The word for today, boys and girls, is NATIONALIZE! All thru out the news last week, economic pundits called on the government to NATIONALIZE THE BANKS! What does this mean? Leading economists of the capitalist system calling for nationalization can mean several things. But first, we need to define nationalization and society in the age of misinformation.
On February 19th, President Barack Obama made a speech in Arizona, which has the third highest foreclosure rate in the country. Obama wants to help banks restructure mortgages, and refinance some mortgage holders who owe banks for homes no longer worth what they paid. All this is part of his stimulus package.
However, that day’s news reported that the automakers continue to be in distress and Goodyear lays off workers because slow car sales means less tire manufacturing. The New York Stock Exchange closed down by 300 points. Economic activity is predicted to contract and unemployment is expected to rise. Most experts believe the recession will last at least 24 months if it doesn’t plunge into a depression.
Structural readjustment for the US economy can only lead towards financial disaster. The bloodsucking international banking system proved this in Africa, Asia and Latin America. When economists begin demanding the nationalization of banks, capitalism is in big trouble. Nationalization means a government takeover of a sector or the whole economy. This can happen under a socialist state, which we do not have, or it can happen in a state moving towards fascism, which we appear to have.
While the administration has not broached this subject, since Larry Summers of the White House’s National Economic Council appeared in several interviews that evening and never even hinted at it, business experts and leading economists have begun making powerful cases for nationalizing the banks. To underscore, on Tuesday Timothy Geithner, Treasury Secretary and former head of the New York Fed, has a grounded policy initiative due to a sharp change of course which resulted in tanking markets on Wall Street. The pundits have panned Geithner and made an issue of Obama trying to fix the economy from the White House, citing politics and, paradoxically, George W Bush’s policy of giving the Fed a free hand.
All the leading capitalists, from the president on down, smell like a stinking joke.
But to nationalize the banks? Wow, that is a great leap, and not of the Maoist kind. Because we must ask the inevitable question, how will that happen? Especially after banks continue to receive massive monies from the public coffers. In the age of misinformation, where the neocons have convinced white workers that welfare, national health care reform and Social Security are socialist programs while remaining silent on gov’t giveaways to financial institutions, people must be wary of what it means for certain forces to make the call for nationalization. Because if Obama’s administration emerges from this period looking like the Weimar Republic, it will set the stage for a neoconservative resurgence out for blood.
Paul Krugman, a leading liberal economist, recently defended the calls to nationalize the banks. He defended the suggestion by saying that nationalization exists all over the United States. Krugman is no socialist, and altho he is a Keynesian economist, no justification for nationalizing the financial sector can displace the possibility that the highest levels of capitalism have reached their historical limitations. So we must be wary that this call is exactly a step to keep the neocons hanging around and to undermine any movement by the Left to build a revolutionary movement.
By no means should the Left attempt to solve the Imperialist crisis; to the contrary, we must build a broad working class upsurge. Yet we have to stave off the reactionaries in the meantime. Our reasoning need say that a government takeover of the banks mustn’t transpire after so much money has been doled out to them, nor without purging the top management of any banks that get seized. No takeover should happen with compensation going to stockholders, either. Altho this contradicts US laws concerning imminent domain, the banks have already received massive liquidity injections of public funds on a periodic basis since July 2006. Whichever banks are insolvent the government has no business acquiring them in any attempt to make them float.
Thus, experts calling for nationalization seem to be pulling the wool over our heads. They have the temerity to defend Bush’s economic policy decisions while criticizing the moves made by the four-week-old Obama presidency. Among others, business experts Nina Easton, Fred Mishkin, Nuriel Roubini and Mark Zandi have appeared on Charlie Rose to form a consensus on nationalization and against a White House-run national economic group. However, the calls for nationalization have been broader than just theirs, cattle-prodding the black president into a less deliberate response to a crisis that has built up over the life of the entire subprime mortgage era.
Since the Clinton-era “war on crime”, codified in repressive criminal legislation and accompanied by a massive prison boom on the backs of black prisoners that jolted the voodoo economy of his predecessors, plus the passage of NAFTA alongside the unspoken war against Chicanos and other Latino immigrant workers, the United States has become a neo-fascist republic. This trend sharply intensified under two terms of the Bush 43 administration with the so-called “war on terror”, itself a form of terrorism. Combine that with an economic crisis in the making since the S&L scandals of the Eighties thru the DotCom shakeout on to the current subprime mortgage meltdown, if it can be correctly characterized that way.
The effect of these combined scandals and crises has been a huge concentration of liquidity into ever fewer hands. The credit regime arose because liquidity had been squeezed to the extent that people lacked the resources to buy with cash.
So, in making paper tigers from coast to coast, it became necessary for economic growth to rely heavily upon consumer credit spending. And this practice resulted in a more intensified concentration of liquidity. By concentrating cash in so few hands, money became even scarcer for workers, the middle class and small business. Towards the end, statisticians revealed how Americans worked longer and harder than their counterparts in other industrial countries, how production had increased because of people trying to work themselves out of debt and folks had less to show for it.
In a country where workers happily settle for $300 tax kickbacks while the government doles out $750 billion to financial institutions, anybody calling for nationalization of banks is either delusional or on a serious mission to turn this country into a fascist state. The steps towards fascism remain firmly in place and Obama, being a part of the ruling class, may not be turning away from that.
Ultimately, we need a workers economy based upon redistribution of wealth. Concentration of wealth must become thoroly diluted so that society will experience no more of these economic crises. The abstract value of paper documents from legal tender to asset-backed commercial paper and other capitalist instruments has to be abolished. The love of one another will overwhelm the love of money if we make it happen. Ubuntu (humanness) is our only future: We need a society built upon people power instead of crass dollarism.