A financial coup d’état

That’s not the opinion of some left-wing loony. It’s the opinion of Democratic congresswoman Marcy Kaptur who says Wall Street has effectively taken over the US Congress and Federal Reserve. An excellent interview here on Bill Moyers with her and former IMF Economic Chief Simon Johnson (hardly Marxists either of them).

BILL MOYERS: So, Simon, what happens now? If we’re going to avert a depression and the next calamity, what needs to be done?

SIMON JOHNSON: Well, I think you have to keep at it, Bill. I mean, that’s the lesson from previous generations of Americans, who have really confronted entrenched power like this. You have to keep at it. And you mustn’t be satisfied. When the Administration says, ‘Okay, we fixed it. Don’t worry. We did some technical tweaking on capital requirements, for example, in the banks.’ You have to say, ‘No, that’s not true. Let’s look at what’s happening, let’s follow it through.’

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The smaller they are the bigger they fall

In times of crisis there are always winners and losers and the financial crisis has been a triumph for a big business. For small businesses however, it has been a disaster as this BBC report illustrates. It shows how small business owners in the USA are now being denied credit by banks and even having existing agreements withdrawn. Large corporations on the other hand continue to borrow at will and as we’ve seen with the bailouts, even receive huge handouts from the Government.

I listened to a retrospective on the BSE (mad cows disease) crisis last week and one of the points that came out was that it was wonderful for large farming conglomerates. The collapse in the market for British Beef devastated small farmers in the UK, most either going bankrupt or committing suicide.

Such crisis help big business flush out small competitors and leave consumers at the mercy of a handful of corporate giants who reap even greater profits in the aftermath and reduce both commercial diversity and choice for the consumer.

The legacy of the financial crisis will be concentration of financial power in an even smaller number of hands.

Eric Hobsbawm: Socialism has failed. Now capitalism is bankrupt. So what comes next?

So argues Historian Eric Hobsbawm in The Guardian today. Hobsbawm is right that after years of capitalist dogma that there is no alternative, the time has never been better to seek alternatives.

Many of the comments that follow his piece however take issue with his assertion that socialism has failed. The communist brand of “socialism” practiced in Russia wasn’t socialism at all – more a vicious state centralised authoritarianism that had little to do with true socialist ideals. The same could be said however for the type of neo-liberal capitalism we have today which has strayed so far from the principles and ideals of pure capitalism as outlined by founders such as Adam Smith that it’s almost unfair to say that capitalism has failed also.

The problem is that if a new socio-economic system emerged, it would have to be adopted by every country in the world. Countries are so inter-linked nowadays through exports and imports that a country could have the most stable and healthy economic system on the planet but it wouldn’t be able to cope if other countries around it were collapsing.

Incidentally, Hobsbawm’s volumes The Age of Revolution, The Age of Extremes and The Age of Capital are excellent reads.

A superficial solution to a deeper problem

A Brief History of Neoliberalism - David Harvey

A Brief History of Neoliberalism - David Harvey

Democracy Now have an interesting interview with David Harvey about the G20 summit and the bailouts. He makes the point that the billions of taxpayer dollars that have been funneled into bailouts are merely preserving an economic system that is fundamentally flawed.

Capitalism almost collapsed entirely in the 1930’s, played a large part in the rise of Hitler and the Second World War and went through another serious crisis in the 1970’s.  This cycle of boom and bust is set to continue until the current brand of neo-liberal capitalism is replaced with something more sustainable. One suggestion Harvey makes is that we have to move towards a “zero-growth” economy i.e. one where profit is not the single motivating factor behind the economy. In other words, simply existing should be enough and factors other than profit – such as the environment, jobs, education and human wellbeing – should be the focus.

Harvey however doesn’t pretend to offer any blueprint as to how such a society would look like and critics would no doubt jump to point out that such a system would not foster progress or innovation. In capitalist society, profit is the basis behind innovation and without a financial incentive, no individual or company would invent or design anything new and mankind would effectively stagnate. However, maybe it could be argued that much of what passes for “innovation” and “progress” – such as bigger cars, more sophisticated marketing and advertising industries, cheaper electronics and travel – constitute the wrong kind of progress anyway.

Before a zero-growth economy could be conceived, there would have to be a fundamental shift in human thinking about what profit and progress should really be all about.

Incidentally, David Harvey has uploaded videos of his classroom lectures plus you can read excerpts from his book A Brief History of Neoliberalism.

The Corporation

Quite simply one of the best documentaries I’ve ever seen. To have any idea of why the world is at is today, you have to understand the rise and influence of corporations on society.

THE CORPORATION explores the nature and spectacular rise of the dominant institution of our time. Footage from pop culture, advertising, TV news, and corporate propaganda, illuminates the corporation’s grip on our lives. Taking its legal status as a “person” to its logical conclusion, the film puts the corporation on the psychiatrist’s couch to ask “What kind of person is it?” Provoking, witty, sweepingly informative, The Corporation includes forty interviews with corporate insiders and critics – including Milton Friedman, Noam Chomsky, Naomi Klein, and Michael Moore – plus true confessions, case studies and strategies for change.

Winner of 24 INTERNATIONAL AWARDS, 10 of them AUDIENCE CHOICE AWARDS including the AUDIENCE AWARD for DOCUMENTARY in WORLD CINEMA at the 2004 SUNDANCE FILM FESTIVAL. The long-awaited DVD, available now in Australia and coming in March to North America, contains over 8 hour of additional footage.

The film is based on the book The Corporation: The Pathological Pursuit of Profit and Power by Joel Bakan. Please consider buying this documentary from the film website www.thecorporation.com or from this direct link on Amazon. The makers of this film have barely profited from this film whicb took years of production and filming.

Watch documentary on Google Video

YouTube Clip: