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McKinney and White on the economic crisis.

topic posted Fri, September 19, 2008 - 9:48 AM by  Unsubscribed
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In the following two essays, Green Party presidential candidate Cynthia McKinney and Socialist Equality Party candidate Jerome White lay out their programs for the economic crisis.

Personally, I am not supporting the McKinney campaign because, among other things, she is running as a candidate of the capitalist Green Party and she does not advocate socialism except in a limited way for healthcare. It is my opinion that the deep and profound problems of this country can only be solved through public ownership of the financial institutions, energy industries, health services, and the means of production. It is also worth noting that she voted as a congresswoman for the war against Afghanistan, and while she now calls for a full and immediate pull-out from both Afghanistan and Iraq, her original vote for war reflects a dangerous lack of understanding of the true predatory nature of U.S. imperialism.

For these reasons, I'm instead giving critical support to the presidential campaign of the Socialist Equality Party, but I thought people would find both of these articles interesting.

-Steven Argue


Seize the Time!
An essay by Cynthia McKinney
September 19, 2008

We the people must now seize the time! We have always had the capability of determining our own destiny, but for various reasons, the people failed to elect the leaders who provided the correct political will. There was always some corporate or private special interest that stood in the way of the public good. And they always seemed to have the power of the purse to throw around and influence public opinion or our elected officials. The very foundation of the U.S. economy is crumbling underneath our feet. This represents a unique moment in U.S. history and we must now seize the time for self-determination--for health care, education, ecological wisdom, justice, and all the policies that will make a difference in the lives of the people including an end to all wars, including the drug war!

The crisis was staved off for a time for some of our major finance engines when they were able to obtain bridge funding from certain sovereign wealth funds. That option grows increasingly dim as The Federal Reserve is becoming the lender of last resort. This means that the people are becoming the owners of the primary instruments of U.S. capital and finance. This now means that the people have a say in how these instruments are to be used and what their priorities ought to be. The people should now have more say in how their tax dollars are spent and what the priorities of government and the public sector must be. We the people must now set our demands to ensure and promote the public good.

Now, as we ponder the importance of this moment to do good and serve the needs of the people, some politicians have already figured out their answer for us: win or steal the next election, prepare for more war, and leave it to others to try and figure out what to do next. While banks are failing all around us and the U.S. taxpayer is drenched with news of billion-dollar bailouts for *selected* companies, the Congress, which has utterly failed in its twin responsibilities of setting policy and Executive Branch oversight, plans to adjourn instead of setting new policies; lessening the impact of the economic freefall on innocent victims; or stopping war, expansion of war, new war, and occupation.

In a dizzying turn of recent events, we have all witnessed the collapse of Fannie Mae and Freddie Mac mortgage providers, investment banks Lehman Brothers and Bear Stearns, and insurer American International Group (AIG), and other companies. So far, at least eleven banks have filed for bankruptcy this year. The case of the AIG bailout is particularly curious as Merrill Lynch was denied taxpayer largesse. I wonder if AIG was the selected company for bailout because of its relationship to the U.S. intelligence community and what others would discover if AIG's books were opened in an audit. The last person to get close to AIG and its shady operations was Eliott Spitzer.

But some more fundamental issues must be explored here, relating to the underlying assumptions that have guided U.S. political and economic activity, particularly over the last eight years.

The Bush Administration's "anything goes, just don't get caught" attitude has set the tone for what we are witnessing today. To be sure these problems didn't start in January of 2001, but they sure were allowed to accelerate during the George W. Bush Administration. For example, what tone was set when the Administration shipped $12 billion to Paul Bremer's provisional government in Iraq in cash on wooden pallets for Iraq reconstruction? No wonder $9 billion of it was "lost." What I'm constantly reminded of is that the money didn't just vanish, somebody got it. Now it's up to us to find out who!

However, the Administration's blatant disregard for good governance, the rule of law, standards of moral and ethical conduct, and even etiquette, when coupled with a laissez-faire, "go-along-to-get-along" attitude from Congress meant that no holes were barred and no hands were on the deck--a sure prescription for disaster.

In my reading over the course of the last few years, I had to become somewhat conversant with the language of the new economy: bundled mortgages, securitization, SPEs, SIVs, derivatives. But in addition to the old concepts that always seemed to be with us--predatory lending, redlining, no affordable housing amid "the housing bubble,"-- it soon became clear that basically folks had figured out a way to make money off of a ticking time bomb. Kind of like prisons for profit. And even though the Enron scandal was supposed to have cleaned up a lot of this, unfortunately, even Fannie Mae and Freddie Mac regularly engaged in some of these practices and that's why you and I own them today. I believe it is true that the very foundations of the U.S. economy and conventional political behavior have been shaken. Now is not the time for business as usual. And although this is by no ways exhaustive, here are a few things that I think the Democratic-led Congress could work on now instead of adjourning:

1. enactment of a foreclosure moratorium now before the next phase of ARM interest rate increases take effect;
2. elimination of all ARM mortgages and their renegotiation into 30- or 40-year loans;
3. establishment of new mortgage lending practices to end predatory and discriminatory practices;
4. establishment of criteria and construction goals for affordable housing;
5. redefinition of credit and regulation of the credit industry so that discriminatory practices are completely eliminated;
6. full funding for initiatives that eliminate racial and ethnic disparities in home ownership;
7. recognition of shelter as a right according to the United Nations Declaration of Human Rights to which the U.S. is a signatory so that no one sleeps on U.S. streets;
8. full funding of a fund designed to cushion the job loss and provide for retraining of those at the bottom of the income scale as the economy transitions;
9. close all tax loopholes and repeal of the Bush tax cuts for the top 1% of income earners;
10. fairly tax corporations, denying federal subsidies to those who relocate jobs overseas, repeal NAFTA.

And since the Congress plans to adjourn early and leave these problems to The Federal Reserve, The Federal Reserve should operate in the interests of the U.S. taxpayer and not the interests of the private, international bankers that it currently represents. This, of course means that The Federal Reserve, too, must undergo a fundamental ownership and mission change.

This crisis does not have to be treated as merely a "market correction," or the result of a few rotten apples in an otherwise pristine barrel. This crisis truly represents the opportunity to introduce fundamental changes in the way the U.S. economy and its political stewards operate. Responsible political leadership demands that the pain and suffering being experienced by the innocent today not be revisited upon them or the next generation tomorrow. But sadly, instead of affirmative action being taken in this direction, the Bush Administration ratchets up the drumbeat for war, Republican Party operatives busily remove duly-registered voters from the voter rolls, and our elected leaders in the Congress go home to campaign while leaving all of us to fend for ourselves. For the Administration and the Democrat-led Congress, I declare: MISSION UNACCOMPLISHED. For the public whose moment this is, I say: Power to the People!

***********
No return to the 1930s! For the public ownership of the banks!
Statement by SEP presidential candidate Jerome White
17 September 2008

The bankruptcy of Wall Street firm Lehman Brothers and the forced takeover of Merrill Lynch are the latest demonstrations of the collapse of American capitalism. All the lies and propaganda about the supposed infallibility of the “free market” are being discredited. The people of the US and the world are confronting a financial catastrophe on a scale not seen since the Great Depression.

What is revealed in this crisis is not merely the recklessness, incompetence and greed of America’s financial elite, but the failure of capitalism—an economic and political system that subordinates the needs of society to profit and personal enrichment.

Who is going to pay for this crisis? Here the US corporate and political establishment agrees: working people must accept a drastic reduction in their living standards to bail out the Wall Street investors and banking executives who are responsible for this debacle.

The American ruling class has for decades championed “private enterprise” and the wonders of the market as the pinnacles of human civilization, capable of solving all problems, while socialism has been denounced as evil and oppressive. Over the past 30 years, the operations of big business were deregulated—under both Republican and Democratic administrations—removing all legal restraints on corporate profit-making and the personal accumulation of wealth.

The ruling class responded to the crisis of American capitalism by carrying out a deliberate policy of deindustrialization, which wiped out millions of jobs and decimated cities like Detroit. Vast industrial resources were destroyed, and the savings of workers were plundered in order to free up capital for the most parasitic forms of financial speculation.

Increasingly, wealth was separated from the creation of real value. Corporate corruption and insider dealing became the norm, and vast fortunes were amassed in the hands of a small layer of the population.

The Financial Times recently reported that compensation for major executives of the seven largest US banks totaled $95 billion over the past three years, even as the banks recorded $500 billion in losses. Of course, neither Barack Obama or John McCain suggest that this money should be paid back.

Now that this orgy of financial speculation has produced a disaster, the corporations and banks are determined to roll back the conditions of the working class to the 1930s to pay for the crisis.

Obama and McCain are absolutely committed to the defense of capitalism and America’s financial elite. The next president—whether a Democrat or Republican—will move to gut entitlement programs such as Medicare and Social Security and support the corporate attack on jobs and living standards.

McCain’s sudden discovery of “greed” on Wall Street is laughable, coming as it does from a long-time defender of the US corporate establishment. Obama’s complaints about a lack of oversight ignore the role of the Clinton administration, whose policies helped fuel the speculative explosion and sub-prime mortgage crisis. Obama is a no less committed defender of the financial elite, receiving more campaign cash from Wall Street firms such as Lehman Brothers and Goldman Sachs than John McCain.

The Democratic candidate proposes no criminal investigations and refuses to hold anyone responsible, making his proposals for “regulation” thoroughly meaningless. In comments Tuesday, moreover, Obama declared his full support for the capitalist system, saying the “free market has been our engine of our progress,” which “rewarded the innovators and risk-takers.”

It is precisely these “risk-takers” and “innovators” who concocted the debt instruments and derivatives used to funnel billions into the hand of the wealthy. Meanwhile, the working class—which had been declared virtually obsolete in the “new economy”—is, as Marxists have always insisted, the only producer of real value.

It is indicative of the decrepit state of American democracy that the bailout of mortgage giants Fannie Mae and Freddie Mac, followed by Wall Street insurer AIG—which will essentially double the national debt while providing nothing for distressed homeowners—was taken without the slightest political debate or discussion. This underscores once again that behind the trappings of democracy, the American political system is a plutocracy, i.e., a government of, by and for the rich.

The alternative to capitalism and financial catastrophe is socialism—the reorganization of economic life to meet social needs and not private profit.

I call for:

* A public auditing of corporate finances and the personal accounts of the top management of the financial institutions over the past decade.

* The recovery of the vast sums of money that have been pocketed by the wealthy elite. Those responsible for the economic devastation must be brought to justice.

* A massive public fund to make whole all of the victims of predatory lending and the collapse of home values. All home foreclosures must be immediately halted, and funds made available to provide quality housing for all.

* Trillions of dollars for rebuilding basic industry, cities and the country’s infrastructure. This should be paid for through the establishment of a genuinely progressive tax system that drastically increases taxes on the wealthy, and through the dismantling of the gigantic US war machine.

* Transforming the giant banks and financial institutions into publicly owned and democratically controlled utilities, with measures taken to protect small shareholders. The financial resources of society—which are the product of the labor of millions of working people—must not be left in the hands of a financial aristocracy.

* Reorganizing the economy on the basis of a rational, democratic and egalitarian plan guided by the socialist principle of production for human need, not the enrichment of a wealthy elite.

Insofar as the Democrats even mention the economic crisis, it is to promote economic nationalism and the pitting of American workers against workers in other countries. In fact, the global consequences of the breakdown of American capitalism have demonstrated: (1) the integration of the world economy, and (2) the pressing necessity for the international unity of the working class in the struggle to defend jobs and living standards.

The SEP encourages all forms of mass opposition to attacks on social services, the gutting of jobs and the wave of home foreclosures. This crisis has proven that the capitalist class is unfit to direct economic and political life and that working people must establish genuine democratic control over society.

This requires a political break with the two parties of big business and the building of a mass political party of the working class fighting for a socialist alternative. I encourage workers and youth to support our election campaign, contribute to our fund and, above all, make the decision to join and build the Socialist Equality Party.


White Article from the World Socialist Website
www.wsws.org/articles/20...at-s17.shtml

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