Archive for September 8th, 2008


September 8, 2008

The USA just nationalized the two largest US banks holding 45% of US mortgages (total worth: about half of US GDP). But nobody in the USA wants to use the word “nationalization”. Hey it would sound socialist, or even, God forbids, French!

The famous economist from Princeton, Paul Krugman opines in the New York Times that: “the Fannie-Freddie rescue was a good thing. But it takes place in the context of a broader economic struggle — a struggle we seem to be losing.”

Losing? The US economy is failing because it is a horse without a rider. It has eaten all the grass in its small enclosure, but it can’t get out on its own, and it needs to be led somewhere else by a more intelligent creature.

The basic socioeconomic mistake of the Nixonian, Reaganoid USA has been to believe that the “free market” should, and can control all. Since what’s most free in the market is what, and who, has most money, to believe that the free market should control all, is another way of saying that money should control all, and so that money-power – in one word, plutocracy – should reign. (Come to think of it “free market” is a euphemism for the concept of capital, a good way to make old critiques look obsolete by changing the label on the product!)

Abdicating to plutocracy is a complete misunderstanding of what the role of democracy is, and a full violation of the United States of America’s Constitution.

For a reminder here is how the Constitution starts:
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

Where is the free market in this? It is nowhere to be found. The Preamble does not start with: “We the Free Market of the United States of America”. It starts with: “We the People”. And the People has power. It is not: “We the Free Market and Rich People of the United States, and its Venture Capitalists, in order to create more Riches to ourselves and our Posterity, and establish more injustice, promote the general Welfare of the higher ups in the Chinese Communist Party and secure the general misery of the People, establish this Delocalization of the Constitution of the United States of America…”

Thanks to decades, even generations of extreme, fantastic right wing propaganda, the United States of America’s population has macerated in the warm mantra that the free market is not just the best path to prosperity, but also is best to decide all strategies and every single thing about the economy. This extremely deep propaganda blossomed in the late forties, when Nixon became a force in the USA, by accusing his Congresswoman opponent to be “pink right down to her underwear”.

Money-power as the ultimate ruler means that whatever or whoever has the most money takes the most important decisions. Laws and regulations do not come in the way (since they have no power, relatively speaking, the power being in the money, not in the representants of the people as such).

So the cities’ very extensive electric tramway systems were dismantled. No maneuver was abject enough to dismantle public transportation. General Motors bought the San Francisco Bay bridge and owned it just long enough to dismantle the train that was going over it, and maximize its car carrying capacity. And so on all over. In general, train operators, less popular in Washington (Smaller bribes? Less glamorous? Or was it that they had fewer actresses around than Howard Hughes?), were neglected, and all the money went to car companies, airlines, the oil industry, etc. Trains and their lines, which transport most goods (even in the USA) were neglected. But of course electric trains as used in Europe are much more energy efficient, and that was bad for maximizing the oil industry and those who like to profit from invading the Middle East and make deals there (Carlyle group, Bush family, countless oil cartels, etc…).

Anyway the big picture is that the so called free market decided where the US economy would go. Bigger SUVs to go along with the bigger potholes. What the US society has overlooked is this: the economy does not exist independently of the sociology. The SOCIOECONOMY IS JUST ONE BLOCK. The economy controls the country, and even the minds. This was not just true in the USSR. Indeed most of United States media control (with the vague exception of NPR and some PBS, restricted to a small elite audience) is in private hands. This is not compensated by the State having a strong independent voice, because elections are literally bought in the USA. Such enormously injurious facts to the concept of democracy are no figure of speech and acidic critique. They are just facts. So those who have the most money end up with the most control, as the present presidential campaign in the USA demonstrates … on both sides…

Since the search for profits has masqueraded as a search for a socioeconomic policy, the USA has piled up insane economic decisions, that connect deeply with American semantics, and American minds.

Take “house ownership”. Absurd statistics are brandished about it (most Americans are homeowners, etc…). The simplest hurtful truth, though, is that many Americans feel that they are proud homeowners, when all they do is to rent their house to a bank at such outrageous rates that they cannot have much of a life (besides feeding the bank). The whole credit crisis has to do with the fact that US citizens are discovering this, and are starting to pull away from that exploitation scheme, thus mightly hurting bank profits (subprime is just a sideshow).

And so on. As long as “We the People” does not become master of its own destiny, captain of its own soul, and does not treat the economy and money as instruments in the service of “general Welfare”, the United States socioeconomy will go down, relatively speaking.

Plutocracies can’t compete with countries with a higher democratic index. Republican Rome defeated the Hellenistic kingdoms and Carthage, simultaneously, because, at the time, Rome was less plutocratic and more democratic than them. This pattern has renewed itself throughout history. Rome, in the end, became a plutocracy too, and then it went down of its own weight, freedom crushed by money, and the few who had it (the “Barbarian” invasions, by tiny armed bands, were more of a symptom of the disease than the disease itself). That, too is a pattern of history: plutocracy can collapse a civilization all by itself. There is no need for an ecological disaster to cause a collapse, contrarily to what another American academic, Jared Diamond assumed, conveniently enough for US plutocracy. 

Patrice Ayme

P/S: 1) Increasingly much simpler version of this commentary were systematically barred by the Krugman team at the NYT (while hundreds of other comments were published; as we hinted in the case of Jared Diamond, claiming that the concept of plutocracy is of no import in the USA is viewed as extremely important by the wealthy owners of America, so they do not want to advertise this anathema).

2) The opposite of democracy is fascism. It is not plutocracy. But unconstrained plutocracy leads to fascism. Plutocracy arises by degeneracy from democracy.

3) A demonstration of the amazing hold of plutocracy occurred when Obama, supposedly the people’s candidate, refused to be financed by the state (his hope was to get more from hyper rich donors, in other words, the plutocracy; those people who do not mind forking out the median US salary to just be in the Presence… at a distance, rubbing with their peers… for a few minutes.) Amusingly the supposed candidate of the rich, McCain, accepted public money (thus forfeiting most direct private contributions). True, McCain had authored the public finance law, another reason why the plutocracy claims not to trust him (besides, what can they offer to him?) Even more amusingly, suddenly private money, having apparently second thoughts, seems to find it less rewarding to get to Obama. Out Machiavellizing Machiavelism seems to be where it’s at. That’s why we are trying to simplify the debate.