Bailout Lesson: Capital Crisis Will Wreck Both Parties

Members of the Moratorium Now! Coalition to Stop Foreclosures and Evictions held a protest demonstration against the bailout of Wall Street. This event occured on Sept. 25, 2009 in downtown Detroit. (Channel 7 Photo).
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Bailout Lesson: Capital Crisis Will Wreck Both Parties

Wednesday, 01 October 2008
by BAR executive editor Glen Ford

The crisis of finance capital has thrown both big business parties into extreme disarray and split the Congressional Black Caucus right down the middle. "In the aftermath of Monday's bloody siege, it was difficult to tell who Wall Street guns-for-hire John McCain and Barack Obama hated most: each other, or the citizens who despite their outraged confusion had the presence of mind to bar the doors to the national treasury." As the Obama-McCain-Bush-Pelosi Axis struggles to serve a common master, "the rest of us must fashion new institutions to perform the societal tasks that were purportedly the domain of the now-extinct investment bankers."

Bailout Lesson: Capital Crisis Will Wreck Both Parties
by BAR executive editor Glen Ford

"The Democratic and Republican Parties, creatures of capital, are decomposing in full view."

In their role as mercenaries in service of finance capital, three-fifths of Democrats joined one-third of Republicans in a (temporarily) failed heist of $700 billion of the people's funds - a nest-egg the public needs to hold onto to weather the unfolding collapse of the Lords of Capital. In the aftermath of Monday's bloody siege, it was difficult to tell who Wall Street guns-for-hire John McCain and Barack Obama hated most: each other, or the citizens who despite their outraged confusion had the presence of mind to bar the doors to the national treasury.

Understandably disoriented from having had to charge backwards - pretending to lead the people while simultaneously assaulting them - Obama peered across the field at the hastily-erected barricades that had broken Hank Paulson's Charge. "I'm confident we're going to get there," said the frustrated thief-enabler, "but it's going to be rocky."

To paraphrase Oscar Brown, Jr., "What you mean WE, Obama-man?" The Illinois senator and his pretend-opponents in the other business party just had their colluding asses kicked by the most motley, disorganized crew imaginable: the American public, who bombarded their legislators with threats of retaliation in November if they bowed to Wall Street's extortionist demands.

Never has Republican-Democratic co-subservience to finance capital been on such naked display. But then, "We the People" have never before been witness to the terminal unraveling of late-stage global finance capital. (See BAR, "Death Rattles of a Criminal Class," September 24.) When the New York Times features no less than three articles declaring the nation's investment bankers ready for burial, as did last Sunday's paper, it is time for the Democrats, especially, to find another paymaster.

Black Caucus Split

Obama's party is wedded to Wall Street. At the local level the Democrats have long been the party of "developers" - the money bags who shape urban policy to fit the needs of corporations. These gentrifiers are the "Renaissance Men" that insist Black politicians earn their campaign and graft payments by helping to expel their own constituents from the cities, so as to make them more congenial to business.

Betrayal starts at home. So it's not surprising to find Rep. Charles Rangel (NY), the corporate-loving Chairman of the House Ways and Means Committee, among the 18 members of the Congressional Black Caucus (CBC) to vote with the Bush-McCain-Obama Wall Street Axis. Edolphus Towns (NY), Gregory Meeks (NY), and Artur Davis (AL) are also in their element, reeking as they do of corporate excretions. However, it is strange - and sad - to see Maxine Waters (CA), Gwen Moore (WI) and other relatively progressive members aligned with the rump end of the Black Caucus.

Among the slim, 21-member majority of the CBC that defied Speaker Nancy Pelosi's edicts, one finds more curious company. Voting alongside usually reliable progressives such as Barbara Lee (CA), John Conyers (MI), Donna Edwards (MD) and Bobby Scott (VA), are some of the Caucus's most rightwing members: William "Dollar Bill" Jefferson (LA) and David Scott (GA), once described as the "Worst Black Congressman" in the House. Panic makes strange bedfellows.

Virginia Rep. Bobby Scott summed up the "No" position:
"There's no point in spending all this money on worthless assets" such as toxic mortgages. Detroit's Carolyn Cheeks Kilpatrick said of the Obama-McCain-Bush-Paulson plan, "This helps the banks in their book of mortgages. It doesn't help the little person who needs it."

"It is strange - and sad - to see Maxine Waters (CA), Gwen Moore (WI) and other relatively progressive members aligned with the rump end of the Black Caucus."

These are eminently good reasons to resist the bipartisan, flag-waving, hyper-ventilating and increasingly ill-looking Wall Street mob, now regrouping for another bum-rush of the Congress. However, the anxious thieves are only a 12-vote switch away from consummating the Greatest Theft Ever. Pelosi's wing of the Business Party is confident they can assemble the blandishments and threats to do the trick.

The Last Hold-up

The criminal-minded and mortally wounded Lords of Capital believed, as Pam Martens has written, that they could "loot and collapse a 200-year old financial system and...be rewarded with a fresh $700 billion of public money to disperse among your cronies who aided and abetted in the collapse."

Or, as Mike Whitney puts it:

"...the $700 billion is just part of a massive ‘pump and dump' scheme engineered with the tacit approval of the US Treasury and the Federal Reserve. Once the banksters have offloaded their fraudulent securities and crappy paper on Uncle Sam, they will do whatever they need to do to pad the bottom line and drive their stocks up. That means they will shovel capital into hard assets, foreign currencies, gold, interest rate swaps, carry trade swindles, and Swiss bank accounts. The notion that they will recapitalize so they can provide loans to US consumers and businesses in a slumping economy is a pipedream."

Treasury Secretary Henry Paulson and his designated wrecking crew have but one objective: theft. Their own world is doomed - "The system is de-leveraging and nothing can stop it," says Whitney - so they are pulling off one last, mega-heist before it sinks beneath the waves.

The rest of us must fashion new institutions to perform the societal tasks that were purportedly the domain of the now-extinct investment bankers: to gather large amounts of capital for projects of social value - for example, a Marshall-type Plan for the cities, a nationwide infrastructure makeover, and fulfillment of the 70-year old federal commitment to provide truly affordable housing for everyone. And of course, jobs, jobs, jobs.

"We must fashion new institutions to perform the societal tasks that were purportedly the domain of the now-extinct investment bankers."

We have many other uses for that $700 billion - what Barack Obama called "our last bullet," although intending to make it a gift to mega-thieves - for instance, to provide relief to current and future homeowner (and rental) victims of the housing bubble that will take years to fully deflate, as prices (and rents) decrease to levels consistent with wages and other social factors.

In a perverse way, Henry Paulson and his co-conspirators have done the public a great favor. He has told us that, Yes, the federal government can come up with $700-plus billion, in an instant, if the health of the nation demands it. He has expanded the fiscal scope of the domestic political conversation, so that it may encompass projects of transformational size. Never again can the corporate class speak of socially valuable projects being so large as to "break the bank" or the budget. Popular forces are now free to think large, too, without being ridiculed from the corporate Right.

The demise of finance capital's premiere institutions, and the brutal arrogance with which their servants moved to strip the commonweal of every squeezable drop of cash, has alerted vast sectors of the citizenry to the reality of capitalism-in-crisis in ways that no amount of Left agitation could have accomplished.

Technical public "ownership" of previously "private" institutions has been thrust upon us by the capitalists, themselves. But this is merely an opening for the great debates and struggles that must follow. Power does not devolve to "the people" by simple virtue of majority shares in failing institutions or even outright nationalization. And "the people" have no need of institutions that serve no purpose but as creatures of capital.

The second casualty of the current crisis, after the collapse of the financial sector, is surely the twin-party game of musical chairs that served to legitimize the rule of capital. The obscenity of a Democrat-Republican syndicate arrayed against the roaring, raging sentiments of citizens of all self-described political persuasions, cannot be erased from the collective national memory - even if congressional party leaders succeed in whipping their members into line, later this week.

"The second casualty of the current crisis is the twin-party game of musical chairs."

When catastrophe hits, radicals must be ready. Recent events have proven Cynthia McKinney and Rosa Clemente to be amazingly prescient in their belief that the Green Party can be - I emphasize can be - a vehicle for presenting and popularizing a truly transformational program for social change. (See McKinney "The Financial Crisis: Seize the Time!" BAR September 24.)

McKinney and Clemente always intended that the Green Party become a nexus for the roiling social currents set in motion by the inexorable decomposition of ruling class institutions. The Democratic and Republican Parties, creatures of capital, are decomposing in full view, as witnessed by the events of this week. Too fragile to weather real political storms, they will not survive the larger, unfolding crisis of capital as twin hegemons. As the crisis deepens, the parties will crack- at a pace dictated by the increasing frequency of convulsions.

When we are confronted with the surreal spectacle of John McCain and Barack Obama attempting to destroy each other even as they rush to deliver nearly a trillion dollars to the same master, while the people scream at both of them to "Stop!" - we know that "change" is coming. But not the kind the Democrats or Republicans anticipate.

BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it.