Jose Maria Aznar to be prosecuted for the invasion of Iraq — "one of the most sordid and unjustifiable episodes in recent human history: a devastating attack on the rule of law" that had left the UN "in tatters." He said, "There is enough of an argument in 650,000 deaths for this investigation to start without delay." This is not to say Blair is about to be collared and marched to The Hague, where Serbs and Sudanese dictators are far more likely to face a political court set up by the West. However, an international agenda is forming and a process has begun which is as much about legitimacy as the letter of the law, and a reminder from history that the powerful lose wars and empires when legitimacy evaporates. This can happen quickly, as in the fall of the Berlin Wall and the collapse of apartheid South Africa — the latter a spectre for apartheid Israel. Today, the unreported "good news" is that a worldwide movement is challenging the once sacrosanct notion that imperial politicians can destroy countless lives in the cause of an ancient piracy, often at (a) remove in distance and culture, and retain their respectability and immunity from justice. In his masterly Dr. Jekyll and Mr. Hyde, R.L. Stevenson writes in the character of Jekyll:

Men have before hired bravos to transact their crimes, while their own person and reputation sat under shelter . . . . I could thus plod in the public eye with a load of genial respectability, and, in a moment, like a schoolboy, strip off these lendings and spring headlong into the sea of liberty. But for me, in my impenetrable mantle, the safety was complete.

Read all here. And brace yourself for the Amero. Suzan __________________

That Ornery Bastard (and more Great Financial Crisis interview)

That Ornery Bastard (who can't be beat for up-to-the-minute-on-the-hilariously-funny-ball with his political commentary) has gone all lyrically poetical on us about the gift of the new Magi Rushing the Delayed Newts. (Please delete now for inexcusably funny use of profanity!)

Y'all want Rush Limbaugh as the head of the Republican party? BRING THAT SHIT RIGHT THE FUCK ON!!! I couldn't have dreamed about such good fortune even six months ago! Cripes! Throw some blood money into a large pit and throw these motherfuckers into it and put a lid on top. Let the biggest fucked up, delusional sonofabitch win. I could really give a shit which one it is, y'all is going to be the Captain of the Titanic, politically. In my wildest dreams, I could not have foreseen the back stabbing over the carcass of a dead political party that so deserved to be buried alive. Rush Limbaugh? OMFG, Bring it. Excuse me for a minute.I had to think about that and pick my teeth, that shit ain't easy when you are laughing uncontrollably. Ditto heads. Bwaaaahhhaaaaaahahaha! Fucking morons. At least my cats can lick their own asses independent of a radio personality telling them when they should eat some shit and call it biscuits and gravy. Thank you, Lord. Michael Steele? Bring it. Tom DeLay, Newt Gingrich, Bitch McConnell? Bring it. The stench of extermination and irrelevance is palpable. Keep running yer yaps boys, The old cotton fields of home are calling your names.

For your added enjoyment, here are a few more tidbits from Mike Whitney's interview with John Bellamy Foster entitled the "Great Financial Crisis" (which is what you're already enjoying!).

Baran and Sweezy summed up their argument by claiming that stagnation was the normal tendency of the monopoly capitalist economy. This was in sharp contradiction to received economic theory which assumed that capitalism by nature tended toward rapid economic growth and full employment. In the mainstream view, rapid growth and full employment were intrinsic to the system, so the emergence of slow growth required a specific explanation. In contrast, Baran, Sweezy, and Magdoff, building on a long line of thinkers before them (Marx, Veblen, Keynes, Hansen, Kalecki, Steindl), argued the opposite, that it was periods of rapid growth under monopoly capitalism, such as the now fabled Golden Age of the 1950s and ‘60s, that needed to be explained as due to special factors. In their view, it was necessary to point to the specific historical stimuli that propelled extraordinary periods of rapid development (in the Golden Age: enormous consumer liquidity after the war, a second great wave of automobilization, military spending associated with two regional wars in Asia and the Cold War, the expansion of the sales effort, etc.). Stagnation itself was the normal tendency of the system and so could be accounted for simply by the waning of such special factors. If investment and consumption are inadequate to maintain demand, as is the normal case under monopoly capitalism, the government is called into help. In the United States this has often taken the form of increased military spending (which is crucial the imperial goals of the system) and lately through financialization. Both of these means of maintaining demand, however, have reached their limits (the U.S. accounts for as much military spending as the whole rest of the world put together and cannot easily expand this at present), resulting in a deepening economic stagnation. Baran and Sweezy’s Monopoly Capital had pointed to financial sector expansion as a possible countervailing factor to stagnation, but in the 1960s this was merely potential and had not emerged to any large extent. The evolution of the system from the 1970s on became so dependent on the growth of finance, and the incorporation of the giant corporations into this, that I have termed this later phase “monopoly-finance capital.” MW: As the economy has become more dependent on financialization for growth, the gap between rich and poor has grown wider and wider. As you point out in your book, "In the United States the top 1 percent of wealth holders in 2001 owned more than twice as much as the bottom 80 percent of the population. If this was simply measured in terms of financial wealth, the top 1 percent owned more than four times the bottom 80 percent." (p 130). How have working class people managed to keep their heads above water with all this wealth being shifted to the rich? JBF: The answer is fairly obvious. If people cannot maintain their standard of living on the basis of their income, they will borrow against income and against whatever wealth they have. The result—if their incomes don’t rise, or if the value of whatever assets they have do not increase—is that they will simply get deeper and deeper in debt in an attempt simply to stand still. I became concerned about the growth of working-class household debt in 2000 and carried out a study of The Survey of Consumer Finances, which is published every three years by the federal government with a three year lag in the data. This is the only major federal government data source that we have on household debt broken down into income groups so that we can determine the debt burden of different classes. I published an article based on this research in the May 2000 issue of Monthly Review entitled “Working-Class Households and the Burden of Debt.” I then followed this up six years later with an article in the May 2006 Monthly Review on “The Household Debt Bubble,” which was to be incorporated into The Great Financial Crisis. There I wrote that “The housing bubble and the strength of consumption in the economy are connected to what might be termed the ‘household debt bubble,’ which could easily burst as a result of rising interest rates and the stagnation or decline of housing prices.” This is of course what happened, and the reason why this crisis has turned out to be so severe was the destruction over decades of the finances of working-class households, on the back of which financialization took place. MW: Will you define "debt-deflation" and explain its potential danger to the economy? As credit continues to tighten and housing prices sink; aren't we slipping into a reinforcing deflationary spiral? Do you think that fiscal policy will reverse this trend or is the stimulus package too small to stop real estate and equities from continuing to slide? The term “debt-deflation” is associated particularly with the work of Irving Fisher during the Great Depression. Fisher wrote an article for the journal Econometrica in 1933 entitled “The Debt-Deflation Theory of Great Depressions.” Deflation as applied to the general economy is a drop in the general price level, something not seen in the United States since the Great Depression, and catastrophic in the economy of monopoly capital (and even more so under monopoly-finance capital). In the first place, deflation (or disinflation, i.e. the reduction of inflation to what the Federal Reserve calls “below optimal” levels) means that the profit margins of corporations are squeezed, even if the cost structure of production, and productivity remain the same. Under these circumstances price competition is reactivated with giant firms actually in a life and death struggle. This also generates pressure for heavy layoffs and wage reductions, creating all sorts of vicious cycles. But the real fear of deflation has to do with the enormously bloated financial structure and the huge debt load of the economy. Under inflation, which is usually assumed to be built into the advanced capitalist economy, debts are paid back with smaller dollars (that is, worth less over time). In a deflationary economy, however, debt has to be paid back with bigger dollars (worth more over time). This then creates a debt-deflation spiral, enormously accelerating financial meltdown. As Fisher put it, “deflation caused by the debt reacts on the debt. Each dollar of debt still unpaid becomes a bigger dollar, and if the over-indebtedness with which we started was great enough, the liquidation of debt cannot keep up with the fall of prices which it causes.” Stated differently, quoting from The Great Financial Crisis (p. 116), “prices fall as debtors sell assets to pay their debts, and as prices fall the remaining debts must be repaid in dollars more valuable than the ones borrowed, causing more defaults, leading to yet lower prices, and thus a deflationary spiral.” In order to check this deflationary tendency, the Federal Reserve and the Treasury have been trying to reflate the economy by printing money (euphemistically called “quantitative easing”). But they have not succeeded and deflationary forces are still very strong, causing President Obama to warn shortly after his election that “we now risk falling into a deflationary spiral that could increase our massive debt even further.” It is also worth mentioning the effect that deflation has on investment. With capital faced with the fact that a few years down the line the price level could be lower than it is now, expected profits on investment in new productive capacity (given that this takes years to be built and has to paid for in current prices) are depressed, creating a deeper stagnation of accumulation. The stimulus package introduced by the Obama administration is far too small to pump up demand and reflate the economy under these circumstances. It is less than $400 billion a year, forty percent of which is tax cuts, so that the increased governmental spending is miniscule compared to the size of the hole created by the drastic drop in consumption, investment, and state and local government spending. It is also dwarfed by the total federal government support programs, primarily to financial institutions, which now amount to more than $9.7 trillion in the form of cash infusions, debt guarantees, swaps of Treasuries for financial toxic waste, etc. MW: Karl Marx seems to have anticipated the financial meltdown we are now facing. In Capital, he said, "The superficiality of political economy shows itself in the fact that it views the expansion and contraction of credit as the cause of the periodic alterations of the industrial cycle, while it is a mere symptom of them." Marx appears to agree with your theory that the real problem is deeper---economic stagnation which forces surplus capital to look for more profitable investments. While the monetarist theories of Milton Friedman are under withering attack, Keynes and Marx seem to have held up rather well. What does Marx mean when he talks about "political economy"? JBF: Marx was an acute analyst of financial crises in his time and described their main features. However, he saw financial expansions (as economists in general have until recently) as occurring at the peak of a boom, not as a secular phenomenon. Financialization in the sense of a long-term shift in the center of gravity of the economy toward finance, with financial speculation building over decades, is a completely unprecedented situation. Marx and Engels did place great emphasis on the growth of joint-stock companies/corporations and the appearance of a market for industrial securities that began to appear near the end of the nineteenth century. It was this creation of the modern market for industrial securities that was the real beginning of the emergence of finance as a relatively independent aspect of the monopoly capitalist economy. There are essentially two pricing structures to the economy: one in the real economy related to the production of goods and services, the other in the financial realm associated with the pricing of assets (paper claims to wealth). The two are interrelated but can be disassociated from each other for periods of time. Keynes in the 1930s singled-out the dangers of an economy that was increasingly governed by the speculative pricing of financial assets. Marx was such an acute observer of capitalism, that even in his time he began to see the contradictions emerging between money (or fictitious) capital and real capital. One thing that Marx did argue in this context is that surges in financial speculation were responses to stagnation and decline in the real economy, as capital desperately sought a way to maintain and expand its surplus. Thus he wrote that the “plethora of money capital” in such periods was due to “difficulties in employment, through a lack of spheres of investment, i.e. due to a surplus in the branches of production” and showed nothing so much as the immanent barriers to capitalist expansion (quoted in The Great Financial Crisis, p. 39). Marx remains the strongest foundation for the critique of the capitalist economy, down to our day. But the real Keynes (not to be confused with the bastardized Keynesianism of today) is also important, since he emphasized what he called the “outstanding faults” of the capitalist economy: the tendency to high inequality and high unemployment. He also pointed to the dangers of a system geared to speculative finance. MW: Is wage stagnation and income inequality a direct result of financialization? I would put it the other way around. Wage stagnation and growing income and wealth inequality are components of the underlying stagnation tendency. Both have shown a tendency to worsen over time, resulting in deepening stagnation tendencies within the overall economy. Real wages in the United States peaked in 1971, when Richard Nixon was president, and by 2008 had fallen back to 1967 levels, when Lyndon Johnson was president. This is in despite of the enormous growth of productivity and expansion of wealth over the intervening decades. Hence, this is a marker of “the tendency of surplus to rise,” as Baran and Sweezy put it, or a rising rate of surplus value, in Marx’s own terms. This was accompanied by a massive growth of income and wealth at the top. As we stated in The Great Financial Crisis (p. 130), “From 1990 to 2002, for each added dollar made by those in the bottom 90 percent [of income] those in the uppermost 0.01 percent (today about 14,000 households) made an additional $18,000.” By 2007 income/wealth inequality in the United States had reached 1929 proportions, i.e., the level reached just prior to the 1929 Stock Market Crash that led to the Great Depression. I do think you are right, though, that financialization made income and wealth inequality worse, and contributed to the stagnation of wages. We can see neoliberalism as basically the ideology of monopoly-finance capital, introduced originally as the ruling class response to stagnation, and then increasingly geared to promoting the financialization of capital, itself a structural response to stagnation. Neoliberalism promoted incessant breaking of unions, forcing down wages, cutting state social welfare spending, deregulation, free mobility of capital, development of new financial architecture, etc. One way to understand this is the enormous need for new cash infusions to feed a financial superstructure that was voracious in its demand for new money capital, which it needed to leverage still more piling up of debt and financial speculation. Insurance companies, real estate, and mutual funds all provided infusions into this financial superstructure, as did the state. All limits were removed. Under these circumstances workers were encouraged to use their houses like piggy banks to finance consumption, credit cards were handed out to teenagers, subprime loans were pushed on those with little ability to pay. Individual retirement packages were shifted toward IRAs that were tied into the speculative financial system. This had all the signs of an addictive system. In these circumstances, too, the real economy, particularly production of goods and manufacturing, was decimated. In the introduction to The Great Financial Crisis we include a chart covering the period since 1960 showing production of goods as a percentage of GDP in a slow, long-term decline, while debt as a percentage of GDP is skyrocketing over the same period. All of this meant a massive redistribution away from working people to capital, and to those at the pinnacle of the financial pyramid. MW: In your book The Great Financial Crisis, you are critical of Paulson's capital injections into the banks saying that "at most they buy the necessary time in which the vast mass of questionable loans can be liquidated in an orderly fashion, restoring solvency but at a far lower rate of economic activity--that of a serious recession or depression." On Friday, Timothy Geithner told CNBC that "We will preserve the system that is owned and managed by the private sector." This suggests that the Treasury Secretary might not liquidate the toxic assets at all, but try maintain the appearance that these underwater banks are solvent. What do you think will happen if Geithner refuses to nationalize the banks? I would not interpret Geithner’s statement that way. Rather we are experiencing one of the greatest robberies in history. I have written on the question of nationalization for the “Notes from the Editors” forthcoming in the March 2009 Monthly Review. All the attempts to rescue the financial system at this time go in the direction of nationalization. The federal government is providing more and more of the capital and assuming financial responsibility for the banks. However, they are doing everything they can to keep the banks in private hands, resulting in a kind of de facto nationalization with de jure private control. Whether the federal government is forced eventually toward full nationalization (that is, assuming direct control of the banks) is a big question. But even that is unlikely to change the nature of what is going on, which is a classic case of the socialization of losses of financial institutions while leaving untouched the massive gains still in the hands of those who most profited from the whole extreme period of financial speculation. To get an idea of what is happening one has to understand that the federal government, as I have already indicated, has committed itself thus far in this crisis $9.7 trillion in support programs primarily for financial institutions. The Federal Reserve (together with the Treasury) now has converted itself into what is called a “bad bank.” It has been swapping Treasury certificates for toxic financial waste, such as collateralized debt obligations. As a result the Federal Reserve has become the banker of last resort for toxic waste with the share of Treasuries in the Fed’s balance sheet dropping from about 90 percent to about 20 percent over the course of the crisis, with much of the rest now made up of financial toxic waste. Obviously, full, straightforward nationalization would be more rational than this. But one has also to remember the system of power—both economic and political—that we are dealing with at present. The classic case of full bank nationalization was Italian corporatist capitalism of the 1920s and ‘30s, and was carried out by the fascist regime. Without suggesting that we are headed this way now it should be clear from this that nationalization of banks itself is no panacea. The fact that Geithner, Obama’s pick for Treasury Secretary, is overseeing the enormous robbery taking place, probably exceeding any theft in history, with the ordinary taxpayers picking up the tab, should certainly cause one to ask questions about the “progressive” nature of the new administration. MW: Former Fed chief Alan Greenspan has dismissed criticism of his monetary policies saying that no one could have seen the humongous bubble developing in housing. In your book, however, you make this observation: "It was the reality of economic stagnation beginning in the 1970s...that led to the emergence of the 'new financialized capitalist regime's kind of 'paradoxical financial Keynesianism' whereby demand in the economy was stimulated primarily 'thanks to asset bubbles.’” (p 129) The statement suggests that the Fed knew exactly what it was doing when it slashed rates and created a speculative frenzy. Debt-fueled asset bubbles are a way of shifting wealth from one class to another while avoiding the stagnation of the underlying economy. Can this problem be fixed through regulation and better oversight or is it something that is intrinsic to capitalism itself? Greenspan is of course trying desperately to salvage his reputation and to remove any sense that he is culpable. I would agree that the Fed knew what it was doing up to a point, and deliberately promoted an asset bubble in housing—what Stephanie Pomboy called “The Great Bubble Transfer” following the bursting of the New Economy tech bubble in 2000. The view that no one saw the dangers of course is false. It reminds me of Paul Krugman’s face-saving claim in his The Return of Depression Economics and the Crisis of 2008 that while some people thought that financial and economic problems of the 1930s might repeat themselves, these were not “sensible people.” According to Krugman, “sensible people” like himself (that is, those who expressed the consensus of those in power) knew that these things could never happen—but turned out to be wrong. It is true, as Greenspan says, no one could have foreseen precisely what really happened. And certainly there were a lot of blinders at the top. But there were lots of warnings and concerns. For example, I drafted an article (“The Great Fear”) for the April 2005 issue of Monthly Review that referred to “rising interest rates (threatening a bursting of the housing bubble supporting U.S. consumption)” as one of the key “perils of a stagnating economy.” Other close observers of the economy were saying the same thing. The Federal Reserve Board, indeed, was internally debating in these years whether to adopt a policy of pricking the asset bubbles before they got further out of control. But Greenspan and Bernanke were both against such a dangerous operation, claiming that this could bring the whole rickety financial structure down. Since they didn’t know what to do about asset bubbles they simply sat on their hands and tried to talk the market up. The dominant view was that the Federal Reserve could stop a financial avalanche by putting a rock in the right place the moment there was a sign of trouble. So Bernanke went ahead, closed his eyes and prayed, raising interest rates to restrict inflation (an action demanded by the financial elite) and the rest is history. At all times it was those at the commanding heights of the financial institutions that called the shots, and the Fed followed their wishes. Greenspan himself is no dummy. He wrote in Challenge Magazine in March-April 1988 of the dangers associated with housing bubbles. But as a Federal Reserve Board chairman he pursued financialization to the hilt, since there was no other option for the system. Needless to say, such financialization was associated with the growing disparities in wealth and income in the country. Debt itself is an instrument of power and those at the bottom were chained by it, while those at the top were using it to leverage rising fortunes. The total net worth of the Forbes 400 richest Americans (an increasing percentage of whom were based in finance) rose from $91.8 billion in 1982 to $1.2 trillion in 2006, while most people in the society were finding it harder and harder to make ends meet. None of this was an accident. It was all intrinsic to monopoly-finance capital. MW: The financial crisis is quickly turning into a political crisis. Already governments in Iceland and Latvia have collapsed and the global slump is just beginning to accelerate. Riots and street violence have broken out in Greece, Latvia and Lithuania and worker-led protests have become commonplace throughout the EU. As unemployment skyrockets and economic activity stalls, countries are likely to experience greater social instability. Do you see this crisis as an opportunity political mobilization? How does one take deep-seated discontent and rage and shape it into a political movement for structural change? JBF: The first thing to recognize is that we are suddenly in a different historical period. One of my favorite quotes comes from Gillo Pontecorvo’s 1969 film Burn!, where the main character, William Walker (played by Marlon Brando) states: “Very often between one historical period and another, ten years suddenly might be enough to reveal the contradictions of an entire century.” We are living in such a period; not only because of the Great Financial Crisis and what the IMF is now calling a depression in the advanced capitalist economies, but also because of the global ecological crisis that during the last decade has accelerated out of control under business as usual, and due to the reappearance of “naked imperialism.” What made sense ten years ago is nonsense now. New dangers and new possibilities are opening up. A whole different kind of struggle is emerging. The sudden fall of the governments in Iceland and Latvia as a result of protests against financial theft is remarkable, as are the widespread revolts in Greece and throughout the EU, with millions in the streets. The general strikes in Guadeloupe and Martinique, the French Antilles, and the support given to these movements by the French New Anti-Capitalist Party is a breakthrough. In fact much of the world is in ferment. Latin Americans are engaged in a full-scale revolt against neoliberalism, led by Venezuela’s Bolivarian Revolution, and the aspiration of a new socialism for the 21st century (as envisioned also in Bolivia, Ecuador and Cuba). The Nepalese revolution has offered new hope in Asia. Social struggles on a major scale are occurring in emerging economies such as Brazil, Mexico, and India. China itself is experiencing unrest. The one place in the world where this world historical ferment appears to not be having telling effect at present is the United States. This can be traced to two reasons. First, the United States as the center of a world empire is a fortress of conservatism. Second, the election of the Obama administration has confused progressive forces, leading to absurd notions that the Democrats under Obama are going to create a New New Deal without renewed pressure arising from a revolt from below. Meanwhile, under Obama’s watch, and with the help of his chosen advisers, vast amounts of state funds are being infused into the financial system to benefit private capital. What is needed in the United States today, we argue in The Great Financial Crisis, is a renewal of the classic concept of political economy (with its class perspective), whereby it comes to be understood that the economy is subject to public control, and should be wrested from the domination of the ruling class. The bailing out of the system right now is going on with taxpayer funds but without the say of the public. A revolt to gain popular control of the political economy is therefore necessary. It is possible to start with the demand for a New New Deal rooted in the best legacy of the Roosevelt administration in the 1930s, most notably the Works Progress Administration. But as Robert McChesney and I argued in “A New New Deal Under Obama?” in the February 2009 issue of Monthly Review, the struggle has to move quickly beyond that to an expansion of workers’ rights along socialist principles, breaking with the logic of capital. For this to occur there has to be a great revolt from below on at least the scale of the industrial unionization movement of the 1930s that created a new political force in the country (later destroyed in the McCarthy Era). The story of this struggle is told in David Milton’s classic account, The Politics of U.S. Labor, which also points out that the rising labor movement was led by socialists and radical syndicalists. It is important, as István Mészáros explained in his Beyond Capital, that the radical politics opened up in this historical moment not be diverted into attempting to save the existing system, but be directed at transcending it. As Mészáros wrote: “To succeed in its original aim, radical politics must transfer at the height of the crisis its aspirations—in the form of effective powers of decision making at all levels and all areas, including the economy—to the social body itself from which subsequent material and political demands would emanate.” In the United States a primary goal of any radical politics should be to cut military spending, which is the imperial iron heel holding down the entire world, while corrupting the U.S. body politic and diverting surplus from pressing social needs. The obvious weak link of the whole political, ideological and economic structure in command in the United States today, is that the system has clearly failed to meet peoples’ real needs. Rather than addressing these pressing needs in the crisis, the emphasis of the economic overlords is to bailout private capital at virtually any cost. Between October 2008 and January 2009 the federal government provided about $160 billion in capital and infusions and debt guarantees to the Bank of America, which had a total net worth in late January of only a small fraction of that amount. The rest had gone down the rat hole. The robbing of public funds to bailout private capital is now on a scale probably never before seen. A politicized, organized working class capable of understanding and reacting to that theft, and choosing thereby to restructure society, to meet real social, egalitarian needs is what is now to be hoped for. The title of a recent cover story Newsweek declared: “We Are All Socialists Now.” As it turned out, Newsweek’s editors were simply referring to the increase in public spending now taking place—hardly an indication of socialism. But the fact that this is said at all in the mainstream media points to the fact that we are in a different historical moment in which radical forces have the possibility of moving forward.

Read the rest of this very fine essay essay here. Suzan ___________________